Medicare: SGR Formula, Debt Commission Standing Committee Recommendations Due


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Topic Medicare: SGR Formula, Debt Commission Standing Committee Recommendations Due
Background The Sustainable Growth Rate (SGR) mechanism aims to control spending for certain types of goods and services provided under Medicare Part B. It sets an overall spending target (measured on both an annual and a cumulative basis) for physicians’ services as well as for items — such as laboratory tests, imaging services, and physician-administered drugs — furnished “incident to” (in connection with) physicians’ services. Payment rates are adjusted annually to reflect differences between actual spending and the spending target — upward if spending is below the target, downward if spending is above the target. Policymakers had two main goals when they adopted the SGR mechanism: ensuring adequate access to physicians’ services and controlling federal spending for those services in a more predictable way than the volume performance standard did. The SGR mechanism has a mixed record with regard to those goals.
Regulating Body Joint Select Committee on Deficit Reduction
Compliance Date 10/14/2011
Consequences Physician payments under Medicare will be reduced by 29.5 percent and most likely will result in physicians not taking new Medicare patients or opting out of Medicare altogether.
Next Steps Contact your U.S. Representative or Senator.
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