Physician Payment Reform Under Medicare: Monitoring Utilization and Access

The Omnibus Budget Reconciliation Act (OBRA) of 1989 brought about significant changes in physician payment policy under Medicare. A major component of physician payment reform was the implementation on January 1, 1992, of the Medicare fee schedule (MFS). The Secretary of Health and Human Services is required to monitor and report annually on the impact of the changes in physician payment on access to and utilization of health care services. This article provides an overview of the 1993 Report to Congress. First, the article discusses the changes made in physician payment policy as well as the complexities involved in assessing the effects of the MFS. Next, the article discusses the approaches that were implemented in the Health Care Financing Administration (HCFA) to generate timely data to monitor and evaluate the impact of physician payment reform on Medicare beneficiaries. Last, the article describes six analyses that were designed to provide differing perspectives for understanding the impact of the OBRA 1989 physician payment changes on access and utilization. Some of the most salient results of these analyses are presented, including preliminary data from the first year during which the MFS was in effect.