Nearly 10% Medicare pay cuts loom without Congress’ action

A trio of federal spending controls jeopardize Medicare physicians’ payments by nearly 10% in 2022 with the AOA and other organizations urging Congress to immediately stabilize payments.

The perfect storm of Medicare payment cuts—a 3.75% cut due to scheduled changes in the Physician Fee Schedule (PFS), a 2% cut for Medicare sequestration and a 4% Statutory Pay-As-You-Go (PAYGO) cut—stand to take effect Jan. 1, 2022, as the health care industry copes with record jobs turnover, the added burdens associated with the COVID-19 public health emergency and the fact that Medicare payments still fall well behind inflation. Such is the case, the AOA and other physician groups urge lawmakers to directly address all three cuts even as rapt attention on Capitol Hill over a budget reconciliation effort to expand Medicare benefits dominates headlines.

“We’re asking members of Congress to recognize these immediate challenges that our practices are facing, to step in and stabilize these payments, so doctors of optometry can keep their doors open not only for our patients but also for those who work to support the delivery of our essential, primary eye health care,” says AOA President Robert C. Layman, O.D.

In an Oct. 14 letter to U.S. House leadership, led by Reps. Ami Bera, M.D., D-California, and Larry Bucshon, M.D., R-Indiana, and signed by 245 members of Congress, as well as 80 national physician organizations, including the AOA, the congressmen insisted now is the time to address these cuts and begin working on reforms for the future. Notably, Reps. Bera and Bucshon successfully led last year’s effort to mitigate the Medicare payment cuts now demanding action.

Last year, Medicare PFS reimbursement increases for primary care and complex, office-based services triggered a 3.75% pay cut in 2021 due to statutory budget neutrality requirements that mandate cuts to other services. To blunt these cuts, Congress included a temporary, AOA-backed, 3.75% payment increase in the Consolidated Appropriations Act set to expire at the end of 2021.

However, Congress’ emergency pandemic spending also triggered other automatic cuts to Medicare payments outlined by federal budget control provisions; namely, a 2% cut due to Medicare sequestration and a 4% cut due to the Statutory PAYGO Act of 2010. Congress had passed moratoriums on the former, yet the sequester pause also will expire in 2021. As for the latter, Congress has previously wiped clean the PAYGO scorecard and has never triggered a PAYGO sequester, though that is little solace for doctors practicing with the specter of sizable payment reductions on the horizon.

Combined, these cuts could hit providers all at once in 2022 with nearly 10% less in Medicare payments without immediate congressional action, notes Reps. Bera and Bucshon.

“As Congress considers a framework to ensure appropriate reimbursements and improve the Medicare payment system broadly, we must act before the end of the year to avert the imminent cuts, including extending the 3.75% payment adjustment, and provide continued stability for physicians and other health care professionals,” the congressional letter reads. “Otherwise, the profound exhaustion from the pandemic combined with the stress of uncertainty in payments may lead to further retirements, office closures, or reduced staffing, ultimately limiting patient access to care.”

The AOA and optometry’s advocates are calling on Congress to waive the statutory PAYGO implications and to do so in the upcoming government funding package. Additionally, the AOA calls for an extension of the 3.75% payment adjustment as part of the Consolidated Appropriations Act and an extension of the Medicare sequester moratorium at least through 2022.

Tell Congress to address these pay cuts

Time is of the essence and immediate congressional action is necessary to prevent these sizable pay cuts from taking effect. Help support the AOA’s advocacy on this issue: 

• Visit the AOA’s Action Center to urge your members of Congress to immediately address all three Medicare payment cuts now targeting physicians. Or text “PAYMENT” to 855.465.5124 to access the Action Center.

For more information or questions about these Medicare pay cuts, please contact the AOA’s Federal Advocacy at advocacy@aoa.org.