You might wonder just what that is. The best I can define it, is that it is the yearly process designed to go around limits that were placed on the growth of spending on Medicare passed in the Balanced Budget Act of 1997. Since much of the increase in spending - at that point - was based on increased spending on health the act limited increases to the size of gross domestic product. This includes reimbursements to doctors and hospitals, both of which are strong interest groups and do not want to see reductions in those reimbursements.
The fancy name for this is the Medicare Sustainable Growth Rate.
- Click here for the Wikipedia on the subject.
The Medicare Sustainable Growth Rate (SGR) is a method currently used by theCenters for Medicare and Medicaid Services (CMS) in the United States to control spending by Medicare on physician services. Enacted by the Balanced Budget Act of 1997 to amend Section 1848(f) of the Social Security Act, the SGR replaced theMedicare Volume Performance Standard (MVPS), which was the previous method that CMS used in an attempt to control costs. Generally, this is a method to ensure that the yearly increase in the expense per Medicare beneficiary does not exceed the growth in GDP. Every year, the CMS sends a report to the Medicare Payment Advisory Commission, which advises the U.S. Congress on the previous year's total expenditures and the target expenditures. The report also includes a conversion factor that will change the payments for physician services for the next year in order to match the target SGR. If the expenditures for the previous year exceeded the target expenditures, then the conversion factor will decrease payments for the next year. If the expenditures were less than expected, the conversion factor would increase the payments to physicians for the next year. On March 1 of each year, the physician fee schedule is updated accordingly. The implementation of the physician fee schedule update to meet the target SGR can be suspended or adjusted by Congress, as has been done regularly in the past (a doc fix). Physician groups, including the American Medical Association and the American Osteopathic Association, lobby for a permanent reform to the SGR so that physician payment rates are not subject to annual cuts (a permanent doc fix).
Note that the updates have to be done in early March - which explains why its topical.
From Modern HealthCare
- House, Senate leaders unveil permanent 'doc fix' bills.
Congressional leaders Thursday announced a bipartisan, bicameral deal to permanently repeal Medicare's loathed sustainable growth-rate formula for paying doctors. Bills containing terms of the deal were introduced in both chambers of Congress.
Unclear for now, though, is the fate of the Children's Health Insurance Programand the exact details of how it will be financed.
The legislation, if enacted, would end one of Washington's longest-running fiscal battles and bring welcome stability to payments for doctors who treat Medicare patients. Congress has passed 17 consecutive short-term fixes dating back more than a decade. A vote is anticipated next week. Doctors would face a 21.2% cut in payments on April 1 if no legislative fix is enacted.
“As a doctor, I know firsthand just how destructive the SGR formula has been to America's seniors and their providers,” said. Rep. Michael Burgess (R-Texas), the chief sponsor of the House legislation, in a statement. “Finally, after unparalleled progress in recent years, both sides of the aisle have begun to understand that the long-term solvency of our Medicare system depends on taking this fight head-on together.”
The “doc fix” deal was negotiated by House Speaker John Boehner and Minority Leader Nancy Pelosi in recent weeks behind closed doors. But key committee members have signed on. Sponsors of the legislation included Rep. Paul Ryan (R-Wis.), chair of the House Ways and Means Committee and Sen. Orrin Hatch (R-Utah), chair of the Senate Finance Committee.
