Considerations for Reforming the Sustainable Growth Rate System

February 10, 2005 Considerations for Reforming the Sustainable Growth Rate System To moderate Medicare spending for physician services, the SGR system sets spending targets and adjusts physician fees based on the extent to which actual spending aligns with specified targets. If growth in the number of services provided to each beneficiary-referred to as volume-and in the average complexity and costliness of services-referred to as intensity-is high enough, spending will exceed the SGR target. While the SGR system allows for some volume and intensity spending growth, this allowance is limited. If such growth exceeds the average growth . . .