42 physicians in state head Medicare list

Each got over $1 million for specialties, medicines

Oncologists, rheumatologists and ophthalmologists topped the list of Arkansas physicians who received the highest total Medicare payments in 2012, according to a review of federal data released last week.

The data show that 42 doctors in Arkansas each received more than $1 million in Medicare payments in 2012.

The list consisted of 16 with a specialty listed as hematology/oncology, seven medical oncologists, five ophthalmologists, five rheumatologists, three cardiologists, two dermatologists and one doctor each with specialties in diagnostic radiology, radiation oncology, nephrology and neurology.

For many physicians with high payment totals, drugs administered under their supervision accounted for much of the expense.

That was true for several ophthalmologists who each billed Medicare for hundreds of thousands of dollars for injections of the drug Lucentis.

The use of that drug to treat macular degeneration has drawn criticism because many experts say a much cheaper drug, Avastin, is equally effective.

“There’s no medical advantage of using Lucentis over Avastin,” said J. Gregory Rosenthal, an ophthalmologist in Toledo, Ohio.

Allison Neves, a spokesman for South San Francisco-based Genentech, which makes both drugs, disagreed.

“Avastin is approved for the treatment of patients with certain forms of cancer and is not manufactured or approved for use in the eye,” Neves said in an emailed statement.

In all, Medicare paid more than $77 billion in 2012 to doctors, ambulance services, surgical centers, clinics and other medical providers nationwide, including $755.8 million to providers in Arkansas, according to the data released by the federal Centers for Medicare and Medicaid Services.

More than 49 million Americans, including 552,000 Arkansans, are covered by the federal insurance program for the elderly and disabled.

The Medicare agency had not released similar provider-specific data before Wednesday.

The payments were made under Medicare’s Part B feefor-service program. The data include costs for services billed by physicians, nurse practitioners, imaging clinics, laboratories, ambulance services and other types of noninstitutional care. It does not include costs for inpatient or outpatient hospitalizations.

A federal court order had prevented the release of the provider-specific Medicare data since 1979, but that injunction was lifted last year.

In releasing that data Wednesday, officials at the Centers for Medicare and Medicaid Services said they hoped it would help expose fraud, inform consumers and lead to improvements in care.

Arkansas Surgeon General Joe Thompson said the data could help identify “either practice variation that should not occur, or missed opportunities to improve the quality of patient care that should occur.”

“We may find providers that are doing something that has been outdated, and we need to work on a continuing education strategy to get them up to where the science is,” he said.

The American Medical Association warned that the data could contain errors and has a number of other limitations.

For instance, the group said in a statement that multiple residents, physician assistants, nurse practitioners and others could all file claims under the same doctor’s identification number.

Because the drug costs make up such a big portion of the costs for some specialties, the reimbursement totals can give a misleading picture of what the doctor received, said David Wroten, executive vice president of the Arkansas Medical Society.

“The pharmaceutical companies are getting the majority of that money,” Wroten said. “It makes it look like the physician’s getting it, but they’re not.”

Drug expenses made up the bulk of the payments for Kamal Patel, a specialist in hematology/oncology at Little Rock-based CARTI, formerly known as the Central Arkansas Radiation Therapy Institute.

He received the highest payment total, more than $7.2 million, in 2012.

CARTI spokesman Allison Melson said Patel’s office is in the same area as the organization’s chemotherapy suite, and most of the chemotherapy drugs administered there are billed under Patel’s name.

Medicare generally pays for the cost of such drugs, plus a 6 percent fee to the physician.

Greg Campbell, chief executive of the Little Rock Diagnostic Clinic, said automatic spending cuts, known as the sequester, have reduced that fee to 4 percent.

In cases where a patient must meet a deductible or make a copayment to cover part of the charge, the fee collected by the clinic may be even less, he said.

Richard Houk, a rheumatologist at the clinic, said chemotherapy drugs and other medicines accounted for 92 percent of the more than $3.3 million in Medicare reimbursement the clinic received under his name in 2012.

