Geographic Variation in Relative Fees Under Medicare

Published in: American Journal of Public Health, v. 81, no. 11, Nov. 1991, p. 1491-1493

Posted on RAND.org on December 31, 1990

by Jose J. Escarce

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Little is known about geographic variation in Medicare's relative fee structure. Using 1986 Part B Medicare claims data, ratios among physician fees for surgical procedures belonging to small families of closely related procedures, excluding outliers, were found to vary up to twofold. Under Medicare's current system of physician payment, physicians in different areas face different financial incentives for performing one procedure in preference to possible alternatives. Changes in incentives under a resource-based Medicare fee schedule will be more pervasive than previously recognized.

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