Physician Shortage Areas: Medicare Incentive Payment Not an Effective
Approach to Improve Access (Letter Report, 02/26/99, GAO/HEHS-99-36).
Pursuant to a congressional request, GAO reviewed the Medicare Incentive
Payment program to determine if: (1) it is an effective mechanism for
improving access to care for Medicare beneficiaries and underserved
populations other than Medicare beneficiaries; and (2) the program's
goals, performance measures, and financial controls provide a sound
structure for continuing or expanding the program.
GAO noted that: (1) the Medicare Incentive Payment Program is not an
effective mechanism for improving Medicare beneficiaries' ability to
obtain health care; (2) the program was created out of concern that low
Medicare payment rates for primary care services, particularly in areas
with a shortage of physicians, could cause access problems for Medicare
beneficiaries; (3) however, since the program began, Congress has taken
additional action to address this concern; (4) this action generally
increased reimbursement rates for primary care services and reduced the
geographic variation in physician reimbursement rates; (5) in addition,
the Health Care Financing Administration (HCFA) survey data show that
Medicare beneficiaries who have access problems, including those who may
live in underserved areas, generally cite reasons other than the
unavailability of a physician--such as the cost of services not paid by
Medicare--for their access problems; (6) the Medicare Incentive Payment
program is also not an effective mechanism for improving access to care
for people not covered by Medicare in underserved areas; (7) although
the program is considered a means of attracting and retaining physicians
in shortage areas, the program does not appear to play a significant
role in this regard; (8) the relatively small bonus payments most
physicians receive--a median payment of $341 for the year in 1996--are
unlikely to have a significant impact on physician recruitment and
retention; (9) the program has two other severe limitations that
restrict its ability to address identified needs of those in underserved
areas; (10) specialists receive most of the program dollars, even though
primary care physicians have been identified as being in short supply,
while shortages of specialists, if any, have not been determined; (11)
the program provides no incentives or assurance that physicians
receiving bonuses will actually treat people who have problems obtaining
health care; (12) the Department of Health and Human Services (HHS) has
not developed goals or related performance measures for the Medicare
Incentive Payment Program to clarify what the program is expected to
accomplish; (13) without such goals and measures, it is difficult for
HHS to determine what the program is accomplishing; and (14) HCFA's
oversight of the program also has limitations that allow physicians and
other providers to receive and retain bonus payments they claimed in
error.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: HEHS-99-36
TITLE: Physician Shortage Areas: Medicare Incentive Payment Not an
Effective Approach to Improve Access
DATE: 02/26/99
SUBJECT: Health care programs
Internal controls
Cost effectiveness analysis
Physicians
Medical fees
Health care services
Performance measures
IDENTIFIER: Medicare Incentive Payment Program
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Cover
================================================================ COVER
Report to Congressional Requesters
February 1999
PHYSICIAN SHORTAGE AREAS -
MEDICARE INCENTIVE PAYMENTS NOT AN
EFFECTIVE APPROACH TO IMPROVE
ACCESS
GAO/HEHS-99-36
Medicare Incentive Payments
(108369)
Abbreviations
=============================================================== ABBREV
AHCPR - Agency for Health Care Policy and Research
AMA - American Medical Association
HCFA - Health Care Financing Administration
HHS - Department of Health and Human Services
HPSA - health professional shortage area
HRSA - Health Resources and Services Administration
OBRA - Omnibus Budget Reconciliation Act
PPRC - Physician Payment Review Commission
Letter
=============================================================== LETTER
B-279809
February 26, 1999
The Honorable John L. Mica
Chairman, Subcommittee on Criminal Justice,
Drug Policy and Human Resources
Committee on Government Reform
House of Representatives
The Honorable Christopher Shays
House of Representatives
Many Americans face difficulties obtaining health care. In many
areas of the country, ranging from remote rural areas to inner
cities, these difficulties may be the result of a shortage of
physicians. Recognizing this need, the federal government identifies
areas with shortages of primary care physicians and administers a
variety of programs designed to improve access to care for people
living in those areas. One of these programs is the Medicare
Incentive Payment program.
The Medicare Incentive Payment program pays physicians a 10-percent
bonus payment for Medicare services they provide in areas identified
as having a shortage of primary care physicians. The program,
administered by the Health Care Financing Administration (HCFA) of
the Department of Health and Human Services (HHS), is viewed as a
method to attract and retain physicians in underserved areas and
improve access to care, both for Medicare beneficiaries and for
others who may have difficulty obtaining health care. In 1997, bonus
payments paid from the Medicare Supplemental Medical Insurance trust
fund amounted to over $92 million.
In recent years, both the Administration and the Congress have
considered expanding or otherwise modifying the program to address
continuing concerns about medical underservice. Proposed approaches
include increasing the bonus percentage for primary care services;
expanding bonus payments to other providers, such as nurse
practitioners and physician assistants; and allowing more areas to
become eligible for bonus payments. In light of these proposed
modifications and our prior work identifying problems with federal
efforts to target resources to underserved areas, you asked us to
determine if the program is an effective mechanism for improving
access to care for (1) Medicare beneficiaries and (2) underserved
populations other than Medicare beneficiaries. You also asked us to
determine if the program's goals, performance measures, and financial
controls provide a sound structure for continuing or expanding the
program.
We focused our work on the extent to which the program design
addresses access to health care needs. Our work included analyzing
HCFA data for all physician claims for which bonus payments were made
in calendar year 1996 and the results of HCFA's Medicare Current
Beneficiary Survey for that year. We supplemented this analysis with
reviews of agency documents and studies on physician practice
location decisions and interviews with agency officials, contractors
who process the bonus payments, and health services researchers. We
conducted our work from May through December 1998 in accordance with
generally accepted government auditing standards. For more on our
scope and methodology, see appendix I.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
The Medicare Incentive Payment program is not an effective mechanism
for improving Medicare beneficiaries' ability to obtain health care.
The program was created out of concern that low Medicare payment
rates for primary care services, particularly in areas with a
shortage of physicians, could cause access problems for Medicare
beneficiaries. However, since the program began, the Congress has
taken additional action to address this concern. This action
generally increased reimbursement rates for primary care services and
reduced the geographic variation in physician reimbursement rates.
In addition, HCFA survey data show that Medicare beneficiaries who
have access problems, including those who may live in underserved
areas, generally cite reasons other than the unavailability of a
physician--such as the cost of services not paid by Medicare--for
their access problems.
The Medicare Incentive Payment program is also not an effective
mechanism for improving access to care for people not covered by
Medicare in underserved areas. Although the program is considered a
means of attracting and retaining physicians in shortage areas, the
program does not appear to play a significant role in this regard.
The relatively small bonus payments most physicians receive--a median
payment of $341 for the year in 1996--are unlikely to have a
significant impact on physician recruitment and retention. The
program has two other severe limitations that restrict its ability to
address identified needs of those in underserved areas. First,
specialists receive most of the program dollars, even though primary
care physicians have been identified as being in short supply, while
shortages of specialists, if any, have not been determined. Second,
the program provides no incentives or assurance that physicians
receiving bonuses will actually treat people who have problems
obtaining health care.
