Medicare Physician Payment Updates and the Sustainable Growth Rate (SGR) System

The Sustainable Growth Rate (SGR) is the statutory method for determining the annual updates to the Medicare physician fee schedule. The SGR system was established because of the concern that the Medicare fee schedule itself would not adequately constrain overall increases in spending for physicians' services. While the fee schedule limits the amount that Medicare will pay for each service, there are no limits on the volume or mix of services. In the first few years of the SGR system, the actual expenditures did not exceed the targets and the updates to the physician fee schedule were close to the Medicare economic index (MEI, a price index of inputs required to produce physician services). For the next two years, in 2000 and 2001, the actual physician fee schedule update was more than twice the MEI for those years. However, beginning in 2002, the actual expenditure exceeded allowed targets, and the discrepancy has grown with each year, resulting in a series of ever-larger cuts under the formula. With the exception of 2002, when a 4.8% decrease was applied, Congress has enacted a series of laws to override the reductions. However, these actions have required almost yearly attention from Congress. This report provides a background on the Medicare fee schedule, the SGR system and the annual updates, and discusses recent proposals to address this issue. Bills: H.R. 3630, H.R. 3765


This package includes following files:

#	File Name	Document Date	Order ID:	Number of Pages	Price
1	R40907.pdf	Dec 27, 2011	R40907	21	$29.95	Add to Cart

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