AAOS Bulletin - February, 2006

Ongoing efforts and unfinished business in 2006

The most pressing issue for the entire physician community during the 2nd Session of the 109th Congress, which convened last month, was eliminating the 4.4 percent Medicare reimbursement cut that went into effect on Jan. 1. The AAOS is also working with other medical societies, especially the Alliance of Specialty Medicine, for a permanent solution to the flawed payment formula.

Orthopaedic research funding

In 2005, for the first time, the AAOS sought Department of Defense (DoD) funding for orthopaedic research. The 2006 fiscal year Defense Appropriations bill includes $7.5 million to establish the Orthopaedic Trauma Research Program at the U.S. Army Institute of Surgical Research (ISR). ISR will administer this program, which will fund intra- and extramural peer-reviewed orthopaedic extremity trauma research. AAOS and ISR will announce details of the grant application process when they become available.

This appropriation for extremities trauma research was the fourth highest medical technology appropriation item in the DoD bill. The AAOS will pursue additional funding and hopes to make this an ongoing line-item in the DoD appropriations bill.

Orthopaedic PAC

The Orthopaedic Political Action Committee (PAC) set a new fund raising record, enhancing the ability of the AAOS to promote an advocacy agenda in the Federal health policy arena. In the first 12 months of the 2005-2006 cycle, the Orthopaedic PAC received $1,216,964 in receipts: $870,880 in “hard” dollars (which can be used to directly support political campaigns) and $346,084 in “soft” dollars (which must be used for other purposes). Approximately 16 percent of the AAOS fellowship supported the PAC.

Greater member support enables the Orthopaedic PAC to have more extensive interaction with members of Congress and the White House. In 2005, several orthopaedic surgeons held fundraisers, and AAOS leadership was able to interact at the highest political levels. AAOS President Stuart L. Weinstein, MD, made several trips to Washington, D.C., and the AAOS held fundraisers with President George W. Bush and Speaker of the House Dennis Hastert (R-Ill.) among others. Although 2005 was a non-election year, the PAC was involved in more than 170 Congressional races.

Medicare reimbursement

Although Congress failed to pass the Budget Reconciliation Bill before adjourning, the AAOS and the Alliance of Specialty Medicine delivered a consistent message: Prevent a cut in physician Medicare payments for 2006 and beyond, permanently fix the flawed formula and implement a value-based purchasing program for physicians under Medicare only after a formula change. The AAOS and the Alliance will continue to advocate for a new physician payment formula based on real practice costs in 2006 and beyond.


While a pay-for-performance (P4P) program was not included in the budget reconciliation bill, the Centers for Medicare and Medicaid Services (CMS) will implement value-based purchasing structures through nationwide demonstration projects. The AAOS will continue efforts to ensure that P4P programs are not implemented unless there is a valid quality system with a foundation in acceptable measures. 

Specialty hospitals

As the moratorium on specialty hospitals expired in June 2005, CMS announced that it would review its requirements and procedures for approving new specialty hospitals as well as its current payment policies. Until the review is completed, no new specialty hospital applications will be approved. CMS plans to review current payment policies and, by 2007, implement changes to reflect severity of cases when determining payment levels. The AAOS joined an ad hoc coalition to prevent permanent implementation of this moratorium, which would continue under the budget reconciliation bill.

75-percent rule

In October 2005, the American Association of Hip and Knee Surgeons sent a letter to key congressional leaders supporting both delayed implementation of the 75-percent rule and further study of the impact of the rule on beneficiary access to appropriate care.

AAOS and eight other organizations signed a joint statement in support of the “Preserving Patient Access to Inpatient Rehabilitation Hospitals Act of 2005,” which would maintain the enforcement of the 75-percent rule at the current 50-percent threshold until 2008. The budget reconciliation bill would extend the transition period for a facility to qualify as an inpatient rehabilitation facility (IRF), setting July 1, 2006, as the deadline for meeting the 60-percent level. The threshold would become 65 percent on July 1, 2007, and 75 percent on July 1, 2008.


The AAOS, through the Coalition for Patient-Centered Imaging (CPCI), continued to oppose efforts by the radiology community to implement legislative and regulatory restrictions on the provision of in-office diagnostic imaging. CPCI representatives made more than 300 visits to Capitol Hill to educate representatives and senators on the importance of office-based medical imaging.

