Overcoming Challenges to Physician Payment Reform in a Post-SGR World

On April 16, 2015, President Barack Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA), which, among other things, finally repealed the Sustainable Growth Rate (SGR) mechanism of paying for physician services in Medicare. The SGR had been blamed for causing instability and uncertainty among physicians for over a decade and led to 17 overrides of scheduled cuts to the physician fee schedule, at a cost well in excess of $150 billion.

Although the repeal of SGR was a major legislative event, it is the implementation of MACRA, along with other health care payment and delivery reforms that will profoundly shape the future health care system in the U.S.

Policymakers should ensure that payment reform has an adequate infrastructure of meaningful performance measures and a sufficient number of PF-APMs. Policymakers should avoid the unintended consequences of additional administrative burden and greater health care consolidation.

MACRA, if not implemented correctly, could force physicians to choose between an overly burdensome pay-for-performance program and impractical alternative payment models that are likely to be both professionally and financially unrewarding. If implemented correctly, MACRA could give physicians the choice of how they practice and how to meaningfully measure the value of their care.

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