D. Economic index limitation on increases in prevailing charge levels

Pursuant to section 224(a) of P. L. 92-603, prevailing charge levels used in determining Medicare reasonable charges for physician’s services may be increased above the level for fiscal year 1973 only to the extent determined to be justified by the Secretary on the basis of appropriate economic index data. The economic index figure is furnished by CMS to all carriers. The economic index limitation applies only to increases in prevailing charges and only to physician’s services. It does not affect carrier’s customary charge calculations. The law established the carrier’s prevailing charge screens for fiscal year 1973 (based on physician’s charge levels during calendar year 1971) as the base for measuring all future increases. The economic index calculated for each fiscal year will, therefore, reflect on a cumulative basis the changes that have taken place in physician’s practice expenses and in general earnings levels since calendar year 1971.