This bill would reform Medicare’s Sustainable Growth Rate (SGR), a formula used to determine physician reimbursement. The bill would extend the Children’s Health Insurance Program (CHIP) by two years, while implementing other changes to Medicare and related health programs.
The SGR was established in 1997 to set the Medicare payment rates for physicians. It was designed to ensure that the spending per beneficiary for physician services would "grow on average at the rate of increase in gross domestic product per capita minus the expected rate of increase in productivity for the economy as a whole."
This bill would repeal the current SGR that is currently scheduled to reduce physician compensation by 21 percent on April 1, 2015. The SGR would be replaced with plan to give physicians a 0.5 percent annual pay increase through 2019. After that, doctors would operate in a system that either grants them bonuses or penalties based on their government performance scores.
Funding for CHIP would be extended until 2017, as it would currently run out of money after the 2015 fiscal year despite the program being authorized through 2019. If you don't know, CHIP is a program offering low-cost health coverage to children from families that earn too much money to qualify for Medicaid. It is offered in every state and as of 2013, covers more than eight million children and pregnant women.
This bill also authorizes another two years of funding into 2017 for the Community Health Center (CHC) Program, that is otherwise set to expire in September 2015. In 2013 the CHC served 22.7 million patients across 9,518 sites.