Sustainable growth rate repealed

On April 16, 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015. The new law repeals Medicare’s sustainable growth rate (SGR) formula for physician pay and will ultimately move the Medicare program from fee-for-service to pay-for-performance. Although the specific components must still be defined, the law will have a major impact on the medical community.

  • Doctors who were facing the 21% SGR-triggered rate reduction will now receive a stable annual payment increase of 0.5% in each of the years 2015 through 2019, beginning July 1, 2015.
  • Additional financial incentives will be available for those doctors who take advantage of approved alternative payment models (APMs). The specific APMs have not yet been identified.
  • Several of the Medicare Quality Reporting programs (PQRS, VBPM & MU) will be combined into a new program called the Merit-Based Incentive Payment System (MIPS).
  • The use of 10- and 90-day global surgical codes in Medicare will be reinstated.

Signing the largest healthcare bill since 2010, President Obama was optimistic and eager to see these historic reforms put into action. “It starts encouraging payments based on quality, not the number of tests that are provided or the number of procedures that are applied, but whether or not people actually start feeling better,” he said.


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