Medicare Pulls Back The Curtain On How Much It Pays Doctors

Apr 9, 2014
Originally published on April 10, 2014 2:20 pm

Medicare's release Wednesday of records of millions of payments made to the nation's doctors comes as the government is looking to find more cost-efficient ways to pay physicians, particularly specialists.

The federal government published data tracing the $77 billion that Medicare paid to physicians, drug-testing companies and other medical practitioners throughout 2012, and the services they were being reimbursed for.

The data cover 888,000 different practitioners. More than 6,000 procedures are included, and the full database is so large that it requires statistical software to analyze it.

While the database provides tantalizing details, showing, for instance, the huge amount ophthalmologists are paid to treat common eye disorders, analysts cautioned that the data can be easily misunderstood and could lead to some doctors being unfairly pilloried.

The release comes 35 years after a court-issued gag order prevented anyone from revealing Medicare Part B payments to individual doctors. Advocates for more transparency in health care payments heralded the release as a leap forward. "Taxpayers have the right to understand what is being paid for and how it is being paid for," said Jonathan Blum, principal deputy administrator for the Centers for Medicare & Medicare Services.

He asked the public to comb through the information to help find waste and fraud and also encouraged researchers to use it to try to determine why spending on health care for the elderly varies so much in different parts of the country. This could replicate on the physician level what the Dartmouth Atlas of Health Care has been doing for decades in showing variances in Medicare's hospital spending.

"The uses of this data can and will go significantly beyond the identification of fraud, waste and abuse," said Niall Brennan, the Medicare official who oversaw the development of the database.

The release also comes at a propitious time for the government's effort to refashion the way America's health care system is financed. Earlier this year Medicare invited advice on how it should devise new ways of paying specialists to replace the current system, in which doctors are paid a set fee for each visit or procedure. The goal of these approaches is to remove the financial incentive for practitioners to overdo care.

Under the authority of the federal health care law, the Obama administration has already launched experiments aimed mostly at hospitals and large medical groups. There are hundreds of trial efforts under way to pay medical practitioners a set fee to treat a particular ailment, such as replacing a knee, with the fee covering all aspects of the care from before the operation through the recovery and any setbacks.

Medicare is in the midst of creating a similar program for cancer specialists. In February, the government's Center for Medicare & Medicaid Innovation invited suggestions on how it should fashion new payment programs that "would be designed to improve the effectiveness and efficiency of specialty care, in part by clarifying the specialist practitioner's clinical role." The deadline for ideas and suggestions is Thursday.

Dr. Kavita Patel, a former White House health care staffer and a researcher at the Brookings Institution, said the administration's timing wasn't coincidental. "They are building the case for doing targeted specialty payment models," she said. "The administration is trying to get at the delivery system from all angles."

Unsurprisingly, medical specialists whose work involves expensive drugs, such as oncologists and ophthalmologists, appeared at the top of the list of biggest reimbursements. That's because in 2012 Medicare paid doctors for the market cost of drugs they used plus 6 percent, Blum said. (That amount has been lowered by the spending cuts imposed by Congress, known as the sequester.)

Despite their volume, the Medicare records omit as much important information as they include. The records don't include any treatments doctors provide to patients not covered by Medicare, such as the privately insured, those with Medicaid and other who pay cash. The records also lack any information about roughly a quarter of Medicare beneficiaries who have coverage through Medicare Advantage private insurance plans, and for various payment experiments the government is trying.

The payments for some doctors may be larger than it appears in the data because they also could have billed Medicare through a combined medical practice or other medical organization.

Fred Trotter, a health care data specialist, warned ahead of time: "We should be very careful to not draw any conclusions at the low end of the spectrum. That doctor who 'only' performed procedure X 11 times? That probably means nothing. What the doctor is actually doing with his/her patients is just not showing up at all."

Procedures billed to one doctor may actually have been performed by a number of workers in one practice such as medical residents, nurses and physician assistants. A Los Angeles rheumatologist whom Medicare paid $5.4 million in 2012 told The Washington Post that about $5 million of that paid for very expensive drugs and the billings also helped cover his staff of 40 people.

CMS' Brennan said that one goal of the release was to encourage each individual medical practitioner to bill Medicare directly, so that the government could get a better handle on spending.

In a note published on the website of the Association of Health Care Journalists, Charles Ornstein, a senior reporter at the investigative nonprofit ProPublica, cautioned reporters to be careful in interpretation: "Don't just assume that because a number is large, a doctor has done something wrong."

In addition, there's no information about the quality of the care provided, and no information about how sick the patients were or why a particular procedure was performed. In fact, to ensure that the identity of any patient could not be known, Medicare has only included procedures that each doctor performed at least 11 times.

And large numbers of procedures performed by a doctor may be a good sign. Someone billing a lot might well be a very talented practitioner, since research has found that medical skill tends to improve the more times a physician performs the same operation.

