Trends in Special Medicare Payments and Service Utilization for Rural Areas in the 1990s

By Donna O. Farley; Lisa R. Shugarman et al. | Go to book overview

6.
UTILIZATION AND SPENDING FOR PHYSICIAN SERVICES
The analyses presented in this section describe trends during the 1990s in the distribution and characteristics of both basic payments and bonus payments made to physicians on behalf of rural Medicare beneficiaries in non-metropolitan counties and in counties with a HPSA designation. The analyses were designed to address the following basic questions:
How have total payments and bonus payments for physician services provided to rural Medicare beneficiaries changed during the decade of the 1990s? What proportion of these payments is for beneficiaries residing in rural HPSAs and those residing outside HPSAs?
How has the distribution of bonus payments across primary and specialty care physicians changed over time?
What are the trends in the mix of primary care and other services that have a bonus payment attached?

The perspective taken for the analyses presented in this section is that of the Medicare beneficiary. As described in Section 2, the sample was selected based on the state and county of residence for beneficiaries in non-metropolitan counties. This population-based approach is intended to gain a better understanding of the extent to which non-metropolitan beneficiaries utilize physician services, particularly in underserved areas, and related bonus payment costs.


DISTRIBUTION OF TOTAL AND BONUS PAYMENTS

We begin by reporting basic Medicare spending for physician services and for bonus payment amounts, by county category as defined by UICs. As shown in Table 6.1, Medicare spent more than $5 billion on physician services for non-metropolitan beneficiaries in 1992, which increased to $7.4 billion by 1998. Although total payments for physician services increased during the 1990s, the distribution of these payments across county categories remained virtually the same over time. Physicians serving beneficiaries residing in counties adjacent to an MSA received more than half the total Medicare payments in each year studied.

Bonus payments to physicians increased through 1996, followed by a decline by 1998 (see Table 6.1). In 1992, physicians received $25 million through the bonus payment program, and amounts reached $42 million in 1996. Bonus payments declined by 13 percent over the next two years to $36 million in 1998.

Similar to Medicare spending for physician services, the distribution of bonus payments across county categories varied little over time (see Table 6.1). The majority of bonus payments were for services provided to beneficiaries residing in counties without a city of 10,000 or more population, including those in counties adjacent to an MSA and those that are not. Physicians providing services to beneficiaries residing in counties adjacent to an MSA but without a large city received over one-third of all bonus payments made in each year studied. This pattern reflects the fact that more than one-third of the whole-county HPSAs in non-metropolitan counties are in counties adjacent to an MSA without a large city.

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