Way back in the early 90s the Sustainable Growth Rate was introduced to us by Congress and Medicare. This would result in an annual reduction of physician's fees annually, unless congress took action to either eliminate that year's adjustment or postpone it until the next fiscal year. After 4 years of 'deferrals' the amount pending is 20%. In the midst of heated congressional examination and proposals for health reform, this 'adjustment' has not publicly been discussed. It however is a major bone of contention amongst providers of medicare services. It becomes more important in the face of other payors who base their reimbursements upon Medicare's fee schedule.
The SGR includes the costs of drugs and other items billed by the provider, and also the payments made to ambulatory surgery centers. These numbers are included in the calculation of provider expenses. Claims that provider payments have increased are largely due to these two amounts. As we all know ambulatory surgery centers have literally exploded in volume, and pharmaceutical expenses have risen sharply as well.
In the past, not much has been made of this item.