by Robert E. Moffit
The Heritage Foundation
January 24, 2014
This year, Medicare physicians face a 24 percent pay cut. The reason: Congress updates Medicare doctors’ payments by a formula called the Sustainable Growth Rate (SGR). If physician payments exceed the GDP growth in any given year, they are automatically reduced the next year. Because physician payment has outpaced economic growth, payment cuts are routinely triggered. The House Ways and Means and Senate Finance Committee proposals would repeal the SGR, freeze physician payment until 2023 (zero update), encourage physician participation in “alternative payment models” (APMs), and create a value-based performance (VBP) payment program. The repeal of the Medicare SGR presents Congress with a golden opportunity to strengthen the doctor–patient relationship, guarantee greater transparency in medical pricing and performance, inspire clinical innovation, and promote personalized medicine.



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