CEO SUMMARY: Never in 50 years had the Medicare program made public the money it pays physicians for Part B services— never until April 9, that is. On that day CMS revealed how it disbursed $77 billion to individual physicians during 2012. Newspapers and television reporters jumped on this story and several pathologists found themselves listed among the highest paid physicians in the nation, rightly or wrongly. Experts predict this data release will trigger changes to physician payments.
WHEN IT COMES TO HOW MEDICARE pays physicians, things will never be the same. That’s because, for thefirst time since inception of the Medicare program in 1966, the federal Centers for Medicare & Medicaid Services has made public what it pays doctors.
Moreover, pathologists should not overlook the cascade of national and regional news stories that followed the release of the 2012 payment data made to 880,000 U.S. physicians during 2012. It shows that the American public is hungry for this information.
Equally noteworthy is the fact that certain pathologists found themselves named in news stories as being among Medicare’s highest paid physicians in 2012. In many cases, the number was deceptive, since an entire pathology laboratory had often used one pathologist’s billing account number. Nonetheless, news accounts trumpeted that pathologist’s name and the amount of money that Medicare had paid.
What will catch the attention of Congress, federal health officials, and managed care executives is the fact that a small number of physicians received a large percentage of the $77 billion paid to physicians by Medicare for Part B services in 2012. In its analysis of the data, The New York Times reported that just 2% of physicians received about 25% of the total payments, about $15 billion. That figure excluded the $13.5 billion of the total that went 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, along with “dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million each” during 2012.
The data released April 9 allow consumers to compare doctors and treatments in a way they have never had until now, stated The Times, adding that it built a searchable database to allow consumers to search payments by physician name, specialty and zip code.
The release of the physician payment data this year follows the CMS release last year of what approximately 3,000 U.S. hospitals charge for the 100 most frequently billed discharges.
Among those physicians receiving the most in Medicare payments were two pathologists. According to a report from CNBC.com, one pathologist was Michael McGinnis, M.D., medical director for PLUS Diagnostics in Union, New Jersey. McGinnis received $12.6 million in reimbursements, CNBC reported.
“I was actually stunned,” McGinnis told CNBC of the amount before explaining that more than two dozen other pathologists at PLUS Diagnostics bill under the same National Provider Identifier.
In its analysis of the data, The New York Times reported that just 2% of physicians received about 25% of the total payments, about $15 billion
PLUS Diagnostics used McGinnis’ ID number for all billing and then paid other pathologists, McGinnis told Becker’s Hospital Review. “The money doesn’t come to me. It goes to the company. It goes to PLUS Diagnostics,” he said.
During a conference call with CMS officials, reporters asked about the practice of how a physician will use another’s NPI to bill Medicare. Niall Brennan, acting director of the CMS Offices of Enterprise Management, responded, saying, “We believe, in general, providers should not be using another provider’s number to bill. We’d like to encourage providers to use their own NPI number.”
A similar story was reported in Minnesota when the Pioneer Press in St. Paul wrote that Franklin Cockerill, M.D., chairman of the pathology department at the Mayo Clinic, was the highest-paid Medicare physician in Minnesota. He received $11.6 million in 2012, the newspaper said.
$11.6 Million to Pathologist
A clinic spokesman explained that Cockerill’s situation was similar to that of McGinnis in that the $11.6 million represented total fees for all patient specimens tested at Mayo laboratories during the year, the Pioneer Press reported. As the supervising physician for the clinical laboratory, Cockerill’s name appears on all claims from Mayo laboratories, a Mayo spokesman said.
“Like all Mayo Clinic physicians, Dr. Cockerill receives a salary. He doesn’t receive commissions on tests performed by Mayo laboratories,” the spokesman told the newspaper.
In Massachusetts, Boston Business Journal reported Quest Diagnostics received $22.2 million in 2012, making it the highest paid provider in the state. Second was American Medical Response, an ambulance services company that got $19.4 million. Third was Boston Heart Diagnostics Corp., a company in Framingham that got $13.1 million to provide outsourced clinical lab services, and Cohen Dermatopathology in Newton that was paid $9.9 million from Medicare in 2012, the journal reported.
Release of Payment Data
Release of this data has been controversial and many physician associations had multiple reasons to oppose the release. CNBC made the significant point that fraud investigators, health insurers, and researchers will likely go through this Medicare Part B payment data to physicians to see how many tests each physician ordered and how many procedures they performed. The result is likely to be some downward adjustments in payment to physicians from Congress, CMS, and commercial payers.