This study used data from 1986 through 1992 to estimate the “volume offset” that may occur when payment rates for Medicare physician services are changed. Although policymakers assume that 50 percent of all fee reductions are offset by volume increases and that this occurs across all type of services, this analysis does not support that position. There is a “volume offset,” but it is generally smaller than 50 percent. For evaluation and management and imaging services, an offset of about 25 percent would seem appropriate. Although the 50 percent assumption for procedures is consistent with this study, our analysis suggests that an offset occurs in response to fee increases as well as decreases. (Medical Care Research and Review 1998 December; 55(4):457-458).
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