Passage of a $1.1 trillion omnibus measure that keeps the federal government open through September 2016 also contains a number of helpful tax provisions and language beneficial to patients and the profession.
With days in the 2015 calendar running out before the federal budget did the same, Congress approved the Omnibus Appropriations Act—a sweeping $1.1 trillion funding bill packaged with a $622 billion tax plan—on Dec. 18, 2015, that advanced AOA priorities, delayed implementation of a handful of Affordable Care Act (ACA) taxes and made permanent other business-related tax breaks.
Among provisions in the bill include a number of measures notable for AOA and its members, including:
- Funding to expand access to doctors of optometry.
The package allocates $200 million to support expansion of medical services, including vision care in underserved areas. Originally authorized under the ACA, these grants were funded each of the past few years at the urging of AOA and others. The AOA continues to work with health centers to apply for funding with the goal of adding or expanding the role of doctors of optometry in these areas.
- Small-business expensing.
The package includes a modification and permanent extension of increased expensing limitations and treatment of certain real property as Section 179 property. This extends the small-business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). These amounts currently are $25,000 and $200,000, respectively.
- Bonus depreciation.
The package extends bonus depreciation for property acquired and placed in service during 2015 through 2019 (with an additional year for certain property with a longer production period). Bonus depreciation percentage is 50% for property placed in service during 2015, 2016 and 2017 and phases down, with 40% in 2018 and 30% in 2019.
- Medical device tax.
The package includes a two-year moratorium on the 2.3% excise tax on medical device sales. AOA successfully fought for exclusion of contact lenses and eyeglasses from this tax when it was originally enacted, though some equipment and other items used in optometry practices likely have been hit by the levy. Now, the tax will not apply to sales during calendar years 2016 and 2017.
- "Cadillac tax."
The package includes a two-year delay in the tax on high-cost health insurance policies, also known as the "Cadillac tax." The AOA had previously won an exclusion from this new tax covering the cost of vision coverage. Delaying the "Cadillac tax" helps AOA members because it may prevent more coverage being shifted to HMOs and smaller networks and smaller benefit packages.
Roger Jordan, O.D., AOA Federal Relations Committee chair, hailed these provisions and says this tax package helps doctors better plan for new technology and instrumentation upgrades. Medical devices purchased will not include the 2.3% medical device tax, and depreciation when doing tax returns will improve the final tax bill for that year, he explains.
Also, delay of the "Cadillac tax" ensures flexible spending accounts (FSAs) stay in patient control, which in turn, permits patients to spend on necessary eye health and vision services provided by doctors of optometry, Dr. Jordan says.
"So with this bill's passage, access to eye health and vision care has been expanded, and doctors of optometry can purchase more technology for better care, pay less than the past few years for the equipment, have a reduced tax bill and see patients continue to use their FSA for vision care and products," Dr. Jordan says.
"Overall, I feel that this new spending law will clearly be a benefit that most doctors of optometry will notice and see as a boost to their practices."
Report stresses increases in eye health and vision services
Generally considered a political compromise among lawmakers, the tax package also contained report language that, while not binding in the same manner as language in the statute itself, does give some indication of federal agencies' and lawmakers' priorities. That language identified areas where federal entities could step up vision and eye health services with two of particular note.
Report language directed at the U.S. Department of Education acknowledged that 1 in 4 American school children have some form of unmet visual need with thousands of children from low-income families thusly disadvantaged in their education by poor vision. It was recommended that the Department of Education consider funding programs to help identify and provide prescription glasses to such children.
Additionally, report language included in directives to federal health agencies also encouraged the Centers for Disease Control and Prevention (CDC) to increase vision impairment and eye disease surveillance efforts, and review eye health research as a means for early detection of chronic conditions, such as heart disease, stroke and diabetes.
Meaningful use hardship exemption
New AOA-backed legislation signed into law before year's end also expands doctors' eligibility for hardship exemptions under Stage 2 of the meaningful use program.
Introduced by Sen. Rob Portman (R-Ohio), S. 2425 (the Patient Access and Medicare Protection Act) seeks to provide doctors added flexibility in the hardship exemption for meaningful use "for the 2015 EHR reporting period for 2017 payment adjustments."
A similar bill authored by Rep. Tom Price (R-Georgia) blamed the widespread hardship on the "delay in timely publication of the Stage 2 meaningful use rule," however, that bill was dropped in favor of S. 2425. CMS issued a final rule with alterations to Stage 2 rules with less than 90 days left in 2015.
The sponsor of the new law believes that the legislation gives CMS the ability to batch process hardship exemptions as opposed to the current routine of issuing exemptions on a case-by-case basis. Congress has opened the door for CMS to provide exemptions to doctors more broadly, but CMS has to determine what circumstances will qualify. AOA will update members as soon as new information becomes available.
Eligible professionals will have until March 15 to apply for an exemption, pushing back the original Jan. 1 filing deadline.
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