The House Ways and Means and Senate Finance Committees have released a draft legislative proposal to eliminate the Medicare Sustainable Growth Rate (SGR) formula. The proposal would permanently repeal the SGR update mechanism, reform the fee-for-service (FFS) payment system through greater focus on value over volume, and encourage participation in alternative payment models (APMs). The revised FFS system would freeze current payment levels through a ten-year budget window, while allowing individual physicians and other health care professionals to earn performance-based incentive payments through a compulsory budget-neutral program. Beyond 2023, professionals participating in advanced APMs would receive annual updates of two percent, while all other professionals would receive annual updates of one percent.
