The physician fee schedule is applicable to procedures  conducted in a variety of health care settings, including hospitals, ASCs,  and physicians’ offices. Level of Safety of Endoscopy Does Not Appear to Differ by Medical Setting

We found no evidence to suggest that the level of safety of  gastroenterological or urological endoscopy conducted on Medicare  beneficiaries differs by medical setting. If this occurred, patients in most of the nation would not likely  experience access problems for the procedures in our study, given that  relatively few procedures are performed in the office setting. They have  suggested that the differential provides an incentive to the physician to  provide endoscopic procedures in a setting—the physician’s office—that  is less safe than another setting, such as a hospital or an ASC. We selected the 12 gastroenterological and 8 urological endoscopic  procedures that are ordinarily performed in health care facilities and that  we defined as being conducted at least 90 percent of the time in health  care facilities and less than 10 percent of the time in offices. Many of these procedures require the use of sedation and entail  some risks for patients. To assess whether the practice expense site-of-service payment  differential acts as an incentive for physicians to conduct  gastroenterological and urological endoscopic procedures in their offices,  we analyzed data from the Centers for Medicare & Medicaid Services  (CMS) using the Part B Extract and Summary System on the medical  settings (office, inpatient hospital, outpatient hospital, and ambulatory  surgical center) for relevant procedures for 1996 through 2001. To determine whether access to care by Medicare beneficiaries would be  affected if endoscopic procedures in physicians’ offices were no longer  reimbursed by Medicare, we analyzed CMS data (using the Part B Extract  and Summary System) on office-based endoscopy for the nation as a  whole and for the New York City area, which has the highest proportion of  office-based procedures in the nation.
What GAO Found

Every year millions of Americans covered by Medicare undergo endoscopic medical procedures in a variety of health care settings ranging from physicians' offices to hospitals. These invasive procedures call for the use of a lighted, flexible instrument and are used for screening and treating disease. Although some of these procedures can be performed while the patient is fully awake, most require some form of sedation and are usually provided in health care facilities such as hospitals or ambulatory surgical centers (ASC). Some physician specialty societies have expressed concern that Medicare's reimbursement policies may offer a financial incentive to physicians to perform endoscopic procedures in their offices and that these procedures may be less safe because physicians' offices are less closely regulated and therefore there is less oversight of the quality of care. For the 20 procedures reviewed, there was no evidence to suggest that there in any difference in the level of safety of gastroenterological and urological endoscopic procedures performed on Medicare beneficiaries in either physicians' offices or health care facilities, such as hospitals and ASC's. There was also no evidence found to suggest that the resource-based site-of-service payment differential has caused physicians to conduct a greater proportion of gastroenterological or urological endoscopic procedures in their offices for Medicare beneficiaries. If Medicare coverage for the office procedures in the study were terminated, few access problems would occur in most of the country because physicians perform the vast majority of the procedures that were studied in health care facilities.