Geographic payment adjustments: Medicare’s disputed borders

Ama-assn.org: 11/26/12

Physicians practicing in all parts of the country long have agreed that Medicare payments have been too low for too long, but a growing chorus of health policy officials say these doctors’ rates also are inaccurate when compared with one another.

Medicare uses geographic adjustments to pay more in areas deemed to have higher costs of providing care to seniors. The Centers for Medicare & Medicaid Services employs a patchwork of 89 pay locales to set rates in a budget-neutral environment. As a result, a doctor treating a Medicare patient in midtown Manhattan receives more than a doctor providing the same service in rural West Virginia.

In some places, large geographic swaths are considered part of the same region, meaning all doctors in an immediate area receive the same adjustments to their pay. But in other places, the practice just down the road — where building rents, equipment costs and staff salaries are practically the same — could get higher pay for providing the exact same service. Read More