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2013 Medicare pay hike for ODs back on track under Washington’s last-minute ‘fiscal cliff’ deal

January 2, 2013

An increasingly rare mix of Democrats and Republicans came together on the floor of the U.S. House of Representatives this week to approve a last-minute, bipartisan “fiscal cliff” deal to extend income tax rates for most Americans, reauthorize expiring tax breaks for certain businesses, and delay deep spending cuts targeting many domestic programs.

Negotiated between White House officials and U.S. Senate leaders within the last few days, the sweeping package featured key AOA-backed provisions that will provide relief for optometrists and other physicians from a series of Medicare pay cuts that were scheduled to take effect in the opening days of 2013.

Approved by the U.S. Senate early on New Year’s Day, the budget legislation delivers a one-year reprieve from the nearly 27 percent Medicare pay cut called for under Medicare’s sustainable growth rate (SGR) payment formula and a two-month delay to the additional 2 percent Medicare pay reduction –  commonly known as “sequester” – mandated under a 2011 deficit-reduction law.

The AOA Advocacy Group confirms optometrists do not need to hold claims. Optometrists can submit claims for services in 2012 and expect to be paid normally. Claims submitted for 2013 are expected to be paid on time, though Medicare contractors might hold claims behind the scenes for up to 10 days.

The AOA also reminds members that the Centers for Medicare & Medicaid Services and Medicare contractors are updating the physician fee schedule to include changes made in the law, and ODs should watch contractor websites for local fee schedules.

The one-year Medicare physician payment patch is offset partly through $22 billion in payment reductions to other Medicare providers, including hospitals, pharmacies, and dialysis clinics. Thanks to the AOA’s hard-won seat at the table in Washington, D.C., and the effective advocacy efforts of Federal Keyperson doctors and other AOA members, Medicare payments to ODs were not targeted and are actually expected to rise in 2013.

Overall, according to the AOA Advocacy Group, Medicare payments to optometrists in 2013 have increased by about $450 million since 2004. This represents a 74 percent increase in Medicare payments to optometrists during a period when the annual SGR update has remained essentially flat. In fact, Medicare’s higher valuation of medical eye care services provided by optometrists means that payments to ODs have increased 37 percent more than for physicians generally over the last decade.

The budget deal also prevents lower Medicare payments to physicians, including ODs, in geographic areas with relatively low practice costs. Also, the agreement extends exceptions to caps on OD-provided therapy services, but allows new reductions to be imposed when certain multiple procedures are provided.  Effective Jan. 1, Medicare will expand its Multiple Procedure Payment Reduction policy to the technical component of selected eye care procedures.

In a successful call to action last month, AOA President Ron Hopping, O.D., MPH, urged all AOA members to contact U.S. senators and representatives in support of a plan to avert the impending Medicare pay cuts. Boosting the AOA’s work on Capitol Hill, AOA members utilized the AOA’s Online Legislative Action Center to communicate with their elected leaders on this important issue.

While the immediate Medicare pay crisis has been averted for now, the one-year SGR fix and the two-month sequester delay signal the start of a new effort to prevent future Medicare pay cuts and finally fix Medicare’s broken SGR payment formula. A growing concern, the two-month delay in sequester cuts directly aligns with the date on which the nation is expected to reach its borrowing limit, providing yet another opportunity to potentially target Medicare payments to doctors of optometry.

At the same time, federal agencies and states will continue preparing implementation directives for the new health care law. Although the AOA’s patient access message is increasingly taking hold in the new regulations, particularly with respect to the pediatric vision care essential health benefit, there are key battles ahead that will determine how state-based health insurance exchanges will operate when they’re launched later this year.

Dr. Hopping and other AOA leaders are already providing guidance to ensure AOA members are preparing now to serve a possible influx of patients under a changing health care system.

With more than 80 newly elected members of Congress due to be officially sworn in tomorrow and President Obama preparing to launch his second term with continued emphasis on overhauling health care, the AOA – recognized in a 2012 survey of Washington, D.C., insiders as one of the nation’s most effective and respected health care advocacy groups – will continue to ensure that optometry’s concerns are heard loud and clear in the nation’s capital.

One comment

  1. Medicare’s higher valuation of medical eye care services provided by optometrists means payments to ODs have increased 37 percent more than for physicians generally over the last decade.



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