The SGR is the Sustainable Growth Rate Forumla that determines physician pay rates for Medicare B patients. The plan is meant to control overall Medicare B spending.
For the last several years physicians have been seeing an increase of Medicare B patients and have been billing more for those visits year in and out.The SGR adjusts for this increase in spending by reducing payments to physicians- by about 4 or 5% a year. These cuts come to a field where prices generally increase about 7% each year. As a result physicians are increasingly underpaid for their Medicare patients.
For the last 5 years, those paycuts have been overridden by legislation. This year's threat of "Medicare Meltdown" was another SGR scheduled paycut. Currently, about 90% of physicians will take Medicare patients. The "Meltdown" occurs if paycuts are implemented and physicians find the Medicare patients to be too much of a financial burden and begin to turn them away. Annual overrides postpone this "Meltdown."
The problem with these temporary annual fixes is that they are refactored into the SGR. Each time a paycut is postponed, it is factored into the future Medicare budget. If the SGR remains as currently stands, annual paycuts will increase to higher percentages that will continue to have to be overridden year to year.
Scheduled paycuts that must be overcome by annual legislation: another reason I don't want to be part of a U.S. Government-run health care industry.