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Invited Commentary
October 14, 2013

Using Science to Shape Medicare Physician Payment

Author Affiliations
  • 1Center for Studying Health System Change, Washington, DC
JAMA Intern Med. 2013;173(18):1737-1738. doi:10.1001/jamainternmed.2013.6585

In the 1980s, Congress decided that the long-standing method of setting payments for physician services, which was in use in Medicare, many Medicaid programs, and much of commercial insurance, was systematically undervaluing cognitive services in favor of procedures. Concerns were expressed about disincentives to enter or remain in primary care, especially at a time when the role of primary care should have been increasing. These concerns are eerily similar to those expressed today. The previous payment method was a passive one of screening billed charges to make sure that they were in line with other charges for the same service in the community. The method accepted the community norms. Congress called for studies of approaches to reform payment and created the Physician Payment Review Commission, which later became the Medicare Payment Advisory Commission (MedPAC), charging it with developing a proposal to reform Medicare physician payment.

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