Long List of Health Policy Tops Congress’ Agenda

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By Peter W. Thomas, JD, and Leif Brierley, MPH

The second session of the 115th Congress began on January 8, and Congress returned to a packed short-term agenda. The Senate gaveled in and immediately confirmed two new members, trimming the Senate Republican majority to 51-49. The House and Senate faced a two-week timeline to pass legislation to fund the federal government beyond January 19, but at the time of this writing, the outcome of that effort was unclear. Congress also has a number of outstanding items remaining from 2017, including the reauthorization of several important Medicare provisions. This package of provisions is known as the Medicare extenders legislation and it presents the O&P community's best opportunity to attach key sections of the Medicare Orthotic and Prosthetic Improvement Act (S. 1191 and H.R. 2599).

Also on Congress' agenda is long-term reauthorization and funding for the Children's Health Insurance Program (CHIP) and community health centers (CHCs). Meanwhile, Republicans, fresh off the passage of comprehensive tax reform legislation, are deciding on a 2018 agenda while facing a busy Congressional election year. President Trump and his team have said they are focused on advancing an infrastructure package, job growth, skills training, welfare reform, and funding the building of a border wall. This article provides an overview of the current federal political and policy environment at the start of 2018, including a summary of research funding efforts related to rehabilitation and O&P research.

PERTINENT Healthcare Items
in the December 21 CR


The CR provided a six-month, $2.9 billion patch for CHIP, retroactive to September 30, 2017. The funding patch funds the program through March. This timeline lends itself to the likelihood of a legislative vehicle on which to attach healthcare provisions in late March


Veterans' Access to Private Healthcare Facilities

The CR also includes a $2.1 billion patch for the Veterans Choice program. This cash-strapped program allows military veterans to access healthcare at healthcare facilities outside of the Department of Veterans Affairs system. The bill also applies to orthotics and prosthetics. 



The CR provides $550 million for CHCs, whose long-term funding ended September 30, 2017. The $550 million appropriation is enough to keep them funded through March, according to the Department of Health and Human Services (HHS).


Short-term Continuing Resolution

On December 21, 2017, Congress passed a Continuing Resolution (CR) (H.R. 1370) to provide continued funding for the federal government through January 19. The measure passed the House 231-188, and the Senate quickly followed, voting 66-32 in favor of passage. Enactment of the CR avoided a government shutdown that otherwise would have begun when funding ran out on December 22, 2017.

Notably, the CR included a waiver of the 2010 Pay-As-You-Go Act (PAYGO) rules, which would have required Congress to finance cuts to revenue with spending cuts to mandatory programs, including Medicare. Such cuts are known as sequestration. The waiver of PAYGO rules allowed the president to sign the Tax Cuts and Jobs Act on December 22 without triggering an automatic $136 billion sequestration order from the Office of Management and Budget, including $25 billion in cuts to Medicare in fiscal year (FY) 2018 to offset the costs of the tax cuts.

The CR gives Congress until January 19 to reach a long-term government funding deal, setting Congress up to focus on resolution of the CR as its first order of business. Negotiations between the White House and Congressional leadership are under way, but many expect Congress to resort to passing another short-term CR to buy additional time to work out the massive spending deal and a number of controversial issues, such as immigration policy.

Research Funding Summary

The 21st Century Cures Act enacted a year ago authorized significant increases in funding for the National Institutes of Health (NIH). Many federal agencies fund rehabilitation science, including O&P research and development, but NIH is the darling of congressional leaders who increased the NIH budget by $2 billion in FY 2017, raising it to over $33 billion. There are strong indications that Congress may grant NIH a similar bump in funding in FY 2018, negotiations for which continue at the time of this writing. NIH spends almost $500 million on rehabilitation science each year and significant funding is devoted to O&P priorities. NIH is currently working with the Department of Defense to co-fund a registry related to O&P care that will dramatically improve the data available about O&P patients.

