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Medicare fee schedule in place.

P L Grimaldi

    Health Progress (Saint Louis, Mo.)
    |March 10, 1990
    PubMed
    Summary
    This summary is machine-generated.

    The Omnibus Budget Reconciliation Act of 1989 (OBRA '89) replaces Medicare's physician reimbursement with a fee schedule. This new system aims for equitable payments and controlled spending growth.

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    Area of Science:

    • Health Policy
    • Medical Economics

    Background:

    • Medicare previously used a "reasonable charge" method for physician reimbursement.
    • The Omnibus Budget Reconciliation Act of 1989 (OBRA '89) mandated a shift in physician payment systems.

    Purpose of the Study:

    • To introduce a new Medicare physician payment system based on a fee schedule.
    • To control long-term spending growth for physician services.
    • To ensure more equitable distribution of Medicare physician payments.

    Main Methods:

    • Implementation of a fee schedule comprising a resource-based relative value scale (RBRVS) and a conversion factor.
    • Payment set at the lower of the physician's actual charge or the fee schedule amount, with geographic cost adjustments.
    • Mandated review of the RBRVS by the Health and Human Services (HHS) secretary every five years.

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    Main Results:

    • The RBRVS is designed to reflect the costs incurred by efficient physicians for services.
    • The conversion factor initially based on 1991 aggregate Medicare spending, with annual formulaic updates.
    • Introduction of a fee cap for non-participating physicians in Medicare.

    Conclusions:

    • The OBRA '89 payment system aims to reform Medicare physician reimbursement.
    • Potential delays in implementation exist due to outstanding tasks.
    • There is a possibility of non-implementation of the new payment system.