Health Care Reform and the Sustainable Growth Rate: What's Happening Now?

Despite the many health care reform policies enacted by the Patient Protection and Affordable Care Act of 2010, one legislative fix that has beset physicians and policymakers for years remains to be made: Medicare’s much maligned sustainable growth rate (SGR) formula for physician payment. Also known as (not so affectionately) the “doc fix,” the SGR was enacted as part of the Balanced Budget Act of 1997 to lower physician payment rates but only modestly below the levels they would have reached under prior Medicare law. In 2001, the SGR formula began to create quite a fury among physicians when a 4.8% cut in physician reimbursement was projected. Government policymakers and Congress agree that the SGR formula is “fundamentally flawed,” but there is much less agreement on how to change it without creating an intolerable health care budget deficit.