Growth in Medicaid costs

The Medicaid Commission appointed by Secretary of Health and Human Services Michael Leavitt recommended six actions—ranging from the pricing and rebate system for prescription drugs, to rules regarding asset transfers that accelerate Medicaid eligibility and federal matching payment calculations—to eliminate more than $10 billion in Medicaid spending. The commission is now planning a hearing on Medicaid’s long-term sustainability. The AAOS will continue to monitor developments and identify opportunities to participate in the process. The Pediatric Orthopaedic Society of North America will be working with AAOS to provide information and testimony where appropriate.

Medical Liability Reform

Dr. Weinstein, as chairman of Doctors for Medical Liability Reform (DMLR)—a national organization representing several high-risk specialties and about 230,000 physicians—met regularly with key House and Senate leadership, as well as President Bush, to advocate for reform. 

Although the House again approved a medical liability reform bill, efforts to pass a similar measure in the Senate were unsuccessful. AAOS is continuing to work for a Senate vote early in 2006.

Last October, DMLR launched a new grassroots recruitment and advocacy campaign with a radio tour, media information, animated e-mails, Internet advertising and a redesigned Web site—www.ProtectPatientsNow.org. This site includes interactive profiles on the medical liability situation in each state.

In 2006, DMLR will target states where it may be possible to elect pro-liability reform senators or defeat candidates who are opposed. The AAOS, working through DMLR, is planning a major campaign. The AAOS Board of Directors has agreed to match member contributions on a dollar-for-dollar basis up to $1 million. To contribute, make your check payable to the AAOS Medical Liability Reform Campaign, and sent it to AAOS, 6300 N. River Road, Rosemont, Ill. 60018.


The Emergency Medical Treatment and Active Labor Act (EMTALA) Technical Advisory Group (TAG) heard public testimony from several hospital and physician representatives and other witnesses. AAOS collaborated with the Orthopaedic Trauma Association to prepare remarks for Jason W. Nascone, MD, who testified that mechanisms forcing physicians to provide on-call services will only serve to further divide hospitals and physicians. He urged the TAG to look for solutions that will encourage collaborative efforts.

In June, the TAG rejected a proposal made by hospital representatives to require physicians to serve on-call as a condition of Medicare participation. It later recommended that all hospitals be treated equally under EMTALA, clarifying that specialty hospitals should not be required to maintain emergency departments because not all general hospitals maintain emergency departments. The TAG further recommended that specialty hospitals have an EMTALA obligation and duty to accept EMTALA transfers within their specialized capabilities, regardless of whether they have an emergency department.

Food and Drug Administration

The use of Cox-II inhibitors continued to be controversial. In February, two Food and Drug Administration (FDA) advisory committees concluded that all nonsteroidal anti-inflammatory drugs have a class effect that increases the risk of cardiovascular events and recommended they all carry black-box warnings. In April, Pfizer, Inc. voluntarily removed Bextra, leaving only one Cox-II inhibitor on the market.

The AAOS attended an FDA meeting in November on direct-to-consumer (DTC) promotions of regulated medical products. Public support for tighter restrictions on DTC advertising seems to be increasing, and recent research has demonstrated that physicians may feel coerced into writing a prescription at a patient’s request, leading to unnecessary health care spending and improper prescribing. FDA staff noted that patients are not receiving enough risk information through DTC advertising, although benefit information is prominent. The AAOS plans to submit its concerns and comments on this issue to the FDA.

The new Medical Device User Fee Stabilization Act of 2005 adjusts user fees for medical device applications and amends labeling provisions for reprocessed single-use devices. The user fees will enable the Center for Devices and Radiological Health to hire additional medical device reviewers.

The FDA also finalized tissue regulations, providing a comprehensive regulatory framework to enforce stringent tissue practices. 

Patient Safety

The Patient Safety and Quality Improvement Act of 2005 establishes a national voluntary and non-punitive medical errors reporting structure through the establishment of Patient Safety Organizations. The final version of the bill includes a specific AAOS-supported confidentiality provision and prohibits patient safety data, termed “patient safety work product,” from being used against a provider in civil, criminal, or administrative proceedings, including disciplinary actions.

For a complete discussion of all Federal legislative activities during 2005 go to: www.aaos.org/dc (password protected).

David A. Lovett, JD, is director of the AAOS Washington office. He can be reached at lovett@aaos.org

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