News in brief - Dec. 4, 2000

Medicare advisory group considers whether to recommend end to SGR

The Medicare Payment Advisory Commission in November wrestled with the pros and cons of Medicare's use of a sustainable growth rate in the physician fee schedule.

The sustainable growth rate, which is a target spending level for physicians, is one of the key factors that determines Medicare's payment update each year. The update factor goes up or down depending on whether actual doctor spending exceeds, meets or falls below the target.

Gail Wilensky, PhD, MedPAC chair, said one reason the commission is reconsidering the SGR is because no other health care sector has its Medicare payment rates set using a volume-control approach.

"We're clearly doing something very different in the physician sector relative to what we do everyplace else in Medicare," Dr. Wilensky said.

The different payment structures might lead to incentives to move services from a doctor's office to a hospital outpatient setting or vice versa, she explained. The commission, Dr. Wilensky said, has yet to make a formal recommendation on the issue but expects to take it up at future meetings.