Medicare's method of payment to physicians has been a thornyproblem since the program began more than 40 years ago. Medicare'sinitial method for setting fees mimicked the typical systemused by the Blue Shield plans of the 1960s: payment for thelowest of usual, customary, or reasonable fees. Twenty-fiveyears later, the resulting fee schedule made little sense; individualphysicians were paid grossly different amounts for providingidentical medical services, with large variations across differentgeographic areas. As a result, Medicare adopted the resource-basedrelative-value scale in an attempt to tie relative fees to theamount of work and . . . [Full Text of this Article]
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From the Department of Health Care Policy, Harvard Medical School; the Department of Health Policy and Management, Harvard School of Public Health — both in Boston; and the Kennedy School of Government, Cambridge, MA.
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