Three Cheers for Logrolling — The Demise of the SGR

• Published in: The New England journal of medicine Vol. 372; no. 21; pp. 1977 - 1979
• Main Author: Aaron, Henry J
• Format: Journal Article
• Language: English
• Published: United States Massachusetts Medical Society 21.05.2015
• Subjects: Boehner, John A; Budgets; Eligibility Determination - legislation & jurisprudence; Fees & charges; Fees, Medical - legislation & jurisprudence; Growth rate; Health care expenditures; Medicaid - economics; Medicaid - legislation & jurisprudence; Medicare; Medicare - economics; Medicare - legislation & jurisprudence; Obama, Barack; Pelosi, Nancy; Reimbursement Mechanisms - legislation & jurisprudence; State Government; United States; United States
• ISSN: 0028-4793; 1533-4406
• DOI: 10.1056/NEJMp1504076

Thanks to old-fashioned vote trading, Congress has finally scrapped the sustainable growth rate formula for calculating Medicare's physician fees, replacing it with new but promising incentives that could catalyze increased efficiency and greater cost control. Congress has finally euthanized the sustainable growth rate formula (SGR). Enacted in 1997 and intended to hold down growth of Medicare spending on physician services, the formula initially worked more or less as intended. Then it began to call for progressively larger and more unrealistic fee cuts — nearly 30% in some years, 21% in 2015. Aware that such cuts would be devastating, Congress repeatedly postponed them, and most observers understood that such cuts would never be implemented. Still, many physicians fretted that the unthinkable might happen. Now Congress has scrapped the SGR, replacing it with still-embryonic but promising incentives . . .