PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2177 "(ID for other services, such index (such as the consumer price index) that was applicable under this part in 1989 to increases in the payment ]^ amounts recognized under this part with respect to such services. " (B) ADJUSTMENT IN UPDATE. — "(i) IN GENERAL.—The update for a year provided under subparagraph (A) shall, subject to clause (ii), be increased or decreased by the same percentage by which (I) the percentage increase in the actual expendi- tures for physicians' services (as defined in section (f)(5)(A)) in the second previous fiscal year over the third previous fiscal year, was less or greater, respec- tively, than (II) the performance standard rate of in- crease (established under subsection (f)) for such cat- egory of services for the second previous fiscal year. "(ii) RESTRICTIONS ON ADJUSTMENT.— The adjustment \ made under clause (i) for a year may not result in a decrease of— "(I) more than 2 percentage points for the update for 1992 or 1993, "(II) 2y2 percentage points for the update for 1994 or 1995, and "(III) 3 percentage points for the update for any succeeding year, " (e) GEOGRAPHIC ADJUSTMENT FACTORS. — " (1) ESTABLISHMENT OF GEOGRAPHIC INDICES. — "(A) IN GENERAL.— Subject to subparagraph (B), the Sec- retary shall establish— "(i) an index which reflects the relative costs of the mix of goods and services comprising practice expenses - 1 (other than malpractice expenses) in the different fee schedule areas compared to the national average of such costs, "(ii) an index which reflects the relative costs of malpractice expenses in the different fee schedule areas compared to the national average of such costs, and "(iii) an index which reflects V4 of the difference between the relative value of physicians' work effort in each of the different fee schedule areas and the na- tioned average of such work effort. " (B) (JLASS-SPECIFIC GEOGRAPHIC COST-OF-PRACTICE IN- DICES. — The Secretary may establish more than one index under subparagraph (A)(i) in the case of classes of physi- cians' services, if, because of differences in the mix of goods and services comprising practice expenses for the different classes of services, the application of a single index under such clause to different classes of such services would be substantially inequitable. "(2) CJOMPUTATION OF GEOGRAPHIC ADJUSTMENT FACTOR.—For purposes of subsection (b)(l)(C), for all physicians' services for each fee schedule area the Secretary shall establish a geo- graphic adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in para-
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