Much of that cost is “a direct pass-through to the pharmaceutical company in my name,” Houk said.

The drugs are used to treat arthritis, lupus and other connective-tissue diseases.

Houk said the clinic tries to be economical, but “for these biologic chemotherapy drugs, we don’t have generics yet.”

“We’re kind of locked into the brand names.”

Of the five ophthalmologists with payment totals of more than $1 million, four received more than $500,000 each for injections of Lucentis, including one whose total for that drug alone topped $1 million, according to the Medicare data. According to a report in December in The Washington Post, Lucentis costs about $2,000 per injection, while Avastin costs about $50 per injection.

Six randomized clinical trials involving more than 3,000 patients have found Lucentis and Avastin to be largely equivalent, but Genentech has discouraged the use of Avastin to treat eye ailments by packaging it in doses far too large for use in ophthalmology, the newspaper reported.

Nevertheless, Rosenthal said, most ophthalmologists use Avastin, even though Genentech has not applied to the Food and Drug Administration for approval for its use to treat macular degeneration.

“You can make a strong case that nobody should give Lucentis,” Rosenthal said.

Neves said in the statement that Lucentis binds more tightly to its “target,” a protein that causes blood vessel growth, and was designed to leave the bloodstream more quickly than Avastin to reduce the risk of side-effects.

“Recent safety findings add to a growing body of evidence suggesting the risk of systemic adverse events may be higher when injecting Avastin into a person’s eye compared to Lucentis,” Neves said in the statement.

The two dermatologists in the state whose payments topped $1 million were Scott Dinehart and Randall Breau, both of the Little Rock-based Arkansas Skin Cancer and Dermatology Center.

Most of the payments for both doctors were related to Mohs surgery, which involves slicing off skin cancer in thin layers and examining each piece to determine whether all the cancerous tissue was removed.

Dinehart said in an email that he and Breau completed fellowships focusing on Mohs surgery and receive referrals from a four-state area. Their patients are primarily on Medicare and include “many of the more difficult to manage skin cancer patients,” he wrote.

He said the practice uses Medicare guidelines to determine which patients are eligible for the surgery, which he described as “an employee and overhead intensive treatment.”

“We have a large number of employees per doctor and use expensive equipment to perform Mohs surgery,” Dinehart wrote, adding that “The majority of our revenue is applied to our overhead.”

He continued, “In general, we are busy because we get good outcomes, we get patients in to see us in a timely fashion, we are punctual and we have over 32 years experience treating skin cancer.”

Out of the total reimbursement paid to doctors, clinics and other providers, the biggest share — $80.7 million — went to family practice physicians.

They were followed by internal medicine doctors, who received $59.1 million, and ambulance service providers, which received $53.9 million.

Out of the more than 400 organizations that received payments, the largest totals went to Little Rock’s Metropolitan Emergency Medical Services, which received $7.3 million, and CARTI, which received $6.3 million.

Jon Swanson, director of MEMS, said the agency is the largest emergency transportation provider in the state, with a service area covering a population of about 516,000 people.

About 40 percent of the ambulance service’s 60,000 annual transports are for Medicare patients, Swanson said.

The reimbursement provided by Medicare is “way below” that provided by commercial insurance, he added.

“In many markets — MEMS included — the Medicare rates, if they cover costs, only barely cover costs, and in many cases don’t cover the cost of providing the service,” Swanson said.

At CARTI, a nonprofit organization with facilities in 12 Arkansas cities, the bulk of the payments are for radiation treatment for cancer patients, Melson said.

According to the Medicare data, CARTI was reimbursed for services to 1,040 Medicare patients in 2012.

The payments help pay the cost of the equipment involved. For instance, Melson said, the organization has eight linear accelerators, each of which cost about $3.5 million.

“In many cases, what the government pays for cancer care is less than our actual cost,” Melson said.