HHS has not developed goals or related performance measures for the
Medicare Incentive Payment program to clarify what the program is
expected to accomplish. Without such goals and measures, it is
difficult--if not impossible--for HHS to determine what the program
is accomplishing. As it stands, the program provides no assurance
that the more than $90 million spent each year is improving access to
care in underserved areas. HCFA's oversight of the program also has
limitations that allow physicians and other providers to receive and
retain bonus payments they claimed in error.
This report contains matters for congressional consideration,
including a determination of the program's appropriateness for
addressing medical underservice. In addition, the report contains
recommendations to the Secretary of HHS to strengthen program
accountability and financial controls.
BACKGROUND
------------------------------------------------------------ Letter :2
The Medicare Incentive Payment program was originally proposed
because of concerns that low Medicare reimbursement rates,
particularly for primary care services, could cause access problems
for Medicare beneficiaries in some areas. Since the program began,
it has also come to be viewed as a mechanism to address the medical
underservice problems of a broader population.
In a 1987 report to the Congress, the Physician Payment Review
Commission (PPRC)\1
reported that geographic variations in Medicare payments might
contribute to access problems for beneficiaries in some rural and
low-income urban areas. PPRC was concerned that low Medicare
payments in such areas might affect physicians' willingness to see
Medicare beneficiaries and could affect their decisions to establish
and maintain practices there. As an initial step to address these
problems, PPRC recommended that Medicare pay an increment above
approved charges for primary care services delivered in underserved
areas. In response, the Congress included language in the Omnibus
Budget Reconciliation Act of 1987 (OBRA 87) that established a new
section 1833(m) of the Social Security Act.\2 The new provision
provided for a 5-percent bonus payment effective January 1, 1989, for
all physician services provided in rural areas with the greatest
degree of physician shortages.\3 OBRA 87 also provided for the bonus
payments to be extended to urban areas with the greatest degree of
physician shortages, effective January 1, 1991.\4
In its report accompanying OBRA 87, the House Budget Committee
expressed concern that low Medicare payment rates for primary care
services, particularly in areas with a shortage of physicians, could
lead to Medicare beneficiaries having difficulty accessing care. The
committee acknowledged that higher payments for services might not be
a complete solution to the problem but asserted that such payments
were "a necessary ingredient in the solution" and were likely to
significantly improve access to such services.\5 The program
requirements were amended in 1989, increasing the bonus payments to
10 percent, effective January 1, 1991, and they were extended, as
provided under OBRA 87, to urban areas with physician shortages on
that same date.\6 The amendments also extended bonus payments to all
areas identified with a shortage of physicians by removing the
requirement that the services be provided in those areas with the
greatest degree of physician shortages.
More recently, the program has been viewed as serving a broader goal
of benefitting underserved areas in general, not just helping ensure
that Medicare beneficiaries have adequate access to care. Some
health services researchers, physician groups, and rural health
advocates see the program as a mechanism to provide assistance to
underserved areas, particularly in recruiting and retaining
physicians.
--------------------
\1 PPRC was established to advise the Congress on reforms in
physician payment under the Medicare program. In 1997, PPRC was
merged with the Prospective Payment Assessment Commission to create
the Medicare Payment Advisory Commission.
\2 P.L. 100-203, sec. 4043, 101 Stat. 1330, 1330-85 (42 U.S.C.
1395l(m)).
\3 The federal government classifies shortage areas into four
classes. OBRA 87 restricted the bonus payments to class 1 and class
2 rural areas, which have the greatest degree of shortage.
\4 OBRA 87 also charged the Secretary of HHS with studying and
reporting on the feasibility of such an extension.
\5 H.R. Rep. No. 100-391(I), at 389 (1987). No Senate report was
submitted with this legislation.
\6 Omnibus Budget Reconciliation Act of 1989, P.L. 101-239, sec.
6102(c)(1), 103 Stat. 2106, 2184.
HOW BONUS PAYMENTS ARE MADE
---------------------------------------------------------- Letter :2.1
The program's bonuses are based on payments to physicians for
services in both hospital and nonhospital settings paid by Medicare's
medical insurance (part B). These payments include office visits and
physician evaluations of hospitalized patients. Bonuses are not paid
for other health care costs covered by Medicare's hospital insurance
(part A), such as inpatient hospital care. In addition, bonuses are
not paid for services provided under Medicare managed care plans.
Bonus payments are made when the location where the services are
provided is in an area designated by HHS' Health Resources and
Services Administration (HRSA) as a primary care health professional
shortage area (HPSA). All types of physicians, including
specialists, are eligible for these payments, while nonphysician
providers, such as nurse practitioners, are not. Physicians
providing services in HHS program sites serving underserved areas and
populations--such as rural health clinics, community health centers,
and other federally qualified health centers--are not eligible for
bonus payments.\7
To be designated a primary care HPSA, an area must be a rational
service area and have a population-to-physician ratio of at least
3,500 to 1.\8 HHS designates primary care HPSAs in one of three ways:
(1) a general shortage of providers within a geographic area; (2) a
shortage of providers willing to treat a specific population group,
such as poor people or migrant farmworkers, within a defined area; or
(3) a shortage of providers for a public or nonprofit facility, such
as a prison or a hospital. Only HPSAs in the first
category--geographic HPSAs--are eligible for Medicare incentive
payments. Geographic primary care HPSAs can include an entire county
or only part of a county such as specific census tracts. In
practice, areas are designated as geographic HPSAs even when only a
portion of the population is underserved. HPSA designations are made
without accounting for the presence of health care facilities, such
as hospitals, or physicians not in primary care fields. As of March
31, 1998, over 1,800 areas were designated as geographic primary care
HPSAs eligible for bonus payments.
--------------------
\7 These clinics and health centers receive cost-based reimbursements
under Medicare part B, which covers their actual costs of providing
care.
\8 Under certain circumstances, a population-to-physician ratio of
3,000 to 1 is used. This ratio is calculated by counting nonfederal
physicians providing direct patient care who practice principally in
one of the four primary care specialties--general or family practice,
general internal medicine, pediatrics, and obstetrics and gynecology.
See 42 C.F.R. Appendix A to Part 5 (1998).
PROGRAM EXPENDITURES
---------------------------------------------------------- Letter :2.2
Program expenditures have increased dramatically since the program
began, paying more than $400 million dollars in bonuses over the past
5 years. Because it is tied to Medicare payments for physician
services, the program is not exposed to the same routine legislative
scrutiny as many other programs.\9 Program payments totaled less than
$2 million in 1989 and grew to nearly $32 million in 1991, the first
year program amendments were implemented. Since that time, without
any further changes in the program, expenditures have grown to over
$100 million in 1996 and over $90 million in 1997. Of the amount
paid in 1996, $57 million was paid for services provided in urban
areas; the remaining $49 million was paid for services provided in
rural areas.\10
We and others have reported on concerns about the program's
operation, particularly about the effectiveness of using the HPSA
designation system as the primary tool for determining where such
bonus payments should be targeted.\11 Since the issuance of these
reports, numerous proposals for expanding or otherwise modifying the
program have been considered, but none has been enacted.\12
--------------------
\9 Medicare payments for physician services are financed by monthly
premiums as well as federal general revenues.
