Medicare Sustainable Growth Rate
The Medicare Sustainable Growth Rate or (SGR) refers to the current method of funding Medicare. The growth rate idea was based on a number of factors including:
- Estimated percentage change in physicians’ fees
- Estimated percentage change in Medicare beneficiaries
- Estimated 10-year average change in GDP per capita
- Estimated percentage change in expenditures based on law or regulations
While this rate was able to fund medicare and properly reimburse physicians at one time, the funding method has proved inadequate and has undergone many changes since 2000. Most of these changes have been considered temporary patches to provide short-term solutions to the problems that have plagued this Medicare funding method for years. As the population needing care has grown, the economy has not always kept pace, causing shortages that affect both physician reimbursement and patient care.
Bipartisan Efforts
In what may be one of the most united efforts by Congress, the House approved the “Doc Fix” bill with a vote of 392-37. Since 2003 alone, Congress has passed over 17 short-term patches to the law and is now looking for a long term solution. White house leaders were eager to move this bill along before a two-week recess, getting new legislation approved before the old patch expires. The doc fix specifically applies to patient reimbursements for doctors who serve the medicare population, but also includes provisions for the Children’s Health Insurance Program CHIP and for community health centers.
Important Facts for Providers
An already stretched Medicare payment system was facing a staggering 21% in cuts to physician providers. This would have put both doctors and administrators in a difficult position between providing needed patient care and obtaining reimbursements to keep their practices afloat. Cuts in basic care could affect services that some may see as elective, like orthopedic surgery and much-needed radiology scans. The current plan will fund $141 billion over the next 11 years and seeks to help with both urgent and preventative care.
Under new plan funding, the old Medicare payment system will be replaced. Details of the new plan include:
- Payments to doctors will increase by one-half of one percent every year through 2019.
- After 2019, doctors will receive either bonuses or penalties based on government performance scores.
- Scores will be valued based on the quality of care, not the quantity of patients.
- Two years of additional funding for community and child medicare created. The plans hope to aid in preventative benefits for underserved populations.
The new “Doc Fix” law, officially known as the Medicare Access and CHIP Reauthorization Act of 2015, passed the Senate after they returned from their recess on Tuesday April 14th, and was signed by President Obama in the Rose Garden two days later. He congratulated House Speaker, John Boehner, and Minority Leader Nancy Pelosi for the work they did in bringing this about and praised their bipartisan efforts in this regard.
These changes provide a positive perspective for the future funding of the medical profession, but does bring some additional concerns as well regarding implementation and what it will mean for physician reimbursement. At Healthcare Information Services (HIS) we are prepared to assist our client practices with ongoing reimbursement challenges.