Title page

Contents

The Need for Physician Payment Reform 5

How Traditional Medicare Pays Doctors Today 7

The Evolution of the Medicare Physician Payment Policy 12

The Status Quo and Its Consequences 16

How the Physician Payment Affects Medicare, Patients, and Physicians 19

What Congress Should Do 23

Conclusion 30

FIGURE 1. An Overview of Calculating Payments 10

Charts

CHART 1. Total Medicare and Medicare Part B Expenditures 8

CHART 2. Medicare Parts, A, B, and D as Percentage of Total Expenditures 9

CHART 3. Distribution of Physicians by Practice Ownership Structure 19

CHART 4. Change in the Medicare Physician Fee Schedule Conversion Factor Reflect Lagging Physician Payments 21

CHART 5. Medicare PFS Spending per Beneficiary and CPI Grew Faster than MEI and Medicare PFS Payment Updates 22