Sustainable Growth Rate system
Sustainable Growth Rate systemA 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.