Medicare Fees and Physicians' Medicare Service Volume: Beneficiaries Treated and Services per Beneficiary

Jack Hadley and James Reschovsky used physician survey data linked to Medicare claims data to analyze how fee levels, market factors, and financial incentives affect physicians' fee-for-service Medicare service volume. They found that Medicare fees are positively related to both the number of beneficiaries treated and the intensity of services provided. The results also suggest that physicians may manipulate the mix of services to increase the effective Medicare fee. Several market factors also influence the quantity of Medicare services physicians render. Results highlight limitations of the present system for compensating physicians in Medicare's fee-for-service program. (International Journal of Health Care Finance and Economics 6, pp 131-150, June 2006.)

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