By Jeffrey Young - 01/04/06 12:00 AM EST
For some on K Street, the delayed passage of a pending budget bill is no big deal. But for others, it has triggered much angst.
The delay, expected to be in the range of 45-60 days, triggered a change of direction for certain lobbyists. After working with the Hill for a large portion of the year, K Street insiders working on the bill now have a new focus: the Bush administration.
With Congress having failed to complete action on budget reconciliation, some healthcare lobbyists and senior members of Congress are looking to the administration to step in to halt cuts to Medicare providers that took effect Sunday.
The Centers for Medicare and Medicaid Services (CMS) is considering taking administrative action to hold off on the implementation of new limits on physical, speech and occupational therapy for Medicare beneficiaries who suffer from strokes and other ailments, lobbyists said.
The budget-reconciliation bill, which awaits final action when the House returns at the end of the month, would create exceptions to the therapy caps for certain patients. The Senate-passed version of the bill would have simply postponed the caps for one year.
The clamor over the impact on therapy providers and patients of the delayed action on budget reconciliation quieted during the two-week holiday period, lobbyists said, despite the fact that the caps were due to take effect on New Year’s Day. Moreover, the launch of Medicare’s prescription-drug benefit Sunday has occupied much of CMS’s attention.
Nevertheless, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) wrote Health and Human Services (HHS) Secretary Mike Leavitt two weeks ago asking that the administration step in. “I am asking that you impose an administrative moratorium on [the caps’] implementation,” Grassley wrote.
Two therapy caps were written into law as part of the Balanced Budget Act of 1997 but have never been implemented because of the subsequent intervention of Congress or CMS. Most recently, the Medicare Modernization Act of 2003 postponed the effective date until Jan. 1, 2006.
Under the law now in force, Medicare beneficiaries are annually limited to $1,740 for physical and speech therapy and $1,740 for occupational therapy. The caps do not apply to services received at hospitals.
“An individual with intense rehabilitation needs could easily exceed the cap by the middle of January,” according to Grassley’s letter.
In addition to Grassley, House Majority Leader Roy Blunt (R-Mo.) and Rep. Nancy Johnson (R-Conn.), chairman of the Ways and Means Committee’s Health Subcommittee, are among those leading the effort to convince the administration to act, lobbyists said.
Trade organizations such as the American Physical Therapy Association (APTA), the American Health Care Association (AHCA) and the National Association for the Support of Long-Term Care (NASL) are spearheading the fight from K Street.
NASL Executive Vice President Peter Clendenin said that Leavitt’s office could respond to Grassley’s letter by the end of the week. The administration must determine whether it has the statutory authority to hold off on enforcing the law, among other considerations.
A spokesman for the APTA said that CMS officials have indicated their reluctance to move ahead an administrative fix but that they continue to weigh the agency’s options.
Clendenin questioned why CMS does not already have a plan prepared to act administratively on the therapy caps. “They’ve got everything in front of them they need to know,” he said.
In 2003, CMS delayed the implementation of the caps because it had not yet established a system to monitor the services received by beneficiaries. That system has since been enacted, which eliminated one potential rationale for a further administrative postponement.
But CMS has not shown it can adequately track payments or keep patients informed of how close they are to a cap at any given time, Clendenin said. The agency should not carry out the caps until it can guarantee that patients and providers will be aware of their status over the year.
Despite being confident that the House eventually will pass the budget-reconciliation bill, thereby ameliorating the caps, lobbyists for therapy providers remain concerned about the implementation of the “medically needy” exceptions clause that replaced Grassley’s one-year moratorium during conference negotiations.
Under the legislation, HHS would have until July 1 to establish the means by which Medicare beneficiaries could qualify for exceptions to the caps.
In order potentially to postpone the caps and then put them in place with a mechanism to allow exceptions, CMS would have to issue several new regulations, observed Jim Smith, AHCA’s senior vice president for policy and government relations. That process has not yet begun, he noted.
Physical, speech and occupational therapists were not the only Medicare providers who greeted the new year with trepidation. As of Sunday, physicians will have to endure a 4.4 percent cut in their Medicare payments until, or if, Congress finalizes budget reconciliation.
The physician lobby, too, continues to maintain that CMS has the ability at least to mitigate the cut but refuses to.
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) and other members have made numerous requests that CMS take action but have not swayed the agency. CMS has not indicated that it will change its position for 2006, though Congress could opt to make the physician payment change retroactive to Jan. 1.