Lower Medicare fees hike profitable services

March 19, 2010

In the face of flat or shrinking reimbursements, physicians tend to order more profitable Medicare services.

In the face of flat or shrinking reimbursements, physicians tend to order more profitable Medicare services, but overall services have not increased, according to a new study.

Researchers from George Mason University analyzed orders from 13,707 physicians from 2000 through 2005 on eight Medicare services, according to the study in the journal Inquiry.

They found no evidence of intentional increased ordering but did find that the relative profit a physician receives for providing a service is positively related to the quantity provided. Echocardiograms were much more sensitive to fee variations than office visits, according to the study.