Goodbye, Sustainable Growth Rate—Hello, Merit-Based Incentive Payment System

2015 ◽  
Vol 163 (2) ◽  
pp. 138 ◽  
Author(s):  
Robert B. Doherty
Keyword(s):  
Growth Rate ◽  
Payment System ◽  
Sustainable Growth ◽  
Incentive Payment ◽  
Sustainable Growth Rate

scholarly journals Analysis of the Carrot and Stick Policy of Repeal of the Sustainable Growth Rate Formula: The Good, The Bad, and The Ugly

2015 ◽  
Vol 3;18 (3;5) ◽  
pp. E273-E292 ◽  
Author(s):  
Laxmaiah Manchikanti
Keyword(s):  
Growth Rate ◽  
Payment System ◽  
Sustainable Growth ◽  
Balanced Budget Act ◽  
Incentive Payment ◽  
Improvement Program ◽  
Quality Reporting ◽  
Provider Payment ◽  
Sustainable Growth Rate ◽  
Balanced Budget

The Balanced Budget Act which became law in 1997 was designed to help stem the increasing in costs of healthcare. The Sustainable Growth Rate (SGR) formula was incorporated into that law as a method of helping balance the budget through a complex formula tying reimbursement to the growth in the economy. Soon after its inception, the flawed nature of the formula, linking the balancing of the federal budget to physician professional fees was realized. Congress has provided multiple short-term fixes known as SGR patches over the years so as to avoid generally progressively larger negative corrections to professional reimbursement. The near annual SGR correction requirement has been compared to Groundhog Day in the legislative arena. Over the years, physician and other providers faced numerous looming, large cuts. Most recently, on April 1, 2015 physicians faced a 21.2% cut in provider payments. To the surprise of many, in April 2015 a bipartisan bicameral effort permanently repealed the Medicare SGR formula for controlling provider payment. The repeal of SGR means the temporary measures to override the growth rate formula will no longer dominate Medicare policy discussions and now the focus turns to continue payment reforms. The MACRA provides physicians and other health care professionals with stable fee update for 5 years and it follows with a new incentive program, termed the Merit-based Incentive Payment System (MIPS) replacing and consolidating preexisting incentive payment programs: meaningful use of electronic health records (EHR), physician quality reporting system, and the value-based payment modified. Thus, payments to clinicians will be subjected to adjustments based on participation in MIPS or other approved alternative payment mechanisms. This legislation also creates numerous other regulations. The MACRA has been criticized for providing insufficient statutory updates, enacting a flawed quality and performance improvement program associated with MIPS and inappropriate use of utilization and payment data. Thus, the MACRA offers physicians a predictable schedule for Medicare rates – a carrot, and controls the physician behaviors with payment reforms analogous to a stick. Thus, it could be said that this legislation embodies some good, bad, and ugly aspects. Key words: Balanced Budget Act, sustainable growth rate, alternative payment models, Medicare Access and CHIP Reauthorization Act of 2015, Merit-based Incentive Payment System, payment reform, payment modernization, health information technology

The effect of intangible assets on sustainable growth and firm value – Evidence on intellectual capital investment in companies listed on Bucharest Stock Exchange

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Catalin Ionita ◽  
Elena Dinu
Keyword(s):  
Growth Rate ◽  
Intellectual Capital ◽  
Firm Value ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Content Type ◽  
Sustainable Growth Rate ◽  
The Impact

PurposeThe present study investigates the connection between company investments in intellectual capital (IC) and how they translate into financial value. The aim is to test the impact of intangible assets on the firm value and its sustainable growth.Design/methodology/approachThe research employs computation models to determine the sustainable growth rate (SGR) and the firm value (FV), and by using the ordinary least squares (OLS) model through a linear regression assesses the relationship between the dependent variables and expenditures on intangibles like R&D, IT programs and patents. A sample of 42 companies has been selected out of the 78 listed at Bucharest Stock Exchange (BSE), based on the appropriateness of the information disclosed in the financial reports for the period 2016–2019.FindingsThe results show that intangibles classified as innovative competences (R&D and Patents) do not have a positive impact on SGR and FV in listed companies from Romania. Moreover, R&D has a negative and significant effect on FV, while IT Programs have a positive and significant impact on FV, but not on the SGR. Variables categorised as economic competencies (Brands, Shares held in associates and jointly controlled entities) and firm structure-specific variables (Leverage, Firm Performance) seem to have a significant effect on SGR and FV. Shares held in associates and jointly controlled entities is the variable that can have the biggest impact when it comes to FV for companies listed at BSE.Research limitations/implicationsDue to non-disclosure of specific information by some companies, or lack of investments in intangibles the sample had to be reduced and does not cover all listed companies.Practical implicationsCompanies listed on the Regulated Market from the Bucharest Stock Exchange should maintain their scale of liabilities at a reasonable level when financing intangible assets in order to ensure corporate long-term and sustainable development. Also, these companies should maintain awareness about the importance of intangible assets and invest more in specific sub-components, in order to sustain competitive advantage. Recognizing the roles of intangibles, managers need to develop strategies to invest in profitable intangibles by reasonably allocating their limited resources, in order to achieve sustainable growth and increase company success.Originality/valueStudies concerning the relation between investments in intangibles and sustainable growth rate and firm value of listed Romanian companies are very scarce. This paper reveals new research, never before undertaken, concerning expenditures on intangibles by Romanian companies and the valuation of such investments on Bucharest Stock Exchange.

scholarly journals Conservative Working Capital Policy: Can it Increase Profitability and Sustainable Growth Rate?

