Presidential Vetoes and Congressional Leaders Stymie Health Care Initiatives

With partisan debates on the Iraq war, immigration and lobbying reform dominating most of the 2007 Congressional calendar, Congress has managed to save nearly all of its other legislative priorities including children’s health care, annual federal spending bills and a Medicare physician payment adjustment, until the end of the year. And many of the priorities left on the agenda are those that are of importance to O&P providers and the people they serve.

Democratic leaders have told members of Congress that they will likely be in session through much of December. Even with those additional weeks on the Congressional calendar, it remains unlikely that Congress will be able to get all of their work done before the first session of this Congress concludes. In addition to legislative activity, efforts continue to work with the Department of Veterans Affairs (VA) and the Department of the Defense to ensure that veterans and injured soldiers have access to appropriate O&P professional care.

Presidential vetoes threaten annual spending bills

Although fiscal year 2008 began on Oct. 1, 2007, 11 of the 12 annual spending bills which fund the federal agencies have yet to be signed into law. President Bush has signed continuing resolutions to temporarily fund the various agencies of the federal government, averting a federal shut-down, as occurred in 1995. As of press time, the most recent continuing resolution will fund the federal government through Dec. 14, 2007.

The President has threatened to veto annual spending bills that exceed his budget requests. The President followed through on that threat recently by vetoing the always controversial Labor-Health and Human Services-Education (L/HHS) spending bill. The Defense spending bill, which provides $459.3 billion in discretionary funding ($39.7 billion more than provided in fiscal year 2007, but $3.5 billion less than President Bush requested) was signed into law in mid-November 2007.

Labor-Health and Human Services-Education programs

In early November, Congress reached a compromise on the annual L/HHS spending bill which would fund the departments at $150.7 billion in fiscal year 2008 – nearly $10 billion more than the President requested in his annual budget proposal. As promised, the President promptly vetoed this spending bill, categorizing it as excessive government spending.

The vetoed L/HHS spending bill would have been positive for orthotic and prosthetic providers and patients. Under the bill, the National Institutes of Health (NIH) would receive $30 billion in fiscal year 2008. This would represent a $1.1 billion increase from last year’s spending levels and $1.3 billion more than the President requested. Within the NIH, the National Institute of Child Health and Human Development (NICHD) would receive a total of $1.29 billion, a $33.6 million increase from last year’s levels. The NICHD is the institute that houses the National Center for Medical Rehabilitation Research (NCMRR), which in turn, houses an active orthotic and prosthetic research and development program. This O&P research program would have presumably benefited from these increases.

Similarly, the Centers for Disease Control and Prevention would have received $6.6 billion in fiscal year 2008, $349 million more than fiscal year 2007 levels and $633 million more than the President requested. Included in this budget is funding for the National Limb Loss Information Center, a grant administered by the Amputee Coalition of America. The National Institute of Disability Research and Rehabilitation (NIDRR) at the Department of Education would have received a $900,000 increase over last year’s budget of $106.7 million. NIDRR has supported an O&P Rehabilitation Research and Engineering Center for several years based out of the Rehabilitation Institute of Chicago. This would have represented the first increase in NIDRR funding in several years.

Of particular importance to the O&P field, the L/HHS spending bill would have provided $1 million through the Rehabilitative Services Administration under the Department of Education to continue funding Project Quantum Leap, a grant program administered by the American Academy of Orthotists and Prosthetists. This grant is designed to improve the quality of applied orthotic and prosthetic research and to help meet the demand for provider services. The project also supports an orthotics and prosthetics awareness campaign designed to recruit and retain professionals through educational outreach.

VA spending

White HouseCongress has also passed the fiscal year 2008 Military Construction-Veterans Affairs (VA) appropriations bill but has yet to send it to the President for his signature. The President has stated that he will sign the spending bill which includes $64.7 billion in discretionary spending – $3.4 billion more than he requested.

Democratic leaders had originally attached the VA spending bill to the L/HHS spending bill in the hopes that the President would reconsider his L/HHS veto threat if the bill were attached to popular funding for veterans. However, Senate Republicans managed to separate the two spending bills on the Senate floor, forcing Congressional leaders to send the L/HHS bill to the President on its own. Democratic leaders continue to hold the VA spending bill as an important leveraging tool or legislative vehicle onto which other priorities may be attached in the near future.

