The federal government has proposed a change for the Sustainable Growth Rate (SGR) formula, the formula used in determining doctors' yearly fee for Medicare.
SGR was first introduced in 1997 but it was never really implemented. It aims to cut the doctors fees to maintain federal budget for medical care. However, doctors have opposed the idea and each year, the implementation of SGR is suspended. According to the Wall Street Journal, if the SGR hasn't been suspended, hundreds of doctor will leave the Medicare program. In fact, the number of doctors who have left Medicare tripled between 2009 and 2012.
The Congressional Budget Office (CBO) has estimated that the Senate's direct spending will increase by $150.4 billion for the period of 2013-2014 due to the revised SGR. The proposed change offers two possible payment plans: the Value-Based Performance (VBP) program and the Alternative Payment Model (APM) program.
Payments made to those who will choose the VBP program would be based on the positive and negative outcome of the doctors' performance.
Those who will opt for the APM program will receive a lump-sum payment in 2017 to 2022 equivalent to five percent of their total Medicare Payments for the previous year for services rendered on the fee schedule for physicians.
Senior Vice President and Kaiser Family Foundation's Program for Medicare Policy director, Tricia Neuman, stated that the bill was not able to address all the concerns associated to it, primarily the source of funds that will cover the changes on the SGR.
"The huge outstanding question is how to pay the bill," she said to MainST. "The focus has been on the good stuff, how to eliminate the fee cuts. But nothing on how to pay for it. There has been no public discussion or legislation on how to finance the bill so far."
