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Geographic Adjustment in Medicare Payment Phase II: Implications for Access, Quality, and Efficiency (2012) / Chapter Skim
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5 Observations on the Larger Policy Context
Pages 125-134

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From page 125...
... In this environment, the concern is that any change in price per unit, such as could be experienced by a change in Medicare's geographic adjustment factor, could change provider behavior. In particular, in areas where implementation of the proposed changes in geographic adjustments would result in lower per-unit prices, there have been concerns that providers would accept fewer Medicare patients or move to geographic areas where payment adjustments are more favorable, creating access problems for Medicare beneficiaries, or that they could reduce quality to maintain incomes in the face of lower payments.
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From page 126...
... These discussions centered on the Medicare fee schedule for physicians and other individual practitioners and on the supplemental payments to hospitals to subsidize the costs of GME. Fee-for-Service Payment In Chapter 2 of this report, the committee examined statistical simulations of its recommended changes to geographic adjustments to Medicare payments to clinical practitioners and considered how the changes might affect Medicare beneficiary access to health care.
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From page 127...
... In contrast, primary care services account for about 20 percent of all RVUs billed in metropolitan areas. In 2006, the American Medical Association RVU Update Committee established a workgroup to identify potentially misvalued services using objective mechanisms for reevaluation (AMA, 2012)
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From page 128...
... Figuretotal NOTE: The figure is based on the share of national 5-1.eps Part B RVUs billed in 2010 by physicians identified as internists, geriatricians, family practitioners, and pediatricians, plus RVUs billed by nurse practitioners and physician assistants. RVU = relative value unit.
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From page 129...
... They found the odds were 67 percent higher for ZIP codes with a majority African American population. Residents of predominantly African American, Hispanic, and integrated ZIP codes have also been found to be less likely to use services provided by nurse practitioners and physician assistants (Gaskin et al., 2011)
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From page 130...
... GEOGRAPHIC ADJUSTMENT AND PAYMENT REFORM Geographic adjustment to Medicare payment makes up an important but small part of the overall multipayer fee-for-service payment system. It has a limited ability to influence many of the factors the committee was asked to evaluate and consider, including access, health care qual
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From page 131...
... It appears that the actual costs incurred by providers will be determined by weighting services provided to Medicare beneficiaries by ACOs using the Medicare fee schedule, which incorporates in it a geographic adjustment factor. Thus, geographic adjustment is likely to have an impact on both the benchmark used to determine savings as well as the estimate of the costs of services delivered to ACO patients.
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From page 132...
... However, the committee also noted that payment policies of the larger delivery system and certain demographic factors potentially had more influence on access, efficiency, and quality of care than did geographic adjustment. In conducting the statistical simulations of the impact of its Phase I recommendations on clinical practitioners, the committee found a disproportionate impact on certain geographic areas, such as rural and frontier areas, and on racial and ethnic minorities in underserved communities.
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From page 133...
... Washington, DC: The National Academies Press. MedPAC (Medicare Payment Advisory Commission)
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Key Terms

  • medicare payment
  • rvus billed
  • geographic adjustments
  • care services
  • adjustment factor

  • fee schedule
  • payment policies
  • nurse practitioners
  • geographic access
  • care practitioners

  • medicare beneficiaries
  • adjustment factors
  • ethnic minorities
  • medicare geographic
  • geographic differences

  • medicare payments
  • care physicians
  • care provided
  • ethnic health
  • medicare sets

  • care delivery
  • care shortage
  • care billings
  • medicare fee
  • health disparities

  • payment advisory
  • advisory commission
  • beneficiary access
  • physician fee
  • service corps


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