\10 When physicians claim the bonus payment, they indicate on the
claim form whether the service was provided in an urban or a rural
HPSA. We used these self-reported categorizations for our analysis
of urban and rural bonus payments.
\11 See Health Care Shortage Areas: Designations Not a Useful Tool
for Directing Resources to the Underserved (GAO/HEHS-95-200, Sept.
8, 1995), and Medicare Incentive Payments in Health Professional
Shortage Areas: Do They Promote Access to Primary Care?, HHS Office
of Inspector General (OEI-01-93-00050, June 1994).
\12 In 1995, as part of a budget reconciliation bill, the Congress
approved a provision to increase bonus payments to 20 percent, limit
the payment to primary care services, and extend bonus payments for 3
years after a HPSA designation is withdrawn. However, the bill was
vetoed by the President.
PROGRAM IS NOT AN EFFECTIVE
MECHANISM FOR IMPROVING
MEDICARE BENEFICIARIES' ACCESS
TO CARE
------------------------------------------------------------ Letter :3
Since the inception of the Medicare Incentive Payment program the
basis for Medicare physician reimbursement has changed. The program
began out of concern that low Medicare rates, particularly for
primary care services, were causing access problems for Medicare
beneficiaries in some areas. However, in 1989 the Congress required
the Secretary to establish a Medicare fee schedule for physician
services.\13 Implementation of the fee schedule, which began in 1992,
generally increased reimbursement rates for primary care services and
decreased the geographic variation in physician reimbursement rates.
For example, between 1991 and 1993, the payment rates for services
provided by general and family practice physicians increased 17
percent. PPRC has reported on the fee schedule implementation since
1992 and has found no evidence linking changes in Medicare
reimbursement rates with health care access problems for Medicare
beneficiaries. For five reports issued between 1993 and 1997, PPRC
analyzed changes in beneficiaries' use of services, satisfaction with
care, and ability to obtain care and found no relationship between
the fee-schedule payment rates and access problems for beneficiaries.
In 1998, PPRC's successor, the Medicare Payment Advisory Commission,
reported similar findings.
While some Medicare beneficiaries have reported difficulty obtaining
health care, the reasons cited for these problems are generally not
addressed by the Medicare Incentive Payment program. On the basis of
its 1996 Medicare Current Beneficiary Survey,\14 HCFA estimates that
about 904,000 of more than 29 million beneficiaries enrolled in
Medicare fee-for-service experienced some trouble obtaining health
care.\15 However, most of the primary reasons for trouble obtaining
health care identified in the survey were not directly related to the
lack of a physician. These reasons included services and supplies
not covered by Medicare and the lack of transportation to the doctor
or hospital. Among the beneficiaries estimated to have trouble
obtaining care, HCFA's projections indicate that the portion having
problems for reasons the Medicare Incentive Payment program could
address is relatively small.\16
HCFA's survey data do not break out the extent to which those
Medicare beneficiaries whose trouble obtaining care relates to
physician reimbursement rates may be concentrated in HPSAs. However,
even if most or all of these beneficiaries resided in HPSAs, in
aggregate they would represent a very small percentage of the
estimated 6.2 million Medicare beneficiaries who live within a HPSA.
--------------------
\13 P.L. 101-239, sec. 6102, 103 Stat. 2106, 2169 (42 U.S.C.
1395w-4).
\14 HCFA's Medicare Current Beneficiary Survey is a continuous,
multipurpose survey of a representative sample of the Medicare
population, including both aged and disabled enrollees. In 1996, the
access to care portion of the survey included a sample of over 17,000
Medicare beneficiaries. The survey collects information about
demographic characteristics, health status and functioning, access to
care, insurance coverage, and financial support. See appendix I for
more information on our analysis of survey results.
\15 At the 95-percent confidence level, HCFA estimates the number of
beneficiaries who reported difficulty obtaining health care to be
between 815,023 and 993,292. These survey results are for an
estimated 29 million beneficiaries under Medicare fee-for-service who
were enrolled in one or both parts of the Medicare program as of
January 1, 1996, and were alive and enrolled at the time of the
Medicare Current Beneficiary Survey interview (September to December
1996). Beneficiaries living in long-term-care facilities, such as
nursing homes, were excluded from these estimates.
\16 At the 95-percent confidence level, HCFA estimates that between
19,502 and 70,524 beneficiaries had trouble primarily because the
wait was too long or the doctor was too busy; between 14,448 and
57,442 beneficiaries had trouble primarily because they could not
find a doctor who would accept Medicare; and between 6,368 and 23,424
beneficiaries had trouble primarily because of difficulty or delays
getting an appointment because they were on Medicare.
PROGRAM IS NOT AN EFFECTIVE
MECHANISM FOR ADDRESSING ACCESS
PROBLEMS IN UNDERSERVED AREAS
------------------------------------------------------------ Letter :4
The Medicare Incentive Payment program is also not an effective
mechanism for improving access to care for other residents of HPSAs
for two reasons. First, typical bonus payments are small and are
unlikely to play a significant role in attracting or retaining
physicians to work in HPSAs. Second, the program dollars that are
paid are not linked to primary care physicians, who have been
identified as needed in HPSAs; nor are dollars linked to the
treatment of people who actually have problems obtaining health care.
INFLUENCE ON PHYSICIAN
RECRUITMENT AND RETENTION IS
QUESTIONABLE
---------------------------------------------------------- Letter :4.1
The program's ability to influence a physician's decision to locate
and remain in an underserved area is questionable. Most physicians
who are paid a bonus receive an insignificant amount each year, both
nominally and in comparison to a physician's total income. In
addition, the impact of financial incentives on practice location
decisions may be limited, as many other factors can also influence
these decisions.
In 1996, half of the more than 49,000 physicians receiving a bonus
payment received $341 or less for the year; three-fourths, or about
37,000 physicians, received less than $2,130.\17
This larger amount represents less than 2 percent of the median net
income for physicians during the year.\18 In urban areas, the median
payment is somewhat higher for specialists; in rural areas the
opposite is true. As shown in table 1, however, the highest median
bonus payment is only $427.
Table 1
Median Annual Bonus Payments for
Physicians Receiving a Bonus Payment, by
Physician Type and Location, 1996
Median annual
bonus
payment\a
--------------
Physician type Urban Rural
------------------------------------------------------ ------ ------
Primary care physician $352 $370
Specialist 427 99
All physicians\b 403 161
----------------------------------------------------------------------
Note: The table excludes 328 physicians who submitted valid claims
for bonus payments but received no bonus payments because Medicare
did not pay for the services (for example, if the beneficiary had not
met his or her deductible and paid the entire claim). The table also
excludes 2,319 physicians who received bonus payments in both urban
and rural areas.
