Throughout the last half of 2017 there have been extensive debates on healthcare issues, from massive reforms like repealing and replacing the Affordable Care Act (ACA) to O&P-specific legislation such as the Medicare Orthotics and Prosthetics Improvement Act. This article provides a summary of critical health legislative efforts with an emphasis on developments that impact the O&P community.
State of Healthcare Repeal and Replace
However you feel about the ACA, the law has resulted in healthcare coverage for millions of Americans who would not otherwise have had access to healthcare services, including access to rehabilitation and O&P services and devices. Over the last year, there have been numerous efforts to repeal major aspects of the ACA and replace it with an alternative. It took the U.S. House of Representatives several months to negotiate a bill that ultimately passed after several failed attempts. In the Senate, the legislation under consideration during the summer and, again, in September, would have significantly reduced patient access to healthcare, in the private insurance market and in the Medicaid program.
In response to these significant threats, provider and consumer/disability advocacy groups mounted a successful campaign to preserve coverage of essential healthcare benefits. However, the Senate's failure to advance repeal and replace legislation before the start of the new federal fiscal year on October 1 does not mean that efforts to repeal the ACA are over. There will be additional attempts through the rest of this calendar year and into 2018 to replace the ACA. This means the controversy surrounding the ACA will endure for the foreseeable future.
Graham-Cassidy Bill Fails to Advance
After the House of Representatives narrowly passed legislation to repeal and replace significant portions of the ACA on May 4, Senate Republicans pressed forward to fulfill campaign promises to repeal the ACA "root and branch." However, Senate Republicans were forced to abandon their most recent healthcare legislation after they announced on September 26 that the Senate would not vote on the Graham-Cassidy healthcare reform bill. Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV), and Ron Johnson (R-WI) hoped to advance their bill before the September 30 fiscal year (FY) deadline to utilize the budget reconciliation process, which would have permitted the Senate to pass the measure with only 51 votes, instead of the required 60 votes. Senate Republications ultimately concluded that they could not secure the 51 votes needed and decided not to bring the bill up for a vote on the Senate floor.
The Graham-Cassidy bill faced considerable opposition from many healthcare organizations, including the O&P community. Notably, the bill would have granted states the flexibility to roll back the essential health benefits (EHB) coverage requirement, which currently mandates that non-grandfathered health plans in the individual and small-group markets cover habilitative and rehabilitative services and devices. This is the ACA language that led to widespread coverage of orthoses and prostheses in the individual private market. The Congressional Budget Office's (CBO's) preliminary analysis revealed that Graham-Cassidy would reduce the number of individuals with comprehensive health insurance that covered high-cost medical events by millions. Healthcare advocates mobilized to raise awareness of these potentially devastating effects, which contributed to the ultimate demise of the bill. One of the strongest challenges to the Graham-Cassidy bill was waged during a hearing in the Senate Finance Committee on September 26 when 180 protesters, mostly in wheelchairs, were arrested for demonstrating and chanting slogans such as "Don't take our Medicaid!"
But some analysts have suggested that Senate Republicans may seek to address healthcare reform in the FY 2019 budget resolution and subsequent budget reconciliation bill, the same bill that is expected to include a significant rewrite of the tax laws. Although unlikely, Senate Republicans could also pursue the "nuclear option" by changing the Senate rules that require 60 votes to pass legislation.
Trump Administration Pursues Efforts to Reform the ACA Itself
The Trump Administration has repeatedly expressed frustration with Congress' inability to repeal the ACA and has taken executive action to address healthcare reform without the need to rely on Congress. On October 12, the president signed an executive order directing the secretary of labor to consider proposing regulations or revising guidance within 60 days to allow more employers to form association health plans (AHPs), among other things.
