The National Association for the Advancement of Orthotics and Prosthetics (NAAOP) issued the following statement on healthcare reform:
The Obama Administration continues implementation of the new healthcare reform bill, the Patient Protection and Affordable Care Act (ACA), despite two major recent setbacks that undercut the validity of the law itself. Last week, the House voted largely along party lines to repeal the healthcare reform bill, and ordered the committees of jurisdiction to produce a replacement for the bill. In addition, this past Monday, a federal district court judge in Florida struck down the entire bill, ruling that the individual mandate requiring nearly all citizens to carry health insurance coverage is unconstitutional and that the entire 1,000-page law is invalid as a result. Both of these developments, however, are not the end of the matter as explained below.
Governors and Attorney Generals from 26 states, almost all Republican-led, brought the suit in Florida on the heels of the passage of the ACA. A series of similar suits are working their way through the courts; one other U.S. District Judge, Henry Hudson in Richmond, Virginia, has also ruled that the individual mandate is unconstitutional but several other judges have rejected this argument. However, Judge Roger Vinson of the U.S. District Court in Pensacola, Florida, is the first to find the entire law void. The ACA lacks a “severability clause,” which would explicitly allow the law to remain intact if any single provision is found to be unconstitutional. Absent this clause, Vinson ruled that it is illegal to separate the individual mandate provision from the rest of the reform law.
Vinson stopped short of imposing an injunction on the Obama Administration to stop it from implementing the law, but also stated that an injunction was unnecessary. The judge referenced a long-standing practice that federal agencies are obligated to comply with federal court decisions. This means that in the judge’s view, the ACA is invalid, null, and void in 26 states, and that the Secretary of Health and Human Services (HHS) must stop implementing the law in those states. Not surprisingly, the Obama Administration strongly disagrees with this view and plans to appeal this decision to the Court of Appeals. They intend to continue implementing the law across the country unless and until the U.S. Supreme Court tells them otherwise. Interestingly, Vinson also held that the expansion of Medicaid to cover an additional 19 million people by 2019 was not unconstitutional and, therefore, not a violation of state sovereignty.
Congress was also busy on health reform in the past several days. On Wednesday, January 19, the House voted largely along party lines to repeal the Patient Protection and Affordable Care Act (ACA) and to instruct the House committees of jurisdiction to report alternatives to the healthcare reform law. The House also passed an amendment to include a permanent fix of the Medicare physician fee schedule within an alternative healthcare reform package. Last week, House Republicans held two hearings to highlight what they see as unsustainable costs included in the ACA. On the heels of these hearings, opponents of the bill aim to introduce an array of bills intended to dismantle the ACA piece by piece. This strategy is being employed because the Senate is unlikely to repeal the new law and even if it does, President Obama would very likely veto the repeal bill.
The portions of the ACA expected to come under attack in future legislation include:
- The individual mandate;
- The employer “free rider fees;”
- The medical-device tax (a bill was introduced last week to accomplish this);
- The 1099 tax reporting requirement for small businesses;
- The Independent Payment Advisory Board;
- The Community Living Assistance Services and Supports (CLASS) Act program; and
- The expansion of Medicaid eligibility in the states.
Impact of these Developments and Impact on O&P
The impact of these developments is difficult to measure until further developments emerge on the legal and Congressional fronts. In fact, the legislative approach has a lower chance of materially altering the course of the health reform law at this point than the legal challenges do. If the health reform law were to be held unconstitutional by the Supreme Court and if the entire law were to be invalidated, it would be one of the most significant decisions of modern times. First, the reforms that have already gone into effect would have to be reversed in some way. This means that lifetime insurance caps would be permissible again, young adults on their parents’ insurance plans would have to be removed from coverage, and seniors who hit the “donut hole” in Medicare drug spending would have to either give back the $250 in relief or the government would have to waive these repayments. Many other reforms, such as the state high-risk pools established in June 2010 would have to be dismantled.
There is a major question about the impact of a total invalidation of the law on the raft of Medicare changes in the health reform law. For instance, as the law pertains to O&P reimbursement, the newly imposed “productivity adjustment,” which was responsible for a modest decrease in the O&P fee schedule in 2011, would no longer be valid. This would mean that the CPI-U adjustment would go into effect without a decrease based on the productivity adjustment. The medical device tax would be null and void before going into effect. This would remove any chance that this new tax would apply to O&P manufacturers or any other device manufacturer.
But the expansion in coverage under the law would also not go into effect, leaving large numbers of Americans with no insurance coverage and with no realistic path toward coverage anytime soon (unless Congress acts to reestablish coverage and the chances of this are quite low). And insurance companies would continue to use medical underwriting and current insurance tactics to limit and restrict coverage of O&P services and devices to the maximum extent possible.
Despite these recent developments, the Administration continues to pursue implementation of the health reform law at a rapid pace. But opponents of the ACA are also working to avoid funding key provisions of the law as early as March 2011. Proponents and opponents of the health reform law can look forward to continued struggles into the 2012 election season, as the lightening-rod issue of healthcare reform never seems to disappoint. NAAOP will continue to keep you updated on this and other O&P government relations issues.
For more information, visit www.naaop.org or e-mail [email protected]