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MedicareFeesandtheVolumeofPhysicians
Medicare Fees and the Volume of Physicians’ Services Academy Health June 28, 2009 by Jack Hadley, Jim Reschovsky, Catherine Corey, and Stephen Zuckerman Study Questions Do physicians provide more or fewer services to Medicare patients in response to a fee reduction? Is the magnitude and/or direction of the response the same for all services? Do physicians’ financial incentives in their practice influence the volume of services provided? What are the implications for Medicare’s physician payment system? Changes to the SGR Volume offset assumptions Study Design Estimate physicians provision of specific services to Medicare patients as function of Medicare fee differences (+ other factors) We use exogenous geographic and over-time payment variations to measure differences in fees Data: 2000-01 and 2004-05 CTS Physician Survey (N=13,707) Linked with 2000 2005 Medicare claims of their FFS pts. Estimate 2-part models: Probability of providing service Volume of service provided, given any Calculation of Medicare Fee Differences We measure slope of MC curve for physicians providing specific services to Medicare patients Actual payments do not perfectly correspond to min. AC, as envisioned under RBRVS due to data limitations and policy decisions. Key measure is “Medicare fee difference” (MFD): MFDijt = Paymtijt- Paymtijt* Where: Paymtijt = actual Medicare payment Paymtijt* = RBRVS-based ideal payment - approximation of minimum average cost Payment Formula Adjustments To Reflect RBRVS Ideal More Accurately (Paymtijt* ) Greater geographic detail in calculating GPCIs: Counties rather than Medicare payment areas More accurate Practice Expense RVU assignment in 2000 Eliminated “other policy goals” aspects of MFS ? to full work GPCI adjustment Work GPCI floor Medicare incentive program bonus payments Accounted for decline in real fees, 2000-2005 Annual updates input price increases (MEI) Key Independent Variables (hypothesized sign) Medicare Fee Difference
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