Experts offer their perspective on Medicare data release

The CMS’ recent release of data on 2012 Medicare physician reimbursements has caused some concern within the medical community.

While CMS and Health and Human Services Secretary Kathleen Sebelius said that the release of these data will make Medicare more transparent and help the public to better understand how the service works, the American Medical Association has expressed concerns about the accuracy and value of the data, particularly when presented without context.

Healio.com has asked experts to offer their opinions on the release of the data, and will be adding their responses below.

Charles B. Brownlow, OD, FAAO

Founder, PMI LLC

Primary Care Optometry News Editorial Board member

Gregory Kraupa, OD

Founder, senior partner, Eye Care Center, Maplewood, Minn.

Primary Care Optometry News Editorial Board member

Alan E. Reider, JD

Partner, Arnold & Porter LLP

OSN Regulatory/Legislative Section Editor

Richard L. Lindstrom, MD

Founder, attending surgeon, Minnesota Eye Consultants

Adjunct professor emeritus, University of Minnesota Department of Ophthalmology

Ocular Surgery News Chief Medical Editor

Charles B. Brownlow

Brownlow: The most significant outcome of the release of the data will be that folks will be looking up their doctor's information and will be shocked to see how much (or how little) she or he is being paid by Medicare. It will be coffee shop conversation for a couple of weeks and then fade.

Sadly, the data will probably not provide any measure of the quality or appropriateness of the care that is being provided, nor will it result in Medicare patients getting better care than they currently receive. I'm afraid it will generate some heat, but very little light.

Kraupa: I believe there is very limited value in the provider utilization and payment data recently released by CMS. The sheer volume and format of the data makes it impractical at best and impossible at worst for the average consumer to interpret in any meaningful way. Those few consumers who have the ability to interpret the data are at risk of taking away an inaccurate or misleading message.

Gregory Kraupa

The relative utilization data is meaningless when the clinical setting and the patient population demographics are not considered. A provider practicing in a high-volume geriatric clinic would logically have higher Medicare utilization than a provider in a young suburban neighborhood clinic.

Similarly, the payment data could be very misleading when other variables are not considered. For example, if the usual and customary fees billed by a provider are 10% higher than the Medicare allowable, but the unpublished outcomes of the same provider are 20% greater than the median, the provider may be a great value to the health care system. However, if only payment data is provided, the provider may be considered a costly outlier.

This system needs considerable improvement to be a useful tool for our Medicare consumers.

Alan E. Reider

Reider: I have not had the chance to analyze the data, but it appears from some of the press reports that ophthalmologists make up almost 1/2 of the highest paid physicians, defined as those paid in excess of $3 million. This confirms my fear about the release of this raw data: while it provides only part of the story, the press will leap on it and sensationalize it. My guess is that the majority of the ophthalmologists who are in the highest paid group are retina physicians, and the reason that their numbers are so high is that they are reimbursed for drugs that they administer in their practice. What these numbers do not show is that physicians have to purchase the drugs that they administer in their practice, so the reimbursement numbers are very misleading. For example, when you take a drug like Lucentis, which costs roughly $2,000 a vial, the payment to the physician is more than $2,100. But the numbers released reflect only the payment, not the cost. So it does not reflect accurately what is going on.

It’s interesting that oncology is one of the other groups with several highly compensated physicians. Well, guess what? Oncologists are reimbursed for drugs administered in the office, and they have to purchase drugs, too.

I realize the data was released in part because there was an injunction lifted last year from an old litigation on this same issue back in the seventies. I was in the government in the seventies, and I was dealing with this issue in the seventies. It caused numerous problems then and it appears that we are going to see numerous problems again.

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Lindstrom: The release of the 2012 CMS payments to America's 880,000 physicians is generating a great deal of discussion and opinion, including many articles in newspapers nationwide. Most of it is not favorable to the physician and surgeon who cares for a large number of senior patients.

I would like to share a few personal thoughts. First, this is just another example of the increasing "transparency" that will be required of all physicians in the years to come. Our federal and state governments will want to know in fine detail all our sources of revenue from patient care, corporate consulting, and probably in the not too distant future, investments as well as our choices for philanthropy.

I have stated in a commentary before that I anticipate that in a decade every physician’s federal tax return will be public information, much like the annual publication of the tax returns of our standing Presidents. So, financial privacy will cease to exist for the physician.

Richard L. Lindstrom

While it is very easy to argue that this is inappropriate, it is clear our government has the power to make this happen and as the major payer in health care wants to know every financial detail of those providing the care and billing for services. So, "Sunshine laws" for physicians will continue to expand, and while unfair, it is highly unlikely our complaints will be heard, and I do not think we can stop this trend. Minnesota has been a leader in this area, and so far for the "honest" physician, even one who consults widely in industry, the disclosures have not generated any measurable negatives.

Most physicians who work for a public university have had their gross salaries published for years, as do the coaches and other university leaders including the President. Many editorials are written questioning the appropriateness of highly reimbursed coaches and surgeons, who always make more than the University President. Yet, they continue to be recruited and paid well. This is the nature of public service, and physicians are now in the bucket of public servant and health care is on its way to being a regulated utility.

Ophthalmology is of course a very Medicare dependent specialty, as most eye disease occurs in the elderly. The average ophthalmologist generated $327,239 in 2012 from Medicare, and with a 70% overhead this translates to a net of $97,156. I would have expected it to be even higher, as most surveys suggest that the typical ophthalmologist grosses around $800,000 to $900,000, with a net of $270,000 to $300,000.

If these numbers are accurate, the typical ophthalmologist is generating only about a third of their income from Medicare. This, if true, is a good finding for ophthalmology, and suggests we are more diversified in our revenue sources than a decade ago. Since we can expect continuing cuts from Medicare in the years to come, I am encouraged by these numbers.

Those with very high CMS revenue should anticipate increased scrutiny of their practices. Most are in the retina or high volume cataract surgery field. For retina specialists, the high costs of medications used for wet AMD are included, and this distorts the numbers.

We can expect analysis of this data will allow outliers to be flagged by computers, just as is done by the IRS, and those at the higher revenue levels should expect to be audited.

I encourage my ophthalmology colleagues to be prepared for ever increasing scrutiny of their finances, for financial privacy for the practicing physician who accepts money from the government is now an oxymoron and history. If you are average or below average, your exposure to audits and the like can be expected to remain unchanged, but if you are a high revenue producer, you can expect increased scrutiny. It would be wise to be prepared for this unfortunate fact.

Also: In his blog post for Ocular Surgery News, Darrell E. White, MD, founder of Skyvision Centers in Ohio, offers his take on the release of the 2012 Medicare data. Read more

Disclosure: Reider provides legal counsel to many ophthalmologists. Brownlow is a health care consultant. White is a consultant for Bausch + Lomb, Allergan, Nicox and Eyemaginations. He is on the speaker board for Bausch + Lomb, Allergan and TearLab. Kraupa and Lindstrom report no relevant financial disclosures.