The VA spending bill also has an impact on the O&P field as a significant amount of prosthetic research funding comes from the VA. The overall funding level of $64.7 billion for fiscal year 2008 is $15 billion above fiscal year 2007. This is an unprecedented increase in funding for veterans programs and was largely the result of the debacle earlier this year at Walter Reed Army Medical Center, and the ensuing controversies that followed. The bill would provide $43.1 billion in discretionary spending for the Veterans Affairs Department, including $37.2 billion in discretionary spending for the Veterans’ Health Administration.

This discretionary spending increase from $32.3 billion to $37.2 for veterans’ health care exceeds even the recommendations of the “Friends of the Veterans Administration” (“FOVA”) which is lead by AMVETS (American Veterans), Disabled American Veterans, Paralyzed Veterans of America, and the Veterans of Foreign Wars of the United States. The National Association for the Advancement of Orthotics and Prosthetics (NAAOP) is also a member of FOVA and annually supports FOVA’s yearly “Independent Budget” proposals for the VA. The groups recommended a spending level of $36.8 billion for fiscal year 2008.

Of particular importance to the O&P field, the conference agreement appropriates $480 million for VA Medical and Prosthetic Research as proposed by the House. While this is slightly less than the Senate proposal ($500 million), it represents an increase of $66 million from the fiscal year 2007 spending bill and $69 million more than the President proposed ($411 million). However, it is important to note that in May the President signed a fiscal year 2007 supplemental spending bill that included nearly $1.8 billion in additional fiscal year 2007 funding for the VA, including an additional $32.5 million for the Medical and Prosthetic Research program. Conferees dedicated this additional funding for returning veterans from Iraq and Afghanistan.

Potential Omnibus

The debate over final spending levels for fiscal year 2008 on these programs is far from over. After Congress failed to override the L/HHS spending bill, Senate Democrats began discussing potential compromises. Sen. Harry Reid (D-NV), Senate Majority Leader, has stated that leaders are considering a “mini-omnibus” spending package which would combine several of the annual spending bills and split the difference between the President’s and Congress’s discretionary budget numbers. While the President seems unlikely to compromise, some Congressional Republicans, especially those up for reelection in competitive congressional districts, appear willing to negotiate.

Children’s health care debate continues

Democrats identified reauthorization of the State Children’s Health Insurance Program (SCHIP) as a major legislative priority early in the year and have spent most of the summer and fall debating SCHIP legislation and expansion.

SCHIP was enacted in 1997 and serves as a supplemental health care program for low-income, uninsured children whose families’ incomes are too high to qualify them for Medicaid. Authorization for SCHIP expired on Sept. 30, 2007 and the President has signed continuing resolutions to maintain funding for the program while the debate on reauthorization continues. Currently, SCHIP is federally funded at about $5 billion per year and states also contribute significant funding to the program.

Initially, Democrats were interested in investing an additional $35 to $50 billion in the program, despite the President’s strong opposition to such an expansion. In July, the House approved a massive SCHIP/Medicare package that would have reauthorized the programs for another 5 years and would have provided an additional $47 billion for SCHIP over 5 years. Meanwhile, the Senate approved a strong bipartisan and more streamlined SCHIP bill with a $35 billion increase over 5 years. The Senate bill did not include any Medicare provisions. Following intense House/Senate negotiations, the compromise SCHIP bill closely resembled the Senate’s proposal.

In early October, with the support of many House Republicans, the President vetoed the compromise SCHIP legislation stating that the additional investment represented a step toward government-run health care. While the Senate had the necessary two-third majority vote to override the Presidential veto, the House failed to garner such support. Soon after the override vote, House leaders took a revised SCHIP bill to the floor that they hoped would appease additional House Republicans and achieve the necessary two-thirds majority to override a Presidential veto. However, despite passing the measure, the House again failed to secure the necessary votes needed to override the expected veto. The Senate approved the revised SCHIP legislation by an expected veto-proof vote of 64-30. Many of the missing votes were Senators who are running for President in 2008.

Congressional leaders have agreed not to attempt an override of the revised SCHIP bill, but will instead continue to work with negotiators to reach a compromise on SCHIP reauthorization that can achieve a two-thirds majority vote in both the House and Senate. Senate champions have stated that they need about a dozen House Republicans to switch their votes and support the bill to override a veto, but recent developments indicate that negotiations have stalled. If a final compromise is not achieved this year, Congress will likely pass a continuing resolution to temporarily extend the program until October, which would force another vote on children’s health care soon before the Presidential elections.

