40-15 Physician Pay Report

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What the Physician Pay Report Won’t Tell You

By Matthew Bin Han Ong

For a good time, go to the Medicare database and key in the name of your physician friend, foe, or whatever, and presto!—you will see how much that person had billed Medicare in 2012.

This will make for hours of guilty pleasure, especially if you are willing to set aside concerns about not just privacy, but accuracy.

Do this:

  1. Go to the data released by the Centers for Medicare & Medicaid Services posted online April 9 in The New York Times.
  2. Select Hematology/Oncology under “Specialty”, and key in 98026 as the ZIP code.
  3. Scroll down, look for Jeffery Ward, and click on his name for a breakdown of his Medicare billings.

Ward, a medical oncologist at the Swedish Medical Center in Edmonds, Wash., specializing in hematology and hospice and palliative medicine, told us he doesn’t mind being used in this illustration.

A quick glance shows that Ward billed Medicare $371,232 in 2012, and that he prescribed two anti-nausea drugs—Palonosetron and Granisetron—580 and 1,250 times, respectively.

The drugs, used primarily to mitigate symptoms resulting from chemotherapy, would suggest that Ward had administered chemotherapy 1,830 times in 2012. However, Ward’s chemotherapy treatments were not recorded in the data.

“It was billed through me, and it’s not in there,” said Ward, speaking on behalf of the American Society of Clinical Oncology. “All of the physicians that were in our practice are listed on that page when you go to that ZIP code—I’m actually the highest billing one, and none of us have chemotherapy listed there, except one, and the only chemotherapy drug he has is rituximab, but that makes him stand out about $200,000 higher than the rest of us.

“Why? I don’t know.

“I’m convinced that my billing was over $1 million, including the $371,232. And there are other oncologists in my state where it shows well over $1 million in billing, and it’s because their chemotherapy is in there.”

Ward is the immediate past chair of ASCO’s Clinical Practice Committee.

Medicare officials say that the data they released will enable the public to conduct a wide range of analyses, comparing 6,000 types of services and procedures provided, as well as the payments received by individual health providers.

“Currently, consumers have limited information about how physicians and other health care professionals practice medicine,” HHS Secretary Kathleen Sebelius said in a statement April 9. “This data will help fill that gap by offering insight into the Medicare portion of a physician’s practice. The data released today afford researchers, policymakers and the public a new window into health care spending and physician practice patterns.”

The data were released as a result of litigation by The Wall Street Journal, which has posted its own searchable database.

“I think a lot of people are looking themselves up to see where they are on the list and see whether it’s right or wrong, or if there are any surprises there.

Context Matters

The Medicare data can be easily interpreted out of context, said Matthew Farber, director of provider economics and public policy at the Association of Community Cancer Centers.

“Much like when CMS released hospital cost data last year, taking the data out of context really isn’t all that helpful and can be potentially misleading to patients or to the providers or to payors—any host of audiences will look at this data and try and glean some information out of it.

“Oncology care is unique in many ways in that our doctors are giving a lot of the treatments in the offices, they’re using some very high-cost treatments to do so,” Farber said to The Cancer Letter. “If you don’t take that into account or don’t at least recognize that in reporting of these payments or these Medicare claims, you’re only getting half the story.

“Our biggest concern is that people are going to look at this and say, ‘Oh, that’s money that’s straight revenue, that’s money that the doctors are pocketing,’ when indeed that’s not the full situation.

“People are still kind of trying to wrap their heads around this,” Farber said. “I think a lot of people are looking themselves up to see where they are on the list and see whether it’s right or wrong, or if there are any surprises there.

“They may be looking at some of their colleagues and competitors even, but I think, at least in the oncology community, we all know that any information taken in the abstract is not going to get anyone very far,” Farber said. “And the hope is that we’re not going to have patients or payors or media taking up on this story and running with it without really getting the back story and trying to get the whole picture and looking at what these payments actually mean—how much money goes to pay for the drugs, how much money goes to pay for this or that, so it’s not as if, ‘Oh, they billed for $3 million to Medicare, so therefore they must have made $3 million.’”

The way CMS released the data can be misleading, said Matthew Brow, vice president of business development and public policy at The US Oncology Network.

“All this information is looking at how much the physician charged for care, and how much Medicare paid for the physician, and in reality, the physician as a group for the services that the physician provided to Medicare beneficiaries,” Brow said to The Cancer Letter. “It’s important to keep in mind that nothing CMS is showing is netting out the expenses that the practice or the physician himself or herself actually experiences.”

Many practices and hospitals bill Medicare under a hospital’s tax ID number or through a supervising physician, and the released numbers do not reflect the actual dollars received by individual doctors, or deductions after physician payments to drug companies.

