This final rule makes several policy changes affecting Medicare payment for physician services, including payment for diagnostic services and transportation in connection with furnishing diagnostic tests. The final rule also makes changes in geographic payment areas (localities) and changes in the procedure status codes for a variety of services. Since we established the physician fee schedule on January 1, 1992, our experience indicates that some of our policies may need to be reconsidered. This final rule is intended to correct several inequities in physician payment. This final rule also makes changes to work relative value units (RVUs) affecting payment for physician services. Section 1848(c)(2)(B)(i) of the Social Security Act requires that we review all work RVUs no less often than every 5 years. Since we implemented the physician fee schedule effective for services furnished beginning January 1, 1992, we have completed the 5-year review of work RVUs that will be effective for services furnished beginning January 1, 1997. In addition, we are finalizing the 1996 interim RVUs and are issuing interim RVUs for new and revised procedure codes for 1997.