Assessment of the Physician Payment Review Commission's Proposed Geographic Areas for the Medicare Fee Schedule

摘要

The analysis compares the Physician Payment Review Commission's (PPRC) proposal to reconfigure payment localities under the new physician Medicare Fee Schedule to two options developed by the Urban Institute (UI). Options are contrasted with the status quo on the basis of number of payment areas and changes in the Medicare Geographic Practice Cost Index (GPCI) in rural areas. The authors conclude that the PPRC proposal may be stronger in reflecting the measured differences in input prices incorporated in the GPCI (employee wages, office rents, malpractice and physician time) among Metropolitan Statistical Areas (MSAs) but that the UI options more closely approximate within MSA input differences by recognizing an urban core. The major tradeoffs are simplicity versus recognition of measured input price variation and the extent to which rural areas versus suburban rings gain or lose.