Everything you need to know about the Medicare pricing data dump

The Washington PostApril 9, 2014 

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On Wednesday, the Centers for Medicare and Medicaid Services published a huge cache of information on Medicare billing practices. Here’s a rundown of what information was released and what it means.

What data did Medicare just publish?

For the first time, Medicare has released information about how much individual doctors billed the program, how much Medicare paid the doctors and the total number of treatments the doctors provided. The data release covers $77 billion in payments to 880,000 health-care professional across the country in 2012 for just Medicare Part B, which covers outpatient services like lab tests, surgeries and office visits. The data exclude providers who saw fewer than 11 Medicare patients, and individual patient information wasn’t released.

Why hasn’t this information been available before?

You would think that a publicly-funded program would have been pretty transparent about its data, but this information had been off-limits dating to 1979. That’s when a federal injunction stopped Medicare from releasing physician-identifying information, but a federal judge overturned the injunction last year in a lawsuit brought by Dow Jones, thus bringing us today’s data dump from CMS.

What kind of doctors appear on the list?

Ophthalmologists, oncologists and pathologists were among the specialties ranking highest on Medicare’s billing list. The high tallies don’t necessarily represent what a doctor is pocketing for high-cost services for some procedures, a major chunk of the Medicare dollars could be going toward equipment, drugs, support personnel and other overhead costs. Doctors billing more than $3 million, however, deserve some extra scrutiny, the Health and Human Services inspector general concluded last December.

The services the doctors choose matter. For example, previous evidence shows that ophthalmologists were more likely to choose a drug costing $2,000 per injection over a $50 drug because it was better for their bottom line.

How do doctors feel about this?

Not so great. The American Medical Association, the largest physician lobbying group, had strongly fought against the disclosure in court. The AMA said it’s worried that the public will draw the wrong conclusions about doctors based on the data, potentially “ruining careers.”

Doctors Wednesday morning disputed their inclusion on the list. Some said they are the single name for billing for an entire practice, so they’re not solely responsible for the amounts listed by the Centers for Medicare and Medicaid Services. Others contacted by The Washington Post said that CMS provided inaccurate data.

What will this data tell us?

More transparency is always a good thing, especially in a health-care industry that doesn’t seem to have enough of it. From this data, patients will have more information about doctors’ experience with procedures though not the total picture, since the new data do not include private insurance or other government programs.

For journalists and researchers, it may be easier to detect billing patterns and potentially identify waste and abuse in Medicare. And there’s a lot of that. Improper payments accounted for about $29.6 billion of $350 billion in payments Medicare made for services in 2013.

What is fee-for-service?

It’s basically what it sounds like. Medicare providers are reimbursed by the government based on the amount of services provided, rather than quality of care, though this is changing under the Affordable Care Act. As the Medicare Payment Advisory Commission reported this year, FFS payment “allows some specialties to increase the volume of services they provide more easily (and therefore increase their revenue from Medicare).” Medicare payments could also vary based on a number of factors, including geography, the setting where care is provided and number of services in the same day.

Why are we still using a fee-for-service system?

About 75 percent of Medicare beneficiaries received care through the traditional FFS system as of June 2011, according to MedPAC. However, Medicare is moving away from FFS, making a greater effort to reward doctors based on quantity. The Affordable Care Act has accelerated the use of accountable care organizations, which reward doctors for providing better care (not just more expensive treatment). About 5.3 million Medicare beneficiaries are enrolled in the coordinated care arrangements, as of December 2013. A proposed bipartisan reform of the Medicare physician payment system, which has broad support of the physician community, would further embrace this shift toward quality.

How else is health care becoming transparent?

Here’s some good news: The health-care industry in the past few years has been moving toward more transparency. The Medicare disclosure today comes about a year after the agency released information on the wildly varying prices hospitals charge for common procedures. The health-care agency has also required pharmaceutical and medical device companies to report payments to doctors and will require insurers next year to disclose more detailed claims and enrollment data.

What else can be done to increase transparency on health-care pricing?

The physician payment reform bill before Congress would require a Medicare provider website to post information about physician charges and services. Senate Finance Committee Chairman Ron Wyden, D-Ore., and Sen. Chuck Grassley, R-Iowa, have also proposed standalone legislation that would create a searchable database of Medicare claims.

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