On October 6, 2011, the Medicare Payment Advisory Commission (MedPAC) voted to recommend that Congress repeal and replace the statutory sustainable growth rate (SGR) formula for updating the Medicare physician fee schedule (MPFS). Without legislative action, CMS estimates that the SGR formula would result in an almost 30% MPFS cut in 2012. As discussed in a previous blog posting, the controversial MedPAC plan – which would require Congressional approval -- would freeze current Medicare MPFS rates for primary care services for 10 years, while other services would be subject to annual payment reductions of 5.9% for 3 years, followed by a freeze. MedPAC offered a list of options for Congress to consider if it decides to offset SGR repeal costs (estimated at about $200 billion over 10 years) within the Medicare program. In addition to the SGR proposal, MedPAC endorsed budget-neutral changes to improve data on which MPFS relative value unit (RVU) weights are based and to redistribute payments to underpriced services. MedPAC also recommended that CMS increase the shared savings opportunity for physicians and health professionals who join or lead “two-sided” risk ACOs (where providers can receive bonuses or financial penalties based on performance).