April 1 Medicare sequester date arrives: Congress eyes action on physician pay cuts, PRF taxability
After securing significant allowances for optometry practices in each of Congress’ past COVID-19 relief and recovery packages, optometry’s advocates aim to build support behind two priorities so far left on the cutting-room floor.
Signed into law on March 11, the $1.9 trillion American Rescue Plan Act replenished federal relief funding initiatives that help support optometry practices left struggling by the ongoing public health emergency, including Paycheck Protection Program (PPP) loans, Health and Human Services (HHS) Provider Relief Funds and Small Business Administration Economic Injury Disaster Loans (EIDL), and finalized certain tax changes. However, left untouched were provisions that could immediately affect optometry practices; namely, the lack of an extension on the 2% Medicare sequester moratorium and addressing the tax status of HHS Provider Relief Funds.
Medicare sequester cuts coming April 1 without Congressional action
Originally delayed as part of the March 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act, and temporarily extended as part of the December 2020 Consolidated Appropriations Act, the 2% Medicare payment cuts—known as sequestration—are expected to resume April 1, 2021, without Congressional action.
These across-the-board, 2% physician pay reductions are required by the Budget Control Act of 2011 should Congress exceed annual federal spending caps, triggering government-wide sequester cuts. What’s more, the American Rescue Plan Act triggered an additional and automatic 4% cut to Medicare payments starting in 2022 under a 2010 law known as PAYGO.
Members of Congress immediately began working toward a solution with the U.S. House passing a bill in early March to delay the 4% cut and levy a nine-month extension of the sequester moratorium. However, the U.S. Senate recently approved its own bill to extend the moratorium through the end of 2021. The House is expected to vote on the Senate version when the chamber returns from recess mid-April.
In anticipation of this Congressional action and in light of the impending deadline, the Centers for Medicare & Medicaid Services (CMS) instructed Medicare Administrative Contractors (MACs) to hold all claims with dates of service on or after April 1 for a short period. Reportedly, this will minimize the volume of claims that MACs must reprocess if Congress extends the suspension, and MACs will automatically reprocess any claims paid with the reduction applied if necessary, the CMS notes. Such is the case, optometry’s advocates are needed to contact their House members and urge their support of another sequester delay through Dec. 31.
Take immediate action by visiting the AOA’s Action Center and contacting your House member, or text “PAYMENT” to 855.465.5124 to help drive House members’ support on this priority issue.
Correcting the tax status of HHS Provider Relief Funds
Throughout the COVID-19 public health emergency, the AOA has advocated for optometry’s ability to access crucial federal aid and relief opportunities— to the tune of over $1.69 billion in 2020 alone—ensuring optometry practices can continue delivering essential primary eye health care services. While these federal funds have been critical and much appreciated, the AOA contends that taxation on such relief money is counterproductive.
Already, the AOA successfully advocated for both PPP loans and EIDL grants to be considered tax-free, as well as expenses paid with those funds to be considered fully deductible. Although as it stands currently, HHS Provider Relief Funds remain deemed taxable income and the AOA is adamant in finding a fix.
A reintroduced, bipartisan measure from Reps. Cindy Axne, D-Iowa, Neal Dunn, R-Florida, and Brian Fitzpatrick, R-Pennsylvania, known as H.R. 2079, The Eliminating the Provider Relief Fund Tax Penalties Act of 2021, ensures such past and future funds provided in response to COVID-19 would not only be tax-free but also allow entities receiving these funds to maintain tax deductions attributable to these funds. Unfortunately, with so many high-profile issues under consideration in Congress, this matter faces substantial hurdles and requires urgent attention from the profession to gain consideration.
Take immediate action by visiting the AOA’s Action Center and contacting your members of Congress, or text “TAX” to 855.465.5124 to drive Congressional support on this priority issue.
Join optometry’s advocates at Virtual AOA on Capitol Hill, May 23-25
The dynamic nature of Congress and the AOA’s federal advocacy means your profession needs you to answer the call now—and what better way to get involved than by attending the centerpiece of optometry’s federal advocacy efforts.
Virtual AOA on Capitol Hill, May 23-25, is a remarkable opportunity for advocacy-minded doctors, optometry students and paraoptometrics to voice the profession’s priorities and leave a lasting impression on members of Congress. The AOA’s single-largest annual advocacy event, Virtual AOA on Capitol Hill returns in a virtual format for 2021 with a goal of building upon what was a record-breaking-attended 2020 event that helped solidify crucial opportunities and wins for optometry.
Once again, the AOA is encouraging the profession’s turnout at Virtual AOA on Capitol Hill as advocates bring forward issues that immediately affect optometry practices, their current viability and future prosperity, and require a unified voice in our nation’s capital. Consider registering yourself and your practice today.
What: Virtual AOA on Capitol Hill
When: Online sessions available at various times, May 23-25
For more information about Virtual AOA on Capitol Hill, agenda questions or the issues, email firstname.lastname@example.org or call 800.365.2219. Note: Virtual meetings with members of Congress are pre-arranged and coordinated through state associations.
The second of two Medicare sequester cuts took effect July 1 with up to 2.75% of Medicare physicians’ pay affected in 2022. Even more significant cuts are scheduled in 2023 without Congressional action.
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