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Sustainable Growth Rate (SGR) and Medicaid Increase
Overview
Congress has long recognized that the Sustainable Growth Rate (SGR) is a poor method for establishing payment rates for health care providers paid under the Medicare physician fee schedule. Over the past almost 11 years, Congress has voted to override the cuts mandated under the formula. These last minute fixes have served to increase the size of future cuts, the cost of long-term reform, and the insecurity among people with Medicare about their ability to maintain access to their doctors.
The Congressional Budget Office (CBO) estimates the cost of the “doc fix” to patch the SGR for one year at $25 billion. The CBO estimates that increasing Medicaid payments for specified primary care services to Medicare levels for certain primary care physicians in 2013 and 2014 will cost $15 billion.
Legislators could decide to use the parity funds to offset some of the SGR payment cuts.
- Offering coverage is only half of the promise. Ensuring newly covered individuals have access to health care professionals is equally important. Many primary care physicians do not participate in the Medicaid program due to poor payment policies that, historically, are well below the actual costs of providing care.
- Investments in primary care are a priority of all health care systems. Both public and private health care systems are placing an emphasis on creating health care delivery models that are built on a foundation of accessible, high quality primary care
- A key to creating this primary care foundation is aligning payment policies with coverage delivery policies.
- The Medicaid payment parity provision is consistent with policies currently in place within the Medicare program, as well as numerous private insurance plans.
Learn More
- Read more from AAFP's Medicaid Increase Fact Sheet (2 -page PDF; About PDFs)
- View an infographic of the potential impact of 2013 Medicare payment cuts (1 -page PDF; About PDFs)
See Also
- AAFP's full overview of Medicaid Payment Parity
- AAFP's overview of the 2013 Physician Fee Schedule
Medicare Physician Payment
AAFP's Response to the SGR Proposal, Second Iteration (*PDF file)
AAFP Response to the SGR Proposal (*PDF file)
Joint Letter to the National Association of Medicaid Directors on Medicaid Primary Care Payment Increase (*PDF file)
Joint Letter to the National Governors Association on Medicaid Primary Care Payment Increase (*PDF file)
Endorsements and Letters to Congress
(*PDF file. About PDFs)
