Q&A: Public Release of Medicare Payment Data

Topics: Access to Care, Medicare, Payments and Reimbursement

Welcome to American Health Line's Q&A feature, Expert Explanations, where we ask experts to provide insight on a health policy issue.

In this edition, Robert Berenson -- former vice chair at the Medicare Payment Advisory Commission and fellow at the Urban Institute -- discusses the recently released Medicare physician reimbursement data.

>> For our coverage of the Medicare payment data, click here, here and here

The Obama administration released this data as part of an effort to increase transparency and combat data fraud. How will making this information public help those efforts?

By definition, it increases transparency. However, the data themselves do not necessarily tell you fraud. For fraud, you need to know intent and things like that, but this information could shine a spotlight on some billing that deserves follow up or raises concerns. There may be justification for these billing patterns, but in some cases probably not.

The administration already has been tracking this information on its own for quite some time. How will making that system public improve the system or its ability to track fraud?

Some purchasers will be able to look at this data in relationship to their own and see much broader patterns of care and maybe look anew with what they are seeing in their own data, so that offers some potential for greater referrals for fraud investigations. In addition, journalists are a major source of review and there will be investigative journalism going on here.

The American Medical Association and other groups have voiced concerns about how this data could potentially lead to patient misinterpretation and undermine physicians’ reputations. How could this information potentially be misused?

This data does not associate the individual practitioner with the practice or medical group that he or she may be a part of. So it is conceivable that in some practices the roles are differentiated, so one physician might look as if he or she is doing an inordinate number of interventions and another doing only office visits. Unless you knew how this worked out within the practice, you may draw incorrect inferences about overdoing or underdoing or whatever it might be.

In addition, the data just show gross payments and do not take into account the fact that practices often have high practice expenses. The clearest example of this is ophthalmology testing, where certain drugs cost $2,000, but the physician is actually just making a 6% markup over the average sales price and it is essentially a pass through. It shows up as payment to that physician and then it becomes $15 or $18 million dollars, but that physician is paying the large bulk of that to pay pharmaceutical companies.

Also, it might look like some physicians are particularly high spenders in comparison to peers but in their specialty that may be a function of the fact that they do a different kind of service or their services are concentrated where others are not.

How could this potential for misuse influence the federal government to release or withhold future Medicare data?

A lot will depend on whether anybody is going to be documenting substantial misuse. If in fact journalists are responsible and payers provide the right sort of analysis, I think this is very useful data. I think we will know within the next few years.

AMA has offered a few suggestions on how to combat these potential misinterpretations, such as allowing physicians to review the data prior to its release. Do you know other ways the administration can preemptively address these concerns about misuse while still making the information public?

The easiest, not completely satisfactory answer is to put some of the caveats in their background material. To the extent that it is largely going to be information brokers -- analysts, people hired by newspapers to investigate the data -- they will need to be the ones who provide those caveats.

The data could also spotlight some potential public policy issues, such as how we pay doctors for drugs that are Part B drugs. Currently, physicians are paid the average sales price, plus a 6% markup, and whether that payment pattern induces some physicians to use more expensive drugs is a worthwhile public policy question.

Most of the benefits listed here touch on higher-level issues. How will this information -- after being trickled down through information brokers and coupled with other ACA efforts to boost patients’ personal agency -- affect patient behavior?

Medicare patients will likely not be as interested in the information because they are protected from cost sharing. However, this data coupled with the data Medicare released on hospital charges is much more important for commercial payers and personal insurance, at least to the extent that personal insurance features high deductibles, provider networks and differential cost sharing.

If there is a series of doctors who have dramatically high charges, it arms patients with that information and becomes potentially useful information.

Robert Berenson

Compiled by Marcelle Maginnis, Staff Writer