Health Care Reform Ablaze on Capitol Hill

American flag and stethescope

The U.S. health care system leads the world in innovation and technological advancement, as well as clinical skill and cutting edge medical research. But it is also described by many as broken and in need of serious attention. The United States spends more than twice per person on health care than any other nation and yet our health system and collective health status is ranked 37th by the World Health Organization. Considering the trajectory of health care spending and the demographic shifts yet to come during the next 30 years, most agree that significant reform is necessary, but many disagree on what form this should take.

The controversy

Where you stand on the health care reform proposals pending before Congress depends in large measure on where you sit politically. Whether you are conservative or liberal, capitalist or more socialistic, Republican, Democrat, or Independent, one’s ideological perspective profoundly impacts views about what is needed to reform our health care system. Add to this the fact that health care in America is not only a major industry comprising 17% of the gross domestic product, but it is also one of the most controversial public policy issues because it is so personal.

The fact that the U.S. health care system is so fragmented and decentralized makes it much more difficult for Congress to improve its design without causing all kinds of unintended consequences. Health care reform cannot be analyzed in the abstract. We must compare the pending health reform bills to the current health care system, where 50 million Americans have no insurance coverage, insurance companies are increasingly capping benefit levels for O&P care and other services at unrealistic levels, and costs to government, businesses, and individuals continue to rise at unsustainable levels. For all of these reasons, health care reform is beginning to slow in Congress despite heavy pressure from President Barack Obama and the congressional Democratic leadership to press forward with a bill this summer, so final legislation can be sent to Obama later this year.

Key priority for Obama

In a White House press conference held Wednesday, July 22, Obama attempted to take the case for reform to the American people. Concerned that the process was getting bogged down by partisan disputes, the complexities of the topic and the means to pay for reform, he addressed the American people to try to explain how ordinary Americans could benefit from the legislation. Whether Obama’s attempts to keep reform efforts on track will be successful will depend largely on how much momentum proponents can build among the American people or whether citizens will be too concerned about the cost and risk involved in overhauling the system to support comprehensive reform legislation.

How health reform impacts you

Health reform will enable small businesses to more easily obtain affordable insurance for their employees.

Many O&P providers are unsure if they support the reform bill, mainly because it may impact the same individual or business both positively and negatively. For instance, most O&P providers are small businesses, which are responsible for the majority of job creation in this country. On one hand, health reform will enable small businesses to more easily obtain affordable insurance for their employees and not be penalized financially if one or two members of their group plan have high health care costs in a given year.

On the other hand, that same employer may be required to provide health care coverage to their employees and pay a fine to the government if they do not comply. The individual business owners of the O&P practice may also be hit with additional individual taxes because of income tax policy changes being contemplated by Congress, depending on the corporate structure the business has chosen and the amount of income the business owner has.

Benefits of health care reform

What has received relatively little media coverage are the key elements of the legislation that will be beneficial to anyone trying to obtain affordable health insurance who has a history of needing health care services, such as O&P patients. The benefits of covering more uninsured Americans is also not well understood and seldom discussed, despite the fact that the theory of reform is to cover as many people as possible and spread the “bad risks” or O&P patients, for example, across the entire insurance premium-paying populace. From these perspectives, the case for supporting the key elements of the legislation is compelling. For instance, the main House and Senate reform bills would:

1. Completely reform the health insurance marketplace to prohibit discrimination based on health status, claims experience, disability and genetic information. This is a huge advance for people requiring O&P care that is often required for the life of the patient and can be expensive depending on the technology needed by the individual.

2. Eliminate pre-existing condition exclusions and prohibit premium rating practices based on claims experience, another huge advance for O&P patients and the providers who serve them. This would have the effect of prohibiting insurance plans from medically underwriting their enrollees, limiting or eliminating dramatic spikes in insurance premiums.

Doug Elmendorf testified that the House bill and the Senate HELP Committee bill would not save money over the long term.

3. Eliminate annual and lifetime caps and limitations in benefits, another extremely important patient protection. This provision alone would assist many amputees and others with orthopedic impairments from obtaining access to quality prosthetic and orthotic care for the entire period of need, and for the rest of their lives if need be.

4. Make huge investments of federal dollars in Medicaid as well as subsidies to help low income people pay for health care coverage. This is the most expensive part of the bill for sure, but these investments will, by definition, increase the amount of people in this country who have access to sources of funding to help pay for quality O&P care. This is a huge benefit for patients, of course, but greater prevalence of third party payment will allow O&P providers to receive payment for their services to a greater extent than the current system permits.

5. Cover orthotics and prosthetics, as well as durable medical equipment, under the “essential” package of benefits that all private insurance plans must offer if they participate under a new Health Insurance Exchange. The draft bills released in May and June did not specifically include coverage for durable medical equipment, prosthetics, orthotics and supplies, but extensive efforts by the O&P Alliance organizations, as well as the broader disability community, has established that these services and devices are considered essential benefits under insurance plans, at least at this stage of the legislative process.

How reform legislation is progressing through Congress

U.S. Senate

The committees of jurisdiction in the House and Senate have been diligently working on the issues involved in revamping the system, and have thus far published two large bills — one over 1000 pages long before amendments — that the committees are marking up. Even with those two bills released, a second portion of the Senate bill is expected to be produced by the Senate Finance Committee before the health reform bill can be brought to the Senate floor for consideration. This portion of the bill will include revenue raisers and changes to entitlement programs (Medicare and Medicaid) that are within the Committee’s jurisdiction.

