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When Transparency Isn’t Transparent

eye on the news

When Transparency Isn’t Transparent

A planned release of Medicare and Medicaid physician data will likely confuse patients and the public. February 24, 2015
Photo by David Valdez

Last April, the Centers for Medicare and Medicaid (CMS) released records detailing the amounts physicians were paid and the procedures they performed in 2012. CMS has now announced that it will begin publishing these records annually, in what advocates see as a victory for transparency. But the new policy will accomplish little beyond confusing patients and embarrassing physicians.

The problem is that patients cannot intelligently interpret the CMS data. If the records show, for example, that a doctor has received what seem like high payments for a particular procedure—and for performing that procedure an unusual number of times—is the doctor an expert, or a crook? Health researchers have long maintained that high-volume providers have better outcomes. Perhaps the doctor is especially proficient, and her expertise attracts large numbers of patients who need the procedure? The CMS records won’t help patients assess the quality of the services provided or compare one doctor with another. A patient could just as easily believe that the highly paid doctor is over-utilizing the procedure, performing unnecessary and possibly harmful procedures to boost revenue.

The payment records could also mislead patients because they don’t indicate whether a payment was made to a single provider or to multiple providers out of a single office, using one provider’s Unique Physician Identification Number for billing purposes. A pathologist in Minnesota collected $11 million from Medicare in 2012. It wasn’t fraud; he was chairman of the Mayo Clinic’s Department of Laboratory Medicine and Pathology, one of the busiest in the country, and the entire lab billed under his name and Medicare number.

Similarly, the records don’t indicate what portion of a payment represents reimbursements to physicians who make negligible profits from treating patients with expensive drugs or treatments. When a hematologist or oncologist administers chemotherapy, the drug’s cost to the doctor dwarfs what he can collect. The same is true for ophthalmologists who administer macular-degeneration treatments. Current Medicare rules allow physicians to collect the average sale price of the drug plus 6 percent. The actual margin, however, may be less, when overhead costs are factored in. Small practices that purchase drugs in small amounts at higher than “average” costs may actually lose money.

Disclosure advocates also claim that disclosure will help researchers study geographic variations in health-care expenditures and how to eliminate them. But the data are not risk-adjusted. Some doctors treat a greater number of sick patients than others. Unfortunately, the payment records provide no insight into the severity or complexity of diseases treated by doctors, so they cannot be useful for comparing costs and utilization among providers or different regions.

CMS’s release of the records will have at least one clear benefit: helping to identify fraud and abuse. Outliers in total billings or total procedures performed warrant further investigation. But these records are already available to law enforcement and regulatory authorities. In fact, many physicians with unusual billing patterns in the 2012 record release had already been disciplined by state medical boards and/or law enforcement. Yet, Medicare continued to pay physicians who had been sanctioned, lost their licenses, or had been convicted of fraud and theft and spent time in jail—a failure of the system’s fraud-detection procedures that won’t be solved by the public release of physician payment records.

One is left with the suspicion that the primary purpose of the record release is to shame doctors whom policymakers believe routinely exploit the current fee-for-service payment system for personal gain. True, some physicians are guilty as charged; as in any profession, some bad apples exist. But most physicians take their professional duties seriously. They make a good faith effort to perform services for the best interests of their patients and not for personal gain. They don’t deserve to be pilloried based on misleading information. Until Medicare payment records can be made useful and readily intelligible, CMS should suspend their release. If CMS insists on going ahead, it should at least help people understand what they’re looking at.

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