Forum Session

Replacing the SGR: Changing the Paradigm for Medicare Physician Payment?
September 20, 2013


William J. Scanlon, PhD, Consultant & Sally Coberly, PhD


The Sustainable Growth Rate (SGR) formula was enacted as a means of exercising control over total Medicare physician expenditures. Recognized from the outset as a very blunt instrument, it has evolved so that, in recent years, full implementation would result in double-digit reductions in Medicare physician fees. These reductions have been overridden almost annually by the Congress, but by law they are still pending each subsequent year. This year the congressional committees responsible for Medicare (House Energy and Commerce, House Ways and Means, and Senate Finance) have focused on a more permanent correction. The unanimous approval on July 31 of the Energy and Commerce Committee's bill (H.R. 2810) shows tangible progress in moving away from the SGR model. That bill calls for setting aside the SGR and starting on a pathway to transform Medicare physician payments from a pure fee-for-service system to one that would promote and reward quality and value. This Forum session examined what is proposed in the Energy and Commerce bill, as well as other proposals for changing the SGR and Medicare physician payment that have been discussed in hearings this year. What moving to paying for quality or value would entail in terms of defining accurate and reliable measures of performance, and how information would be collected for their application, was also reviewed.


Jessica Farb, MA (bio)
Assistant Director, Health Care
U.S. Government Accountability Office

Cheryl Damberg, PhD, MPH (bio)
Senior Policy Researcher, Professor 
Pardee RAND Graduate School

Nicholas Wolter, MD (bio)
Chief Executive Officer
Billings Clinic (Montana)

With commentary from House and Senate Committee staff:

Robert Horne
Professional Staff Member (R)
Committee on Energy and Commerce
U.S. House of Representatives 

Brett Baker
Professional Staff Member (R)
Subcommittee on Health
Committee on Ways and Means
U.S. House of Representatives

Karen Fisher
Professional Staff (D)
Committee on Finance
U.S. Senate

Related Materials

Medicare Payment Advisory Commission, "The sustainable growth rate system: Policy considerations for adjustments and alternatives," in Report to Congress: Medicare and the Health Delivery System, June 2011.

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