Weekly Checkup No. 012: Alternatives to the SGR

It is clear to lawmakers and physicians alike that the Sustainable Growth Rate (SGR), used to determine how much physicians are reimbursed, is broken. The SGR, enacted as a part of the Balanced Budget Act of 1997, and was put in place as a mechanism to stem the growth of Medicare spending for physician services. At the time, the volume and complexity of physician services charged to Medicare was growing at a relatively slow rate compared to previous years. Therefore, the formula used to calculate the SGR when it was enacted was based on an uncharacteristically low trend.

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