For first time since launch of the Medicare program, CMS released data on Medicare payments to individual physicians

Once again, Medicare officials have stuck a blow for price transparency. On April 9, 2014, the Centers for Medicare and Medicaid Services (CMS) released data on total payments made to individual physicians for the year 2012. In several states, pathologists were identified as among the highest-paid physicians.

Release of this information generated stories by the national and local media. There was also plenty of criticism from a number of prominent national physician associations, including the American Medical Association. It was just last year when CMS released data on what 3,000 hospitals charged Medicare for the 100 most-frequently billed discharges.

Total Medicare Payments to Certain Physicians Was Eye-Popping

The total dollars paid to certain physicians was eye-popping. After studying the data, several newspapers reported that $77 billion was paid to physicians by Medicare for Part B services in 2012. In its story about release of the data, The New York Times reported that just 2% of physicians received about 25% of the total payments, or about $15 billion.

In calculating that figure, The Times excluded $13.5 billion of the $77 billion that was paid to clinical laboratories and ambulance services. The Times also reported that 100 physicians were paid a total of $610 million. Of this group, the highest total was $21 million paid to a Florida ophthalmologist. There were also “dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million” during 2012.

Headlines Name Pathologists in New Jersey and Minnesota

Two examples of pathologists who found themselves in the headlines were Michael McGinnis, M.D., Medical Director for PLUS Diagnostics (now Miraca Life Sciences) in Union, New Jersey. and Franklin R. Cockerill, M.D., Chairman of the Pathology Department at the Mayo Clinic, in Rochester, Minnesota. CNBC.com reported that McGinnis had been paid $12.6 million by Medicare in 2012. The Pioneer Press in St. Paul reported in its story on physician payments that Cockerill was the highest paid physician in Minnesota, having been paid $11.6 million.

When interviewed by different media outlets, spokespeople for both McGinnis and Cockerill were careful to point out that, as supervising physicians of their respective laboratories, all claims had been filed using their physician provider numbers. Thus, neither pathologist had personally received the total amounts in Medicare payments reported by the CMS.

Last year, the CMS published Medicare price data on 3,000 nationwide for common diagnoses or episodes of care. This move was aimed at raising public awareness of the arbitrary nature of hospital pricing. (See Darkdaily.com, “Medicare Officials Post Prices of 3,000 Hospitals in Effort to Raise Consumer Awareness of Arbitrary Hospital Pricing”, May 31, 2013.)

CMS to Shine Spotlight on Medicare Payments to Physicians

CMS’s decision to change policy on publishing physician payments came on the heels of a ruling by U.S. District Judge Marcia Morales Howard in Jacksonville, Florida. This ruling dissolved a 1979 federal injunction that had barred the release of Medicare payment data identifying specific physicians. The judge ruled on the grounds that physicians’ privacy concerns no longer outweighed the public interest in releasing the data.

The American Medical Association (AMA) protested this policy change, contending it violates the privacy of doctors and patients. Ardis Dee Hoven, M.D. AMA President, stated in a Modern Healthcare report, “The AMA strongly urges HHS to ensure that physician payment information is released only for efforts aimed at improving the quality of healthcare services and with appropriate safeguards.”

Watchdog Groups Want All Provider Prices Published on Public Website

Industry watchdog groups, however, contend the CMS isn’t going far enough. “Ideally and ultimately, HHS should disseminate the information via a publicly accessible database rather than on a case-by-case basis,” said Joel White, President of the Washington-based interest group Council for Affordable Health Coverage (CAHC), in the Modern Healthcare report. “These data have a value too great in reducing costs, curtailing fraud and improving quality to be handled on an ad hoc basis.”

Joel White (pictured), President of the Council for Affordable Health Coverage, wants all provider price data to be posted on a publicly assessable Website. He contends that public disclosure of provider prices will create competition and reduce healthcare costs. Members of his organization includes insurers, physician groups and the U.S. Chamber of Commerce. (Photo copyright Council for Affordable Health Coverage)

Joel White (pictured), President of the Council for Affordable Health Coverage, wants all provider price data to be posted on a publicly assessable Website. He contends that public disclosure of provider prices will create competition and reduce healthcare costs. Members of his organization includes insurers, physician groups and the U.S. Chamber of Commerce. (Photo copyright Council for Affordable Health Coverage)

There are already online services that provide consumers with fair pricing information for healthcare services. These services are based on insurer-negotiated prices and a provider calculator that estimates healthcare costs based on a patient’s specific insurance plan. (See Darkdaily.com, “Consumers Now Use Medical Cost Websites to Price Shop for Clinical Pathology Laboratory Tests and Other Medical Procedures”, June 29, 2012.).

Who’s Next in the Medicare Price Disclosure Program?

Since Medicare officials have established the principle of disclosing provider price data for both hospitals and physicians, it is likely they will expand this effort to ancillary services. If so, this would mean that the prices provided for Part B Clinical Laboratory Test Services could be made available to the public. That could prove interesting, since, although medical laboratories, are paid the standard fee-for-service price by Medicare, it would allow consumers to see the higher prices on the claims submitted by different laboratory organizations.

—by Patricia Kirk

Related Information:

Sliver of Medicare Doctors Get Big Share of Payouts

How Much Medicare Pays for Your Doctor’s Care

5 Top Medicare Billers Explain Their Charges

Top-paid Medicare doctors say they have reasons

Medicare Officials Post Prices of 3,000 Hospitals in Effort to Raise Consumer Awareness of Arbitary Hospital Pricing

CMS Modifies Policy on Disclosure of Physician Payment Information

Consumers Turn to the Internet to Shop for Cheapest Prices Offered by Hospitals, Physicians, and Clinical Pathology Laboratories

TRANSPARENCY AND DISCLOSURE OF HEALTH COSTS AND PROVIDER PAYMENTS: STATE ACTIONS