Medical Society Comments On Medicare, Medicaid Payment Data Issue

Thursday, April 10, 2014

J. Woody Kennedy, MD, president of the Chattanooga-Hamilton County Medical Society, released the following statement today in regard to the Center for Medicare and Medicaid payment data:

"The Chattanooga-Hamilton County Medical Society and the Tennessee Medical Association support transparency in our healthcare system. Taxpayers deserve to know what CMS pays for services to Medicare patients, just as we deserve to know how any other government program uses public funds.

"Unfortunately, without proper context and explanation, the raw and complex CMS data on Medicare reimbursements can be easily misinterpreted and may lead to erroneous conclusions about physicians in our communities and state. As physicians, we are focused on quality care, compassion and integrity; however, the data provides no insight as to whether a physician provides quality care, or operates his or her business with integrity.

"Further, the unfiltered CMS data does not necessarily provide an accurate picture of the financial aspects of a medical practice. Total Medicare payments may include reimbursement for the physician and other professional staff under the physician’s supervision and included in the billing; overhead for the costs of operating a practice (space, staff, equipment, insurance); costs of medications administered in the practice, and other costs. For some specialties, especially oncology, rheumatology, and ophthalmology, much of the reimbursement actually covers the direct cost of medications administered by the physician in the office.

"In addition, the unfiltered CMS data is not risk-adjusted to reflect the patients’ health status and other factors that can lead to higher costs.  Finally, physicians had no opportunity to review the data to correct reporting errors before it was released.

"There are many ways patients can evaluate physicians to make good choices about quality care. This data is not necessarily one of those.

"We look forward to working at the local, state and federal level on initiatives that improve healthcare quality, uncover fraud and prevent abuse. Data integrity must be at the core of those efforts.

"In considering the limitations of the CMS data, the American Medical Association has released excellent guidelines. The concerns they identified include:

1.      Errors: Data being released may contain errors because there is currently no mechanism for physicians and other providers to review and correct their information.

2.      Quality: The data does not include explicit information on quality of care provided or quality measurement. It solely focuses on payment and utilization of services so it cannot – and should not -- be used to evaluate the value of care provided.

3.      Number of Services: Residents, physician assistants, nurse practitioners and others under a physician's supervision can all file claims under that physician's National Provider Identifier (NPI); the data may not properly detail the services performed and who performed them. Additionally, there are several instances in which it can appear that two surgical procedures were done when in fact there was only one. For example, when there are co-surgeons or an assistant at surgery, the procedure should be counted as only one surgery, not two.

4.      Charges vs. Payment: Medicare and other payers pay fixed prices for services based on fee schedules; therefore the amount paid to physicians is generally far less than what was charged and is not an accurate portrayal of payment.

5.      Patient population: The data being released is an incomplete representation of the services physicians provide, as it is not risk adjusted. Additionally, it does not include care for private insurance patients or Medicaid beneficiaries, making it a limited view of the patients for whom a physician cares.

6.      Site of service: Payment amounts vary based on where the service was provided.  For example, Medicare pays physicians less for services provided in a hospital outpatient department than for services in the physician's office.  However, for services in the outpatient department, another payment is made to the facility to cover its practice costs so that, in reality, the total costs to Medicare and to the patient may be higher than if the same care were delivered in the physician’s office.

7.      Provider comparisons: There is a lack of specificity in specialty descriptions and practice types in the data, which could be misleading when making comparisons between physicians. In some cases, physicians who appear to have the same specialty can serve very different types of patients, thus impacting the mix of services provided.

8.      Missing information: The data does not account for patient mix or demographics. It also does not point out that a significant share of Medicare payments is used to cover such costs as office overhead, employee salaries, supplies and equipment. To make matters worse, the data includes reimbursements for physician-administered drugs but fails to explain that these payments are compensation for the price of the drugs themselves, many of which are very expensive and are required to treat such serious conditions as cancer and macular degeneration.

9.      Coding and billing changes:  Any analysis using the data should take into account changes in Medicare's coding and billing rules that may be different over time and across regions of the country (e.g., local coverage determinations).


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