Medicare providers could see both bigger pay increases and bigger cuts than offered in the current system under a high-profile, bipartisan overhaul proposed Thursday.

The single largest provider benefit in a proposed overhaul from the Bipartisan Policy Center—founded in 2007 by former Republican and Democratic congressional leaders—is the elimination of the sustainable growth-rate formula. That payment system has required congressional patches to avert Medicare physician pay cuts every year since 2002, including a 24.4% cut required at the end of this year.

Overall, the slate of Medicare policy and healthcare tax changes would provide a projected $560 billion in federal healthcare savings, which includes the $138 billion cost of eliminating the SGR and its required cuts.

The catch for providers is that they would never receive another increase in their fee-for-service payments, unless their area is given a rural exemption from the HHS secretary.

That significant policy change was intended to drive most providers into an updated version of accountable care organizations. Without such an incentive, hospitals advocates said some of their members would never move into ACO-type programs as long as an ongoing fee-for-service system was in place, a BPC official said. Read more