This begasn with an inquiry to the U.S. Centers of Medical Services, (CMS) headquartered in Baltimore Maryland, as to Medicare part B health care providers compensation. That is the portion of Medicare that patients ELECT to pay for insuring 4/5ths of their doctor bills. We can suppose the compliance officer that replied has much more to do rather than answering my questions but informing citizens of how their government operates is not of insignificant value. Im posting this letter wherever I can so we all receive the most value for his government paid time. I'm not very familiar with other nations' public health services. The letter he wrote helps explain why I believe that until we can devise something superior, Medicare is the USAs golden standard for the delivery of public medical services. Respectfully, Supposn This is in response to your inquiry concerning how Medicare Part B and the Medicare HMO program reimburse providers. Payment to physicians and other individual health care providers are made in accordance with a prospective fee schedule that is updated every year. Each service that is provided has a predetermined value, referred to as a Relative Value Unit (RVU). While the RVU for the service is the same throughout the country, a geographic adjustment is made in order to account for the differences in the cost of living. This cost of living adjustment is called the Geographic Price Cost Index (GPCI). The country is divided into 89 localities and each one has a different GPCI value that is used to determine the actual Medicare allowed charge for the service. The Medicare program does allow payment for specific preventative medical and screening procedures that have proven to be worthwhile to insure the health of beneficiaries. These services include screening mammography and pap smears, diabetes training, glaucoma screening, prostrate screening, bone mass measurement, flu, pneumonia and hepatitis B inoculations and the initial Welcome to Medicare screening examination. Physicians and other health care providers have the option to either participate in Medicare or be a non-participating provider. If one participates, they will be reimbursed based upon 100% of the fee schedule amount. As part of the participation agreement, they must accept the Medicare fee as payment in full which means in most circumstances, they can only bill the beneficiary for the applicable co-insurance (usually 20%) and any outstanding annual deductible. A non-participating provider is paid at 95% of the Medicare allowed amount but can charge the beneficiary up to an additional 15% above the Medicare fee. While this might appear to be more advantageous to be a non-participating provider, Medicare provides additional services to participating providers including direct payment from Medicare, automatic cross-over to secondary insurers and individual listing in the Medicare directory. These additional incentives have resulted in the Medicare participation rate to be over 95% of all providers in the country. In regard to HMO services, Medicare pays each contracted Medicare Advantage plan a monthly capitation rate, or set amount, for each Medicare enrolled member. The rates are actuarially developed using a wide number of factors including historical expenditures under Part A and B, age, disability, and various other risk-adjustment variables. The rates are not determined by whether an individual Medicare Advantage plan has profit or non-profit status. Rates are adjusted periodically to reflect changes in costs and data corrections to account for prior year estimates. I hope this explanation satisfactorily answers your inquiry. If you have any additional questions, please do not hesitate to contact me at the listed office address; (U.S. Division of Financial Management & Fee for Service, Operations & Integrity Branch, 26 Federal Plaza, room 38-130, NY, NY, 10278). Sincerely, Steven Lisker, Compliance Officer.