Physician payment data may drive hospital, insurer decisions
Insurers want to know which doctors routinely order the most services and the costliest treatments. Hospitals want to know which physicians to partner with for accountable care programs. Fraud investigators and researchers want to know who is ordering unnecessary services or billing excessively. Consumer groups and individual consumers want to know which doctors have the most experience with complex procedures.
All these groups will be closely examining HHS’ massive release last week of information on 2012 Medicare Part B payments to individual physicians and other providers. The watershed publication of the long-sought data is part of what many experts see as a burgeoning new era of transparency in healthcare pricing, quality of care and use of services.
“For too long, the only information on physicians readily available to consumers was physician name, address and phone number,” Jonathan Blum, CMS principal deputy administrator, said in a written statement. “This data will, for the first time, provide a better picture of how physicians practice in the Medicare program.”
The database includes 9.2 million lines describing transactions worth $77 billion by 880,000 physicians, physician practices and other providers certified to collect from Medicare. It includes individual physicians’ names and office locations, the exact services for which they billed Medicare, the average payments for each service and the number of patients who received each service. The data do not include patient identities. The CMS expects to release similar data troves on Part B payments annually.
“The insights that can be gained here are near limitless,” said Dr. Graham Hughes, chief medical officer of business-analytics firm SAS. “The focus will be on utilization, practice patterns and practice variation. I have heard directly from some of our (hospital) customers that they are poring over this data as we speak.”
The data release came over the strong objections of organized medicine, which had fought to block the release for decades, arguing that such information would violate doctors’ privacy rights. “Releasing the data without context will likely lead to inaccuracies, misinterpretations, false conclusions and other unintended consequences,” said Dr. Ardis Dee Hoven, president of the American Medical Association. The data “will not allow patients or payers to draw meaningful conclusions about the value or quality of care.”
Media reports have highlighted the limitations of the data, such as the fact that billings listed under a single physician code may refer to all doctors in a large physician practice. In addition, billings may have included costs for expensive drugs as well as office space, nonphysician providers and other staff.
Still, it’s expected that the data will inform important business decisions by healthcare industry groups. Hospitals can now take a more detailed look at individual physicians’ practice patterns and their patient bases and decide whether to partner with them or try to acquire their practices. The data may reveal which doctors are treating the most patients in each ZIP code and for what diagnoses. That could prove valuable as hospitals and physicians form accountable care organizations and other delivery networks.
Insurers and self-insured employers also plan to examine the information closely, since the Medicare data set on physician billing is far larger than what most of them could have previously accessed. They want to know which doctors order expensive services, procedures and drugs more than their peers. The data could help them choose doctors for their narrower, value-based networks and so-called tiered networks of preferred providers.
Some of the early findings from Modern Healthcare’s analysis of the data show that:
■ Routine office visits accounted for the single largest share of Medicare physician billings in 2012 even though they amounted to just one-seventh of the $77 billion in payments covered in the data release.
■ Many of the highest-paying procedures include the purchase and admin-
istration of drugs. The single highestpaying service in Medicare Part B is $25,730 for administration of prostate cancer drug Provenge for patients with “castration levels” of testosterone and evidence of tumor progression.
■ Ophthalmologists are among Medicare’s highest-paid specialists—a finding already drawing scrutiny from policymakers and watchdogs worried about waste and fraud. But many of the highest-paying codes for eye doctors relate to the use of Lucentis, a branded injectable drug for macular degeneration that costs $2,000 a dose.
The relatively large amounts received by some physician specialties drew attention from consumer groups. Last year, HHS’ Office of the Inspector General recommended that the Medicare program focus its fraud scrutiny on individual physicians billing more than $3 million a year.
“If I was a policymaker, I would want to take a hard look at whether we are paying higher prices than we should for some of those
“There is an enormous amount of entirely legal but inappropriate patterns of care that are provided under Medicare.”
—Bill Kramer, executive director of national health policy at the Pacific Business Group on Health
procedures, or if there are excessive procedures being done,” said Robert Krughoff, president of consumer organization Consumer’s Checkbook, which sued for release of Part B data in 2006.
The public quickly learned that Medicare’s highest-paid doctor is Florida ophthalmologist Dr. Salomon Melgen, who received $20.8 million from the program in 2012 alone and is a close associate of U.S. Sen. Robert Menendez (D-N.J.). Melgen’s defense lawyer has insisted all the payments were legal. Ophthalmology in general came under aggressive scrutiny.
The data also could be helpful to consumers in choosing doctors. Krughoff said the data offer them rich information on which doctors have the most experience performing complex procedures. “There is quite a bit of evidence that says experience matters in many types of procedures,” he said.
Researchers will be combing through the data to find evidence of practice pattern variation by geographic location. Experts say such analysis is important not just in weeding out waste and fraud, but also in protecting patients from risk of injuries or infections from unnecessary services and procedures.
“There is an enormous amount of entirely legal but inappropriate patterns of care that are provided under Medicare,” said Bill Kramer, executive director of national health policy at the Pacific Business Group on Health, which represents large employers.
While employees of the group’s member companies generally aren’t in Medicare, Part B data will still have value, particularly when combined with information from all-claims databases. “The best providers will thrive when we all know who the best doctors and hospitals are,” Kramer said. “It is ultimately how we are going to improve the whole healthcare system.”