New data released by the government makes the billing practices of physicians in the U.S. more transparent than before, showing that Medicare — which guarantees health insurance to people over the age of 65 — paid almost 4,000 doctors over $1 million each throughout 2012. Information of this type has not been released since 1979.
The new information also shows that Medicare payments differ widely throughout different parts of the country, as depicted by this Bloomberg infograph.
“If we see more procedures, more spending going to one part of the country than another, without necessarily a difference in quality or satisfaction of care,” Johnathan Blum, principal deputy administrator of the Centers for Medicare and Medicaid Services, told The Washington Post, “that’s an important question to be asking.”
The data shows that Medicare spends far more on drugs handed out by physicians in some regions than in others. This means that medication may be used more in some areas, and underused in other areas — an effect of either differences of disease prevalence across the nation, or the fact that some doctors may prescribe medication when it’s unnecessary. Others, like oncologists, tend to use some chemotherapy drugs more “liberally” than others. But the money received from Medicare doesn’t all go directly into their pockets; instead, the majority of it is used to cover the cost of these drugs, or so these physicians claim.
One physician, an ophthalmologist in Nebraska named John C. Welch, was paid $9.5 million from Medicare in 2012. “I don’t control what Medicare decides to pay the drug company,” Welch told The Washington Post.
Indeed, high billing numbers can merely be a sign of physicians who care for a large number of Medicare patients, or simply doctors who specialize in procedures with costly overheads. However, what this data also hints at — and perhaps why some doctors who have been listed are angered — is that high Medicare payments could also mean physician fraud, which has happened before. Some of the physicians with highest numbers listed in the new data have been under government scrutiny before.
“Medicare bureaucrats seeking to rein in drug costs have been stymied by rules that forbid the government to negotiate lower prices,” The Washington Post reported. “In 2010, they even lost the ability to mandate, when two equivalent drugs are available, that physicians be paid only for the cheapest.”
The Washington Post reports that many doctors resent the release of the Medicare records that show the details about payments to physicians. “[M]any of the doctors said they were just passing through the payment to drug companies,” The Post reported. “Some said they were unfairly singled out even though they were billing for an entire practice. And still others disputed the accuracy of Medicare data.”
In fact, there could very well be errors in the data. For instance, it doesn't take into account the fact that doctors must pay for equipment, support personnel and malpractice insurance — which can often amount up to 75 percent of the payment. Overall, it’s safe to assume that solid conclusions can’t be made from the data, and that it lacks context in order to show which doctors in particular are abusing the system, and which are simply doing their jobs that naturally involve higher costs and bigger bills, like radiation oncology.
"People are going to see these numbers and people aren't going to understand," Gerald Ho, a rheumatologist in L.A., told The Post. "I am not pocketing $5.3 million. To tell you the truth, I know there's been lot of Medicare fraud, and I understand the government wants to provide a measure of transparency. But when they throw out numbers like this without any context, it's going to be misconstrued by the public."