Rural and urban Medicare beneficiaries use remarkably similar amounts of health care services.

Medicare payment policies for rural health care providers are influenced by the assumption that the limited supply of physicians in rural areas causes rural Medicare beneficiaries to receive fewer health care services than their urban counterparts do. This assumption has contributed to the growth in special payments to rural providers. As a result, Medicare pays rural providers $3 billion more each year in special payments than they would receive under traditional payment rates.