Medicare payment reform

Where did SGR come from?  

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.

Why has SGR failed?

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.

On April 14, 2015, the Senate passed the Medicare Access and CHIP Reauthorization Act, clearing the way for a law that permanently repeals the SGR formula and restores global codes. Read more about this victory for dermatologists and the entire house of medicine.

See also:


AADA applauds repeal of SGR—Senate clears SGR repeal bill ending 13-year reimbursement rollercoaster

April 14, 2015: In a victory for dermatologists and the entire house of medicine, the Senate passed the Medicare Access and CHIP Reauthorization Act, clearing the way for a law that permanently repeals the sustainable growth rate (SGR) formula and restores global codes. The perennial fixes and patches posed great harm to patient access to care and deterred meaningful payment reform efforts. The restoration of global codes will alleviate additional co-pays for patients seeking follow-up care after a surgery or procedure. The President is expected to sign the bill into law very soon.

The unwavering support of the AADA membership in the form of thousands of emails, letters, calls and in-person visits to Capitol Hill each year helped secure this legislative milestone.

As the law begins implementation phase, it is essential that dermatologists remain vocal advocates. The law provides a pathway for physicians to lead in the development of new payment and care models. The AADA will continue to bring you the latest on the law’s implementation.

AADA praises House passage of SGR repeal; Victory in Senate possible with your help!

March 26, 2015: In a historic display of bipartisanship, the U.S. House of Representatives overwhelmingly voted to pass legislation that ends the dramatic, 13-year rollercoaster of patches and fixes for physician payment. The bill also reverses CMS’ decision to phase out the use of global codes for surgery – a win for patients who undergo procedures in a dermatologists’ office. The AADA supports the bill, and thanks its members who have joined the call to action for SGR repeal in sending over 2000 emails to Capitol Hill in recent weeks.

The victory is tempered by what still could be an uphill battle for passage in the Senate. The AADA needs all hands on deck from its members as there is no contingency plan if the bill fails to pass in the Senate. The clock is ticking, and time is running out. It takes two minutes to call or send a pre-drafted letter to your Senators through our Dermatology Action Network.

With your help – and in unity with colleagues from across the house of medicine – we can get SGR repeal passed once-and-for-all.