BACKGROUND: Multiple payment reform efforts are under way to improve the value of care delivered to Medicare beneficiaries, yet few directly address the interface between primary and specialty care. OBJECTIVE: To describe regional variation in outpatient visits for individual specialties and the association between specialty physician-specific payments and patient-reported satisfaction with care and health status. DESIGN: Retrospective cross-sectional study. PATIENTS: A 20 % random sample of Medicare fee-forservice beneficiaries in 2012. MAIN MEASURES: Regions were grouped into quartiles of specialist index, defined as the observed/expected regional likelihood of having an outpatient visit to a specialist, for ten common specialties, adjusting for age, sex, and race. Outcomes were per capita specialty-specific physician payments and Medicare Current Beneficiary Survey responses. KEY RESULTS: The proportion of beneficiaries seeing a specialist varied the most for endocrinology and gastroenterology (3.7-and 3.9-fold difference between the highest and lowest quartiles, respectively) and least for orthopedics and urology (1.5-and 1.7-fold difference, respectively). Multiple analyses suggested that this variation was not explained by prevalence of disease. Average specialty-specific payments were strongly associated with the likelihood of visiting a specialist. Differences in per capita payments from lowest (Q1) to highest quartiles (Q4) were greatest for cardiology ($89, $135, $172, $251) and dermatology ($46, $64, $82, $124 Q4, 94.5 % [94.4-94.8 %]). CONCLUSIONS: Substantial regional variability in outpatient specialist visits is associated with greater payments with limited benefits in terms of patient-reported satisfaction with care or reported health status. Reducing outpatient physician visits may represent an important opportunity to improve the efficiency of care.