\a The median bonus payment is the amount at which half of the
physicians receiving bonus payments received less for the year and
half received more. Median bonus payments were calculated for
physicians who received bonus payments in 1996, based on Medicare's
identification numbers for unique physicians.
\b Physicians who received bonus payments and who were listed as both
a primary care and specialty physician in HCFA's claims data were
excluded from the median calculations. If these physicians were
included, the median annual bonus payments would increase to $488 in
urban areas and $193 in rural areas.
Regardless of the size of these payments, studies and surveys have
suggested that factors other than income play a role that is of equal
or greater importance in physicians' decisions about where to
practice. Opportunities to pursue professional interests,
availability of colleagues and continuing education, and quality of
life issues have been cited in studies and ranked in surveys of
physicians as being as influential as or more influential than income
on their practice location decisions.\19 In a 1992 PPRC report, the
commission questioned the impact of financial incentives on
attracting physicians to underserved communities. PPRC observed that
to recruit physicians who have established a practice elsewhere, a
payment incentive would in theory have to offset the costs associated
with starting a new practice and the nonfinancial costs of
relocating. Even for new physicians, income differentials do not
significantly affect the decision to locate in a nonmetropolitan
versus metropolitan area, PPRC reported.
In some instances, such as for physicians operating at the financial
margin, the bonus payments may be a factor in a physician's decision
to stay in a community. However, we were unable to find evidence
regarding the relative influence of a small financial incentive
compared to other factors. One study of primary care physicians who
moved to rural areas found that only physicians' satisfaction with
their communities and opportunities to achieve professional goals
lengthened retention. While the study found that satisfaction with
income also tended to predict longer retention, this did not quite
reach levels of statistical significance.\20 The study did not
examine the influence of small financial incentives on retention.
--------------------
\17 In rural areas, three-fourths of, or about 18,700, physicians
received less than $1,520 for the year. In urban areas,
three-fourths of, or about 16,300, physicians received less than
$2,558 for the year.
\18 According to survey data from the American Medical Association
(AMA), the median net income in 1996 for all physicians after
expenses and before taxes was $166,000; for general or family
practitioners, it was $130,000. Seventy-five percent of all
physicians had net incomes over $120,000.
\19 In its 1991 report to the Congress, PPRC reviewed the range of
factors that affect a physician's decision where to practice. Among
the most important from the perspective of rural physicians are
proximity to hospital facilities; access to continuing medical
education; and the presence of other physicians, which provides
opportunities to join a group practice, interact with colleagues, and
obtain coverage for patients when off-call. In addition to
professional considerations, the physical environment and amenities
of an area have some bearing on a physician's location decision.
Also, in a 1994 AMA survey of physicians under age 40, location
preference, personal autonomy, opportunity to pursue professional
interests, and convenience of work hours were cited more often than
income potential or guaranteed income as important factors
influencing their employment decisions.
\20 D. Pathman, E. Williams, and T. Konrad, "Rural Physician
Satisfaction: Its Sources and Relationship to Retention," The
Journal of Rural Health, Vol. 12, No. 5 (1996), pp. 366-77.
PROGRAM EXPENDITURES MAY NOT
ADDRESS ACCESS PROBLEMS OF
UNDERSERVED AREAS
---------------------------------------------------------- Letter :4.2
In addition to providing little incentive to recruit physicians to
HPSAs, the Medicare Incentive Payment program does not link program
dollars to need. Access to primary care providers is viewed by the
federal government and health services researchers as one of the most
critical access needs in underserved areas. However, most program
dollars are paid to specialists--even though the extent of specialist
shortages, if any, has not been identified. In addition, bonus
payments provide no incentive or requirement for physicians to treat
people who are having problems obtaining health care.
PRIMARY CARE PHYSICIANS
ARE IN SHORT SUPPLY IN
UNDERSERVED AREAS, BUT
MOST PROGRAM DOLLARS GO
TO SPECIALISTS
-------------------------------------------------------- Letter :4.2.1
Primary care providers provide continuous, basic, and preventive
health care and coordinate patient needs for specialty care; for this
reason, the federal government has a variety of programs that spend
over $1 billion each year in an effort to address the primary care
needs in underserved areas.\21 States also view the availability of
primary care providers in underserved areas as a critical need.\22
Forty-six states participate in a rural recruitment and retention
network to inform health care providers about employment
opportunities in rural areas, including underserved areas. All
states in the network are seeking primary care providers.
Despite the need for primary care physicians, specialists received
the majority of Medicare Incentive Payment program dollars in
1996.\23 This occurs because of the disconnect between the types of
physicians identified as needed in HPSAs and the physicians eligible
to receive bonus payments. HPSA designations only identify shortages
of primary care physicians and do not identify whether shortages of
specialists exist.
Areas that have a shortage of primary care physicians do not
necessarily have a shortage of specialists. In general, a smaller
portion of a given population needs specialty care. For example,
researchers estimate that to sustain a practice, a cardiologist would
need a population base that is nine times larger than the population
base needed by a family practice physician.\24
Even though the need for specialists in shortage areas is unknown,
bonus payments to specialists amounted to over 60 percent ($65
million) of all program dollars.\25 A larger proportion of these
payments--and many of the substantial bonus payments--were made to
specialists in urban areas, where they are typically concentrated.\26
For example, in 1996, specialists in urban areas received more than
$41 million.\27 One cardiac surgeon received over $75,000, a
dermatologist received over $69,000, and a neurosurgeon received over
$57,000 in bonus payments. While many specialists provide some
primary care services, 84 percent--or about $35 million--of the 1996
bonus payments to specialists in urban areas was for specialty
services.\28
In a 1994 HHS Inspector General report, the necessity of paying
bonuses to specialists, particularly in urban areas, was questioned.
The Inspector General reported that these physicians generally
provide few primary care services and are attracted to urban areas
for reasons other than bonus payments. In its response to the
report, HCFA agreed that making incentive payments to specialists in
urban areas was an unnecessary expenditure for the trust fund but
said that provisions in the President's Health Security Act, then
under consideration, would limit bonus payments in urban HPSAs to
primary care services.\29 However, the President's Health Security
Act was not enacted, and HCFA has not proposed any other legislative
solution to the problem.
--------------------
\21 These programs include the Health Center program, the National
Health Service Corps, the Rural Health Clinic program, and various
health professions education programs.
\22 In 1990, 90 percent of states cited availability of primary care
physicians as one of their top concerns regarding health care
shortages, according to HHS' report States' Assessment of Health
Personnel Shortages: Issues and Concerns, Pub. No. HRS-p-OD 90-6
(Washington, D.C.: HHS, Oct. 1990).
\23 We considered physicians practicing in general or family
medicine, internal medicine, obstetrics/gynecology, and pediatrics as
primary care physicians, and physicians practicing in other
specialties as specialists.
\24 L. L. Hicks and J. K. Glenn, "Rural Populations and Rural
Physicians: Estimates of Critical Mass Ratios, by Specialty,"
Journal of Rural Health, Vol. 7, No. 4, Supplemental (1991).