The talks between SCHIP supporters and House GOP lawmakers have centered on several key issues. For example, House Republicans wanted to ensure that:

  • the program covered only poor children,
  • measures were taken to ensure children did not leave private coverage to enroll in SCHIP, and
  • illegal immigrants were not eligible for the program.

Additionally, some House Republicans have come forward with a request that Democratic leaders include a provision in the SCHIP bill that would cap Medicaid eligibility at 300% of the federal poverty level, or about $62,000 for a family of three.

At the time of this writing, it is appearing less and less likely that Congress will be able to enact an SCHIP bill this year.

Medicare bill in the works

In what is becoming somewhat of a holiday tradition, Congress must decide what to do about large Medicare cuts to the physician fee schedule next year that physician groups state will compromise access to care for Medicare beneficiaries.

The statutorily-based sustainable growth rate formula used to calculate physician payments under Medicare will result in a 10% cut to doctor reimbursements in 2008 if Congress does not act. This pending multi-billion dollar legislative lift in a Congressional pay-as-you-go (PAYGO) environment could result in a large Medicare package which could help or hurt the O&P field.

The current PAYGO rules require that all new mandatory spending provisions (Medicare, Medicaid, Social Security) be paid for by other legislative provisions that save the government money, resulting in budget neutral legislation. As a result, Congress is looking at cuts to other Medicare providers and Medicare managed care plans as possible ways to pay for the Medicare physician payment fix.

Earlier this year, the House passed a combined Medicare and SCHIP package, the Children’s Health and Medicare Protection (CHAMP) Act, which included a two-year Medicare physician payment fix, providing doctors with a 0.5% increase in 2008 and 2009. At the time of this writing, the Senate has not taken action on its Medicare package but was expected to mark-up a bill in the Finance Committee in December.

The House’s CHAMP Act would have paid for its Medicare and SCHIP changes through an increase in the tobacco tax and cuts to Medicare managed care plans. Payments to many Medicare provider groups including hospitals, skilled nursing facilities, and home health agencies also would have had their payments modified. Fortunately, for the O&P field, the House bill contained no cuts to the Medicare orthotic and prosthetic fee schedule. It is unclear at this time what lies in store for the O&P field in the Senate bill.

NAAOP meeting

The NAAOP has been meeting with Congressional leaders in senior positions on the Veterans Affairs Committee as well as the VA Prosthetic and Sensory Aids Service over the past several months to attempt to resolve outstanding issues with respect to veterans’ access to O&P care.

NAAOP has taken a lead role in addressing what occurred this year in southern California and Nevada, where approximately 70% of prosthetists with long-standing VA relationships have had their contracts discontinued. To make matters worse, a significant number of suppliers who were awarded contracts in this area were not properly credentialed at the time the contracts were awarded.

NAAOP met directly with the chairman of the House Veterans Affairs Committee three times over the course of the year and has directly engaged the committee in this alarming situation. Meetings also were held with the chief of the VA Prosthetic and Sensory Aids Service to attempt to resolve this problem. At the time of this writing, two congressional committees are interested in assisting with a resolution to this situation in a manner that preserves veterans’ access to their long-standing O&P practitioners.

In addition, NAAOP recently met with the head of the Department of Defense’s initiative to better coordinate and manage the care between the Department of Defense and the VA that injured soldiers receive after experiencing a war-time injury, including amputations and other musculoskeletal injuries. The meeting, which occurred at the Pentagon and was focused on post-acute care of injured soldiers, was a tremendous opportunity to inform Department of Defense of the necessary bridges that must be better developed between Department of Defense facilities, such as Walter Reed Army Medical Center and Balboa Naval Medical Center (to name a few) and the various VA prosthetic clinics throughout the country. The Department of Defense is in the midst of compiling a resource directory for its new case manager program to use when attempting to link injured soldiers with long-term and community-based O&P and other rehabilitation providers.


By the time this article is read, the outcome of many of the issues discussed above will be known, assuming Congress does not agree to delay serious consideration of these major policy debates until the first quarter of 2008. Whether this occurs, the last month of 2007 will prove to be an extremely busy time in Washington, D.C. and the O&P field will be watching congressional actions closely.

It remains to be seen how much progress Congress will make in terms of their legislative agenda, but with the 2008 elections nearing and partisan tensions escalating, Democratic leaders will have their work cut out for them if legislative priorities are not accomplished in the near future.

Peter Thomas

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

Emily Niederman is the legislative director of Powers, Pyles, Sutter and Verville, P.C. in Washington, D.C.

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