IMPACT OF MEDICARE PAYMENT REDUCTIONS ON ACCESS TO SURGICAL SERVICES

Objective. This study evaluates the impact of surgical fee reductions under Medicare on the utilization of surgical services. Data Sources. Medicare physician claims data were obtained from Il states for a five -year time period (1985-1989). Study Design. Under OBRA-87, Medicare r educed payments for 11 surgical procedures. A fixed effects regression method was used to determine the impact of these payment reductions o n access to care for potentially vulnerable Medicare beneficiaries: jo int Medicaid-eligibles, blacks, and the very old. Data Collection/Extr action Methods. Medicare claims and enrollment data were used to const ruct a cross-section time-series of population-based surgical rates fr om 1985 through 1989. Principal Findings. Reductions in surgical fees led to small but significant increases in use for three procedures, sm all decreases in use for two procedures, and no impact on the remainin g six procedures. There was little evidence that access to surgery was impaired for potentially vulnerable enrollees; in fact, declining fee s often led to greater rates of increase for some subgroups. Conclusio ns. Our results suggest that volume responses by surgeons to payment c hanges under the Medicare Fee Schedule may be smaller than HCFA's orig inal estimates. Nevertheless, both access and quality of care should c ontinue to be closely monitored.