Stop the 10% Cut in Medicare Reimbursement

Stop the 10% Cut in Medicare Reimbursement to Optometrists Due to Take Effect on July 1, 2008


Georgia Optometric Association President John Whitlow, O.D., testifies on behalf of optometry during a Nov. 8 hearing before the U.S. House Committee on Small Business’ Subcommittee on Regulations, Health Care and Trade. He detailed the harmful impact of Medicare reimbursement cuts on small business optometric practices.

After months of effective grassroots lobbying by AOA Keypersons and active AOA Members, optometry realized another hard-won victory on Capitol Hill in the closing days of 2007. Just prior to its adjournment for the year, Congress approved AOA-backed legislation that included a stop-gap plan to block a massive 10.1 percent cut in Medicare physician reimbursement due to take effect on January 1, 2008. The measure, which was signed by President Bush on December 29th, delivered ODs and other health care professionals a marginal 0.5 percent increase in their Medicare Part B reimbursements until July 1, 2008. However, without immediate and decisive congressional action, this temporary “fix” will expire and be replaced with a substantial 10.1 cut starting July 1, 2008. To make matters worse, these cuts are likely be followed by further reductions in January 2009.

Optometry will, once again, need to fight for our profession and our patients by urging Congress and the Administration to work toward correcting the flawed payment formula that again threatens doctors of optometry with massive cuts. In fact, the AOA has been a leader of successful efforts to block massive projected cuts - as much as 10% -- to Medicare physician payments in 2003, 2004, 2005, 2006, 2007 and for the first-half of 2008. With the next cuts due to take effect July 1, 2008 and January 1, 2009, the AOA and other physician groups are urging Congress to link immediate corrective legislation with long-term reform of the Medicare payment system.  However, this year our fight will not be easily won as growing partisanship further divides Washington and the implications of an election year on the legislative process combine with a short six month timetable to present optometry with one of the most challenging battles yet.

AOA will urge Congress to address the issue of stopping these draconian cuts to Medicare physicians by working to securing long-overdue reform of the Medicare fee-setting formula and a long-term stabilization of the Federal government’s health plan’s physician reimbursement. Although a long-term solution is needed to safeguard Medicare, Congress and the Administration have used a year-by-year, stop-gap approach that is creating more confusion and concern, and threatening the overall stability of the program.

The problem is that the Medicare payment formula involves the sustainable growth rate (SGR), which penalizes providers with lower payments when the growth in utilization of health care is greater than the growth in the gross domestic product (GDP). Linking the SGR to the GDP is flawed because growth in health care is driven by factors other than the GDP, such as patient health needs, new technology, and public policies that encourage patients to seek certain services, such as preventive benefits – none of which providers have control of. The 2006 Medicare Trustees Report projects cuts in physician payment rates of nearly 40 percent through 2015, resulting from this flawed SGR component.

The Medicare Payment Advisory Commission (MedPAC) has recommended that the SGR be replaced with a system that reflects increases in practice costs. The Centers for Medicare & Medicaid Services (CMS) has indicated that the current system is not sustainable. Also, due to active coalition-building efforts, others in the health care community are supporting a new Medicare physician payment system that would fully reflect increases in the cost of providing care.

The 110th Congress will need to take up legislation designed to prevent the massive cuts in Medicare reimbursement to optometrists and other physicians that are due to take effect beginning on July 1, 2008. PLEASE EDUCATE YOUR SENATORS AND REPRESENTATIVES ABOUT THE CARE YOU PROVIDE TO MEDICARE PATIENTS, AND URGE THAT CONGRESS:

  1. Safeguard Medicare patients and the physician services they need and deserve.
  2. Prevent a Medicare physician payment cut in 2008 and beyond, and secure a positive payment update that accurately reflects practice cost increases.

Work with the AOA to replace the flawed SGR formula with a long-term solution and eliminate the need for Congress to have to consider year-by-year stop-gap proposals.