Friday, April 17, 2015

JAMA Network | JAMA | The Repeal of Medicare's Sustainable Growth Rate for Physician Payment

JAMA Network | JAMA | The Repeal of Medicare's Sustainable Growth Rate for Physician Payment:

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The End of  SGR is only the beginning of integration of other reimbursement methods

In April 2015, Medicare's sustainable growth rate (SGR) formula for controlling physician payment was permanently repealed and replaced with a far-reaching package of reforms.1 

The Medicare Access and CHIP Reauthorization Act of 2015 (HR 2) provides physicians and other health care professionals with stable fee updates for 5 years (current levels through June 2015, an update of 0.5% for the last 6 months of 2015, and an increase of 0.5% per year for 2016 through 2019). For 2015 to 2018, the current payment system remains unchanged. In 2019, a new incentive payment program, termed the Merit-Based Incentive Payment System, or MIPS, will replace and consolidate 3 existing incentive payment programs: the Physician Quality Reporting System, the value-based payment modifier, and the meaningful use of electronic health records. Payments to individual clinicians would be subject to adjustment depending on whether they participated in MIPS or approved alternative payment mechanisms. Alternative payment mechanisms include accountable care organizations (ACOs), medical homes, bundled-payment arrangements, and other models being evaluated by the CMS Innovation Center. Such models involve a risk of financial loss and a quality measurement component.
Now that the SGR has been repealed, it is likely that policy conversation about physician payments will move on to other outstanding issues, such as the balance of payments between primary care and other services and continued delivery system reforms, including population-based payments, with no fee-for-service component.2,5 The SGR fix, however, should not be viewed as a permanent solution to the ferment over the physician payment system and uncertainties about beneficiaries' access to care. Until the details of the measures of quality and value and incentive payments become available, it is uncertain if physicians will consider them reasonable and fair


Corresponding Author: Robert Steinbrook, MD, Department of Internal Medicine, Yale School of Medicine, 333 Cedar St, I-456 SHM, PO Box 208008, New Haven, CT 06520 (
Published Online: April 17, 2015. doi:10.1001/jama.2015.4550.
Conflict of Interest Disclosures: The author has completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest and none were reported.


The Medicare Access and CHIP Reauthorization Act of 2015. HR 2. Accessed April 16, 2015.
MEDPAC. Report to the Congress: Medicare Payment Policy. March 2015. Accessed April 12, 2015.
Spitalnic  P. Office of the Actuary. Centers for Medicare & Medicaid Services. Estimated financial effects of the Medicare Access and CHIP Reauthorization Act of 2015 (HR 2). April 9, 2015. Accessed April 14, 2015.
Burwell  SM.  Setting value-based payment goals: HHS efforts to improve U.S. health care. N Engl J Med. 2015;37210):897-899.
PubMed   |  Link to Article
Rajkumar  R, Conway  PH, Tavenner  M.  CMS: engaging multiple payers in payment reform. JAMA. 2014;311(19:1967-1968.
PubMed   |  Link to Article
Pear  R. House provision offers doctors more protection against malpractice suits. New York Times. March 30, 2015.
Congressional Budget Office. Cost Estimate and Supplemental Analysis for H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015. March 25, 2015. Accessed April 12, 2015.
Office of the National Coordinator for Health Information Technology. Report to Congress: report on health information blocking. April 2015. Accessed April 12, 2015.

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