In fact, health care analysts often encourage patients to choose a doctor based on the volume of cases the physician has done. Alternatively, in some cases — probably a small number — a doctor with lots of billing could be ripping off the system.

Several doctors with the biggest Medicare payments are already under investigation for potential fraud, such a Dr. Salomon Melgen, a Florida ophthalmologist who The New York Times said was paid $21 million in 2012. His lawyer said Melgen has followed all Medicare rules.

The the gag order on the data stretches back to 1979, when a Florida court issued a permanent injunction barring the government from releasing information about Medicare payments to individual physicians in any manner that would allow the doctor to be identified. In 2011, the parent company of The Wall Street Journal successfully sued to overturn the injunction as the paper prepared a detailed look at Medicare spending.

The American Medical Association complained that physicians weren't allowed to review the data for inaccuracies. However, Medicare's previous release of similar information about hospital payments did not result in reports of any major errors. Brennan pointed out that the data is based on claims medical providers billed to Medicare and were reimbursed for. "We are quite confident this data is accurate," Brennan said.

Copyright 2018 Kaiser Health News. To see more, visit Kaiser Health News.


From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.


And I'm Melissa Block. Today, for the first time, the agency that runs the Medicare program has released data showing how much doctors get paid by the government for everything from office visits to surgical procedures to chemotherapy. It's a massive amount of data that may help patients learn more about how their doctor practices medicine.

The data are sure to provide some interesting insights, but there are also limits to how much can be learned. And joining me in the studio not to talk more about this is Jordan Rau with our partner Kaiser Health News. Jordan, thanks for coming in.

JORDAN RAU: Glad to be here.

BLOCK: Why don't you tell us first just exactly what the government released today in this massive data dump?

RAU: Well, they put down an entire year's worth of billing that doctors did to Medicare and it's huge. It's 880,000 different doctors billing about $77 billion and it's on over 6,000 different procedures, everything from an office visit to a very complicated chemotherapy to the use of a helicopter or an airplane to transport a patient.

BLOCK: And just to be clear, this is doctor information, doesn't include patient name.

RAU: There's no patient information. In fact, the release was designed to protect patient privacy and the way that they did that was, aside from obviously not naming the patients, they only included procedures where a doctor had done it a bunch of times so that you could not be identified even by, you know, the nurse or the receptionist in the actual doctor's office.

BLOCK: Now, we mentioned this is being released for the first time. Why wasn't it released before now?

RAU: Well, for three decades, the American Medical Association has blocked the release of this data through a court order. They didn't want it to come out because some of it, way back during the Carter administration, was inaccurate. In fact, one Michigan doctor was described as having billed $150,000 when he actually billed 15,000. And so they've been successful in that case until recently when The Wall Street Journal sued and was able to overturn that injunction.

BLOCK: There are a number of headlines run that are framing the conclusion of this data as being that a very tiny sliver of doctors, two percent, are accounting for something like 25 percent of the total Medicare payments, that $77 billion number. Does that seem like a fair characterization to you of what you're learning?

RAU: Well, to some extent, it's not surprising. I mean, you're going to have some doctors that do an enormous amount very expensive procedures, you know, on the spine or neurologists or transplants, and so those are going to take up a large amount of the bills. But overall, I'm not sure that that's going to tell us anything that's that useful. It's not that a huge amount, 1 percent or 2 percent, are just ripping off the system and driving around in expensive Maseratis.

BLOCK: So what is the point then? What's the idea behind releasing these numbers?

RAU: Well, to some extent it's the government's biggest effort at crowdsourcing. I mean, they want everyone to dig in and look for waste, fraud and abuse and questionable billing practices. But the other thing is to shine a lot of light on where the Medicare's money goes to show that some doctors are performing really, really expensive procedures when there might be cheaper ones to see why, in some areas of the country, doctors are spending a lot more of Medicare taxpayers' dollars than for doctors in the other areas of the country doing the exact same thing.

BLOCK: And from the patient's perspective, if I were to be looking at these numbers trying to figure out anything about doctors or a procedure I might be interested in, what would I learn?

RAU: Well, you probably wouldn't learn that much. There's no quality information to show how well a surgery actually turned out. There's a possibility that a lot of what a doctor did is not for Medicare so you might not even know that they did a lot of stuff for private insurance. It might be useful theoretically if you love to spend time with an excel spreadsheet, it might be helpful to take a look and find doctors that do something that's very unusual. If you happen to be looking for a particular type of transplant or chemotherapy, it might help winnow that down. But otherwise, I would be very careful about drawing any conclusions about any individual doctor from this.

BLOCK: Jordan Rau is a reporter with Kaiser Health News. Jordan, thanks.

RAU: Thank you. Transcript provided by NPR, Copyright NPR.