Geographic localities used to adjust Medicare payments for physicians should be revised, according to a Government Accountability Office report.
There are currently 89 geographic payment areas in the U.S. that the CMS uses to adjust physician fees. In more than half of those places, there was at least one county within with a large payment difference, meaning there was a difference of 5% or more between physicians costs and Medicares geographic adjustment for an area.
Overall, there were 447 counties with large payment differencesrepresenting 14% of all counties, the report stated. Sixty percent of these counties were located in California, Georgia, Minnesota and Ohio.
Several factors may account for these large payment differences. The CMS, for example, has not revised certain payment localities to reflect substantial population growth that has taken place in some areas, and may be leading to increased costs.
In revising its payment localities, the GAO recommended that the CMS use an approach that would be applied uniformly to all states, and based on current data. Payment areas should be updated on a periodic basis, the watchdog agency stated. The CMS said it would consider some of the GAOs recommendations, but didnt like the choice of using counties as the basis for comparing physician costs and Medicares geographic adjustment. The GAO also didnt take into account the effect its recommendations would have on physician payments, the agency stated. -- by Jennifer Lubell
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