Medicare pay takes stage as health overhaul moves to back burner
February 18, 2010While the AOA remains committed to advancing optometry’s health overhaul priorities, the association is focusing its advocacy drive on preventing enactment of a massive cut in Medicare physician payments. Without corrective legislative action, ODs and other physicians face a staggering 21.2 percent cut in reimbursement scheduled to take effect March 1, 2010.
The AOA is working directly with concerned patient and provider groups as well as leading members of Congress to prevent enactment of this massive cut. The broad national coalition is also pressing Congress to find an equitable and lasting replacement for the faulty Medicare pay formula, which threatens seniors’ access to care and could undermine the future of the entire program.
Over the last few years, the Medicare Sustainable Growth Rate (SGR) payment formula has mandated annual cuts in provider payments as spending exceeded targets. The payment cuts have been exacerbated over time by congressional actions that have prevented a drop in reimbursement but failed to adjust the target, leading to ever-larger projected cuts over time.
The AOA has been pushing Congress to repeal or rebase the SGR for years, especially as the Medicare program is set to begin enrolling the first wave of baby boomers, with enrollment expected to grow from 44 million in 2011 to over 50 million by 2017. However, Congress has continued to avoid the larger problem by passing stop-gap measures year after year.
Working to prevent immediate cuts, the AOA and others partnered with leading lawmakers late last year to delay enactment of a similar 21.2 percent cut scheduled to take effect Jan. 1. As a result, Congress approved and President Obama signed into law a two-month freeze on Dec. 21. The delay was attached to a spending bill to fund the Department of Defense.
The temporary patch, which expires Feb. 28, was designed to give Congress additional time to prevent future cuts and find a long-term solution to the flawed Medicare payment formula. Without permanent and lasting reform, ODs and other physicians face an overall cut of 40 percent in Medicare physician payments by 2016.
While the U.S. House has already approved a long-term payment reform bill that would align physician rates more closely with the costs of providing care, Senate Democrats have been largely unable to muster enough support to approve a similar bill in the upper chamber.
For its part, the U.S. Senate passed H.J. 45, a resolution to raise the federal debt ceiling, on Jan. 29. Attached to the joint resolution was a provision that would reinstitute pay-as-you-go (PAYGO) rules for any new spending. The provision mandates that any new spending would have to be offset by matching spending cuts or tax increases.
However, the newly imposed spending guidelines included a number of exemptions to PAYGO, including one that could fund a five-year freeze in Medicare payments. The provision would mean up to $82 billion in spending for another patch to the SGR would not have to be offset.
This Senate action likely sets up a scenario where a longer-term freeze could be implemented. However, Congress will still need to enact separate legislation to actually prevent the March 1 scheduled cuts. The U.S. House gave its approval to H.J. 45 on Feb. 4.
With the deadline drawing near, the AOA is now placing increased pressure on Congress to prevent the March 1 cut and approve lasting reform to end the uncertainty facing patients and providers. The AOA Washington office team will provide further updates to AOA members as new information becomes available.
