Thursday, February 11, 2016 Obama Budget, APTA Comments to Congress Converge on Elimination of Self-Referral Loophole For the fourth year in a row, the federal budget plan announced by President Barack Obama proposes that the so-called Stark law be tightened up to eliminate exceptions that allow physicians to self-refer for certain services, including physical therapy. And should Congress need an additional reminder of the importance of this change, it need look no further than APTA, which recently supplied Senate and House committees with comments outlining exactly why the loopholes should be closed. The $4.1 trillion FY 2017 budget plan is unlikely to be enacted by Congress, where Republican leaders have stated that they would break with tradition and not hold a hearing on the budget with the administration's budget chief. Still, Obama's budget has helped to emphasize issues that the administration believes are worth attention—and action. According to administration budget estimates, elimination of exceptions to the prohibition on referral to in-office ancillary services (IOAS) in Medicare would result in $4.98 billion in savings over 10 years. The current IOAS exception allows for self-referral for physical therapy, anatomic pathology, advanced diagnostic imaging, and radiation therapy. As in past years, the Obama proposal around IOAS was applauded by the Alliance for Integrity in Medicare (AIM) a coalition of organizations, including APTA, that has been advocating for removal of physical therapy and other services from the exception. "Since fee-for-service continues … the financial incentive remains for clinicians to exploit the IOAS exception[s]," AIM writes in a news release on the budget. "Alternative payment models … will not be successful if arrangements that allow overutilization continue to be incentivized in the Medicare program." Obama's emphasis on elimination of the IOAS exception was recently echoed by APTA, which supplied comments to the Senate Finance and House Ways and Means committees. In those comments, APTA writes that "care furnished under the IOAS exception is often degraded, raising serious quality concerns" and that legislators should support the "original intent of the IOAS exception," which was centered on same-day services. "This reform is in the best interests of taxpayers, patients, and the American health care system overall," APTA writes. Elimination of the IOAS exceptions remains one of APTA's public policy priorities, and has gained support from the American Association of Retired Persons (AARP), which announced its position against the exceptions late in 2014.