The latest health policy brief from Health Affairs and the Robert Wood Johnson Foundation, released June 25, examines the issue of Medicare physician payment. Specifically, the brief addresses the controversy surrounding the sustainable growth rate (SGR) mechanism, which ties physician payment rates to Medicare spending for physician services and the growth rate of the overall economy.

Amidst fears that physicians would stop treating Medicare patients, Congress has repeatedly intervened to temporarily block large payment cuts dictated by the SGR formula, most recently on June 24. However, permanently revamping Medicare’s physician payment regime would significantly increase deficits, so Congress has not altered the SGR formula itself. Therefore, each temporary fix has left intact the threat of future physician payment cuts and in fact has increased the size of the future cuts called for by the SGR.

The new policy brief details the history of the SGR and the associated political debates. The brief also discusses options for reforming Medicare physician payment and looks at what might happen next politically.

A previously published cluster of Health Affairs Blog posts offers more detail on some of the reform options. And for further discussion of the policy brief and the SGR debate, see Naomi Freundlich’s post on the Century Foundation’s HealthBeat blog.

The SGR brief is the most recent in a series of Health Policy Briefs that offer more context than fact sheets but provide quicker reads than most background papers. The information in the briefs is objective and reviewed by Health Affairs authors and other specialists with years of expertise in health policy.

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