AHPs allow groups of small business owners or trade groups to purchase health insurance outside of the ACA's individual market, thereby skirting many of the federal ACA insurance regulations. Operating outside the legal framework of the ACA, AHPs would be allowed to offer plans that do not comply with the ACA's EHB requirement. AHPs would also not be governed by the ACA's provisions regarding non-discrimination and pre-existing conditions, community rating, and lifetime or annual caps in benefits. Proponents believe AHPs will offer less expensive insurance options and, thereby, more people will have access to health insurance coverage. Opponents believe AHPs skim the younger and healthier individuals out of the ACA insurance risk pool and provide them with skimpy benefit packages, while the relatively older and sicker population will drive up costs further for ACA insurance, potentially causing a death spiral in the individual insurance market.
That same day, President Trump announced the administration would no longer pay cost-sharing reduction (CSR) subsidies to insurance plans, sparking widespread concern about the future viability of the individual insurance market. CSRs are federal payments to insurers in the individual markets to offset the costs of deductibles and copayments that many low-income ACA consumers are not able to afford to pay themselves. These payments are a critical funding source to compensate health plans for these lost revenues. In response to the announcement, Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) of the Senate Committee on Health, Education, Labor and Pensions announced a bipartisan agreement to fund the CSR payments for an additional two-year period to help stabilize the individual markets. Numerous healthcare advocacy groups are urging Congress to enact Alexander's and Murray's proposed legislation—the Bipartisan Health Care Stabilization Act of 2017. The chairmen of the Senate Finance Committee and House Ways and Means Committee have recently introduced similar CSR legislation, but their bills also contain provisions that Democrats will undoubtedly oppose. Although the timing on this legislation is in flux, if it passes, it is expected to be adopted before the end of the year.
Regulatory Efforts to Undermine the ACA
The Trump administration considers the ACA an abject failure, one that must be repealed to rid the American people of a harmful law. In this light, the administration's many efforts to curtail the ACA can be viewed as implementation of its goals. On November 2, the Centers for Medicare & Medicaid Services (CMS) issued its notice of benefit and payment parameters for 2019, which sets forth the proposed regulations concerning the risk adjustment and risk adjustment validation programs, user fees for federally-facilitated marketplaces and state-based marketplaces using the federal platform, and cost-sharing parameters and cost-sharing reductions.
CMS' proposed rule seeks to expand the role of states related to the qualified health plan certification process and to provide states with more flexibility in establishing and operating marketplaces, particularly the Small Business Health Options Program (SHOP) marketplaces. In addition to marketplace eligibility and enrollment provisions, the proposed rule also includes market reform provisions that address the minimum essential coverage designation for the Children's Health Insurance Program (CHIP) buy-in programs, the medical loss ratio, and the rate review process.Notably, the rule also includes a proposal that seeks to grant states more flexibility in their selection of an EHB-benchmark plan for plan years beginning on or after January 1, 2019.
CMS also proposes to define requirements concerning the scope of benefits that a state's EHB-benchmark plan must provide. These are perhaps the most alarming in the entire proposed rule because they grant new authorities to states to dismantle comprehensive benefit coverage, which directly threaten coverage of O&P care in private insurance plans and Medicaid expansion programs.
Important Legislation Impacting the O&P Community
The O&P community continues to engage in numerous bills that impact O&P patient care. A summary of these initiatives follows:
Medicare Therapy Caps
On October 26, after years of short-term legislative patches, leaders of the House Ways and Means Committee, House Energy and Commerce Committee, and Senate Finance Committee (the Committees) released a bipartisan and bicameral discussion draft of legislation that would permanently repeal the arbitrary Medicare outpatient therapy caps—an annual limit on per-beneficiary Medicare Part B expenditures for certain outpatient therapy services—effective January 1, 2018. The healthcare community generally welcomed the proposed language eliminating the long-standing therapy caps that the rehabilitation and habilitation community has opposed for 20 years. However, the Committees are still finalizing details, and congressional enactment is uncertain.
Currently, the Medicare therapy cap is $1,980 for occupational therapy per year, per beneficiary, and $1,980 for physical therapy and speech-language pathology services combined. Medicare beneficiaries with certain conditions may exceed the therapy cap limits, but medical necessity for continued services must be demonstrated in the medical file. At $3,700, CMS contractors may conduct a targeted medical review under each cap.