\25 In rural areas, specialists received 49 percent of bonus payment
dollars; in urban areas, specialists received 73 percent of bonus
payment dollars.
\26 See appendix II for information on the distribution of bonus
payments by the type of county of the Medicare beneficiaries'
residence in relation to metropolitan areas.
\27 Of this amount, 29 percent was paid to physicians in the
specialties of cardiology, ophthalmology, and diagnostic radiology.
Specialties receiving more than $1 million in bonus payments for
services provided in urban HPSAs include anesthesiology, emergency
medicine, gastroenterology, general surgery, nephrology, orthopedic
surgery, pulmonary disease, psychiatry, and urology. Appendix III
lists the different specialty areas in which physicians received
bonus payments in urban areas and the total amount of bonus payments
each type received in 1996.
\28 Similar results are found in rural areas. In 1996, 79
percent--or about $19 million--of the $24 million in bonus payments
to specialists in rural areas was for specialty services.
\29 This bill also included an increase in incentive payments for
primary care service in both urban and rural HPSAs from 10 percent to
20 percent.
PAYMENTS ARE NOT LINKED
TO TREATING THOSE
ACTUALLY UNDERSERVED
-------------------------------------------------------- Letter :4.2.2
In addition to paying the majority of program dollars to specialists,
the program does not require physicians receiving bonus payments to
treat people who are actually underserved, such as the uninsured.\30
Thus, a physician treating a large number of Medicare beneficiaries
and receiving bonus payments for each could have few or no uninsured
patients but would receive a relatively large amount in bonus
payments. Conversely, a physician with a large number of uninsured
patients but few Medicare patients would receive a relatively small
amount in bonus payments.
The program also does not target all types of primary care services
needed to address an area's access problems. For example, many
states report the need for more pediatricians, obstetricians, and
gynecologists, in particular, to improve health care services for
populations such as young children and pregnant women in underserved
areas. However, children and pregnant women are typically not
eligible for Medicare; as such, the program pays few, if any, bonuses
to those pediatricians, obstetricians, and gynecologists who treat
them.\31
Bonus payments are also made for beneficiaries who are treated but do
not live in a geographic HPSA. For example, both the physician's
office and the beneficiary's residence could be in an suburb outside
a HPSA, but the physician would receive a bonus payment for treating
the beneficiary in a hospital located in a HPSA. This problem is
more pronounced in urban areas. We estimate that of the $57 million
paid in urban areas in 1996, about 1 out of every 2 dollars, or about
$31 million, was paid for treating beneficiaries who did not live in
a geographic HPSA.\32
HHS officials have acknowledged that the HPSA system is not
structured to effectively identify areas where the Medicare Incentive
Payment program should be implemented and that it was not set up to
do so. HHS has proposed some revisions to address a number of other
problems related to the HPSA designation system, but these changes
are not directed at the problems in using the designation for the
Medicare Incentive Payment program.\33 Therefore, the proposed
changes do little, if anything, to improve the link between Medicare
incentive payments and the treatment of people who are actually
underserved.
--------------------
\30 Not all residents of a geographic HPSA have difficulty obtaining
health care; rather, many of the geographic HPSA designations
actually mean a specific segment of the population living in the area
is underserved. In addition, according to a report by the Agency for
Health Care Policy and Research (AHCPR), families with one or more
uninsured family members were two to three times more likely to have
experienced barriers to receiving needed health care services than
insured families. According to the report, the inability to afford
medical care and insurance-related problems were the main reasons
families reported for their difficulty, delay, or inability to obtain
health care in 1996. See Access to Health Care in America--1996,
MEPS Highlights 3, AHCPR Pub. No. 98-0002 (Oct. 1997).
\31 Medicare may cover pregnant women or children under certain
circumstances if they are disabled or have chronic kidney disease.
For most physicians with specialties of pediatrics or
obstetrics/gynecology, Medicare payments comprise a relatively small
percentage of their revenues. According to AMA survey data, Medicare
comprised an average of 1.3 percent of revenues for pediatrics and an
average of 8.7 percent of revenues for obstetrics/gynecology in 1996.
In contrast, Medicare comprised an average of 24 percent of revenues
for general/family practice physicians.
\32 In rural areas, we estimate that about 1 of every 10 dollars in
bonus payments was paid for treating beneficiaries who lived outside
a geographic HPSA. These estimates are based on random samples of
claims for which bonus payments were made. At the 95-percent
confidence level, we estimate that the total bonus payments made for
beneficiaries who lived outside a geographic HPSA was between $18.5
and $43.9 million in urban areas and between $3.2 and $5.8 million in
rural areas.
\33 HHS began developing the proposed revisions in 1992 to accomplish
several goals and alleviate problems associated with the existing
methods of HPSA designation. HHS describes various purposes for
these revisions, including (1) consolidating the HPSA designation
process with another HHS process for designating medically
underserved areas, (2) reducing the need for time-consuming
population group designations by including indicators representing
access barriers experienced by these groups in the criteria applied
to area data, and (3) ensuring that current services to underserved
populations are not disrupted in the transition to the new system.
See 63 Fed. Reg. 46538, 46539 (Sept. 1, 1998).
PROGRAM LACKS SOUND
ADMINISTRATIVE STRUCTURE
------------------------------------------------------------ Letter :5
The Medicare Incentive Payment program's goals, performance measures,
and financial controls do not provide a sound structure for
continuing or expanding the program. HHS has not defined program
goals or related performance measures against which to measure the
program's accomplishments. In addition, HCFA may be able to
implement at no additional cost more effective financial controls
that could save millions of dollars in erroneous bonus payments.
GOALS OR RELATED PERFORMANCE
MEASURES ARE ABSENT
---------------------------------------------------------- Letter :5.1
HCFA officials said they administer the program as required by
law--making bonus payments when a service is provided in an eligible
HPSA--and that the agency's flexibility to target payments is limited
by statute. While changing the eligibility for receiving bonus
payments would require legislative action, the agency can nonetheless
develop clear program goals and related performance measures to
monitor the program as part of its implementation of the Government
Performance and Results Act of 1993 (Results Act). Thus far,
however, the program has not been part of HHS' Results Act planning.
For example, HHS has a strategic goal to "improve access to health
services and ensure the integrity of the nation's health entitlement
and safety net programs." One of the objectives to achieve this goal
is to "improve access to primary care services." The Medicare
Incentive Payment program has not been incorporated into this goal or
objective.
Department-level action is important because the Medicare Incentive
Payment program is within the domain of two different HHS
agencies--HCFA and HRSA--and neither has incorporated the program
into its performance plans. Moreover, HHS has not developed goals or
performance measures for the program. For HCFA, which administers
the Medicare Incentive Payment program, three core
dimensions--content of care, access, and satisfaction--are central to
its performance measurement. However, the only access-related goal
in its fiscal year 1999 performance plan is to improve access for
Medicare beneficiaries who do not have supplemental insurance. The
performance plan does not establish any objectives or related
performance measures for the Medicare Incentive Payment program or
clarify how it relates to the Department's other access to care
programs. HRSA is responsible for administering other federal
programs addressing access problems in underserved areas, including
the Health Center Program and the National Health Service Corps
program--the federal government's main program for placing providers
in shortage areas. In fiscal year 1998, these two programs received
$826 million and $112 million, respectively. However, HRSA's fiscal
year 1999 performance plan is silent on how these or its other
programs relate to the Medicare Incentive Payment program.
