What Happened to the Sustainable Growth Rate?

Posted by Blake Wright on April 22, 2014 at 4:40 PM



Common Sense Action's Director of Public Policy, Ryann Roberts, is back for her second blog on the Sustainable Growth Rate.

The March 31st deadline to avoid a 24% cut in Medicare’s payment to physicians has passed. As detailed in the last Sustainable Growth Rate (SGR) blog (link to blog), congressional leaders had two options to avoiding the largest cut in physician payments in the history of the Medicare program: repeal the sustainable growth rate formula and replace it with a more sustainable payment mechanism or continue to delay payment cuts by effectively pushing the cuts to 2015. 

Although replacing the SGR has overwhelming bipartisan support, members of the House and the Senate chose to delay cuts by extending the current payment rates until April 2015. In a 64-35 vote, the Senate passed the “Protecting Access to Medicare Act of 2014”, the legislation that delayed the implementation of SGR cuts for a year.  

Is this a big deal?

This seems like a really big deal right? Would you believe that the uproar over the bill has very little to do with the actual SGR extension? The extension has been overshadowed by another delay that was written into the legislation and signed into law. The implementation of the International Classification of Disease, 10th revision (ICD-10) was delayed until October 2015, another one year delay.  ICD-10 is the worldwide standard for monitoring population health, incidence and prevalence of disease for epidemiology and clinical purposes.  The ICD-10 standard is crucial to health as it allows nations to measure and report the same type of data to better understand and mitigate trends in population health. 

The implementation of the ICD-10 would allow the United States to “Catch Up” to other nations and compare trends more efficiently, more so than the current ICD-9 that is used in the US. ICD-10 was recommended by the World Health Organization in 1994 and has been adopted by almost every other nation. The 11th revision, ICD-11, is set to become available for use in 2017. 

What all this means for you

The SGR is still very important to the trajectory of improving Medicare quality and lowering long run Medicare cost while setting the stage for positive Medicare reform in the future. The extension works just like the SGR “patchwork” legislation passed by Congress every year; the cuts will be larger next year unless Congress repeals or replaces the SGR. Unless congressional leaders are proactive in the discussion of the SGR, we’ll have to have the same conversation on March 31, 2015 to avoid cuts. 


[1] http://beta.congress.gov/bill/113th-congress/house-bill/4302/text?q=%7B%22search%22%3A%5B%22hr+4302%22%5D%7D

[2]  http://www.who.int/classifications/icd/en/

[3]  http://www.who.int/classifications/icd/en/