In the United States, Medicare gradually reduced payments for central dual-energy X-ray absorptiometry (DXA) performed at physician offices (or other nonhospital settings) from an average of $139 in 2006 to about $82 in 2007 and 2008 and $72 in 2009. Reimbursement for hospital outpatient DXA service was unchanged. We investigated the utilization of hip and spine (central) DXA in the Medicare population before and after the reduction. We identified individuals from the national 5% random sample of Medicare beneficiaries who were ≥65 years of age and enrolled in Medicare Parts A and B but not in a Medicare Advantage plan from 2002 through 2009. For each calendar year, we calculated the proportion of beneficiaries who submitted claims for DXA, the proportions of DXAs performed in hospitals and in physician offices and the number of physician office-based practices that discontinued or started to provide DXA services. From 2002 to 2006, the proportion of beneficiaries who had at least one central DXA increased from 7.9% to 9.6% at an annual increase of 0.4% and from 2006 to 2009, the annual increase dropped to 0.1%. The number of DXAs performed in physician offices dropped from 1,643,720 (69% of 2,363,500 total DXAs) in 2006 to 1,534,240 (66% of 2,338,240) in 2009. This decline was offset by an increase in the number of DXAs performed in hospitals, which increased from 719,780 (31%) in 2006 to 804,000 (34%) in 2009. Among physician office-based practices, more practices initiated than discontinued DXA service each year from 2002 to 2006. However, the trend was reversed since 2007 such that in 2009, 1876 practices discontinued and only 1394 initiated DXA service. The reduction in DXA reimbursement was associated with a decrease in the number of DXAs performed in physician offices and fewer physician offices that provided DXA services.