President Obama signed a two week budget extension last week, averting a government shutdown, as current funding was set to expire on March 4^th.  The extension cuts $4B from current spending levels over the two-week period and creates a new deadline of March 18^th.  Senate leaders have introduced their own funding document scheduled to begin debate this week.  Any final agreement will need to be reconciled with the previously passed House version before a bill funding the government through September 30^th can be reached.  The House and Senate appear to be approximately $50B apart at the beginning of negotiations.  In addition to the $50B, Senate Democrats and the White House are likely to fight for removal of the health care defunding amendments passed by the House.  Removal of defunding amendments will ensure O&P friendly insurance reforms come to fruition, but also mean the anticipated negative Medicare productivity adjustment and medical device excise tax will also be allowed to move forward.

 AOPA made headlines last week by lobbying the Treasury Department and the IRS for an exemption for O&P related products from the medical device excise tax.  The Affordable Care Act allows for products that are retail in nature to be excluded from the tax.  AOPA made a very convincing case for an exemption of all O&P products. AOPA also commissioned a study that concludes nearly 75% of private insurance packages include O&P coverage.  This should help O&P’s efforts to be included in the “essential benefits package” being debated at HHS.  The EBP is a minimum set of benefits that must be included in any insurance plan sold on the “health exchanges”, which will ramp up in 2014.  It is very important that O&P be included in the essential benefits package.  Check out the OPGA Connection for more information on the essential benefits package.

 Last week brought more health care hearings to Capitol Hill.  Several Governors testified on the stresses of Medicaid on state budgets this year and the need for waivers to be granted by CMS on eligibility and mandatory benefits.  Governor Haley Barbour (R-MS) raised the possibility of turning Medicaid into a “block grant” program, meaning the Federal government would give each state a lump sum annually for Medicaid expenditures and leave implementation of the program completely up to individual states.  Obviously, this depends heavily on individual state policies, but this proposal would likely to have a negative impact on the coverage of O&P under Medicaid, as well as the number of patients eligible for Medicaid nationwide.  On a related note, the President did endorse a bill that would allow states to “opt out” of Affordable Care Act requirements, but only if they presented a plan to meet benchmarks outlined in the bill for coverage, benefits and cost containment.

 OPGA Government Relations will continue to monitor these issues; you can follow these updates daily on our Government Effects blog, www.opga.com.  Please contact us if you have any questions, comments or ideas.