Public Policy

Fix for Sustainable Growth Rate Formula a Top Priority


The Improving Access to Medicare Coverage Act isn’t the only legislative proposal on hospitalists’ radar right now. Republican members of the U.S. House of Representatives recently revised their plan to replace the sustainable growth rate (SGR) formula used to determine physician payments. A bill has not been introduced, but Beltway buzz hints one could be forthcoming this year.

“Fixing the flawed SGR physician payment is a top priority for the Committees on Energy and Commerce and Ways and Means,” GOP legislators said in an open letter to the “provider community.”2

The letter requested feedback from physicians and other stakeholders by April 15.

Any proposed fix would look to end the series of time-stamped delays that continue to delay a pending 27% cut to physician payments under Medicare. The latest delay was approved earlier this year, meaning that the new deadline for the SGR cut to be implemented is Dec. 31.

The SGR formula was created in 1997, but the pending cuts tied to the federal sequester were included in the Budget Control Act of 2011. At the time, the massive reduction to Medicare payments was tied to political brinksmanship over the country’s debt ceiling. But the cut also was considered a Draconian penalty that was never likely to actually happen.

Richard Quinn is a freelance writer in New Jersey.


  1. SHM. Letter to Congress members. SHM website. Available at: Accessed May 3, 2013.
  2. U.S. House of Representatives' Committee on Ways and Means, Energy and Commerce Committee, Health Subcommittee. Second draft of sustainable growth rate (SGR) repeal and reform proposal—request for feedback letter. U.S. House of Representatives' Committee on Ways and Means website. Available at: Accessed May 3, 2013.

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