Table 4Services defined in Medicare Part B as physicians' services (1993-1998)

Service TypePayment MethodUpdate Method
Physicians' services (includes Doctors of Osteopathy, Optometry, Dentistry, and Medicine)Resource Based Relative Value Scale (RBRVS).Sustainable Growth Rate
System (SGR) Fee Schedule update
Services and supplies furnished incident to physicians' servicesMost included in the practice expense component of RBRVS.Practice Expenses — SGR
In other cases charges are determined by the carrier, relative to average wholesale price.Increase in Average Wholesale Price
Outpatient physical therapy and speech therapy, and outpatient occupational therapy servicesFee schedule, but some services are paid at a percentage of RBRVS.SGR Fee Schedule update
Antigens prepared by or under the direct supervision of a physicianAntigens were paid under the physician payment schedule after Jan. 1 1995.Consumers' Price Index (Urban Consumers) (CPI-U)
Drugs and biologicalsCoverage limited. For covered items, before January 1998 drugs were paid using a mix of methods (cost, prospective payment basis, or they were based on the lower of the billed charge or the average wholesale price). (American Medical Association, 2001:7). After January 1 1998, drugs and biologicals were paid according to the actual charge, or 95% of the AWP, whichever was lower.Increase in Average Wholesale Prices
Services of physician assistants, certified registered nurse anesthetists, certified nurse midwives, clinical psychologists, clinical social workers, nurse practitioners, and clinical nurse specialistsRBRVS used, but reimbursement rates vary. Some professionals such as physician assistants receive a discounted percentage of the total RBRVS charge.SGR Fee Schedule update
Clinical laboratory testsReasonable and prevailing charges subject to national limits. The clinical lab fee schedule is set using national median submitted charges. The amount paid is the lesser of the actual charge, the local fee, or the national limitation amount. Before 1998, payment schedules were set at 60% of the prevailing charge level in each area. After 1998, the national limit became 74% of the median of the local fees for tests.CPI-U
(frozen from 1995-2002)
X-ray, radium, and radioactive isotope therapyReasonable and prevailing charges.CPI-U
Surgical dressings, splints, casts, and other devices used for reduction of fractures and dislocationsReasonable and prevailing charges.Increase in charges


Federal Register September 4, 1990 Volume 55, No. FR 36178

Final Rule, Federal Register Vol. 56, No. 227, Monday, November 25, 1991.

Final Notice, Federal Register, Vol. 57, No. 228. Wednesday, November 25, 1992.

Final Notice with Comment Period, Federal Register, Vol. 58, No. 230, Thursday, December 2, 1993.

Final Notice, Federal Register, Vol. 59, No. 235, Thursday, December 8, 1994.

Final Notice, Federal Register, Vol. 60, No. 236, Friday, December 8, 1995.

Final Notice, Federal Register, Vol. 61, No. 227, Friday, November 22, 1996.

Final Notice, Federal Register, Vol. 62, No. 211, Friday, October 31, 1997.

Notice with Comment Period, Federal Register, Vol. 63. No. 211, Monday, November 2, 1998.

Program Memorandum AB-02-163, November 8, 2002.

From: 1, Introduction

Cover of Determinants of Increases in Medicare Expenditures for Physicians' Services
Determinants of Increases in Medicare Expenditures for Physicians' Services.
Technical Reviews, No. 7.
Buntin MB, Escarce J, Goldman D, et al.

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