By Mary Agnes Carey, KHN Staff Writer

After years of legislative wrangling and last-minute patches, expectations are high among physician groups, lawmakers and Medicare beneficiaries that Congress could act this year to permanently replace the current Medicare physician payment formula. While committees in both chambers have approved their own “doc fix” proposals, the approaches have yet to be reconciled, and none have identified how they would pay for a repeal. Below are some frequently asked questions and answers about the formula – known as the “sustainable growth rate” – and how Congress may change it.

Q: What is the sustainable growth rate?

A: Known as the SGR, the formula was created as part of a 1997 deficit reduction law designed to rein in federal health by linking physician payment to an economic growth target. For the first few years after it was created, Medicare expenditures did not exceed the target and doctors received modest pay increases. But in 2002, doctors…[read more]