Small Percentage of Medicare Doctors Got Lion’s Share of Payments in 2012

Medicare880,000 doctors and other health care providers were paid $77 billion by Medicare in 2012. A very small number of those doctors, only about 2 percent, received the lion’s share of that total: about $15 billion.

New data released yesterday by the Centers for Medicare and Medicaid Services (CMS) shed light on the fact that some of the top earners of Medicare dollars were paid up to 100 times the average amount for their specialties in 2012.

Here are some of the numbers:

Only one-quarter of doctors are responsible for three-quarters of the payments made under Medicare Part B.

100 doctors received a total of $610 million.

Nearly 4,000 physician were paid over $1 million each in 2012. One cardiologist in Florida got $18.1 million, mainly for putting in stents. A New Jersey pathologist got $12.6 million. And one Michigan vascular surgeon received $10.1 million.

Radiation oncology is one of the highest paid specialties. Less than 1,000 of these physicians were paid $1.1 billion.

About 3,300 ophthalmologists were paid a total of $3.3 billion, mostly for treatment of macular degeneration, the leading cause of severe vision loss in elderly people. Approximately $1 billion of that paid for 143,000 patient to receive a single treatment.

The most common expense paid by Medicare is routine office visits. $12 billion was paid for 214 million office visits.

Medicare is the government insurance program for the elderly. It is the nation’s largest medical insurer. The data is the most detailed information on Medicare payments ever released. The American Medical Association (AMA) blocked its publishing for decades, but a federal judged ruled last year the that the information could be made public.

News outlets and consumer groups have requested the information for years. In releasing the data Medicare officials say they hope to help expose fraud, provide better information for consumers and patients, and lead to improvements in care.

Steven F. Grover is a lawyer who represents people who sue doctors they claim have defrauded Medicare. Grover says there is going to be a lot of litigation over this.

The AMA does not see that this data will be of much use to the public in assessing the competency of doctors. AMA president Dr. Ardis Dee Hoven says it is raw claims data, so there is not much information on the quality of treatment. Patients will be able to see how many of a particular procedure a doctor has performed, but will get no information on the outcomes and benefits from surgery, or whether the patient needed the surgery at all.

Some of the top areas of spending are controversial. The five top-paid specialties are ophthalmology, hematology/oncology, cardiology, radiation oncology, and internal medicine. All treat conditions common in the elderly populations.

Some of these high billers may just be very efficient doctors, or ones who see unusually high numbers of Medicare patients. Or the highest paid physicians may specialize in procedures that require expensive overhead, meaning that a lot of money paid ends up with pharmaceutical companies or medical device makers.

There are some very good reasons why such a large share of Medicare payments went to such a small percentage of doctors in 2012.

For example, with some specialties the cost of drugs is factored into what docs get paid. Rheumatologist Gerald Ho from the Los Angeles area got paid $5.4 million by Medicare in 2012, but says that about $5 million of that went to the cost of the genetically-engineered drugs he used to treat patients with rheumatoid arthritis. Plus he has to pay a staff of 40.

Ho says when numbers like this are thrown around without any context, the information is going to be misunderstood by the public.

The same overhead issue occurs with hematologist/oncologists, who bill all the chemotherapy drugs under the doctor’s name. Most of the Medicare payments pass through to the drug company. Doctors have to purchase the drugs up front, about $25,000/treatment, then wait for Medicare or insurance to reimburse them.

The number one Medicare biller was Salomon Melgen, a Florida ophthalmologist who got paid $20 million by Medicare in 2012.

The number one Medicare biller was Salomon Melgen, a Florida ophthalmologist who got paid $20 million by Medicare in 2012. $11.8 million of this was for injecting eyes with a very expensive drug, Lucentis, which is used to treat macular degeneration. The doctor has to pay most of the $2,000 for each shot to the drug maker, Genentech.

But here is where some of the controversy comes into play. There is a much less expensive drug called Avastin that many ophthalmologists consider just as good as Lucentis. Using Avastin would have dropped Melgen’s $11.8 million billing to Medicare to less than $500,000.

But doctors often have financial incentives to use more expensive drugs. Medicare pays more, and drug makers offer discounts to docs using high volumes of their drugs.

The Office of Inspector General for the Department of Health and Human Services recommended in December that the highest billing physicians be more closely scrutinized. He suggests that Medicare establish a threshold, and look more closely at the small percentage of physicians that get paid more than that amount.

By Beth A. Balen

New York Times
Washington Post