JimHahn
Specialist in Health Care Financing
Janemarie Mulvey
Specialist in Health Care Financing
TheSustainable Growth Rate (SGR) is the statutory method for determining theannual updates to the Medicare physician fee schedule. The SGR system wasestablished because of the concern that the Medicare fee schedule itselfwould not adequately constrain overall increases in spending forphysicians’ services. While the fee schedule limits the amount that Medicarewill pay for each service, there are no limits on the volume or mix ofservices. Under the SGR formula, if expenditures over a period are lessthan the cumulative spending target for the period, the annual update isincreased. However, if spending exceeds the cumulative spending target over acertain period, future updates are reduced to bring spending back in linewith the target.
In the first few years of the SGR system, the actual expenditures did notexceed the targets and the updates to the physician fee schedule wereclose to the Medicare economic index (MEI, a price index of inputsrequired 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 thoseyears. Beginning in 2002, the actual expenditure exceeded allowed targets,and the discrepancy has grown with each year. However, with the exceptionof 2002, when a 4.8% decrease was applied, Congress has enacted a seriesof laws to override the reductions.
There is a growing consensus among observers that the SGR system isfundamentally flawed and is creating instability in the Medicare programfor providers and beneficiaries. The SGR system treats all services andphysicians equally in the calculation of the annual payment update, which isapplied uniformly with no distinction across specialties. In addition, therehas been an increased concern that continued declines in physician paymentrates, especially among primary care specialties, may potentiallyjeopardize access to services. Finally, legislative overrides since 2002have only provided temporary reprieve from projected reductions in paymentsunder the SGR calculation, requiring even steeper reductions in paymentrates in the future.
Several alternatives to the current SGR mechanism have been proposed in recentyears. For example, H.R. 3162, the Children’s Health and MedicareProtection Act of 2007 (CHAMP), introduced in the 110th Congress, wouldhave created six categories of physicians services, each with a separateexpenditure target, while H.R. 3961, the Medicare Physician Payment Reform Act of2009, would have had only two expenditure categories: (1) evaluation,management, and preventive services, and (2) all other services. OnOctober 14, 2011, the Medicare Payment Advisory Commission (MedPAC) sentits recommendations to Congress, repealing the SGR system and replacing itwith a 10-year schedule of specified updates for the physician fee schedule,with primary care practitioners receiving a 0% update over the next 10 yearsand nonprimary care practitioners facing a 5.9% decline in payment ratesthe first three years and 0% thereafter. None of the proposals hasgarnered sufficient support to be passed into law.
Congress has passed several bills in recent years that override the SGRmechanism. Most recently, on February 16, 2012, House and Senate confereescame to an agreement on a conference report for H.R. 3630 (P.L. 112-96)that extends the override through December 31, 2012, maintaining physicianfee schedule payments at the current level. Unless Congress enacts legislationto override projected SGR changes, physician fees would be reduced by 27% in calendaryear 2013. A one-year freeze to physician payments would cost an estimated$11.1 billion in FY2013 and $18.5 billion over 10 years (2013 to 2022),according to the Congressional Budget Office (CBO); a longer-term fix suchas a freeze in physician pay rates over the next 10 years would cost about$273.3 billion.
Date of Report: August 2, 2012
Number of Pages: 24
Order Number: R40907
Price: $29.95
Document available viae-mail as a pdf file or in paper form.
To Order:
R40907.pdf to use the SECURE SHOPPING CART
e-mail congress@pennyhill.com
Phone301-253-0881For email and phone orders, provide a Visa, MasterCard, American Express, or Discover cardnumber, expiration date, and name on the card. Indicate whether you want e-mailor postal delivery. Phone orders are preferred and receive priority processing.
Follow us on TWITTER at http://www.twitter.com/alertsPHPor #CRSreports
Hiç yorum yok:
Yorum Gönder