AOPA Board member, Michael Oros, CPO of Scheck and Siress accompanied by AOPA lobbyist Catriona Macdonald, testified before the House Veterans Affairs Subcommittee on Health on May 16, 2012 raising concerns about administrative barriers limiting care by non-VA providers, among other issues. His testimony pointed out the need for timely care that doesn't require the Veteran to travel hundreds of miles for that care and pointed out that older Veterans are particularly affected as they are more reluctant to pursue advocacy on their own behalf.

Mr. Oros described three things the VA could do to provide more uniformly high quality care by (1) ensuring Veterans choice of providers; (2) support for the O&P master's degree program to expand the pool of qualified providers; and (3) support evidence-based practice by promoting comparative outcomes research.

AOPA was also able to provide a dozen examples of barriers to care, denial of care, and pressure applied to Veterans to receive their prostheses from in-house VA clinicians rather than contracted providers. The examples were gathered by AOPA member, Eric Eisenberg, MS, CPO, and provided to AOPA for the hearing without identification of the sources.

Members of the Committee agreed with AOPA that the VA Inspector General's cost comparison, suggesting that VA-fabricated limbs cost 25% of those made by private providers, was not an apples-to-apples comparison and not useful for policy purposes.

Opening testimony by two Veterans provided patient experience confirmation of the problems later raised by AOPA in its testimony. One Veteran who said that his care had been very good at VA facilities and with private providers described how he had recently been led to believe that he could only receive a high tech knee from the VA facility 70 miles away, and that is was available from his local provider only 7 minutes from his home. One of the Veterans proposed a common sense approach of freezing all plans to change how prosthetics are provided pending a top to bottom programmatic review of the VA prosthetics program.

Following the hearings, Mr. Oros and Ms Macdonald met with key VA officials and secured a commitment to a first step on that recommendation by bringing all the VA elements or prosthetic services together with the O&P community to have an "all in one room" discussion of issues to avoid the confusion over who does what, where and when.

The interests of O&P, and the O&P Alliance were well-represented at the hearing, as John Register, an amputee Veteran testified on behalf of the National Association for the Advancement of Orthotics and Prosthetics. AOPA's counsel, Catriona Macdonald, had been approached by House VA Committee staff and in response to that request had provided background information to the staff which helped them in formulating some of the questions posed at the hearing, and it appears that NAAOP was similarly engaged by the VA Staff also.

Click Here for the detailed summary of the hearing.

Photos of the AOPA presence are also available here:

Michael Oros Testimony

Michael Oros and witness panel

VA House Health Subcommitee Panel 

Questions? Contact Catherine Graf at cgraf@AOPAnet.org or (571) 431-0807.

The US Treasury Department's Proposed Rule issued February 7, 2012 to implement the 2.3 percent excise tax on the sale of medical devices reflected AOPA's belief that O&P devices, like the devices that are explicitly exempted by the Affordable Care Act -- eyeglasses, contact lenses and hearing aids -should be exempt under the Affordable Care Act's exemption for devices that are sold at retail for individual use. AOPA met with Treasury and IRS officials in January of 2011, prior to the proposed rule being issued to provide the rationale for exempting O&P devices.   Subsequently, the Proposed Rule did exempt O&P devices and confirmed that IRS and the Treasury Department initially agreed with AOPA's interpretation of the law. The ongoing challenge has been to make sure the final rule retains the O&P exemption and clarifies that both patient care facilities as well as manufacturers of components and other O&P suppliers are exempt from the tax.

AOPA provided written comments on the proposed rule. In addition, on Wednesday, May 16, AOPA's outside counsel, Stephanie Kennan of McGuireWoods, presented testimony on behalf of O&P patient care facilities, suppliers, manufacturers and distributors at a hearing convened by the Department of Treasury and IRS as they draft the final regulation. Ms. Kennan, in her testimony, reinforced AOPA's support for exempting O&P devices. AOPA's testimony asked for further clarification on two issues. The first issue is that component parts of O&P devices also be exempt from the tax. AOPA believes that to tax component parts would simply kick the collection of the tax further up the distribution chain and therefore subvert the intent of the exemption. The second issue AOPA asked for clarification on is to ensure that the term "administered by a medical professional" did not include fittings, adjustment and training of patients to use their device. The concern is that the way in which the proposed rule uses the phrase "administered by a medical professional" could make it less certain that O&P devices would be exempt from the tax. AOPA has argued that even the devices explicitly exempt from the tax include services of a professional to fit, adjust and train the individual to be able to use the device effectively.

AOPA along with AdvaMed, the Medical Imaging and Technology Alliance, the Medical Device manufacturers Association, Invacare and the American Association for Homecare testified at the IRS. After the scheduled witnesses were finished, the IRS permitted others in the audience to make brief statements. These groups included the Association of Blood Centers, HIDA, and Accenture. AOPA was unique in requesting clarification concerning the phrase "administered by a medical professional" and how that would relate to orthotics and prosthetics that otherwise would be included in the retail sales exemption. While one other witness raised the issue of component parts and whether they would be taxed, the circumstances raised were related to service contracts for large devices providing imaging services. Few questions were asked of any witness. The IRS panel did not indicate how they felt about the arguments raised by AOPA.

The initial Treasury/IRS draft reflected much input that AOPA had provided previously, dating back to January 2011, and the proposal recognized that O&P products would qualify for a special exemption from the tax applicable where finished medical devices, unique to the needs of specific patients are delivered at retail facilities to those patients for their use

Other witnesses raised issues concerning the complexity of implementation and the lack of information technology to provide companies with all information needed to calculate the tax. Some witnesses asked for a delay in promulgating the rule. Such a delay is unlikely given the effective date of the tax in the Affordable Care Act.

Click here for the complete statement presented by Ms. Kennan.

Photos of the AOPA presence are also available here:

Stephanie Kennan

IRS Panel

Stephanie Kennan Testifying

Hearing Audience 

Questions? Contact Catherine Graf at cgraf@AOPAnet.org or (571) 431-0807.

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