How Much Did Medicare Pay Each of 32,641 Anesthesiologists in 2012?

Interested parties can now look up how much Medicare paid each of more than 880,000 providers, including 32,641 anesthesiologists, 1,856 interventional pain physicians, 2,999 pain physicians, 30,160 nurse anesthetists and 881 anesthesiologist assistants individually by name.

On April 9, 2014, CMS released a massive database, known as the Provider Utilization and Payment Data Physician and Other Supplier Public Use File (Physician Payment PUF), with information on the roughly $77 billion that Medicare Part B paid out to over 880,000 health care providers in 2012.  Part B covers services billed by physicians, non-physician practitioners, laboratories, imaging, ambulance companies and durable medical equipment, all of which except for durable medical equipment are encompassed in the Physician Payment PUF.  The database contains 9.2 million lines and includes the following:

• Physician or other provider name and office location
• Specialty and credentials
• Specific services provided by CPT or HCPCS code and description
• Place of service
• Number of services provided
• Number of beneficiaries to whom each service was provided
• Average Medicare allowed amount and standard deviation
• Average submitted charge and standard deviation
• Average amount that Medicare paid after deducting deductible and coinsurance amounts and standard deviation

Payment Amounts.  The amount that Medicare pays for a given service is already publicly available.  CMS provides geographically adjusted, per-procedure payment information for more than 10,000 physician services (excluding anesthesia services) through its Physician Fee Schedule Look-Up Tool.  Average submitted charge information does not affect the payable amount (unless charges are lower) and is not generally published elsewhere.  As presented in the Physician Payment PUF, it may be of some limited interest to practices that wish to compare their own fees to those of similar practices in their geographic area.

The information does not appear to be highly reliable for most purposes, however, for the reasons noted below.  For example, searching for all pain physicians in Chicago (using the New York Times’ search tool How Much Medicare Pays for Your Doctor’s Care) produces 31 names, for many of whom the only services listed are office and hospital visits.  For those who performed arthrocentesis for major joints (CPT™ code 20610), submitted charges ranged from $155 to $525.  One would need to dig very deeply—and into other sources—to account for the variation, which is too large to be explained by site of service or zip code alone.

Submitted charges for surgical anesthesia cases are even less useful since they depend on variable time units; average charges, and payments, may seem unusually high because of unusually long cases.  The ASA notes, in its news item Medicare Releases Billing Data – Anesthesiologists Among Lowest Ranked Specialties for Allowed Amounts, that “For both nurse anesthetists and physician anesthesiologists, Medicare payment as percent of charges was 15 percent (14.7 percent for anesthesiology, 15.3 percent for nurse anesthetists).”  One could determine the percentage figure for the set of providers in a particular location, multiply one’s Medicare allowable by the corresponding factor (6.67, for a value of 15 percent) and divide by one’s average number of time units for the procedure in question—but there are far easier and better ways to set one’s anesthesia conversion factor, starting with checking ASA’s annual survey of commercial conversion factors.

Utilization.  Payments multiplied by the number of times that the physician performed the service or services, on the other hand, potentially can provide important information on utilization, practice patterns and practice variation.  These data are of interest to:

• Health plans that want to know which physicians routinely order the most services and drugs and the most expensive treatments.  High-utilization, high-cost doctors may see themselves excluded from tiered preferred-provider or “narrow” networks.
• Hospitals and health systems that want to know which physicians to partner with for accountable care initiatives.
• Fraud investigators who want to know which providers are performing or ordering unnecessary services.
• Patients and consumer organizations that want to know which physicians have the most experience with certain procedures.

Many examinations of the Physician Payment PUF have started with the search for outliers, high aggregate payments appearing more questionable or more newsworthy than low payments.  Early reports have focused on providers who have received the largest total amounts; seven providers were paid more than $10 million each, including the now notorious Florida ophthalmologist Salomon Melgen, MD, who received $20.8 million from the Medicare program in 2012, more than any other provider in the database.  Dr. Melgen, according to an April 9th article in the New York Times, was forced to return $9 million to Medicare for overbilling Medicare in 2007 and 2008 and is currently under federal investigation relating to the unusually high frequency of his billing for Lucentis, a medication used to treat macular degeneration that costs $2,000 per vial, which the doctor allegedly divided into three or four doses and for which he was reimbursed a total of $6,000 to $8,000.