The Senate Health, Education, Labor and Pensions (HELP) Committee has released and approved a bill estimated to cost the federal government just more than $600 billion in the course of 10 years. This bill does not include any of the Medicare provisions because these entitlement programs do not fall under their jurisdiction. The HELP Committee bill would include private insurance market reforms, a Medicaid expansion, a mandate on employers to provide health insurance to their employees (with exceptions and phase-ins for small businesses), and a public health insurance option. This option is a major sticking point of the Senate HELP and House reform plans that has generated tremendous controversy.

The Senate Finance Committee, meanwhile, continues its efforts to work out a bipartisan compromise. Dubbed the “G-6,” a subgroup of three Democrats and three Republicans lead by Finance Committee chairman Max Baucus has been toiling for weeks trying to arrive at a preliminary compromise. A consensus draft bill was expected to be marked up in committee in June, then July, and at press time, it is still unclear when the product from those bipartisan deliberations will become public. In addition, the Finance and HELP Committee proposals must be merged into one bill before the legislation is sent to the Senate floor.

U.S. House of Representatives

In this world of high stakes lobbying, pushing a bill through Congress quickly may be the only way reform is possible.

The House bill, H.R. 3200, has been estimated to cost the federal government approximately $1 trillion, but the bill seeks to fix the Medicare physician fee schedule problem that results in chronic problems of physician reimbursement to the tune of several hundred billion dollars. These federal dollars are not considered “offset” by spending cuts or tax increases, leading opponents to charge that Democratic leaders are violating their pledge to have health care reform not add to the federal debt.

The House bill has been coordinated and driven largely by House leadership. The three committees of jurisdiction are all working from the same draft bill and each committee is marking up those sections for which they hold jurisdiction. The House bill has been reported out of the Education and Labor Committee as well as the Ways and Means Committee. But the Energy and Commerce Committee has delayed its mark up of the bill as chairman Henry Waxman works with Obama to assuage the fiscal concerns of moderate “Blue Dog” Democrats on his committee. At some point, there is a chance that the Energy and Commerce Committee will not be able to mark-up legislation and House Democratic leadership will be forced to decide whether to reconcile the work of the two remaining committees and take the bill to the House floor for consideration by the full House of Representatives.

The cost of reform

Also adding to the worries of Democratic party leaders who want to see a bill enacted this year is the skepticism from the Congressional Budget Office (CBO). Obama has often stated that health care reform is necessary in order to reduce the long-term costs of health care. CBO chief Doug Elmendorf testified in front of the Senate Budget Committee in mid-July that the House bill and the Senate HELP Committee bill would not save money over the long term and would add, in fact, to the long-term deficit — two consequences leadership is trying to avoid as they could spell the death of comprehensive reform efforts.

CBO’s concerns about slowing health care inflation have fueled the emergence of a controversial new policy that would dramatically limit Congress’ power to set Medicare payment rates and give more influence to an independent commission such as the Medicare Payment Advisory Commission (MedPAC). Currently, MedPAC recommends non-binding changes in annual updates for Medicare providers who receive “market basket” adjustments for inflation. But a Super MedPAC would signal a shift in power that could potentially reap federal savings because, theoretically, an independent commission is removed from the political process and is thus free to cut rates and reshape the payment structure without political scrutiny.

Inflation update for O&P fee schedule in flux

It is unclear whether such a Super MedPAC would be permitted to adjust rates that currently are guaranteed by statute to receive an annual Consumer Price Index for Urban Consumers (CPI-U) inflation update — unless Congress intervenes and limits or eliminates these updates. This is the method by which the O&P fee schedule under Medicare is adjusted annually. Congress has, in fact, overridden this statutory language many times during the past 20 years. The inflation update that O&P providers can expect for 2010 is even more in flux now that the Department of the Treasury has published its calculation of the CPI-U for 2010. While most years yield a positive update of between 1% and 5%, the CPI-U for 2010 was calculated at negative 1.4%. There is some uncertainty as to whether the Department of Health and Human Services will impose this reduction in the O&P fee schedule for the coming year, or if they will comply with the letter of the statute, which requires only CPI-U “increases” to be applied to the fee schedule.


With opposition to health care reform gaining steam, and the 2010 election year in the near future, the pressure to move legislation quickly is mounting. This fact alone perhaps exposes the fact that if the general public really understood what the reform bills contain, they may not support overall reform at all. This situation lends itself to the same set of dynamics that doomed the national health care reform effort in 1993 and 1994, when Hilary Clinton assembled a team of 200 experts to draft a detailed, 1,000-page reform plan, only to be received by the public as bureaucrats in Washington thinking they know what’s best for the country rather than trying to build consensus from the ground up. But in this world of high stakes lobbying, and with special interests deeply entrenched in a sector of the economy nearing 20%, pushing a bill through Congress quickly may be the only way any meaningful reform is possible.

The technical and political elements to reform are so complicated and far-reaching that proponents are finding it difficult to move the process forward with any speed. But it is clear that Obama and Congressional leaders have made health care reform their top domestic priority, and proponents are unlikely to accept defeat only because major votes were not cast before the August Congressional recess. In addition, the need to pass a physician fee fix by the end of the year will likely serve to build momentum for passing some sort of health care bill before the new year begins.

Peter Thomas

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

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