Factors Affecting Differences in Medicare Reimbursements for Physicians' Services

Under Medicare's Part B program, wide variations are found in average reimbursements for physicians' services by demographic and geographic characteristics of the beneficiaries. Average reimbursements per beneficiary enrolled in the program depend upon the percentage of enrolled persons who exceed the deductible and receive reimbursements, the average allowed charge per service, and the number of services used. This study analyzes differences in average reimbursements per beneficiary for physicians' services in 1975 and discusses allowed charges and use factors that affect average reimbursements. Differences in the level of allowed charges and their impact on meeting the annual deductible are also discussed. The study indicates that average reimbursements per beneficiary are likely to continue to vary significantly year after year under the present Part B cost-sharing and reimbursement mechanisms.