Indeed, two other doctors among the top ten billers have come under federal investigation, according to an April 10th entry on the Washington Post’s Wonkbook blog.  It is no surprise that the OIG recommended in its Workplan for 2014 that the Medicare program scrutinize physicians billing more than $3 million per year.

The highest-paid anesthesiologist in the database received $3,470,467 from Medicare in 2012, much of it for drug testing. The Providence Journal reported on August 31, 2013, that this physician’s license had been suspended “after a review of six patients' deaths showed that he had inappropriately prescribed them narcotics.”  In February of this year, he was arrested on charges of health care fraud, following a Federal Bureau of Investigation probe.  The $3,470,467 that he reportedly was paid in 2012 is almost 100 times greater than the average amount paid to anesthesiologists ($35,636), which places the specialty 48th on a ranked list of 50 medical specialties.

Multi-million dollar amounts paid to several of the physicians among the ten most-highly reimbursed providers appear appropriate and illustrate some of the weaknesses of the data.  Third on the list is Michael McGinnis, MD, a pathologist who is the medical director for PLUS Diagnostics, a New Jersey-based company.  PLUS Diagnostics bills for the work of 26 different pathologists using Dr. McGinnis’s National Provider Identifier, so the total amount of $12.6 million received was attributed to him.  Similarly, Jean Malouin, MD, a family physician at the University of Michigan Health Systems, collected $7.58 million in 2012 for more than 207,000 patients.  Dr. Malouin directs a Medicare project that involves 1,600 primary care physicians, whose services are billed in her name.

Thus the Physician Payment PUF data can be misleading because the amount received by a single physician may represent payment for the services of numerous providers, or because it may cover reimbursement for medications like Lucentis or certain expensive chemotherapy treatments delivered in oncologists’ offices together with the physicians’ professional services.  Other limitations of the data include the following:

1. The data may not be representative of a physician’s entire practice, since it only pertains to Medicare beneficiaries with fee for service coverage.  As noted by the Medical Group Management Association (MGMA), “In certain states, Medicare Advantage comprises over 40% of the Medicare patient population, which makes this data less meaningful for some physicians and difficult to compare across physicians and geographic areas.”
2. Services provided to fewer than 11 patients are excluded because of privacy concerns, so summing the data may underestimate the true totals.
3. The data do not indicate the quality of care provided and are not adjusted for severity of illness.
4. Medicare payments for a given procedure vary based on a number of factors, including geographic cost of practice adjustments, multiple services provided to the same beneficiary on the same day and modifiers that can increase or decrease the intensity of the procedure.  Of particular note when we consider anesthesia provider payments, the data do not include the two-digit modifiers that indicate whether a service was personally performed, medically directed or supervised.
5. The exclusion of facility fees paid separately to hospitals and to ambulatory surgery centers may make services provided in those facilities appear less expensive than those provided in physicians’ offices.
6. Services provided by residents, nurse practitioners, physicians’ assistants and, as seen in the examples above, other physicians may be attributed to the individual provider whose National Provider Number is used.
7. There has been no opportunity to correct inaccurate data.  Many anesthesia practices, among others, have found that the data do not match their own records.
8.  As MGMA also observed, “Revenue does not equal profit.  There is no acknowledgement that a considerable portion of physician payment is used to cover things such as medical practice overhead, employee salaries, equipment and supplies.”

Regardless of the imperfections of the information, its release will undoubtedly mark a turning point in the drive toward health care transparency.  We know that extensive analyses of practice patterns and geographic and other variations are underway.  The data have already shone a spotlight on costly incentives in drug selection.  CMS plans to release annual updates and is considering providing the same information from earlier years, enabling the identification of trends as well.  The story is just beginning to unfold, and we will all be studying it with curiosity and due caution.

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