“In an oncology practice, a lot of the billing that you do for Medicare is for drugs, and we know that in 2012, 94.3 percent of that money goes to drug companies,” Ward said. “Instead of billing Medicare, the pharmaceutical companies bill us, and we bill Medicare. And so it makes oncology look like a huge biller, where you really ought to be saying, ‘Oncology bills this much and the pharmaceutical companies are billing this much.’”

It is problematic to use the data for comparisons between oncologists and other physicians, or even across oncology subspecialties, said Ted Okon, executive director of the Community Oncology Alliance.

“If you look from oncologist to oncologist, depending on what the cancer type they treat, that’s going to determine not only what drugs, but what other treatment is used,” Okon said to The Cancer Letter. “You also have the situation of where the demographics of the patient population is going to change.”

Hospital-based physicians will appear to be billing more because the hospital is typically getting a higher rate and charging more, Brow said.

“That makes it hard to even do an apples-to-apples comparison across specialties, much less across different specialties,” Brow said. “Because it’s all at the aggregate level, it’s really hard to get a sense for relative costs and relative cost-effectiveness, and it would be totally unreasonable to look at the number and say, ‘Well, he billed $4 million and Bob billed $2 million, so Bob is more cost-effective.’ The fact could be that Bob only works two days a week, or his practice is relatively light on Medicare patients, or he doesn’t see Medicare patients by his choice.”

“CMS doesn’t have to release this data for the public to have vigilantes out there looking at outliers; this is something they should be doing.”

Transparency, or PR Stunt?

The physician pay report may help get private researchers and the public involved in ferreting out misuse of services and fraud in Medicare, said Jonathan Blum, principal deputy administrator at CMS, in an interview with Bloomberg April 9.

“We know there’s waste in the system,” Blum said. “We know there’s fraud in the system. While we’ve made tremendous investments to reduce that fraud, we want the public’s help to identify spending that doesn’t make sense, that appears to be wasteful, that appears to be fraudulent.”

The problem is that asking critical questions based on the data without context and accuracy means that people are going to be accused of things they haven’t done, critics say.

“I think that if these data were put in clear context, and if the data was broken down in a way that showed reality, then that’s the kind of transparency and cost issues that I think patients and the public may have a right to,” said Ward. “This data could be used several different ways. So one way to use the data is as a health services research tool. I think that for people who are in research and figuring out how medicine is practiced, who are developing policy and who are working on payment reform issues, this data can be very valuable.

“I’m a little bit disturbed by the fact that CMS has advertised this as, ‘We now want the public and the media to help us find fraud,’” Ward said. “Medicare has had these data for a long time. To release it all and just say, ‘This is going to help us find fraud,’ means other people are going to massage the data and look at it, and ask critical questions.

“I don’t think Medicare has spent any time or effort trying to check the accuracy of the data, or to put it into context, or do any of those things. They just put raw data out there because they have it, because the court had said they should, and they were giddy at the prospects of being able to do so.”

COA’s Okon echoed that sentiment: “But if you can’t compare one physician to another, or if those comparisons are invalid, our biggest concern is not the transparency—the data runs the risk of confusing patients. CMS doesn’t have to release this data for the public to have vigilantes out there looking at outliers; this is something they should be doing.

“What we should have expected but didn’t expect was that CMS would be so giddy that it would provide the news outlets plenty of time to develop the tools to easily extract the data,” Okon said. “I think it’s very unfortunate that CMS chose not to release data that physicians can actually check for accuracy. We had no chance for correcting and checking it, or preparing what we should say to our patients.”

Medicare could be just releasing evidence as a way to say, ‘Look, we need to reduce some Medicare expenditures,’” ACCC’s Farber said.

“But the worrisome part for oncology and others, is taking the data in the abstract,” Farber said. “It’s a disservice to everything that our members do and all the people who help treat these cancer patients, to try and make those decisions without looking at the whole picture.”

CMS had the opportunity to spend time and resources focusing on potential fraud, and do that without a public disclosure of all the data, said US Oncology’s Brow.

“If they were really concerned about health care costs, they’d be figuring out how to incentivize more patients to seek care in community settings and physician offices instead of higher-cost hospital settings,” Brow said.

“They’d be looking at the beneficiaries and benefit design for beneficiaries, putting in differential copayments and bill insurance for choosing more expensive are or less expensive care. That would be a much more practical way to get at the cost question.”

Providers will continue to make sure all necessary and relevant parties are educated about the data, Farber said.

“I’m sure groups like US Oncology, ASCO and ourselves will get together to make sure that if it’s members of Congress or the administration at CMS, payors, whomever that we have to talk, that they do understand the full picture,” Farber said. “There’s no rash decision that’s going to be made solely based on the release of this information.”

Associate Editor


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Associate Editor