Failure of Deficit-Cutting Super Committee Leaves Massive Medicare Pay Cut on Table

December 15, 2011

With the announcement that the Joint Select Committee on Deficit Reduction (more commonly known as the Super Committee) failed to reach an agreement to find $1.5 trillion in deficit reduction, the AOA and other physician organizations are now calling on Congress to take immediate action to address the massive Medicare pay cut set to take effect early next year.

While the AOA believed that the deficit-cutting Super Committee presented Congress with a unique opportunity to stabilize the Medicare program and repeal the Sustainable Growth Rate (SGR) formula, the failure of the bipartisan panel to find common ground on solutions to the nation’s fiscal problems and to address Medicare’s flawed payment formula now means that ODs and others face the threat of a roughly 27 percent cut scheduled to take effect Jan. 1, 2012.

While AOA has continued to press lawmakers to remain focused on addressing scheduled Medicare pay cuts, Super Committee proposals to repeal the SGR seem to have fallen victim to disagreements over fundamental principles for achieving deficit reduction.

Reportedly, sharp partisan divisions over the mix of entitlement cuts and tax hikes prevented the panel from reaching an agreement on a deficit-reduction package totaling at least $1.5 trillion over a 10-year window.

As a result of the failure, current law stipulates that across-the-board cuts totaling $1.2 trillion will be imposed beginning in 2013. Known as sequestration, the spending reduction is to be equally divided between defense and non-defense spending.

While current law protects Medicare beneficiaries, payments to ODs and other physicians could be part of the overall 2 percent across-the-board cut.

However, it is unclear how these cuts will be distributed, and talk abounds on Capitol Hill that the cuts may be delayed or changed.

Despite the committee’s failure, both Republican and Democratic leaders in Congress have publicly stated their pledge to take action to avert scheduled Medicare pay cuts.

Options for relief from upcoming pay cuts outside of the Super Committee have ranged from short-term patches of a year or two to longer-term relief that provides for transition to a new Medicare physician payment model.

However, one plan recently offered by the Medicare Payment Advisory Commission (MedPAC) has the AOA and its partners on Capitol Hill concerned.

In a report issued to Congress earlier this year, the members of MedPAC developed and delivered a plan that would have replaced Medicare’s SGR formula with a series of pay cuts to ODs and other “specialist” physicians amounting to roughly 18 percent over multiple years and followed by a five-year freeze.

The plan would not have imposed cuts on what Medicare considers primary care physicians and would have frozen payment rates for those physicians for the full seven-year window.

However, the plan has received pushback on Capitol Hill.

In an AOA-backed letter authored by Reps. Michael Burgess, M.D., (R-Texas) and Gene Green (D-Texas), the leading lawmakers urged House leaders to find an equitable solution to the ongoing Medicare pay dilemma.

The bipartisan letter was signed by more than 100 members of Congress, many at the urging of AOA, and pleaded for support for a long-term fix.

The Burgess-Green letter also urged their legislative colleagues not to base any plan to fix the Medicare pay problem on the recent MedPAC proposal, saying that the idea was both unwise and unworkable.

Now, after successfully convincing Congress to implement multiple delays in 2010 and to approve a deal to avert a nearly 25 percent cut in 2011, the AOA is once again working with lawmakers to avert immediate cuts and develop plans to replace Medicare’s flawed payment formula.

Congress has a number of items of unfinished business that require action before departing the nation’s capital and adjourning for the year, and the AOA and others are squarely focused on finding a lasting solution to scheduled Medicare cuts.

To help amplify the AOA’s federal advocacy efforts, doctors and students are being asked to reach out to their U.S. senators and representatives by logging in to the AOA’s Online Legislative Action Center at www.aoa.org/x4821.xml.

With massive Medicare cuts set to take effect early next year, now is the time to tell elected leaders to fix the broken Medicare payment system once and for all and to work with the AOA to preserve seniors’ access to the vision and eye health care they need and deserve.

AOA members with questions or concerns should contact the AOA Washington office at 800-365-2219 or by e-mail at ImpactWashingtonDC@aoa.org.

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