**GAO-07-466**                      Published: Jun 29, 2007. Publicly Released: Jul 30, 2007.                  

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## Highlights

The Centers for Medicare & Medicaid Services (CMS) adjusts Medicare physician fees for geographic differences in the costs of operating a medical practice. CMS uses 89 physician payment localities among which fees are adjusted. Concerns have been raised that the boundaries of some payment localities do not accurately address variations in physicians' costs. GAO was asked to examine how CMS has revised the localities; the extent to which they accurately reflect variations in physicians' costs; and alternative approaches to constructing the localities. To do so, GAO reviewed selected Federal Register documents; compared data on the costs physicians incur in different areas with the Medicare geographic adjustment; and used the physician cost data to construct and evaluate alternative approaches.

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## Topics

Health Care

Administrative costsCost analysisLocal governmentsMedical feesMedicareOverpaymentsPaymentsPhysiciansMedicare paymentsCensus