Reforming Medicare's Physician Payment Strategy

Since 1992 Medicare has reimbursed physicians on a fee-for-service basis. In 1997, as medical costs escalated, Congress began using a Sustainable Growth Rate (SGR) formula to reduce reimbursements if overall physician spending exceeded the growth in the economy.

Health Affairs

A new commentary by Gail Wilensky, released today as a web first by , reviews the recent history and future direction of physician payment reform. Since 1992 Medicare has reimbursed physicians on a fee-for-service basis. In 1997, as medical costs escalated, Congress began using a Sustainable Growth Rate (SGR) formula to reduce reimbursements if overall physician spending exceeded the growth in the economy.

However, in all but one year, Congress ignored its own earlier directive, postponing physician payment cuts even as costs remained out of control. With this game of “kick the can down the road” becoming increasingly tiresome to both lawmakers and physicians, Congress is now considering new legislation to do away with the current SGR formula and reimburse physicians for improving quality and lowering costs.

Health Affairs’

Wilensky is a Senior Fellow at Project HOPE, parent organization, who directed the Medicare and Medicaid programs under President George H Walker Bush. In her analysis, she observes that there seems to be growing agreement on the elements that a physician payment reform strategy should contain.

Read the full story here: http://bit.ly/1kGwG9p

Source: Health Affairs