As we have stated in other reviews of HHS activities, the Results Act
provides an opportunity for HHS to make sure that its programs for
improving access to care are on track and to identify how each
program's efforts will contribute to overall access goals.\34
However, without clear goals and related performance measures for the
Medicare Incentive Payment program, HHS cannot identify what the
program is trying to achieve or recognize when it is going off course
and develop corrective actions.
--------------------
\34 See Department of Health and Human Services: Strategic Planning
and Accountability Challenges (GAO/T-HEHS-98-96, Feb. 26, 1998).
HCFA POLICY FOR FINANCIAL
CONTROLS ALLOWS ERRONEOUS
PAYMENTS
---------------------------------------------------------- Letter :5.2
In addition to program goals and related performance measures, the
program's financial controls also warrant attention. HCFA's limited
approach for ensuring that erroneous bonus payments are returned to
the Medicare trust fund may allow millions of misspent bonus payment
dollars to be retained by physicians. When claiming bonus payments
on their bills to Medicare, physicians self-report that a service was
provided in a HPSA. As a check against fraudulent or erroneous
billing, HCFA requires its contractors that process and pay Medicare
claims to select 25 percent of the physicians who received bonus
payments each quarter, review five claims for each physician, and
recover any incorrect payments for those five claims. If a
contractor finds that a physician was paid in error, it is not
required to review more claims to identify additional overpayments.
However, the contractor is required to review all of the claims for
this physician in the following quarter. These reviews are conducted
for a new group of physicians each quarter. In fiscal year 1997, the
most common errors identified by these post-payment reviews included
cases where the area was no longer a HPSA; a physician's office was
in a HPSA, but the service was provided outside a HPSA; and neither
the place of service nor the physician's office was in a HPSA.
Postpayment reviews also identified cases in which the payments were
made for practitioners who were not physicians.\35
More cost-effective and extensive reviews provide HCFA an opportunity
to identify and collect millions of dollars in additional payments
made in error. We found one contractor that prevented substantial
amounts in erroneous bonus payments by increasing its review beyond
HCFA requirements--without increasing its staffing or budget.
Instead of reviewing a 25-percent sample of physicians, the
contractor reviewed claims for all physicians and looked at a larger
number of claims per physician than required.\36
Because its review included more physicians and more claims, the
contractor identified and prevented payment on $1.2 million in
ineligible bonus payment claims for its jurisdiction in 1997.\37 This
amount nearly matches the $1.5 million in erroneous bonus payments
reported in 1997 by the 23 contractors that reviewed claims for the
rest of the country. We also found other contractors that reviewed
more claims than required by HCFA, and without additional staffing,
two of these contractors had a tenfold increase in the amount of
erroneous payments they identified and collected.\38
--------------------
\35 In our review of HCFA claims data for bonus payments made in
1996, we found that bonuses were paid for 23 nonphysician specialties
that are not eligible for bonus payments. These included nurse
practitioners, physician assistants, certified nurse anesthetists,
clinical laboratories, and medical equipment suppliers. These
nonphysician providers received over $1.1 million in bonus payments
in 1996.
\36 The contractor reviewed physicians' claims prior to totaling
bonus payment checks and, as a result, was able to identify amounts
ineligible for payment and deduct them before sending the checks.
\37 In 1997, the contractor was responsible for paying bonus payments
for physicians in Delaware, New Jersey, Pennsylvania, and the
District of Columbia.
\38 This increase is based on data for the first quarter of 1998.
These two contractors reviewed all claims for that quarter for those
physicians in the 25-percent sample for whom they found an erroneous
payment. We also interviewed three other contractors that had
similar procedures. However, these contractors were unable to
provide data on the additional amounts of erroneous bonus payments
that they identified and collected as a result of these procedures.
CONCLUSIONS
------------------------------------------------------------ Letter :6
Our review underscores the need for the Congress to rethink the role
of the Medicare Incentive Payment program, especially since other
congressional action has addressed the initial concern about low
Medicare reimbursement rates. The program's design has fundamental
problems that undermine its ability to improve access to care for
either Medicare beneficiaries or other people living in underserved
areas. Bonus payments are not linked to the reasons Medicare
beneficiaries have difficulties in obtaining care. Nor are they
linked to the physicians and services identified as being needed in
underserved areas and the people who actually have trouble obtaining
care. In addition, the program has problems with planning,
performance measurement, and financial controls. As a result, it is
unlikely that much of the more than $400 million spent on the program
in the past 5 years has actually improved access in underserved
areas.
Because the Medicare Incentive Payment program is linked to Medicare
payments, it is not exposed to the same routine legislative scrutiny
as many other programs. As a result, it is important to decide
whether providing bonus payments for physicians based on Medicare
reimbursement is still a sound mechanism for improving access to care
or whether it is preferable to direct limited federal resources to
other strategies. Medicare Incentive Payment program expenditures
have grown 50-fold since the program began, and there is nothing to
check continued growth in the future. While the amount spent on the
program--$106 million in 1996--is a small fraction of the Medicare
budget, it is a sizeable amount when compared to other HHS programs,
such as the $112-million National Health Service Corps program, that
are aimed at improving access to care in underserved areas.
Nevertheless, if the program is to continue or expand, it needs (1) a
clear definition of the intended outcomes of the program and a design
that links program dollars to those outcomes, (2) clear program goals
and performance measures to track its progress and identify any
necessary corrections, and (3) improved financial controls to better
ensure the appropriateness of bonus payments.
MATTERS FOR CONGRESSIONAL
CONSIDERATION
------------------------------------------------------------ Letter :7
The Congress should consider whether the Medicare Incentive Payment
program is an appropriate vehicle for addressing medical
underservice. If the Congress decides to continue or expand the
program, it should consider clarifying the intent of the program and
taking steps to better structure the program to link limited federal
funds to the intended outcomes.
RECOMMENDATIONS TO THE
SECRETARY OF HHS
------------------------------------------------------------ Letter :8
To improve management and oversight of the program, we recommend that
the Secretary of HHS (1) integrate the program into the Department's
overall access-to-care strategic planning and performance measurement
activities and (2) direct the Administrator of HCFA to establish more
intensive bonus payment review standards for all contractors.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
In written comments on a draft of our report, HHS generally agreed
with our conclusions and recommendations. While HHS did not
specifically comment on our matters for congressional consideration
regarding the program's appropriateness as a vehicle for addressing
medical underservice, HHS agreed with our overall conclusion that the
program has design problems. However, HHS' comments indicate that in
the Department's view the problems with the program may be limited to
bonus payments to urban specialists. HHS commented that bonus
payments should be more appropriately targeted at primary care
physicians in underserved urban areas and all physicians in rural
underserved areas. We disagree with this view. While some problems
are more pronounced in urban areas, the program also has fundamental
design problems that are not limited to specialists in urban areas.
