Bloomberg News

Medicare Pay List Angering Doctors May Trigger More Data

April 10, 2014

Where the money went

Doctors denounced the accuracy and value of data listing $77 billion in Medicare payments to 880,000 medical providers, while consumer and industry groups said it could make the health-care system more cost-effective.

The divergent views of Medicare’s first-ever release of U.S. payments to physicians suggested the impact may take years to play out. U.S. officials, meanwhile, said they may follow yesterday’s report on 2012 data by providing the same information from earlier years, a move that would help regulators and consumers trace changes in health care over time.

“Geeks, nerds and data freaks will have a good time with this,” said Arthur Caplan, director of medical ethics at NYU Langone Medical Center in New York. “But tomorrow morning, in terms of selecting your doctor it won’t make one iota of difference. I’m not saying it’s valueless, but its value is in trends and patterns” over the long haul.

Release of the information may help get private researchers and the public involved in ferreting out misuse of services and fraud in Medicare, the government health program for the elderly and disabled, said Jonathan Blum, principal deputy administrator at the U.S. Centers for Medicare and Medicaid, in a call yesterday.

“We know there’s waste in the system,” Blum said. “We know there’s fraud in the system. While we’ve made tremendous investments to reduce that fraud, we want the public’s help to identify spending that doesn’t make sense, that appears to be wasteful, that appears to be fraudulent.”

Hospital Payments

In six to eight weeks, Medicare will release a database of 2012 payments to hospitals and clinics, the second time this information has been made public for medical institutions, said Niall Brennan, acting director of CMS’s data unit.

The agency released information in May 2013 showing that hospitals often charge prices that can vary by thousands of dollars for the same procedures, even within the same towns. Hospitals questioned the disclosure, saying their prices don’t reflect what they’re paid by Medicare or other insurers.

Yesterday’s listings showed that almost 4,000 doctors and medical providers who individually were paid more than $1 million in 2012, including seven who received more than $10 million each. Most of the spending fell to a small group of doctors, with less than 3 percent taking in about 28 percent of the $64 billion paid out to individual providers.

While drug and hospital costs have been scrutinized, less attention has been paid to doctor fees, which accounted for about 12 percent of Medicare’s budget in 2012. Some industry groups said they supported the data release as a needed first step to explore that part of the equation.

Driving Costs

“We’ll never get health-care costs under control if we don’t have data about the factors driving that cost growth,” said Clare Krusing, a spokeswoman for America’s Health Insurance Plans, or AHIP, the industry’s Washington lobbyist.

The American Medical Association, which fought to keep the information private, heavily criticized yesterday’s release.

Some doctors may make more than the average because they see a disproportionately high number of elderly, or because they have special expertise in a certain area or better outcomes, said Ardis Dee Hoven, who leads the Chicago-based group that is the nation’s largest physician organization.

That’s not reflected in the raw data reported, potentially opening doctors to unfair criticism that may hurt their reputation and practice, she said by telephone.

Group Billing

Michael McGinnis, who received $12.6 million from Medicare in 2012, was the third-highest beneficiary listed in the database released yesterday. That high payment number reflects the fact that his provider identification code for Medicare is used to bill on behalf of about 27 doctors at Plus Diagnostics in Union, New Jersey, where he serves as medical director, he said in a telephone interview.

Franklin Cockerill, who was paid $11.1 million, faces a similar issue, according to Bryan Anderson, a spokesman for the Rochester, Minnesota-based Mayo Clinic (0131376D:US). Cockerill is a salaried employee of the clinic, where his billing number is used to submit claims for all workers at a clinical lab he directs, Anderson said in an e-mailed response to questions.

In response, Brennan of CMS, said the practice of sharing identification codes needs to end because it limits the ability of regulators and consumers to trace the everyday use of federal payouts.

“In general, providers should not be using other provider numbers to bill Medicare,” Brennan said.

The reaction from Congress was generally supportive of the Obama administration, even among Republicans.

‘Greater Transparency’

“This provides us with a real opportunity to shine a spotlight on the billing practices in the Medicare program,” U.S. Senator Orrin Hatch, a Utah Republican who is the senior Republican member of the Finance Committee that oversees Medicare, said in an e-mail from a spokeswoman. “The release of this data provides greater transparency which, in turn, will allow us to hold the bad actors who take advantage of our seniors and taxpayers accountable.”

U.S. Senator Tom Carper, a Delaware Democrat who also sits on the Finance Committee, said that creating “a pool of accessible Medicare payment information” will give all interested parties a tool to better changes that may need to be made in the future.

“While this new public database will need ongoing maintenance and refinement, there are clearly opportunities for consumers, health-care providers and policy makers to gain a better understanding of how our Medicare dollars are spent, including helping our ongoing efforts to curb waste, fraud, and abuse,” he said in an e-mail from a spokeswoman.

To contact the reporters on this story: Alex Wayne in Washington at awayne3@bloomberg.net; Caroline Chen in New York at cchen509@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Andrew Pollack


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