Issues to be Resolved in 2018

Medicare O&P Improvement Act

 The best opportunity for action on key provisions of the Medicare O&P Improvement Act lies in the Medicare extenders package. This is a set of provisions that needs to be reauthorized every year or two and targets specific Medicare fixes that have been legislated over the years. The American Orthotic & Prosthetic Association and its leaders and lobbyists, the National Association for the Advancement of Orthotics and Prosthetics, the O&P Alliance, and the Amputee Coalition have all been working hard to enact this important legislation.

The Medicare O&P Improvement Act is bipartisan legislation introduced by Senators Chuck Grassley (R-IA) and Mark Warner (D-VA) and Congressmen Glenn Thompson (R-PA) and Mike Thompson (D-CA). It is designed to improve the quality of patient care and treatment outcomes while limiting waste, fraud, and abuse in the Medicare orthotic and prosthetic benefit. There are a number of critical provisions in the act that should be included in the Medicare extenders legislation and passed immediately. 

Recognition of Clinical Notes

The House has already passed one of the provisions in the bill (Section 5) as part of the Medicare Part B Improvement Act (H.R. 3178, Section 103). This provision would clarify that the clinical notes of the prosthetist or orthotist are considered part of the patient's medical record, and will h elp establish the medical necessity of prostheses and orthoses provided to Medicare beneficiaries. This would help resolve the problem created in 2011 when the Centers for Medicare & Medicaid Services (CMS) sent out a "Dear Physician" letter stating that it is the physician's notes, not the prosthetist's, that determine medical necessity. This letter, coupled with Medicare guidance that states that supplier-generated records are not part of the patient's medical record, created a large number of claims denials over the past seven years, many of which are still pending appeal. 

Linking O&P Provider Qualifications With Medicare Billing Privileges

Section 8 of the Medicare O&P Improvement Act directs CMS to issue regulations on a section of the federal law that was enacted in 2000 but never implemented (BIPA Section 427). Congress should enact this provision to require CMS to implement this federal law governing the qualifications necessary to provide custom-fabricated orthotics and prosthetics to Medicare beneficiaries. Since CMS withdrew their proposed regulation on this section of the law in 2017 in the name of "regulatory relief," Congressional intervention would serve to resurrect efforts to get BIPA Section 427 fully implemented. 

Clarifying the Scope of Off-the-Shelf Orthotics

Congress exempted custom O&P care from durable medical equipment competitive bidding in the Medicare Modernization Act of 2003 but permitted competitive bidding for off-the-shelf orthotics, defined in the statute as orthoses requiring "minimal self-adjustment." CMS subsequently issued regulations that dramatically expanded the scope of off-the-shelf orthotics, contrary to congressional intent. The provision in Section 7 of the Medicare O&P Improvement Act would restore the original definition, protecting patients who require orthotic treatment by ensuring they receive the clinical services needed for orthoses to fit and function properly.

As Congress works on a long-term government funding plan, these issues will need to be addressed.

CHIP Funding

While the CR funds CHIP through March, a long-term reauthorization of CHIP remains a key item on Congress' agenda.

Funding for CHCs

The CR provides funding through March; however, because CHCs rely on long-term contracts with medical workers and often lease their facilities, a long-term solution is needed.

340B Drug Discount Program Issues

The CR did not include provisions to prevent a 30 percent cut in the amount Medicare pays hospitals for drugs purchased through the federal 340B Drug Discount Program in 2018. On December 29, 2017, a federal judge rejected a request by the American Hospital Association and others for a preliminary injunction against the scheduled 2018 cuts. Congressional activity on the 340B program is expected to continue.

Affordable Care Act (ACA) Stabilization

An effort to reach a deal on stabilization of the individual insurance market under the ACA was also delayed until 2018, despite a deal being a condition  of Senator Susan Collins' (R-ME) support for the tax bill. Senators Lamar Alexander (R-TN), Patty Murray (D-WA), Bill Nelson (D-FL), and Collins had been working on measures to fund cost-sharing reduction (CSR) payments and reinsurance to offset the cost of rising insurance premiums.