2021 ◽  
Vol 12 (3) ◽  
pp. 5630-5637
Author(s):  
Sunardi Sunardi Et. al.
Keyword(s):  
Growth Rate ◽  
Manufacturing Sector ◽  
Sustainable Growth ◽  
Working Capital ◽  
Financing Policy ◽  
Panel Data Regression ◽  
Data Regression ◽  
Sustainable Growth Rate ◽  
Investment And Financing ◽  
Positive Effect

The objective of this study is to investigate the effect of conservative working capital policy on profitability and examine the effect of conservative working capital policy on sustainable growth mediated by profitability in the manufacturing sector in Indonesia. This study involves 133 manufacturing firms in Indonesia during the 2013-2018 period. Data are analyzed using panel data regression with random effects estimation models. The result of this study showed that conservative working capital policy, both investment and financing policy, has proven to have a positive effect on sustainable growth rate. Besides, this study also proved that profitability has a positive effect on SGR. Furthermore, there was the effect of conservative working capital policies on the level of sustainable growth through profitability. This study not only contributes to expanding knowledge about the relationship between working capital policies, profitability and sustainable growth rates, but also has relevant implications for firm managers to improve firm performance to be able to grow sustainably

scholarly journals Merit-Based Incentive Payment System: Meaningful Changes in the Final Rule Brings Cautious Optimism

2017 ◽  
Vol 1 (21;1) ◽  
pp. E1-E12 ◽  
Author(s):  
Laxmaiah Manchikanti
Keyword(s):  
Quality Improvement ◽  
Resource Use ◽  
Quality Measures ◽  
Payment System ◽  
Sustainable Growth ◽  
Composite Score ◽  
Care Providers ◽  
Incentive Payment ◽  
Final Rule ◽  
Care Information

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) eliminated the flawed Sustainable Growth Rate (SGR) act formula – a longstanding crucial issue of concern for health care providers and Medicare beneficiaries. MACRA also included a quality improvement program entitled, “The Merit-Based Incentive Payment System, or MIPS.” The proposed rule of MIPS sought to streamline existing federal quality efforts and therefore linked 4 distinct programs into one. Three existing programs, meaningful use (MU), Physician Quality Reporting System (PQRS), valuebased payment (VBP) system were merged with the addition of Clinical Improvement Activity category. The proposed rule also changed the name of MU to Advancing Care Information, or ACI. ACI contributes to 25% of composite score of the four programs, PQRS contributes 50% of the composite score, while VBP system, which deals with resource use or cost, contributes to 10% of the composite score. The newest category, Improvement Activities or IA, contributes 15% to the composite score. The proposed rule also created what it called a design incentive that drives movement to delivery system reform principles with the inclusion of Advanced Alternative Payment Models (APMs). Following the release of the proposed rule, the medical community, as well as Congress, provided substantial input to Centers for Medicare and Medicaid Services (CMS),expressing their concern. American Society of Interventional Pain Physicians (ASIPP) focused on 3 important aspects: delay the implementation, provide a 3-month performance period, and provide ability to submit meaningful quality measures in a timely and economic manner. The final rule accepted many of the comments from various organizations, including several of those specifically emphasized by ASIPP, with acceptance of 3-month reporting period, as well as the ability to submit non-MIPS measures to improve real quality and make the system meaningful. CMS also provided a mechanism for physicians to avoid penalties for non-reporting with reporting of just a single patient. In summary, CMS has provided substantial flexibility with mechanisms to avoid penalties, reporting for 90 continuous days, increasing the low volume threshold, changing the reporting burden and data thresholds and, finally, coordination between performance categories. The final rule has made MIPS more meaningful with bonuses for exceptional performance, the ability to report for 90 days, and to report on 50% of the patients in 2017 and 60% of the patients in 2018. The final rule also reduced the quality measures to 6, including only one outcome or high priority measure with elimination of cross cutting measure requirement. In addition, the final rule reduced the burden of ACI, improved the coordination of performance, reduced improvement activities burden from 60 points to 40 points, and finally improved coordination between performance categories. Multiple concerns remain regarding the reduction in scoring for quality improvement in future years, increase in proportion of MIPS scoring for resource use utilizing flawed, claims based methodology and the continuation of the disproportionate importance of ACI, an expensive program that can be onerous for providers which in many ways has not lived up to its promise. Key words: Medicare Access and CHIP Reauthorization Act of 2015, merit-based incentive payment system, quality performance measures, resource use, improvement activities, advancing care information performance category

The Anatomy of Sustainable Growth Rate of Indian Manufacturing Firms

2018 ◽  
Vol 19 (4) ◽  
pp. 1050-1071 ◽  
Author(s):  
Lalit Arora ◽  
Shailendra Kumar ◽  
Piyush Verma
Keyword(s):  
Growth Rate ◽  
Manufacturing Sector ◽  
Sustainable Growth ◽  
Profit Margin ◽  
Regression Equations ◽  
Industrial Growth ◽  
Return On Equity ◽  
Net Profit ◽  
Sustainable Growth Rate ◽  
Indian Manufacturing Sector

An important parameter to gauge the reasons behind success (failure) of a firm in the form of sustainable growth rate provides useful insights to managers and investors. This research analyzes the variations in calculations and suitability of method of calculating this growth rate using two different formulas. It also intends to examine the extent to which these variations in sustainable growth rate are explained by some of its important determinants. Using panel data regression by decomposing return on equity into net profit margin, asset turnover and financial leverage, results suggest that four key ratios are robust in capturing the variations in sustainable growth rate even after introducing industry-specific factors like industrial growth and inflation in the regression equations. Sustainable growth rate calculated only on the basis of percentage change in book value of equity provides an aggregate view depicting that any changes in sustainable growth rate across industries are random. Further analysis provides evidence that net profit margin drives the sustainable growth of firms in the Indian manufacturing sector.

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