Today's blog is dedicated to the recent data that Medicare has released to the public regarding physician billing practices, reimbursement rates, and annual compensation from Medicare.
Initially I was so excited to see how the information Medicare provided might help patients and allow for better medical transparency. I was quite disappointed when all I found was dollar amounts without any explanation for why some doctors are reimbursed more than others from Medicare and why such discrepancies exist. Simply knowing these dollar amounts will not help with decreasing healthcare costs -- unless more details are shared regarding each individual's practice of medicine. Thus, I thought it would be important to inform the public of some limitations in the data before this information goes "viral" and your physician begins to be scrutinized.
1. The annual reimbursement rates and activities (ordering of certain tests, office visits, procedures, etc.) of an individual physician may not be represented accurately in the database. For example, a colleague of mine started a private practice with 6 other physicians. When looking up his name, I noticed that he billed frequently for procedures (like an ultrasound) which he never performs. I did recall; however, that one physician in his practice was trained in Radiology and performs ultrasounds routinely for their practice. When looking up the name of the Radiologist in his group, there were no results found. I then looked up all 5 additional physicians in his practice, and noticed none of them were listed either. I grew concerned and spoke with him regarding the data published under his name. He confirmed with me that the database provided information for his entire group as a whole, and not information reflecting his individual practices. This means that all the information provided in the database under his name (i.e. the annual Medicare reimbursement of $100,000+, ALL office visits, procedures, and testing) actually reflect the cumulative activity of all 6 members in his group practice. Ultimately that means each MD in his practice would have been reimbursed roughly $16,000 from Medicare annually, which after considering all the costs associated with running a private practice (paying the staff, nurses, rent, utilities, buying supplies, medications, etc.) can be minimal at best. If I didn't take the time to research each of his group members, his billing practices would have appeared unwarranted and raised a red flag regarding his practice of medicine. Please keep this information in mind when looking at the database, and ask yourself if your MD is part of a larger group practice.
2. The Medicare database reports how often a certain procedure or test is billed for by a physician, and the amount of money that he/she is reimbursed for that procedure or test. Knowing the dollar amounts that physicians are reimbursed for their services is not very helpful to patients. For example, the database might report that a certain GI specialist performed 40 endoscopies in 2012 and got reimbursed $100 for each of them.There is no information in the database to give us clues as to whether or not these endoscopies were medically necessary for each of those 40 patients. Furthermore, we have no way of knowing how often that same GI specialist orders endoscopies to evaluate a specific symptom (i.e. does the MD order an endoscopy in every patient presenting with heartburn or only a minority of these patients). As a patient, I would want to know how my physician's treatment outcomes with a certain disease compare to other MDs in his/her field of medicine and whether or not these outcomes justify the testing that he/she performs. The database provides us none of the above information.
4. There is no explanation of why some specialties make more than others. The article seems to imply greed to me, but if you ask the physicians why these discrepancies exist, they will give you the true answer.
Oncologists and Ophthalmologists are sited as the specialties with the highest reimbursement rates. The reason for this is because they purchase and administer very expensive medications to treat their patients. Medicare reimburses these doctors for the costs of the medications, hence the high reimbursement rates. But, what the database does not show is the net profit the physician makes from administering these drugs.
For example, Lucentis is the only FDA approved drug used to treat macular degeneration (the leading cause of blindness) and can cost up to $2,000 per injection. Reimbursement for Lucentis by Medicare is approximately $500. The physician must cobble together the remaining $1,500 balance from drug rebates, private insurance, and huge patient co-payments. And this still doesn’t take into consideration the additional costs to actually administer the injection--the cost of the equipment, supplies, maintenance of an office and staff, malpractice insurance, etc. With the additional context, these high reimbursement rates hardly even seem fair, let alone excessive. This is the real transparency our patients need to see.
5. It's important to understand disease prevalence and how that plays a role with Medicare spending. Our elderly population are at high risk for many diseases - specifically cancer, heart disease, and eye disease. Most people will say that vision is the most important thing for them, and
most elderly patients will develop cataracts or macular degeneration at some point in their lifetime. Thus it is logical that Ophthalmologists should be reimbursed so highly – their reimbursement is driven by their volume of patients and surgical cases.
With all that said -- I do believe some physicians might be capable of wrongful, fraudulent activity. That's why there is a team within Medicare whose sole purpose is to detect fraud. It's not a patient's job to do so. I think one positive aspect of the database is that it will force the public to evaluate more treatment options and the practices of their MD. Still, the most important thing is for patients to have true medical transparency regarding the quality and outcomes of their healthcare providers.
What are your issues with the Medicare database?