These problems undermine the program's ability to improve access to
care for Medicare beneficiaries or other people living in rural
underserved areas as well.
HHS also raised several other specific issues. For example, HHS
commented that our report's analysis of the impact of small bonus
payments needed to be supplemented with more data on payments to
rural physicians. Accordingly, we have incorporated additional data
showing that most rural physicians receive relatively small bonus
payments. In addition, HHS suggested that we consider information
from a 1994 Inspector General report on the importance of bonus
payments. We did not use this physician questionnaire data because
the report advised that it probably exaggerated the true importance
of the incentive payments.
HHS also provided technical comments that we incorporated as
appropriate. HHS' letter is printed in appendix IV.
---------------------------------------------------------- Letter :9.1
We are sending copies of this report to the Secretary of HHS and
other interested parties. We will also make copies available to
others upon request.
This report was prepared by Frank Pasquier, Assistant Director; Kim
Yamane; Tim S. Bushfield; Evan Stoll; and Bernice Steinhardt.
Please contact me at (202) 512-6802 or Laura Dummit, Associate
Director, at (202) 512-7114 if you or your staff have any questions.
Sincerely yours,
Richard Hembra
Assistant Comptroller General
Health, Education, and Human Services Division
SCOPE AND METHODOLOGY
=========================================================== Appendix I
To accomplish our objectives, we focused on the extent to which the
design of the Medicare Incentive Payment program addresses access to
care needs. We interviewed (1) Health Care Financing Administration
(HCFA) officials, at both central office and HCFA field offices; (2)
Medicare contractors responsible for processing the bonus payments
and conducting postpayment reviews; (3) officials at HHS' Health
Resources and Services Administration (HRSA) and the Agency for
Health Care Policy and Research; (4) officials at the Medicare
Payment Advisory Commission who worked on Physician Payment Review
Commission (PPRC) reports and other health services researchers; and
(5) representatives from the American Medical Association, the
Council on Graduate Medical Education, the National Rural Health
Association, and the Rural Policy Research Institute. We also
reviewed relevant legislation, the Medicare carrier manual, studies
on physician practice location decisions, and Medicare contractor
documents. We also reviewed HHS' strategic plan, HCFA's strategic
plan, and the fiscal year 1999 performance plans prepared by HCFA and
HRSA. We obtained and analyzed data from HCFA on claims for bonus
payments in 1996, the addresses of a sample of beneficiaries for whom
bonus payments were made, contractor quarterly reports, and the
results of the 1996 Medicare Current Beneficiary Survey. We relied
on data from HCFA, including contractor quarterly reports, for
program expenditures since 1992 and data reported by PPRC for program
expenditures in prior years. In addition, we obtained and analyzed
the September 1998 Federal Register Notice discussing the proposed
changes in HHS' health professional shortage area (HPSA) designation
system.
We conducted our work from May through December 1998 in accordance
with generally accepted government auditing standards.
REASONS CITED BY MEDICARE
BENEFICIARIES WHO HAVE
DIFFICULTY OBTAINING CARE
--------------------------------------------------------- Appendix I:1
To identify the reasons cited by Medicare beneficiaries who have
difficulty obtaining health care, we used the results of HCFA's 1996
Medicare Current Beneficiary Survey--a continuous, multipurpose
survey of a representative sample of the Medicare population,
including both aged and disabled enrollees. The survey collects
information about demographic characteristics, health status and
functioning, access to care, insurance coverage, and financial
support. In 1996, the access to care portion of the survey included
a sample of over 17,000 Medicare beneficiaries.
In using the survey results, we relied on analysis of survey
responses conducted by officials in HCFA's Office of Strategic
Planning. Because Medicare incentive payments only apply to
beneficiaries under Medicare fee-for-service, the analysis was
limited to these beneficiaries and did not include beneficiaries
enrolled in Medicare managed care.
BONUS PAYMENTS BY TYPE OF
PHYSICIAN OR SPECIALTY OF
SERVICE
--------------------------------------------------------- Appendix I:2
To determine bonus payment amounts by type of physician specialty or
specialty of service, we analyzed HCFA data for all claims for which
bonus payments were made in 1996. In 1996, physicians submitted over
20 million claims for bonus payments. While we did not independently
test or verify computer data generated by HCFA, we did not find any
evidence that caused us to doubt the reliability or acceptability of
the data. We discussed our data requests with various HCFA officials
familiar with HCFA data systems and former PPRC analysts to verify
that the HCFA claims data was the best source for HCFA data. In
addition, we selected 1996 data because it was the last year for
which final claims were available--these data had been updated for
any adjustments made to the initial claims data.
To determine median bonus payments, payment amounts at the 75th
percentile, and bonus payments for individual physicians, we used
HCFA's unique physician identification numbers. We counted each
number as an individual physician.
For our analysis of whether physicians receiving bonus payments were
primary care or specialty physicians, we considered physicians
practicing in general or family medicine, internal medicine,
obstetrics or gynecology, and pediatrics as primary care physicians.
We counted these four specialties as primary care because they are
the specialties HHS counts as primary care physicians when
designating primary care HPSAs. Because HCFA's claims data do not
specify if physicians who claim internal medicine as their specialty
are practicing general internal medicine or an internal medicine
subspecialty, we counted all physicians with a specialty of internal
medicine as primary care physicians. All other physicians were
considered specialists. To identify nonphysician providers who
received bonus payments, we compared the specialty codes on HCFA's
claims data to the eligible physician specialty codes provided by
HCFA officials.
To determine the amount of bonus payments spent for primary care
services and specialty services, we used HCFA's Common Procedure
Coding System to classify primary care services. This classification
was based on the Congress' definition of primary care services in the
Omnibus Reconciliation Act of 1987 (OBRA 87). All other services
were counted as specialty services.
AMOUNT PAID FOR TREATING
BENEFICIARIES WHO LIVED OUTSIDE
A HPSA
--------------------------------------------------------- Appendix I:3
To estimate how much of the bonus payments were paid for treating
beneficiaries who did not live in a primary care geographic HPSA, we
selected a simple random sample of (1) 500 bonus payments made for
services provided in rural areas and (2) 500 bonus payments for
services provided in urban areas. For each sampled case, we
determined whether the beneficiary's address was within an area
designated as a geographic primary care HPSA in 1996. To be
conservative, we assumed that for those cases for which we could not
make this determination, the beneficiary lived in a geographic
primary care HPSA. For example, we assumed that the beneficiary
lived within a HPSA if the address listed was a post office box. In
addition, because we were only able to obtain 1998 address
information from HCFA, we assumed that the 1998 address was accurate
for 1996. However, if the county information on the 1998 address
data differed from that of the 1996 claims data, we assumed that the
person had lived in a HPSA at the time of the claim. Table I.1 shows
the results of these determinations.
