Democrats Take Over Reins of Power

The win of the presidential race by Barack Obama and the Democratic Party gains in the House and Senate, coupled with the change-over in congressional power from the last election in 2006, places the Democrats in majority control of the federal government. However, with the recent financial instability, confirmed economic recession, ongoing overseas conflicts and other tests facing the nation, the challenges for the president-elect, his new administration and the incoming 111th Congress are daunting. The first order of business for Obama is organizing and selecting his transition team, his White House staff and his Cabinet secretaries. His next order of business will be comprised of mapping out his policy strategy for the first weeks, months and years of his presidency.

Shift in power

The impact of this significant shift in power will be a decided focus on health care policy. It is already clear that structural reform of the health care system is being actively pursued, including dramatic expansions in the number of insured Americans, attempts to improve access to a range of health care benefits and the reduction of unnecessary costs. The large public programs that provide health care services to millions of beneficiaries will also undergo significant reform. Programs like Medicare, Medicaid and the State Children’s Health Insurance Program (SCHIP) are all likely to be addressed in the coming year.

How this concerted focus on health care policy will impact access to assistive devices such as orthotics and prosthetics and related services is unclear at this point, but there are indications that 2009 will bring some of the most significant opportunities and threats the O&P field has seen in many years. Opportunities include a push for O&P parity in the context of health care reform as well as new regulations that may establish education, training and competency standards for Medicare suppliers of custom O&P care. But the economic downturn and the prospects for over a trillion dollar deficit in 2009 will also bring major threats of Medicare fee schedule reductions or freezes, possible expansions of competitive bidding and other proposals to reduce government expenditures on health care generally and O&P care specifically.

This article intends to provide an overview of the policy debates that will occur in 2009 in the health care area with a specific focus on orthotics and prosthetics. A series of health care subjects scheduled for debate in the new Congress will be explored. Obama’s health care team will be discussed and a detailed analysis of the 2008 elections and their impact on Congressional committees with jurisdiction over O&P issues will follow.

President-Elect Obama’s agenda

High on the list of options after Obama takes office will be an expansion of the SCHIP to make health care available to more children in low-income families, eliminating restrictions on federal funding for stem cell research and overturning a recent Supreme Court decision on equal-pay protections for women.

Several huge legislative priorities will come early in the new year as the House and Senate first take up an omnibus appropriations bill for the unfinished fiscal year 2009 spending bills. This “omnibus” bill is expected to be presented to the new president by late January or early February. The bill will fund health care and education programs including O&P research and development programs at the National Institutes of Health and the Department of Education.

Barack ObamaThe second major piece of legislation scheduled to be presented to Obama early in his presidency is the development of a comprehensive economic stimulus package. This package will include a wide variety of proposals, not just the building of roads and bridges, but also new schools, community health centers, the boosting of federal Medicaid matching funds to the states and investment in various new energy options. The litmus test for programs that will be funded under this bill will be those that are likely to create new jobs in the near term. There are estimates that this legislation could cost as much as $700 billion, but this figure could increase even higher as the bill moves through the legislative process. Between the omnibus spending bill for fiscal year 2009 and the economic stimulus package, Congress is expected to spend well over a trillion dollars in the first month or so of the new Congress.

Whether the Obama administration will assert itself into the remaining congressional work needed to be done on the fiscal year 2009 spending bills or simply defer to Congress to clean up the overdue spending bills remains to be seen. And while the details of the fiscal year 2010 budget offered by the new president will be later than usual, a basic outline of the incoming president’s priorities will be sent to Congress in early February. This outline for federal spending will set the stage for the policies to be pursued by the Obama administration over the next four years. With the election widely being considered a mandate for Obama, he and his administration are expected to enjoy a fairly lengthy “honeymoon” before the usual partisanship begins.

Health system reforms

Proponents for health care system reform have been highly energized by the outcome of this election. But it will remain a daunting challenge for Congress to cover millions of the uninsured while the country is in an economic crisis and facing rising health care costs. Whatever political and legislative game plan is chosen for health system reform, many Democrats would argue that Obama should strike early in his term on health care reform issues.

Democratic leaders in the current Congress have already begun preparing the health care reform debate. Senate Finance Committee chairman Max Baucus (D-MT) has issued a comprehensive paper on health system reform options (which calls for an individual mandate for insurance coverage, a new optional public insurance option and expanded Medicare and Medicaid coverage). Senator Ted Kennedy (D-MA), chairman of the Senate H.E.L.P. Committee and a longtime proponent of expanding health care coverage, is promoting the idea of a health care reform consensus bill to be filed just after inauguration day. In addition, Kennedy has created three informal work groups on insurance coverage, prevention and public health, and quality of care to explore and drive these issues within the H.E.L.P. Committee during the health care reform debate.

