July 25, 2012
Congress continues to discuss how best to overhaul the system that Medicare uses to determine physician reimbursements, known as the sustainable growth rate (SGR). The current rates are set to expire at the end of the year but little legislative progress has been made. Most lawmakers agree that they want to replace the current formula but there are still questions about the government’s role in determining doctors’ payments. These questions, along with disagreement on how to pay the nearly $300 billion cost of repealing the current formula, are obstacles to any comprehensive solution.
The current reimbursement formula was put in place to try to limit spending growth in Medicare. For ten years, the formula has called for cuts in physician payment rates, and Congress has enacted a series of payment patches to avoid those reductions. Physicians face a nearly 28 percent rate cut when the latest patch expires at the end of this year. UW physicians would be negatively affected if Congress allows the current SGR extension to expire.