be clarified by a simple reparametrization of the regression equation. The present procedure is represented by formula of the form image where W is the final physician work

index, C is the inclusion factor, and P is the reference (proxy) compensation index. Suppose the regression prediction is image where Xk is the wage index for reference profession k.

This can be rewritten as image is a weighted average of the proxy indexes, corresponding to P in the current method. Then a* is the multiplier C corresponding to the current 25%.

REFERENCES

CMS (Centers for Medicare and Medicaid Services). 2010. Medicare program; payment policies under the Physician Fee Schedule and other revisions for Part B for CY 2010. Federal Register 75(228):73170–73860.

Gillis, K. D., R. J. Willke, and R. A. Reynolds. 1993. Assessing the validity of the geographic practice cost indexes. Inquiry 30:265–280. Center for Health Policy Research, American Medical Association.

Goertz, R. 2011. Testimony to the IOM Committee on Geographic Adjustment Factors in Medicare Payment on behalf of the American Academy of Family Physicians.

MGMA (Medical Group Management Association). 2010. MGMA physician placement report: 65 percent of established physicians placed in hospital-owned practices. Engelwood, CO: Medical Group Management Association. http://www.mgma.com/press/default.aspx?id=33777 (accessed March 8, 2011).



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