Remember Salomon Melgen? Over a year ago, the FBI raided his opthalmologic practice offices shortly after his connection to Senator Robert Menendez’ travel and prostitution habits surfaced. The FBI later opened a probe of Menendez, which went to a grand jury a year ago, and charged Melgen with Medicare fraud last August. CMS released its figures on total compensation from 2012 on Medicare and Medicaid claims, and guess who topped the list?
Medicare paid a tiny group of doctors $3 million or more apiece in 2012. One got nearly $21 million.
Those are among the findings of an Associated Press analysis of physician data released Wednesday by the Obama administration, part of a move to open the books on health care financing.
Topping Medicare’s list was Florida ophthalmologist Salomon Melgen, whose relationship with Sen. Robert Menendez, D-N.J., made headlines last year after news broke that the lawmaker used the doctor’s personal jet for trips to the Dominican Republic. Medicare paid Melgen $20.8 million.
AP’s analysis found that a small sliver of the more than 825,000 individual physicians in Medicare’s claims data base — just 344 physicians — took in top dollar, at least $3 million apiece for a total of nearly $1.5 billion.
AP picked the $3 million threshold because that was the figure used by the Health and Human Services inspector general in an audit last year that recommended Medicare automatically scrutinize total billings above a set level. Medicare says it’s working on that recommendation.
Give AP credit for both mentioning Menendez and his political affiliation — and in the third paragraph, no less. Bloomberg never bothers to mention Melgen’s Beltway connections, which led a commenter to ask: “Why no mention that the florida $21 Million doctor is a benefactor to NJ Senator Menendez?” That’s a good question — as is the question of the status of the probe into Menendez.
The release of this data looks like a campaign to keep doctors from demanding more reimbursement for their services from CMS. Medical providers have long opposed this kind of data dump, and their opponents can claim some victory in finally naming and shaming those billing the most from the government. However, the top-line figures don’t tell the whole story:
The release of the information gives the public access for the first time to the billing practices of individual doctors nationwide. Consumer groups and news outlets have pressured Medicare to release the data for years. And in doing so Wednesday, Medicare officials said they hope the data will expose fraud, inform consumers and lead to improvements in care.
The American Medical Association and other physician groups have resisted the data release, arguing that the information violates doctor privacy and that the public may misconstrue details about individual doctors. …
Some of the highest billing totals may simply reflect a physician who is extremely efficient or who has an unusually large number of Medicare patients.
The highest numbers also may reflect a physician who specializes in procedures that require costly overhead, and in those cases, a large portion of the money may wind up not with the doctor but with pharmaceutical companies or makers of medical devices.
But in some instances, the extremely high billing totals could signal fraudulent doctor behavior, as government inspectors have previously found.
That’s an argument for making the data available to investigators, not public, which it presumably always has been for CMS. The problem with making the top line figure available is that the providers spend most of that on their own services and equipment. As much as 75% or more goes to overhead, the AMA argues, and even under CMS assumptions only 23 of the 4,000 biggest billers earned $1 million for their own personal income from their businesses.
Besides, the concentration of reimbursements to a small number of providers may be an indication not of fraud but of narrowed provider markets precisely because Medicare/Medicaid practice only makes sense when handled on the broadest possible scale. Less than half of all providers will take Medicaid patients any more according to a study released two months ago, and that gets worse in the specialties. Only 7% of cardiologists in my area will take Medicaid patients any longer, which means that they will get an enormous amount of reimbursements as those patients flood into their offices.
If CMS and Congress continue to make this market less attractive, fewer providers will remain in it, and those who do will get a larger and larger share of reimbursements. The figures from this report are hardly surprising, even if some in the media don’t want to dig too deep into the biggest figure of all.