While ACA stabilization measures were expected in the year-end funding package, House Republicans have said they will not consider any stabilization measures without language restricting the use of federal funds for abortion under the long-standing Hyde Amendment. Senator Murray indicated that the inclusion of abortion restrictions in ACA stabilization measures would be a nonstarter for Democrats. She also recently indicated that in light of the elimination of penalties for failure to have health insurance (effectively nullifying the individual mandate), the stabilization bill may need to be enhanced to prevent premium spikes in the individual market.

Opioid Treatment Funding

President Trump declared the opioid crisis a "public health emergency" in October 2017, and there is bipartisan support in the Senate to support the declaration with funding to assist states with the rising number of overdoses and deaths. However, no funding was included in the funding patch.

Medicare Extenders

The CR also did not include funding for Medicare extenders, various Medicare policies for programs that need periodic reauthorization to continue. Those policies include a long-term fix to the Medicare outpatient therapy cap. An extension of Medicare's Independence at Home Demonstration program, which has yielded significant cost savings for the Medicare program, was not included in the CR, nor were any elements of the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, which addresses other Medicare extenders. Medicare extenders, as well as an extension of Independence at Home, are expected to be part of a long-term budget deal.

Outpatient Rehabilitation Therapy Caps

One of the most high-profile extenders is the outpatient therapy caps. This year, bipartisan efforts led to a tentative deal to permanently fix the caps but that has not yet been enacted into law. Unless Congress acts soon, the $2,010 cap for occupational therapy and the separate $2,010 cap for physical and speech therapy combined will go into effect for Medicare beneficiaries who need more therapy in 2018 than the caps allow. This will disproportionately harm low-income beneficiaries who may not be able to pay for additional therapy out of pocket.

Political Environment

Several significant developments have already occurred in 2018.

Orrin Hatch (R-Utah) to Retire

On January 2, Senator Orrin Hatch announced his plans to retire at the end of the year. Elected in 1976, Senator Hatch is the longest-serving Republican senator. The senator's retirement opens a Senate seat in Utah, which many analysts expect former Massachusetts governor and former presidential candidate Mitt Romney (R-MA) to pursue. Senator Hatch is the chairman of the Senate Committee on Finance, a member of the Judiciary Committee, and a member of the Health, Education, Labor and Pensions Committee. He perhaps plays the largest role in the fate of the Medicare O&P Improvement Act as the bill is subject to the jurisdiction of the Senate Finance Committee.

Two Democratic Senators Confirmed

Senators Doug Jones (D-AL) and Tina Smith (D-MN) were sworn in on January 3. Senator Jones recently won a special election to fill the seat of former Senator Jeff Sessions (R-AL), who gave up his seat to become attorney general. Senator Smith, the former lieutenant governor of Minnesota, was appointed as a replacement for former Senator Al Franken (D-MN), who resigned from the Senate on January 2 following allegations of sexual harassment. Smith plans to run in the November special election to complete the remaining two years of Franken's term. The Republican Senate majority is now 51-49.

New HHS Secretary Expected to be Confirmed

On January 9, the Senate Finance Committee convened a hearing to consider the nomination of Alex Azar for Secretary of the HHS. The Finance Committee has jurisdiction over major aspects of the U.S. healthcare system, including Medicare, Medicaid, and CHIP. Azar is expected to be confirmed.

Republican Agenda

President Trump and Republican congressional leaders met recently at Camp David to discuss the 2018 Republican agenda. Attendees included Senate Majority Leader Mitch McConnell (R-KY) and Speaker of the House Paul Ryan (R-WI). The meeting included discussion of a fourth CR to fund the federal government for the remainder of FY 2018. Other long-term agenda items for President Trump include entitlement reform, infrastructure spending, immigration reform, and healthcare.

The Foreseeable Future

Congress faces a significant number of priorities to address in a very short time. The most pressing of them, funding for the federal government beyond January 19, will likely consume significant attention through much of the first quarter of 2018. Again, this is the most significant opportunity to make meaningful progress on the Medicare O&P Improvement Act in the past several years.


Peter W. Thomas, JD, is general counsel for the National Association for the Advancement of Orthotics and Prosthetics (NAAOP). 

Leif Brierley, MPH, is the manager of government relations in the Powers Pyles Sutter & Verville Legislative Practice Group, Washington.