Congress OK's AOA-Backed Plan to Halt Medicare Payment Cuts for 2007

The AOA -- working with concerned Members of Congress and other physician groups -- helped speed final passage of an emergency plan to prevent Medicare physician payments from being slashed starting on January 1st.

The "Tax Relief and Health Care Act of 2006" was approved by the House on Friday, December 8th and the Senate in the early hours of December 9th immediately before the final post-election "lame duck" session of the 109th Congress came to a close. Included in the bill are provisions that the AOA helped to shape to avert the announced across-the-board cut of 5% in Medicare physician payments resulting from the flawed sustainable growth rate (SGR) formula. At the same time, ODs, ophthalmologists and other providers may still face some unrelated reductions in Medicare payments next year -- in the 3% to 5% range for optometrists -- due to the budget neutrality adjustments applied to work values and practice expense methodology changes. The bill also calls for the implementation of a quality reporting system for physician services that offers the potential of bonus payments for physicians.

In the absence of consensus in Congress over how to reform the Medicare physician payment system for the long-term, the AOA has been a leader among physician and patient advocacy organizations in pushing for an immediate payment fix to ensure that optometrists are not faced with devastating cuts in Medicare reimbursement starting next month. AOA Advocacy Group volunteers, Keypersons, grassroots activists and the AOA Washington Office team have been actively working on Capitol Hill to reach a successful conclusion to several months of difficult negotiations.

As reported in recent AOA News articles, the dramatic payment cuts resulting from the SGR formula, would have been implemented on January 1, 2007 and, with even a one-year fix estimated to cost as much as $12 billion, it appeared for a time that Congress would not address the issue this year. The insurance industry, whose private plans receive support from the Medicare stabilization fund that is being used to support the physician payment change, expressed no opposition to the bill, but indicated it would be returning to Congress on the subject.

The Medicare provisions also provide for a 1.5 percent bonus incentive payment to physicians and other eligible practitioners who report on quality measures from July- December 2007. There has been increased activity over the past year by many different constituencies to create a “pay for performance” system relying on the reporting of standards of care/quality measures. The AOA is engaged and working with the Centers for Medicare and Medicaid Services (CMS), the American Medical Association (AMA) Physician Consortium, National Committee on Quality Assurance (NCQA), the National Quality Forum (NQF), and the Ambulatory Quality Alliance (AQA) to ensure that optometry is positioned and involved in the quality reporting activities.

In addition to provider payments and quality measure reporting incentives, the package included other health provisions such as increased payments for rural providers, funding to uncover fraud and waste in the Medicare program, and language promoting the use of health savings accounts (HSAs).

The AMA offered their support for the physician payment fix and the other health provisions, but indicated the need to work with the 110th Congress to address issues regarding the quality reporting framework. The AOA Advocacy Group -- through the AOA Washington Office -- expects to play an active role in these discussions.

The Medicare payment issue will return in the 110th Congress as a long-term solution to the flawed SGR formula is sought. The repetitive nature of the annual Congressional fixes cannot continue given the costs associated to the Medicare program. The Medicare Payment Advisory Commission (MedPAC) unveiled a draft recommendation on December 8 that, if made final and adopted by Congress, would boost Medicare payment rates to doctors by 2 percent in 2008. Quality reporting is an anticipated component of this recommendation as well and MedPAC will release a Report to Congress in March 2007 on future provider payment. Quality reporting programs and “pay for performance” initiatives will continue to be refined and implemented requiring involvement from the AOA to ensure that optometrists are recognized and reimbursed for the quality vision care they provide.