The Centers for Medicare & Medicaid Services (CMS) delayed the 21% cut until April 1.

Current payment system: SGR (Sustainable Growth Rate) is a complex formula used by Medicare.  It states that its average payment to doctors cannot grow faster than the economy as a whole.

Medicare is proposing new ways to pay physicians and it may incorporate one or multiple concepts described below:

• Recalculate the SGR: Spending on physician-administered drugs would be removed from the formula calculations.
  
• Re-base the SGR: The spending target would be altered to reflect the cut reversals Congress has made since 2002.
• Multiple SGRs: The current single overall spending target for physicians would be replaced with several targets - one for each of a different group of services.
• Bundling: Fee-for-service rates would be converted into a global fee that would pay for all services provided during a patient's episode of care. This type of bundling is already in place for the hospitals, home health agencies, and skilled nursing facilities.
• Gainsharing: Hospitals would share with physicians any savings resulting from improved health care outcomes.
• Medical homes: Some physicians would receive additional pay for coordinating patient care.
• Pay-for-performance:  Physicians would receive financial incentives to meet quality or efficiency benchmarks (e.g. PQRI).