Sustainable Growth Rate system

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Sustainable Growth Rate system

A system which replaced the Medicare Volume Performance Standard (MVPS) as the mechanism for ensuring Medicare physician spending does not exceed expenditure targets. The SGR system uses a targeted growth rate based on gross domestic product growth, price changes, and changes in Medicare enrollment and benefits.

The Medicare Economic Index (MEI) is the baseline for each year’s payment update calculation, and used in the target calculation to determine the price component of the SGR. Payment updates are equivalent to the MEI multiplied by an “adjustment factor”, which reflects how spending compares to the SGR targets.
References in periodicals archive ?
For physicians that means we're stuck with an SGR system that everyone agrees is just not good for health care and not good for patients," he said.
Over a decade ago, Congress adopted the SGR system to address rising spending on physician services by requiring that Medicare prices drop if volume growth exceeded a target.
ACLA said that it looked forward to working with MedPAC in seeking ways to fix the broken SGR system without subjecting clinical laboratories to unsustainable reimbursement cuts.
Unless Congress acts to change the SGR system an indefinite series of these stop gap "fixes" will be required to fend off a major drop in Medicare reimbursement.
The SGR system limits the amount by which total national Medicare physician spending is allowed to increase each year by setting yearly spending targets.
The SGR system "fails to create appropriate incentives to improve performance," he said.
With that plan in hand, it would be easier for members of Congress to justify spending $300 billion to replace the SGR system.
Subsequent administrative and legislative actions modified or overrode the SGR system to avert fee declines in 2003, 2004, and 2005.
The other approach would retain spending targets but modify the current SGR system to address perceived shortcomings.
The AMA worked vigorously over the last year with Congress to reach a bipartisan agreement that would eliminate several problems with the SGR system in the future.
No matter whose plan is embraced, fixing the SGR system is unlikely to come cheap.