If enacted, the discussion draft would repeal the therapy caps and, in exchange, permanently lower the medical review threshold to claims over $3,000, starting January 1, 2018. This threshold will be annually adjusted for inflation using the Medicare Economic Index, effective in 2028. The discussion draft would continue to require the therapist to use an appropriate KX modifier when the $1,980 level has been met and services continue. The reason for this is unclear, but Congress may wish to keep providers aware of when they exceed the current caps to create a sentinel effect. The discussion draft would also authorize $5 million for each fiscal year to fund the medical review process. Although many expect that the proposed legislation will have associated costs, the Committees have not yet revealed any offsets to apply to this legislation.
Practitioners in the habilitation and rehabilitation space have long advocated for the elimination of the therapy caps and have applauded the Committees' efforts to address this long-standing issue. These therapy caps impede access to timely patient care that can improve patients' quality of life and maximize functional improvement and independent living. Physical and occupational therapy are critical to people with amputations, particularly shortly after amputation when patients are adapting to the use of prostheses. Practitioners also praised the Committees' decision not to include a prior authorization requirement in the discussion draft, which could potentially result in delays and denials in valuable patient care.
Medicare Orthotics and Prosthetics Improvement Act of 2017 (S. 1191/H.R. 2599)
The Medicare O&P Improvement Act is comprehensive legislation that would significantly advance treatment of orthoses and prostheses under the Medicare program. This summer, an important provision in this bill was included in a package of Medicare legislation and passed by the House. It now moves to the Senate for consideration. The bill recognized the value of the prosthetist's and orthotist's clinical notes for purposes of establishing medical necessity of O&P care provided to Medicare beneficiaries. But there are many provisions of the Medicare O&P Improvement Act that still need to be addressed, including the definition of off-the-shelf orthotics and a directive for CMS to finally issue regulations to implement Section 427 of the Benefits Improvement and Protection Act, which links Medicare billing privileges with the qualifications of the practitioner or supplier of custom-fabricated orthoses and prostheses.
Veterans Affairs Health Program Proposes to Limit Choice of Provider
For over five decades, the Department of Veterans Affairs (VA) has permitted veterans to choose their practitioners, whether the practitioner is a VA employee or a private practitioner with a VA contract. There is also evidence that combat-injured veterans have been able to obtain prosthetic services from private practitioners without a current VA contract. A new regulation proposed by the VA would change that practice. It clarifies that the VA has the sole right to determine which practitioner performs prosthetic services. This would seriously impact veterans' abilities to select the practitioners of their choice, which is an important quality mechanism.
The proposed rule has reinvigorated enthusiasm for the Injured and Amputee Veterans Bill of Rights (H.R. 2322), bipartisan legislation introduced by Congressman Tim Walberg (R-MI). This bill passed the House in 2010 but did not pass in the Senate. The bill would require the VA to post a list of veterans' rights, including the right of amputee veterans to choose their practitioners, in every O&P clinic across the country and on the VA's website. Complicating this issue is congressional interest in reforming and permanently authorizing the VA Choice Program, which allows all veterans who qualify to access private healthcare providers. The Choice bill is likely to begin moving through the House and Senate Committees on Veteran Affairs.
The year-end push for healthcare legislation will be complicated by the December 8 deadline to extend funding for the federal government agencies. This will force Congress to pass legislation, which may serve as a vehicle for other bills to get enacted. The tricky part will be to not make the legislation so heavy with amendments that it sinks under its own weight.
Peter W. Thomas, JD, is general counsel for the National Association for the Advancement of Orthotics and Prosthetics (NAAOP).
Leela Baggett, JD, is an associate in the Powers Pyles Sutter & Verville Healthcare practice group.
Leif Brierley, MPH, is the manager of government relations in the Powers Pyles Sutter & Verville Legislative Practice Group.