Medicare

Pursuant to a congressional request, GAO reviewed: (1) the gross and net incomes of office-based physicians by specialty; (2) the portions of physicians' gross incomes that were earned from the Medicare program and its beneficiaries; (3) the locations where doctors earned their money from Medicare; and (4) the extent to which physicians accepted the Medicare allowable charge as the full charge for their services.

GAO found that: (1) in 1984, the median net pretax income for office-based physicians exceeded $100,000; (2) general practitioners averaged $68,600 and neurosurgeons averaged $179,690 in 1984; (3) physicians' gross income rose an average of 15 percent in 1984; (4) in 1981 and 1982, Medicare paid 68 percent of physicians' income and beneficiaries paid 32 percent; (5) in 1981 and 1982, physicians earned about 63 percent of their Medicare-related income from hospital-related services; (6) in 1985, there was a 9-percent increase in Medicare charges where physicians agreed to accept Medicare's allowable reimbursement as the full charge; and (7) in 1981 and 1982, physicians were more likely to accept the amount paid by Medicare for services provided in hospitals than for services provided in their offices.