Medicare releases data on billing by physicians

WASHINGTON - The Medicare program is the source of a small fortune for many U.S. doctors, according to a trove of government records that reveal unprecedented details about physician billing practices around the nation.

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The government insurance program for older people paid nearly 4,000 physicians in excess of $1 million each in 2012, according to the new data. Those figures do not include what the doctors billed private insurance companies.

The release of the information gives the public access for the first time to the billing practices of individual doctors nationwide. Consumer groups and news outlets have pressured Medicare to release the data for years. And in doing so today, Medicare officials said they hope the data will expose fraud, inform consumers and lead to improvements in care.

Physician groups have resisted the data release, arguing that the information violates doctor privacy and that the public may misconstrue details about individual doctors.

Among the highest billers were a cardiologist in Ocala, Fla., who took in $18.1 million, mainly putting in stents; a New Jersey pathologist who received $12.6 million performing tissue exams and other tests; and a Michigan vascular surgeon who got $10.1 million.

The specialties most common at the top ranks of the Medicare payments were ophthalmologists, oncologists and pathologists.

Some of the highest billing totals may reflect physicians who have a large number of Medicare patients. They also may reflect physicians who specialize in procedures that require costly overhead, and in those cases, a large portion of the money may wind up not with the doctor but with pharmaceutical companies or makers of medical devices.

But in some instances, the high billing totals could signal fraudulent doctor behavior, as government inspectors have previously found. Three of the top 10 earners already have drawn scrutiny from the federal government, and one of them is awaiting trial on federal fraud charges.

Overall, the information covers $77 billion in billing involving 880,000 practitioners in 2012.

The American Medical Association has warned that the data could contain errors, and in some cases, one doctor’s billing number may have been used by multiple support personnel for billing purposes.

In addition, the billing figures reflect what a doctor receives in payment but does not show the actual profit after paying for equipment, support personnel and malpractice insurance. For some procedures, the overhead can reach three-quarters or more of the payment amount.

Many of the highest billers, for example, were in fields with unusually high expenses. Using the assumptions that Medicare and the AMA make when setting payment rates, only 23 of the 4,000 biggest billers personally earned $1 million or more, according to a Washington Post analysis.

“The AMA is concerned that [the Centers for Medicare and Medicaid Services’] broad approach to releasing physician payment data will mislead the public into making inappropriate and potentially harmful treatment decisions and will result in unwarranted bias against physicians that can destroy careers,” Ardis Dee Hoven, president of the association, said in a statement.

But consumer and public-interest groups said the information will help consumers make better decisions.

“This data is important because it will make it possible for consumers to identify physicians that will best meet their needs,” said Robert Krughoff, president of Consumers’ Checkbook, a group that began seeking the release of this information in 2005 and eventually sued for it.

Consumer groups say it will allow patients to know which doctors are most experienced in a given operation. Studies have shown that in several types of surgery, volume matters: Surgeries by doctors who have performed the procedure more times are less likely to end with the patient’s death.

In releasing the data early to news organizations, Medicare officials forbade them from sharing any of the data until 12:01 a.m. today. This provision meant reporters could not solicit responses from doctors. Therefore, this article names only physicians who previously have come under scrutiny and have had an opportunity to respond to questions about their billing practices.

The doctor at the top of the list of largest Medicare billers is Salomon Melgen, an ophthalmologist in West Palm Beach, Fla., who took in $20 million from Medicare in 2012, according to the data released today.

Most of Melgen’s take - about $11.8 million of it - came from injecting patients’ eyes with Lucentis, a drug used for macular degeneration, according to the data.

For each shot, Medicare and the patient pay a doctor about $2,000, but the drug is very expensive and the doctor must then pay most of that money to the drug’s manufacturer, Genentech.

However, Melgen could have used a much cheaper drug than Lucentis - one called Avastin that many ophthalmologists consider an equivalent. Had he used the cheaper alternative, his bill to Medicare for the shots would have dropped from $11.8 million to less than $500,000.

But physicians have a financial incentive to use more expensive drugs. Medicare pays a doctor more for injecting the more expensive drug - the physician’s fee is based on the drug’s price - and Genentech offered doctors its own incentive to use the expensive drug: The company gave discounts to those who used high volumes.

Melgen’s name appeared in headlines in 2012 as result of his connection to Sen. Robert Menendez, D-N.J., a friend who received campaign contributions from the ophthalmologist.

Melgen’s attorney issued a statement before the data release to try to put his client’s billing in perspective.

“At all times, Dr. Melgen billed in conformity with Medicare rules,” Kirk Ogrosky said. “While the amounts in the [Medicare] data release appear large, the vast majority reflects the cost of drugs. … Responsible analysis requires looking beyond the raw data to what was paid for pharmaceuticals and expenses.”

Of the doctors who were paid at least $1 million by Medicare in 2012, 879 were ophthalmologists, who - like Melgen - relied on using the more expensive drug, Lucentis.

Some physicians have suggested that using Lucentis is wasteful because a much cheaper alternative exists.

“There is no advantage of using Lucentis over Avastin - as six randomized clinical trials have shown they’re equivalent,” said Philip Rosenfeld, a Miami ophthalmologist who has pioneered the use of the less-expensive drug.

Melgen, like some other doctors among the top billers, already has drawn scrutiny from Medicare investigators.

Indeed, government inspectors have noted that instances of billing disputes and potential fraud may occur more frequently among the highest Medicare billers.

A December report from the Health and Human Services Department, for example, analyzed the records of 303 physicians who were paid more than $3 million by Medicare in a year. It found that 13 were responsible for overpayments totaling $34 million, six faced payment reviews, three had their licenses suspended and two were indicted.

The second-highest biller in 2012 was Asad Qamar, a cardiologist in Ocala. Qamar made headlines last year after a Reuters report detailed large donations the doctor had made to Democratic causes and how he was flagged for a detailed federal review of his billing practices.

He told Reuters that he had seen “tremendous harassment of the physician community.”

The seventh-highest biller is Farid Fata, a cancer doctor in the Detroit area. He received $10.6 million in Medicare payments in 2012. Fata was arrested in August and is awaiting trial in a $225 million Medicare fraud case, accused of intentionally misdiagnosing illnesses and ordering unnecessary treatments, including chemotherapy for patients who did not have cancer.

Federal authorities said Fata, who owned and operated two health-care companies, fraudulently billed Medicare from August 2007 to July 13 of last year. He also is accused of conspiracy to pay and receive kickbacks to providers of home-health services and hospice services in return for referring patients.

He has denied any wrongdoing.

Jonathan Skinner, a Dartmouth economist, acknowledged that some doctors “may feel that their privacy has been compromised” with the dissemination of their billing records.

But, he said, “as earlier reporting has shown, there are people who are operating in the gray area of health care who are causing Medicare to spend enormous amounts on health care that may be harmful to their patients.” Information for this article was contributed by Amy Brittain, David S. Fallis, Carol D. Leonnig, Steven Rich and Lena H. Sun of The Washington Post.

Front Section, Pages 1 on 04/09/2014

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