As this is an election year for the entire House of Representatives and a third of the Senate, Congress is only expected to work for a total of 60 days this year. As a result, Congress faces the problem of prioritizing the issues it will address, and those it will leave for the next congressional session. The FY07 Budget needs to be acted upon, and is one such priority that should be completed before Congress recesses for the year.

Reiterating the ideas discussed in this year’s State of the Union Address, President Bush’s proposed FY 2007 budget holds “the growth of overall discretionary spending below inflation, proposing to reduce non-security discretionary spending below the previous year's level, and calling for the elimination or reduction of programs not getting results or not fulfilling essential priorities. Like last year, the budget proposes savings and reforms to mandatory spending programs, whose unsustainable growth poses the real long-term danger to our fiscal health.” Along these lines, President Bush’s FY 2007 proposed budget offers several elements that will directly affect the therapy community:

• The Medicare Modernization Act (MMA) included provisions to incorporate market competition into purchasing medical items needed to treat beneficiaries. Competition is an important approach to improving care for beneficiaries by enhancing quality and lowering costs. The Administration will implement a competitive bidding program in July 2006 to enable physicians to obtain certain drugs used in their offices at lower prices. The Administration will expand the use of additional competitive bidding programs in 2007, for example, into the purchase of medical supplies and equipment. In particular, the Budget proposes to integrate competitive bidding into payment of clinical laboratory services.
  


• The Budget proposes a package of initiatives designed to address service areas susceptible to abuse and to target Medicaid dollars more efficiently. To ensure proper use of Federal funds, the Administration plans to clarify through regulation the statutory Disproportionate Share Hospital program provisions and allowable services that can be claimed as rehabilitation services.

On the other side of the isle, House Budget Committee Democrats suggest that those elements in President Bush’s proposed Budget denote the following:

• Limits in Reimbursement for Rehabilitation Services – The proposed budget limits the types of rehabilitation services that are permitted for Medicare reimbursement, for savings of $2.3 billion over five years and $6.1 billion over ten years. This policy may negatively affect chronically ill and disabled beneficiaries by limiting their access to rehabilitative services.
  


• Cuts Inpatient Rehabilitation Facility Update — The proposed budget cuts payment for inpatient rehabilitation facilities (IRF) by freezing payments rates for 2007 at the 2006 level and providing an update for 2008 and 2009 of market basket minus 0.4 percentage points. The policy saves $1.6 billion over five years, and $3.9 billion over ten years. The budget also includes further cuts to inpatient rehabilitation facilities (IRFs) via regulatory changes.

• Cuts for Durable Medical Equipment — The proposed budget makes regulatory changes to payments for wheelchairs and other forms of durable medical equipment, for savings of $1.8 billion over five years and $4.6 billion over ten years.

For more information regarding this year’s budget, please see the websites of the House and Senate Committee on the Budget.