The end of the sustainable growth rate : what was it and what happens next? / Barbara Resnick

"I write this editorial with some trepidation and fear that I may have misinterpreted some piece of all of this very complex legislation. For those of you whose expertise is in the area of policy I apologize ahead of time if I have simplified things too much or missed any critically important points. my intention in writing this, however, was simply to raise awareness that the passage of the Medicare Access and CHIP Reauthorization Act of 2015 is not for physicians oly. Rather, it is critically important for all of us providing care to Medicare recipients and particularly for those of us who are reimbursed under the physician fee schedule. Bottom line establishing a permanent fiz to the Sustainable Growth Rate (SGR) is not just a doctor-fix. Rahter lets think of this as a health care fix and work together to achieve the goals set out in this new legislation. The Sustainable Growth Rate (SGR) was initiated as part of the Balanced Budget Act of 1997. The intention of the SGR was to control the costs of Medicare payments for physicians and other providers paid under the physician fee schedule such as advanced practice nurses. The SGR formula was developed to limit or tie the annual increase in cost per Medicare beneficiary to be consistent with the growth in the national economy. The SGR is layered on top of a system for paying providers, which is referred to as the physician fee schedule. Essential the physician fee schedule pays providers for delivering Medicare services. It is based on the volume of services provided and not on the quality of service or on the providers ability to maintain the health of those for whomo they provide care. Under teh SGR formula, if overall provider costs exceed what the expected or targeted expenditures were, this results in a subsequent reduction in payment ot all providers. The target expenditures are based on spending growth in the economy. This year it was anticipated that there would be a redcution of 21. 2 percent in Medicare reimbursement/payments to providers. A reduction in payment is not unusual or unanticipated occurrence as it has been happening since 2002. In 2001, the combination of a recession and the increasing costs of medical care resulted in an automatic cut of 4.8 percent in Medicare reimbursement in 2002 and each year thereafter. Every year since 2002 Congress has intervened with a shorttern fix via legislation to reverse and avoid the payment reduction. these fixes have resulted in keeping provider payments below the rate of inflation and have resulted in a large divergence between the actual level of Medicare provider related spending and the target in the SGR formula. this annual fix has resulted in high costs and a permanent solution was clearly needed."

Nursing