It Is Time To Speak Up About The Medicare Payments To Doctors Data Dump


The siege against the doctors continues.  For decades some have been asking the government to report what they have been paying the individual doctors for Medicare services.  Well, they finally did that and the Wall Street Journal was there to report it.  What I find fascinating is that with all these decades to share such information with doctors (perhaps to allow us to peer review and reflect on what the data meant to us as providers) the government chose to dump it onto the public as some sort of “shame on the doctors” tactic. There was no real explanation or education about what this data means, just pages of payments based upon codes submitted for services rendered to Medicare patients by Medicare doctors.

Today I replied to an article from the Marketplace Health Care website. As a Medicare provider and the president of our local physician’s association, the Independent Physicians of Lee County (IPALC), I thought it was time to help my readers and the public understand the nuances and complexities of what they are seeing in the recent data dump regarding physician payments from Medicare. Following is a copy of the comments I recently left on the website.

“There is mention of unconscionably high costs. Costs imply price. It is imperative for the public to understand that the fees paid to physicians are set by the government via CMS. If there is a cost complaint, understand it isn’t the providers setting these fees. When you look at the data of the million plus paid group you will likely learn that these providers are charging for injectable and or infusion therapy. These fees are set by Medicare at a profit margin cap of 3-4% above the price the physician pays to the middleman (usually McKesson or Cardinal distributor companies). What this means is that the physician who billed Medicare for the product they bought passed through all but 3-4% of that fee. With that portion of paid services, 3-4% profit margin remains for the physician who then pays him/herself, staff, benefits, real estate expenses, his/her retirement benefits, etc. It is true that opthalmologist have the best “assembly line” model for care but that translates into high volume and therefore high service units being provided by a very limited number of doctors.

These high “costs” reflect high productivity. In all business models high productivity is what the market wants. A better reflection of whether a physician is “costing” medicare a lot of money is to look at patient visits. If a doctor has a lot of visits relative to his peers he or she may be getting more reimbursement but is more productive. Additionally visits have variable levels of complexity and often due to the pressure of coding requirements and fear of fraud accusations most providers actually undercharge/undercode the complexity of their care.

One needs to extract the pass-through revenues that go to the high cost of medication/injections/infusions. Then you have a better idea as to whether that physician is costly or just providing costly medication which is necessarily the price we are paying due to patent protection incentives to get really good therapy.

Folks are going to be barking up the wrong tree if they want to accuse the physicians for those costs- look instead towards the drug industry. Also bear in mind we the people and through our government policies set up these pricing mechanisms and patent incentives to get great medications and innovation. In most instances even though the prices are high, the drug industry costs are more than offset by improved worker productivity, less disability and the avoidance of even more expensive health care costs.”

To read more on issues related to Medicare and the perils of price-fixing in health care consider re-reading some of my prior blogs and a prior newsletter:

Balance Billing Is Key To the Medicare Debate

Patents On Reinvented Medications

From a prior newsletter of mine: Generic Medications