Government Affairs Home > Washington Highlights > March 29, 2002

MedPAC Reiterates SGR Recommendation

March 29, 2002 - The Medicare Payment Advisory Commission (MedPAC) met March 21 and 22 to review the initial contents of its June report to Congress. During the meeting, commissioners reviewed the Centers for Medicare and Medicaid Services (CMS) estimate of the Sustainable Growth Rate (SGR) update for 2003.

MedPAC is statutorily required to review the estimate of the SGR update. CMS's preliminary estimate of the update for physician payments for 2003 is -5.7 percent. The SGR component with the greatest impact in this estimate is the update adjustment factor. CMS has calculated the update adjustment factor to be -7.0 percent, the maximum allowed under the law. MedPAC staff noted that this outcome can be expected under the current SGR system. In its March 2001 report, the Commission recommended replacing the SGR system with, "an annual update based on factors influencing the unit costs of efficiently providing physician services." The commissioners agreed to reiterate this recommendation with its review.

Other issues discussed at the meeting focused on MedPAC's June report to Congress, which will address Medicare's benefit package. Topics included an expert panel report on changes in medical practice and the delivery of care, changes in private sector benefit packages, supplementing Medicare's benefit package, and total spending and sources of payment for beneficiaries' healthcare.

In addition, the Commission discussed:

• Coverage and payment for non-physician practitioners;
• Beneficiaries access to Medicare hospice care; and
• Medicare coverage of cardiac rehabilitation programs and pulmonary rehabilitation services.

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