Senate Passes Bill Repealing SGR Payment Formula

Physicians can breathe a little bit easier after the Senate this week finally approved a bill that would repeal the flawed Sustainable Growth Rate (SGR) formula for how they receive payments for Medicare patients. President Obama is expected to sign the legislation.

The legislation, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), brings an end to more than a decade of short-term measures by Congress that delayed large cuts to physician payment rates.

Instead of a 21% cut to physicians’ Medicare payments, MACRA provides for annual payment increases of 0.5% beginning July 1 and running through 2019.

The American Psychiatric Association lauded the bill’s passage, with President Paul Summergrad, MD, calling it “a major step toward a reliable and rational payment system for Medicare beneficiaries and their physicians.”

MACRA includes payment reforms that emphasize quality rather than volume. Payments will be determined by patient health outcomes, quality measures and a clinician’s involvement in collaborative care.

The legislation also creates a Merit-based Incentive Payment System (MIPS), which combines current quality incentive and penalty programs into one system. Also, quality program standards created under MACRA cannot be used as a “standard of care” in medical liability cases.


American Psychiatry Association. Sustainable Growth Rate (SGR) Repeal and Replacement Summary. Updated April 14, 2015.