The President has signed into law the bipartisan bill H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015,” which permanently repeals the flawed Sustained Growth Rate (SGR) formula and replaces it with a stable Medicare payment system that rewards physicians for providing high-quality, high-value healthcare. Without this new law, physicians would have faced a 21.2 percent decrease in Medicare payment rates scheduled to take effect on April 1, 2015. The SGR formula was established under the Balanced Budget Act of 1997 (Public Law 105-33), and since 2001, the formula, if applied, would have resulted in reduced payment rates. Congress has overridden these reductions 17 times, but to date had failed to develop a permanent solution, much to the frustration of physicians participating in Medicare.

The new law replaces the SGR formula with positive rate increases for 4.5 years and implements a long-term Medicare value-based payment approach that harmonizes the features of the Physician Quality Reporting System (PQRS), Meaningful Use (MU), and the Value-Based Payment Modifier (VBM). It also incentivizes physicians to participate in Alternative Payment Models (APMs). Additionally, the law includes provisions to continue several other policies that, unless extended, would expire soon (often referred to as extenders).