Medicare payment reform

SGR and why it failed  

Enacted as part of the Balanced Budget Act of 1997, the SGR formula was put in place to limit increases in Medicare physician payments by linking payments to the gross domestic product — providing a target for Medicare spending that, if exceeded, would force a payment reduction on physicians the following year.

The SGR formula has proven to be anything but sustainable. The physician community argues that SGR underestimates the increase in volume and complexity of patient cases, and as a result the payment cuts are becoming more severe each year. For almost two decades, the house of medicine has been calling on Congress to repeal and replace the SGR.

Medicare Access CHIP and Reauthorization Act of 2015

On April 14, 2015, the Senate passed the Medicare Access and CHIP Reauthorization Act (MACRA), clearing the way for a law that permanently repeals the SGR formula and restores global codes. It also details CMS’ intent to move 80 percent of providers into alternative payment models by 2018.

Learn more about MACRA and how it will affect your practice.