Proposals to fix the Sustainable Growth Rate (SGR) abound and there is agreement that policy makers must take action, but the question of how to reach a permanent solution remains. The SGR originated as part of the Balanced Budget Act of 1997 to control federal Medicare spending. Congress began overriding the SGR in 2002 and has continued to delay scheduled physician reimbursement cuts ever since. Medicare physician payments were maintained at their current rates in 2012 as a result of The Middle Class Tax Relief and Job Creation Act of 2012. Most recently, Congress extended payment rates until January 2014 as part of the “fiscal cliff” negotiations.
What are some of the problems associated with the SGR formula? Is the SGR compatible with the increase of beneficiaries as baby boomers enter Medicare? What happens next year when SGR reductions must be addressed again? What would elimination of the SGR mean in terms of the deficit? What does the CBO’s lowered cost estimate to overhaul the SGR, totaling $138 billion over the next decade, mean for the doc fix? What are some proposals that have been put forward to reach a solution? How do current innovations that change the way physicians are being paid affect the impact of the SGR?
A distinguished panel of experts addressed these and related questions.
Gail Wilensky, senior fellow at Project HOPE, discussed her forthcoming paper about paying doctors differently through the use of incentives, including examples now being used in the private sector.
Robert Berenson, institute fellow at the Urban Institute, drew on his expertise to highlight shortcomings in the current system of paying physicians and ways to improve it.
Jim Hahn, health economist at the Congressional Research Service, provided an overview of the various legislative proposals that have been put forth to work toward a solution.
Ed Howard of the Alliance and Stuart Guterman of Commonwealth moderated the discussion.
This forum took place from 12:15 to 2:00 p.m. on Friday, March 15 at the Columbus Club in Union Station.
Full Transcript (Adobe Acrobat PDF)