What is the purpose of the Geographic Practice Cost Index (GPCI)?

The Geographic Practice Cost Index (GPCI) plays a crucial role in adjusting payments within the Medicare Physician Fee Schedule based on geographic location. This adjustment is necessary because the cost of providing healthcare services can vary significantly from one region to another due to factors such as local wages, cost of living, and operational expenses.

By using GPCI, the Medicare program ensures that reimbursement rates are more aligned with the actual costs incurred by physicians practicing in different areas. This means that physicians in high-cost areas receive higher compensation adjustments compared to those in lower-cost areas, ultimately promoting equity in payment and access to services across diverse geographic regions. Thus, the primary purpose of GPCI is to reflect these regional differences in costs and adjust payment rates accordingly to enhance the sustainability and accessibility of healthcare services.