Final answer:
The Medicare Fee Schedule was developed by Medicare under the Omnibus Budget Reconciliation Act of 1989 to reimburse physicians. It aimed to standardize payments and control expenditures for physician services provided to Medicare beneficiaries. The schedule was a key part of the evolving healthcare payment systems, including mechanisms like fee-for-service, which have been impacted by legislation such as the ACA.
Step-by-step explanation:
The initiative developed by Medicare to reimburse physicians under the Omnibus Budget Reconciliation Act of 1989 is the Medicare Fee Schedule. This schedule was part of a broader shift towards a fee-for-service system where healthcare providers bill Medicare for each service they provide to patients. The enactment of this fee schedule was an attempt to standardize payments to physicians for services rendered to Medicare beneficiaries and to control Medicare expenditures on physician services.
Moral hazard and adverse selection are both significant issues in healthcare markets like Medicare and Medicaid. Moral hazard refers to the tendency of insurance coverage to lead to over-consumption of healthcare services, while adverse selection describes a scenario where unhealthy individuals are more likely to purchase health insurance, leading to higher costs for insurers.
With the introduction of the Patient Protection and Affordable Care Act (ACA or Obamacare), there were further changes to healthcare systems, including Medicaid Expansion, aimed at increasing healthcare coverage. However, the Medicare Fee Schedule from 1989 is specifically tied to reimbursements for physician services under Medicare.