Currently, it is unclear how Democrats plan to structure a new coverage initiative. For his part, Obama has suggested expanding employer-based coverage by requiring large companies to offer health insurance coverage to employees. In addition, Obama supports creating a federal health insurance plan as an alternative to employer-based coverage and mandating health insurance coverage for children with significant subsidies for low income families. He has also promoted the creation of a National Health Insurance Exchange, through which Americans could enroll in the public plan or an approved private plan.

O&P parity

In the midst of the broader debate on expanding coverage to health insurance, the Amputee Coalition of America is spearheading an effort to promote a federal bill that would establish a floor for coverage of prosthetics in private insurance plans. The bill, HR 5615 and S 3517, is named the Prosthetics Parity Act of 2008 and was introduced by Robert Andrews (D-NJ) in the House and Olympia Snowe (R-ME) and Tom Harkin (D-IA) in the Senate. The bill would apply to both state regulated private health plans as well as self-insured health plans subject to the federal ERISA statute. These latter plans are not subject to state laws that mandate coverage and are not regulated by state insurance commissioners. This is one of the key reasons a federal bill is necessary. Others in the O&P community have contributed to this effort over the course of 2008, but the bill is expected to be revised and reintroduced in the 111th Congress.

As state prosthetic parity laws continue to gain support and more states enact such protections for consumers, the prospects of a federal bill that would apply to the entire private insurance industry improve. But enacting this legislation at the federal level is a significant uphill battle. Extensive efforts by consumers, their families, practitioners, business owners, manufacturers, suppliers and other stakeholders will be necessary if a federal parity law is to be enacted.

Medicare legislation

Before the end of 2009, Congress will again revisit the physician payment structure under the Medicare fee schedule. If Congress does not address Medicare in 2009, the physician fee schedule will decrease by 21% on the first day of 2010. This is untenable, so, Congress will be forced to address it. In addition to this problem, the Medicare outpatient therapy caps are also slated to go back into effect on that same date unless Congress acts otherwise. These two fixes alone cost significant federal dollars and if recent history is any guide, Congress will be looking to other Medicare providers to help offset the cost of these fixes.

This same phenomenon occurred in the summer of 2008 when a proposal to delay the DMEPOS competitive bidding program put the O&P fee schedule in potential jeopardy when initial proposals sought to cut all DMEPOS to offset the cost of delaying the competitive bidding program on DME and supplies. A number of O&P organizations argued strongly that O&P should not be cut because the vast majority of O&P care is not subject to competitive bidding. In the end, this argument carried the day and the O&P fee schedule did, in fact, receive a full CPI-U update effective Jan. 1, 2009. This type of defense will have to be played in the upcoming Medicare debate as well, as legislators seek cost-reduction proposals in this program.

In the course of the Medicare debate this past summer, the O&P community also had to defend against efforts to exempt certain “professionals” from existing statutory requirements to ensure that suppliers and providers of custom orthotics and prosthetics are specifically educated, trained and credentialed in O&P patient care. In the end, physicians, therapists and orthotists and prosthetists were exempted from the Medicare DMEPOS accreditation and quality standards requirements.

On a separate track, the Centers for Medicare and Medicaid Services is currently developing a proposed regulation to define the requirements for these and other providers in order to bill Medicare for custom O&P care. These proposed regulations are not expected to be published until mid-2009 at the earliest and it is unclear when they will become final regulations.

In the meantime, the American Orthotic and Prosthetic Association, with the support of a number of other O&P organizations, has worked to introduce HR 6878, the Medicare Improvements to Orthotics and Prosthetics Act of 2008. Introduced by a member of the Ways & Means Committee, congresswoman Shelley Berkley (D-NV) in the House, the bill would enact a number of protections to ensure that providers and suppliers of custom O&P care are qualified to provide that care to Medicare beneficiaries. This legislation will have to be reintroduced in the new Congress in January and will serve as an important statement of appropriate qualifications for the provision of custom orthotics and prosthetics.

Obama’s health care team forming

The Obama transition team has already filled a number of key positions with major impact on the National Association for the Advancement of Orthotics and Prosthetics’ (NAAOP) interests. Among the most important is the selection of former Senate Democratic leader Tom Daschle (D-SD) as secretary of Health and Human Services. Obama has also chosen Illinois congressman Rahm Emanuel to be his chief of staff as well as his Democratic campaign rival, senator Hillary Clinton, as his Secretary of State. Other key health care positions have also been filled. Jeanne Lambrew will be the deputy director of the new White House Office of Health Reform under Daschle. These and other selections are clear indicators that Obama wants an experienced and savvy team to marshal his agenda in Congress and highlight the importance of health reform in his administration.

House of Representatives election results and impact

Democrats gained 21 seats in the House of Representatives in the 2008 election, not the upper twenties they were expecting. This places the current House breakdown at 257 Democrats to 178 Republicans. This will give speaker of the house Nancy Pelosi an overwhelming majority to work with and provide Obama with a secure base from which to direct his legislative agenda. This gain comes after Democrats’ 30-seat pick-up in 2006, representing the first time in 75 years that Democrats have seen such large gains in back-to-back election cycles. Again, while the gains were significant, they were not the tidal wave that was predicted by many pundits.

