The National Association for the Advancement of Orthotics and Prosthetics (NAAOP) released the following statement regarding the impact of the “fiscal cliff” having been averted and its impact on O&P and healthcare:
In one of the worst displays of federal government dysfunction, on New Year’s Day Congress passed and the President will soon sign a bill that was essentially negotiated by two people, Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden (D). The bill, the American Taxpayer Relief Act of 2012, passed the Senate in the early morning hours of New Year’s Day by a wide bipartisan margin of 89-8, with five Republicans and three Democrats voting against the bill. In the late evening of January 2, the House passed the bill by a vote of 257-167, with 85 Republicans and 172 Democrats voting in favor, while 151 Republicans and 16 Democrats voting against the legislation. Interestingly, Speaker John Boehner (R-OH) voted for the bill while the rest of the Republican leadership team in the House voted against the bill.
The most contentious issues comprising the fiscal cliff-a combination of expiring tax cuts and across-the-board government spending cuts-were simply not addressed in this last-minute bill. For instance, while the bill raises about $600 billion over ten years in new revenue (i.e., increased taxes), it reduces federal spending by a very small margin. This means that the great budget debate of 2012 will continue to be the top order of business for the incoming 113th Congress. Entitlement reform (Medicare and Medicaid spending cuts), and perhaps Social Security, will become the main subject of debate in January and February to help reduce the federal deficit and perhaps to offset another increase in the federal debt ceiling-the amount of debt the U.S. Government is permitted to incur by law.
Impact on O&P Professionals: With respect to healthcare, the bill delays for two months the scheduled 2 percent across-the-board Medicare-provider fee cut that was part of “sequestration,” an automatic form of spending cutback if Congress cannot agree on ways to reduce spending or does not pass a new, higher budget. This means the O&P Medicare fee schedule increased on January 1, 2013 by 0.8 percent-the annual consumer price index (CPI) inflationary adjustment minus the productivity adjustment for 2013.
The bill also grants a one-year extension of the current physician fee schedule. This means that physicians serving Medicare patients for the next year will not have their fees cut by over 27 percent, as was set to occur on January 1. In addition, Medicare patients in need of outpatient rehabilitation therapy will not be subject to the therapy caps set at $1,900 per patient, per episode of care. These extensions and other provisions cost approximately $30 billion. To offset this cost, a number of other Medicare providers were subject to spending cuts including hospitals, end-stage renal disease (ESRD) providers, diabetic care suppliers, advanced imaging providers, and others-but not O&P providers.
The O&P profession was spared the budget ax in this bill as a result of prolonged and intense advocacy by the entire O&P community. The bill does not include any expansion of competitive bidding on orthotics and prosthetics, nor does it reduce O&P fees in other ways. However, these very threats continue to loom as Congress prepares to address the next cliff awaiting it, the debt ceiling/entitlement reform debate scheduled to occur during the course of the next three-month period.
NAAOP will continue to keep its members and friends informed of developments as they occur. For more information, visit www.naaop.org or e-mail [email protected]
Editor’s note: The corresponding webcast is posted on the NAAOP website, shared with members via e-mail, and made available through the NAAOP page on Facebook.
