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IOM Calls for Medicare Reimbursement Formula Overhaul
Health Leaders Media

Medicare needs to change the controversial way it uses geographic price variables to calculate physicians and hospital reimbursement in order to more accurately reflect the cost of providing care for 39 million beneficiaries, the Institute of Medicine recommended in a lengthy report released Wednesday.

The 17-person IOM committee set forth 11 recommendations for two sets of providers, hospitals and physicians, both of which could shift some of the $500 billion a year in Medicare spending from doctors and health systems in some parts of the country to those in others.