The number of new Democrats in the House will likely result in increased Democratic ratios on key committees which will in turn likely make consideration and passage of legislation smoother than in recent years as it will be easier to override the minority party.

Ways & Means Committee

This is the committee in the House that has jurisdiction over Medicare and many health care issues. Leadership on this Committee should stay relatively stable as the only change is ranking member James McCrery’s (R-LA) retirement; he was replaced by representative Dave Camp (R-MI) who was selected over two more senior Republicans on the Committee. There will also be many membership changes on this committee including three Democrats and eight Republicans, five of which were on the Health Subcommittee. On issues, chairman Pete Stark has stated that he would like to work with Obama to enact comprehensive health care reform and rein in health care spending while achieving affordable health care access for all.

Energy & Commerce Committee

This committee shares jurisdiction with the Ways & Means Committee on Medicare Part B issues. The long-running antagonism between veteran Committee leader chairman John D. Dingell (D-MI) and the Committee’s number two Democrat, representative Henry Waxman (D-CA), boiled over yet again as Waxman, a liberal ally of Pelosi, challenged and defeated Dingell to be full committee chairman. This will mean big changes in the Committee’s issue focus as Dingell, a strong Detroit-based supporter of the auto industry, had not treated as priorities, issues related to the Committee’s environmental (global warming) and energy (vehicle emissions) jurisdiction. The membership changes in this committee are all due to retirements as one Democrat and five Republicans left office voluntarily, only two of which were on the Health Subcommittee.

Appropriations Committee

Most of the changes on the Appropriations Committee are on the Republican side and disproportionately affect the Labor, Health and Human Services (L/HHS) Subcommittee as retirements or running for the Senate claimed two Democrats and 7 Republicans. The L/HHS Appropriations Subcommittee is responsible for funding National Institutes of Health research, including the O&P research program under the National Center for Medical Rehabilitation Research. Due to the seniority of a number of these Congressmen, there will likely be changes to several Subcommittee chairs.

Senate election results and impact

With one race (Minnesota) still embroiled in a recount, it is clear that Democrats have significantly increased their power in the Senate. Democrats picked up open Senate seats in Colorado, New Mexico and Virginia and captured seats in New Hampshire, North Carolina, Oregon and Alaska. Republicans staved off losses in Georgia, Maine, Mississippi and Kentucky. The Democrats fell short of a filibuster-proof margin of 60 votes with the current split at 58 Democrats to 41 Republicans with the Minnesota race trending toward the Republican candidate and sitting senator, Norm Coleman. He is a few hundred votes ahead of his Democratic opponent and former comedian, Al Franken.

In addition, now that they have won the presidency and vice presidency, the seats held by Obama and Vice President-Elect Joseph Biden (D-DE) will have to be filled in short order and once she is confirmed as the new Secretary of State, Clinton’s seat will have to be filled as well. Some intrigue surrounds the replacement process for Obama’s Senate seat as the Governor of that state was arrested and accused of literally trying to sell the seat to a successor.

Finance Committee

All members of this committee will be returning for the next Congress except for senator John Sununu (R-NH), who lost his reelection campaign. In terms of the committee’s agenda, Baucus has been a strong proponent of early consideration of health care reform and has issued a “white paper” on bipartisan health system reform options. In addition, all Medicare or Medicaid legislation falls solely within his committee’s jurisdiction.

H.E.L.P. Committee

Most members will be returning to this committee as well in the next Congress—except for Obama and Clinton, whose seats will have to be filled with replacements. Chairman Edward Kennedy and others on the H.E.L.P. Committee will be ardent proponents of early consideration of comprehensive health care reform.

Appropriations Committee

Two changes for Republicans on this Committee came from senators Wayne Allard (CO) and Pete Domenici (NM), both retiring this year. Neither, however, served on the L/HHS Subcommittee, so little practical effect will be felt on NAAOP’s issues of concern. As with the House, the budget deficit will undoubtedly limit the scope of Congress’ spending proposals after an expected initial flurry of economic stimulus spending and a wrap up of fiscal year 2009 annual spending bills.

Finally, with new Democratic members in both the House and Senate, there will be many staff changes that will require new educational and awareness activities from NAAOP and like-minded organizations about the importance of orthotic and prosthetic issues.


There is no doubt that the November elections had a dramatic impact on the Congressional agenda and policy priorities. This year, it is widely anticipated that Congress will be very focused on health care as health insurance and Medicare structural reforms and other issues of interest to orthotists and prosthetists are expected to dominate the legislative arena. The economic crisis will have a significant effect on what kind of changes Democrats can implement. Ever-increasing health care costs, along with SCHIP and Medicare deadlines, will have Congress looking for innovative ways to cut costs while attempting to expand coverage. It is clear that the year will offer many opportunities and threats to the O&P field.

Peter Thomas

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

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