This study examined using metropolitan statistical areas (MSAs), grouping counties with similar practice costs, and incremental revisions in the current localities as potential options for defining the Geographic Practice Cost Index and Geographic Adjustment Factors (GAFs) used to adjust payment under the Medicare Physician Fee Schedule.
No recommendations were made on the favored geographic definition. Using MSAs changed the number from the 89 current payment localities to 387 metropolitan payment areas and 51 non-metropolitan payment areas. Grouping counties with similar GAFs resulted in 134 localities, compared to the 89 localities. statewide localities were reduced from 36 to 7. Incremental approaches retained the current localities, but made small changes to address areas generating the most complaints or in which the data suggested the largest payment inaccuracy.
Report Title: Payment Areas for Medicare Physician Services: Selected Alternatives http://www.cms.hhs.gov/Reports/downloads/Adamache_Final_March_2008.pdf
Agency Sponsor: CMS-ORDI, Office of Research, Development, and Information
Federal Contact: Jesse Levy, 410-786-6600
PIC ID: 8964