Medicare Physician Payment Reform and the Utilization of Cardiovascular Procedures

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Abstract
Effective 1992, the US Congress implemented the Resource-Based Relative Value Scale (RBRVS) for pricing and reimbursing Medicare physician services. This study evaluates the post-1991 impacts of RBRVS on the utilization volumes of two leading cardiovascular procedures--Percutaneous Transluminal Coronary Artery (PTCA) and Coronary Artery Bypass Grafts (CABG). The regression model results based on HCFA-supplied data suggest that the new reimbursement policy reduced (increased) utilization volumes of the more (less) expensive CABG (PTCA) procedures. Physician adjustments to tightened HCFA reimbursements are partly aided by the increased percentage of Medicare patients enrolled in Medigap. The RBRVS fee schedule appears to be meeting its intended cost containment policy goals for the leading cardiovascular procedures.