Don’t Just "Monitor" the Budget Bill — OTs Must Act Locally and Now

The House-passed Budget Reconciliation Bill—nicknamed the "One Big Beautiful Bill" by its sponsors—has generated swift opposition from AOTA. The association’s article focuses on the very real concern that shifting Medicaid funding to block grants or per-capita caps could jeopardize occupational therapy (OT) services for vulnerable populations. That is correct analysis.

But the AOTA messaging on this issue lacks depth and strategy. A pre-written form letter to Congress isn’t a serious response to a structural overhaul of one of OT’s largest funding streams. It’s time for clinicians and educators to stop outsourcing our critical thinking and advocacy.

Here’s a deeper, more balanced look at what’s in this bill—and what OTs need to be doing.

The Real Structural Threat: Medicaid Block Grants

Let’s start with the most important thing the bill proposes: a fundamental shift in Medicaid funding. Instead of Medicaid functioning as an open-ended federal match for state spending, the bill proposes block grants or per capita caps. That means that states would receive fixed amounts of money from the federal government. Although they would be given broad flexibility in how to use those funds, if costs rise (from a health crisis or aging population), states are on their own to cover the difference.

This matters for occupational therapy because OT is an optional Medicaid benefit for adults. That means it’s often the first thing on the chopping block when states need to tighten the belt.

If OTs want to know what block grant funding schemes look like in real life - take a look at the NY State Early Intervention program. When you fund any program through a capped and decentralized structure - relying on local control for administration - you can end up with very bad outcomes.

What AOTA Gets Right—and What They Miss

The AOTA article correctly identifies the risk to adult OT services, particularly in home health, mental health, and community-based care.

What it fails to do is name the next phase of advocacy clearly - once Medicaid becomes a capped system, state governments become the primary battlefield. The article’s link to an “email your representative” tool is fine for Day One. But real advocacy now shifts to your state capitol, Medicaid director, and local health policymakers. That’s where this fight will actually be won or lost.

The same thing happened with repeal of the caps - there was a general focus on the LARGE issue, but not any emphasis on what would follow - namely the differential payments for OTA services to offset the cost.  Time and again, AOTA focuses on what it perceives as the main issue but neglects to tell us all about the downstream impacts.

Are There Benefits for OTs in This Bill?

There sure are but they’re modest, unevenly distributed, and not profession-specific.

  • Overtime pay tax exemption could benefit hourly or per diem OTs and OTAs who log significant overtime. That’s a win—but only for a subset of the workforce.

  • Child tax credit increase to $2,500 per child helps practitioners with dependents. Again, not profession-specific, but a tangible benefit that a lot of OTs will like.

  • The 'Trump Savings accounts' that would be a one-time contribution into a tax advantaged accounts for every newborn is also not profession-specific, but will be something that many OTs will like.

  • Medicare inflation indexing would tie outpatient rates to the Medicare Economic Index, which may slow reimbursement erosion. It’s not a raise—but it may prevent further losses.

These are not fake benefits. But they’re also not structural protections for the profession. And they don’t outweigh the systemic risks you might see by block-granting Medicaid.

State-by-State Variability will be The Real Front Line

Here’s what’s missing from nearly all national commentary so far - The impact of this bill will vary dramatically by state.

In places like New York:

  • OT is already embedded in home care, mental health, and SNFs.

  • The state is likely to protect these services—though under budget pressure, they may limit rates or reduce contract scope.

In places like Alabama (sorry for picking on Alabama):

  • OT for adults is already limited.

  • Under block grants, OT could be eliminated entirely from Medicaid plans to reduce cost burdens.

This means if you’re in New York, California, or Massachusetts, you may need to defend access. But if you’re in Alabama, Mississippi, or Texas, you may need to fight to establish access at all.

We are looking at a future of OT haves and have-nots, driven not by clinical need, but by state policy. And as I already pointed out - even if you are in a 'have' state like NY that does not mean that you will achieve a good outcome (see early intervention!).

What OT Practitioners Should Do—Right Now

Please don't restrict your efforts to federal-level emails. AOTA’s national alerts won’t be enough. Here’s a more serious action plan:

1. Study Your State Medicaid Plan

  • Is OT for adults currently covered?

  • What settings are reimbursed?

  • This tells you what’s vulnerable right now.

2. Identify State-Level Decision-Makers

  • Who’s your Medicaid Director?

  • Who chairs your state health budget committee?

  • Who are the major managed care organizations in your state?

These are the people deciding whether OT stays or goes.

3. Join a State Coalition

  • If your state OT association isn’t addressing this, press them.

  • Partner with PTs, SLPs, disability advocates, and elder care providers.

  • Coalition advocacy works better than one profession acting alone.

4. Show Up in the Right Rooms

  • Medicaid redesigns often include public comment periods.

  • Volunteer for task forces, advisory panels, or budget hearings.

  • OT representation in these spaces is often nonexistent—and that’s a problem that can be fixed.

5. Bring Data + Stories

  • How many of your patients are Medicaid funded?

  • What happens when they lose OT services?

  • Share case examples, not just slogans.

Legislators want to know what this means in their districts—not what a D.C. association says. And even though it is likely that those state block grants won't pass through the Senate untouched, it IS likely that we will see future pilot-level block grant programs, or per capita caps applied to specific populations, or even waivers that act like soft block grants.  So you have to do more than just sent email to federal legislators.

Don’t Just “Monitor.” Act.

AOTA says it will “monitor the legislation.” That’s fine—for them. But OT practitioners can’t afford to be passive. This isn’t a policy tweak. It’s a structural realignment of Medicaid—one of the top funding sources for OT in many states. It’s not a “Washington problem.” It’s a state-level survival challenge. And if you aren’t in the room where these things are being discussed in your state, then your services will probably be at high risk for the chopping block.

Final Thought

It’s tempting to treat every new bill as a threat or a gift. But this one’s both. It offers token financial perks, but also opens the door to massive service inequities if we’re not careful.

So don’t just send an email and wait for updates.

Get Local.  That is where it will all matter.

If you have doubts, ask any NY State early intervention practitioner. They already know.


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