MedPAC makes geographic payment adjustment recommendations
The Medicare physician fee schedule currently includes geographic practice cost indexes (GPCIs) that adjust payments for (1) practice expenses, (2) professional liability insurance, and (3) physician work. The June 2013 Medicare Payment Advisory Commission (MedPAC), an independent Congressional agency, released a report that includes a review of the physician work GPCI.
Congress had asked the Commission to consider whether there should be a work GPCI and, if so, what the level of the GPCI should be. The Commission found that there is need for some geographic adjustment of fee schedule payments for professional work, primarily as an issue of fairness because salaries and cost of living vary. However, they did not find that the work GPCI has an effect on the quality of care, and there is no evidence that the GPCI affects access.
The work GPCI is calculated using salaries of a variety of professionals. The work payment adjustment is one-quarter of the GPCI. For example, if the GPCI is calculated to be 1.2, the multiplier would be 1.05. There is currently a “floor” of 1.0 for all geographic areas, 1.0 being the national average. This means that work RVUs are not currently reduced in places where salaries are less than the national average.
MedPAC recommends that the Congress allow the GPCI floor to expire, as scheduled, at the end of 2013, meaning that some areas would see a small reduction in payments. The report also recommends that the work payment adjustment continue at one-quarter of the GPCI, and that CMS develop a new methodology for determining the work GPCI.