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Medicare Physician Reimbursement Policy

November 4, 2024

A decade ago, a Medicare payment formula known as the Sustainable Growth Rate (SGR) was the source of repeated annual crises for physicians who treat Medicare patients. Manufactured out of the Balanced Budget Act of 1997, the goal of the SGR was to limit the growth in Medicare spending to keep it in line with inflation. Under the SGR, if overall physician payment costs exceeded target expenditures, a cut to Medicare physician payment was triggered.

Rather than serving to reduce Medicare spending, the SGR came to exemplify the idiom of “kicking the can down the road” when 18 times over 13 years Congress acted at the last-minute to delay a series of mandated cuts. It came to be known as the “Doc Fix.”

Before the SGR was repealed and replaced by the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, the sum of the unfunded delays in cuts to physician payment was estimated at 21.2%.

Read the rest of the op-ed at Real Clear Health.

Dr. Bailey is the Director for Healthcare Policy at the Goldwater Institute.

 

 

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