In this brief, we describe the relationship between new federal legislation regarding physician payment and the exchange of health information among organizations. For many years, Medicare has paid physicians on the basis of a resource-based relative value scale. This approach has led to increases in resource utilization and inappropriate care rather than rewarding physicians on the basis of quality of care and patient outcomes. It has resulted in steadily increasing physician fees, which the government attempted to control by implementing the Medicare sustainable growth rate (SGR). SGR slowed the increase and could even result in decreases in physician reimbursement. There has been a need to address these issues and to provide incentives which might lead to greater value to patients and fairer physician Medicare reimbursement.

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