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1992.11.20 :  Medicare Physician Fee Schedule

Contact:  Bob Hardy (202) 690-6145
November 20, 1992

       The first revisions of the Medicare physician fee
schedule, which covers more than 7,000 medical services, will be
implemented beginning Jan. 1, under a regulation to be published
in the Federal Register.
       The date will mark the first anniversary of the new fee
schedule, which determines Medicare payment amounts for the
services of nearly 800,000 medical professionals.
       "We knew that a new payment system of this size and
complexity would need fine-tuning," said HHS Secretary Louis W.
Sullivan, M.D. 
       The revisions affect the values assigned to each medical
service.  These "relative values," representing the work and
overhead costs associated with providing medical services, are
the foundation of the fee schedule.  A formula specified by law
is used to translate the values into dollar amounts.
       An extensive review process produced changes -- mostly
increases -- in the relative values for more than 500 medical
services.  To meet a requirement of law, the increases will be
balanced by across-the-board reductions to prevent the changes
from increasing Medicare spending.
       "Even after the reductions, the adjustments will produce
some net gain for most primary care physicians," said William
Toby Jr., acting administrator of the Health Care Financing
Administration.
       The regulation increases the relative values of certain
services commonly performed by primary care physicians.  These
services include office visits and doctors' visits to patients in
hospitals and nursing homes.
       Toby said that HCFA conducted the review of the fee
schedule over seven months with cooperation from medical
professional societies.
       "We are pleased that more than 120 physicians from a
variety of specialties participated in review panels that
submitted recommendations for the fee schedule revisions," he
said.               

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EDITOR'S NOTE: HCFA, an agency of the U.S. Department of Health
and Human Services, directs the Medicare and Medicaid programs,
which help pay the medical bills of more than 62 million
Americans.  HCFA's estimated fiscal year 1993 expenditures are
$230 billion, the 12th largest government budget of any kind in
the world.