Options for Medicare's Sustainable Growth Rate Mechanism

The Congressional Budget Office (CBO) has analyzed three options for dealing with Medicare's Sustainable Growth Rate (SGR) mechanism under which Medicare's payment rates for physicians' services are scheduled to be reduced by 27 percent in 2013. The CBO has provided tables for showing increases or decreases in outlays for the period 2013-2022 for the cliff option (significant reduction in the first year after a specified update), the clawback option (additional spending for a few years to override reductions in payment rates but reductions to payment rates in subsequent years), and the replace or restructure option (replace the SGR with a one or two percent freeze in each year through 2022). For details see Medicare's Payments to Physicians: The Budgetary Impact of Alternative Policies Relative to CBO’s March 2012 Baseline.