Table I.1
Number of Cases and Percent of Bonus
Payment Amounts Made for Serving
Beneficiaries Having Addresses Within
and Outside a HPSA
Rural Urban
------------------------------ ------------------------------
Percent of Percent of
Number of bonus payment Number of bonus payment
Beneficiary type cases amount cases amount
------------------------- -------------- -------------- -------------- --------------
Address was within a HPSA 361 76% 218 30%
Address was not in a HPSA 62 9 182 54
Location undetermined 77 15 100 15
(assumed in a HPSA)
=========================================================================================
Total\ 500 100 500 100\a
-----------------------------------------------------------------------------------------
\a Numbers may not total due to rounding.
Projecting these results to the total bonus payments made in 1996, we
estimate that at the 95-percent confidence level, between 6.5 percent
and 11.9 percent of bonus payments made in rural areas and between
32.1 percent and 76.3 percent of bonus payments made in urban areas
were paid for treating beneficiaries who lived outside a geographic
HPSA.
RURAL AND URBAN COUNTY
CATEGORIES
--------------------------------------------------------- Appendix I:4
To categorize the counties where Medicare beneficiaries for whom
bonus payments were made lived, we used the U.S. Department of
Agriculture's rural-urban continuum codes for metropolitan and
nonmetropolitan counties. These codes separate counties into 10
different types of urban or rural categories. We grouped these 10
types into three categories--metropolitan counties, nonmetropolitan
counties adjacent to metropolitan areas, and nonmetropolitan counties
not adjacent to metropolitan areas (see table I.2).
Table I.2
Rural-Urban Continuum Codes and
Categories for Metropolitan and
Nonmetropolitan Counties
Code County Category\a
---------------- ----------------------------------------------------
Metropolitan counties (urban)
----------------------------------------------------------------------
0 Central counties of metropolitan areas having a
population of 1 million or more
1 Fringe counties of metropolitan areas having a
population of 1 million or more
2 Counties in metropolitan areas having a population
of 250,000 to 999,999
3 Counties in metropolitan areas having a population
of fewer than 250,000
Nonmetropolitan counties adjacent to metropolitan areas
----------------------------------------------------------------------
4 Counties adjacent to a metropolitan area and having
an urban population of 20,000 or more
6 Counties adjacent to a metropolitan area and having
an urban population of 2,500 to 19,999
8 Counties adjacent to a metropolitan area and
completely rural or having an urban population of
fewer than 2,500
Nonmetropolitan counties not adjacent to metropolitan areas
----------------------------------------------------------------------
5 Counties not adjacent to a metropolitan area and
having an urban population of 20,000 or more
7 Counties not adjacent to a metropolitan area and
having an urban population of 2,500 to 19,999
9 Counties not adjacent to a metropolitan area and
completely rural or having an urban population of
fewer than 2,500
----------------------------------------------------------------------
\a Categories are based on the size of the urbanized population, and
rural areas are separated into those that are adjacent to
metropolitan areas and those that are more remote.
Source: U.S. Department of Agriculture.
The bonus payment amounts made to physicians in 1996 by county type
of beneficiary are provided in appendix II.
BONUS PAYMENTS MADE TO PHYSICIANS
IN 1996, BY BENEFICIARY COUNTY
TYPE
========================================================== Appendix II
In 1996, bonus payments totaling nearly $40 million were paid to
physicians for treating beneficiaries who lived in central counties
of large urban areas. In addition, over $16 million was paid for
treating residents of nonmetropolitan counties adjacent to
metropolitan areas having urban populations from 2,500 to 19,999.
Only a small portion of bonus payments were made for treating
beneficiaries living in the most remote rural areas. (See fig.
II.1.)
Figure II.1: Bonus Payments by
Beneficiary County Type, 1996
(See figure in printed
edition.)
BONUS PAYMENTS MADE IN 1996 TO
SPECIALISTS IN URBAN AREAS
========================================================= Appendix III
In 1996, the Medicare Incentive Payment program made bonus payments
to specialists in urban areas totaling approximately $41 million.
Physicians in the specialty area of cardiology received bonus
payments totaling about $4.6 million. Table III.1 shows the total
and average payments and the number of physicians receiving bonus
payments for services provided in 49 specialties in urban areas.
Table III.1
Total and Average Bonus Payments Paid to
Specialists in Urban Areas in 1996 and
Number of Physicians Paid, by Specialty
Bonus payment
--------------------------
Number of
Specialty Total Average physicians
---------------- ------------ ------------ ------------
Cardiology $4,586,230 $3,614 1,269
Ophthalmology 4,112,967 3,936 1,045
General surgery 3,412,324 2,962 1,152
Diagnostic 3,267,655 2,291 1,426
radiology
Multispecialty 2,414,936 968 2,495
clinic or group
practice
Orthopedic 1,875,943 2,829 663
surgery
Gastroenterology 1,871,086 3,842 487
Urology 1,818,148 3,961 459
Anesthesiology 1,792,283 1,629 1,100
Podiatry 1,565,311 1,285 1,218
Nephrology 1,556,334 4,925 316
Pulmonary 1,362,111 3,632 375
disease
Psychiatry 1,080,679 1,099 983
Emergency 1,010,351 847 1,193
medicine
Thoracic surgery 979,562 5,901 166
Neurology 960,978 2,080 462
Dermatology 710,362 2,853 249
Pathology 642,036 1,589 404
Hematology/ 639,229 3,149 203
oncology
Vascular Surgery 585,504 6,730 87
Otolaryngology 549,810 1,896 290
Physical 546,734 2,747 199
medicine and
rehabilitation
Neurosurgery 461,806 3,322 139
Cardiac surgery 324,274 9,537 34
Endocrinology 315,236 2,649 119
Infectious 309,592 2,120 146
disease
Optometry 292,919 537 545
Radiation 238,053 3,903 61
oncology
Rheumatology 232,783 2,060 113
Critical Care 232,781 6,651 35
Plastic and 173,772 1,687 103
reconstructive
surgery
Medical oncology 157,634 3,031 52
Interventional 153,746 7,687 20
radiology
Hematology 121,508 1,736 70
Nuclear medicine 116,758 2,848 41
Geriatric 102,098 2,836 36
medicine
Chiropractic 86,154 370 233
Peripheral 53,876 3,848 14
vascular
disease
Allergy/ 44,632 930 48
immunology
Colorectal 33,191 2,213 15
surgery
Surgical 25,459 3,182 8
oncology
Oral surgery 23,955 374 64
Osteopathic 22,805 845 27
manipulative
therapy
Hand surgery 9,370 1,041 9
Neuropsychiatry 8,991 1,499 6
Maxillofacial 6,755 483 14
surgery
Preventive 3,410 682 5
medicine
Gynecological/ 1,493 213 7
oncology
Addiction 57 57 1
medicine
----------------------------------------------------------
(See figure in printed edition.)Appendix IV
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
========================================================= Appendix III
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
*** End of document. ***