Lat­est physi­cian data spot­light how Medi­care pays for drugs

Modern Healthcare - - NEWS - By Bob Her­man —Data re­search by Art Go­lab

Medi­care paid out hun­dreds of mil­lions of dol­lars to a small sub­set of physi­cians in 2013, but most of those pay­ments to top Medi­care billers cov­ered the costs of drugs ad­min­is­tered to pa­tients in clin­i­cians’ of­fices.

The drug pay­ment data high­light long­stand­ing con­cerns about Medi­care’s sys­tem for pay­ing doc­tors for drugs used in their of­fices and out­pa­tient cen­ters. But in­ter­pret­ing the data is com­pli­cated, be­cause they lump to­gether doc­tors who may be in­volved in ques­tion­able prac­tices with pro­duc­tive physi­cians in nar­row spe­cial­ties that re­quire in­ten­sive med­i­ca­tion use.

The 100 top-billing Medi­care doc­tors re­ceived more than $655 mil­lion from the pro­gram in 2013, ac­cord­ing to a Mod­ern Health­care anal­y­sis of CMS’ Medi­care Part B data re­leased last week. About 67% of that to­tal, or $439 mil­lion, went to­ward Part B drugs ad­min­is­tered in doc­tors’ of­fices. Most of the high­est-paid doc­tors were on­col­o­gists and oph­thal­mol­o­gists, who of­ten use ex­pen­sive drugs in their of­fices.

Drug costs ac­counted for only 12% of the $75 bil­lion Medi­care Part B paid to all 900,000 providers in 2013.

This is the sec­ond year the CMS has re­leased Part B data on pay­ments to in­di­vid­ual physi­cians and other providers, af­ter Dow Jones & Co. sued for the data and the Obama ad­min­is­tra­tion adopted a new health­care trans­parency ini­tia­tive.

In the lat­est data re­lease, the CMS broke out pay­ments for drugs ver­sus pay­ments for med­i­cal ser­vices, partly in re­sponse to the Amer­i­can Med­i­cal As­so­ci­a­tion’s com­plaint that last year’s data re­lease cre­ated a “mis­lead­ing per­cep­tion that drug re­im­burse­ment was physi­cian in­come.”

Un­der Part B, Medi­care re­im­burses physi­cians for drugs used in their of­fices and out­pa­tient cen­ters by pay­ing for the drug’s av­er­age sales price, plus 6% to cover over­head.

That guar­an­teed ad­di­tional per­cent­age for physi­cians has been crit­i­cized be­cause it en­cour­ages them to buy the high­est-cost drugs when cheaper drugs may be just as ef­fec­tive.

For in­stance, stud­ies have shown that Medi­care could have saved $18 bil­lion over 10 years if doc­tors used the drug Avastin for mac­u­lar de­gen­er­a­tion in­stead of the more­ex­pen­sive Lu­cen­tis.

“The in­cen­tives for physi­cians to use the more ex­pen­sive drugs are very large,” said Paul Gins­burg, an econ­o­mist and health pol­icy ex­pert at the Uni­ver­sity of South­ern Cal­i­for­nia. “Th­ese data will help show the lack of a sys­tem to at­tempt to con­tain costs for physi­cian-ad­min­is­tered drugs.”

One of the top-billing doc­tors in 2013 was Dr. Salomon Mel­gen, an ophthalmologist in West Palm Beach, Fla. He re­ceived $14.4 mil­lion from Medi­care, the third-high­est to­tal for any physi­cian. Close to 47% of that amount was for drugs. Mel­gen was in­dicted this year on sev­eral counts of Medi­care fraud and false claims, and also was charged in a cor­rup­tion case in­volv­ing U.S. Sen. Robert Me­nen­dez (D-N.J.).

Dr. Asad Qa­mar, a car­di­ol­o­gist in Ocala, Fla., was the sec­ond-largest Part B re­cip­i­ent. He col­lected $16 mil­lion in 2013, nearly all for med­i­cal ser­vices. Qa­mar faces a fed­eral law­suit al­leg­ing that he and his med­i­cal group billed Medi­care for un­nec- es­sary heart pro­ce­dures. Qa­mar has called the claims “base­less.”

The CMS has said it closely tracks odd billing and pre­scrib­ing pat­terns among physi­cians. Ge Bai, a health­care ac­count­ing pro­fes­sor at Wash­ing­ton and Lee Uni­ver­sity, said pub­lish­ing Medi­care pay­ment data adds an­other layer of fraud pro­tec­tion through trans­parency. If physi­cians know their Medi­care com­pen­sa­tion will be posted on­line, they “will be­come less likely to scam the sys­tem,” she said.

Dr. Neel Shah, founder of Costs of Care, a not-for-profit that helps physi­cians un­der­stand health­care costs, said the data re­lease will push providers to take a closer look at their pay­ments and in­ter­nal costs. “If you’re three stan­dard de­vi­a­tions away from some­one, you have to be accountable for your­self,” he said.

Be­yond pay­ments to physi­cians, Medi­care Part B also paid bil­lions in to­tal to lab­o­ra­tory com­pa­nies. Mil­len­nium Health in San Diego re­ceived $ 211.3 mil­lion from Medi­care in 2013, the most of any in­di­vid­ual clin­i­cal lab site. But both Lab­o­ra­tory Cor­po­ra­tion of Amer­ica Hold­ings and Quest Di­ag­nos­tics re­ceived higher to­tal pay­ments when their mul­ti­ple lo­ca­tions were all con­sid­ered.

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