The Balanced Budget Act Of 1997
In 1997, under President Clinton, the Balanced Budget Act of 1997 signed into law. The Balanced Budget Act of 1997 was thought to be the solution to decrease federal Medicaid spending. “The legislation projected to achieve gross federal Medicaid savings of $17 billion over the first five years and $61.4 billion over the following ten years” (Schneider, 1997). The goal of the Balanced Budget Act of 1997 was to assist in the reduction of the federal budget by 2002. Accompanying these spending reductions, the Balanced Budget Act of 1997 also included provisions that signified the most impactful set of changes in Medicaid since 1991, twenty-six years after its enactment into the Social Security Act in 1965. Along with its goal to balance the federal budget, the Balanced Budget Act of 1997 introduced the Sustainable Growth Rate (SGR).
The SGR was established by the Centers for Medicare and Medicaid Services (CMS) to control costs and spending in relation to healthcare services received by Medicaid recipients. According to Hirsch, the SRG was tied to some Medicare Part B payments and was intended to provide long-term control of Medicare physician spending. With so much hope for the control of spending, it was devastating when governmental officials realized that the SGR not only failed but also caused, even more, damage to the economy. Taking notice to this, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) eliminated the SGR once and for all.