Putting an end to legal wrangling that dates back 35 years, the Department of Health and Human Services (HHS) earlier this month released a vast trove of Medicare Part B provider payment data that included clinical laboratories and pathologists.
“We believe the public has the right to know this information,” said Centers for Medicare and Medicaid Services (CMS) Principal Deputy Administrator Jonathan Blum at a news conference on April 9, the day the data were released. Blum and other CMS officials cited a variety of reasons for the release, including the fact the Medicare program was funded by taxpayer dollars, the agency believed the public’s interest in knowing the payment data outweighed that of the privacy of the providers, and the potential for the public to use the numbers to sniff out potential fraud.
The
Wall Street Journal spearheaded the release of provider-specific payment data, which had been prohibited under a civil injunction since 1979 as the result of litigation by the American Medical Association (AMA).
In December 2010, the
Journal published a story that was simultaneously illuminating but circumscribed about a group of spinal fusion surgeons who practiced at a medium-sized Kentucky hospital and were apparently leveraging patents they held on medical devices that could be used in the procedures to help them reap millions of dollars a year in royalties. And while the hospital, despite its modest size, was the third-biggest biller of Medicare for spinal procedures in the entire United States, the
Journal was barred from reporting how much the doctors received in payments from the Medicare program.
The newspaper’s attorneys went to court to overturn the injunction, finally prevailing last year.
“Currently, consumers have limited information about how physicians and other health care professionals practice medicine,” said HHS Secretary Kathleen Sebelius, who ordered the data released the day before she announced her resignation. “This data will help fill that gap by offering insight into the Medicare portion of a physician’s practice. The data released . . . afford researchers, policymakers, and the public a new window into health care spending and physician practice patterns.”
The data also include payments made to clinical laboratories and pathologists. CMS released all fee-for-service data for any provider that performed a specific medical function a minimum of 11 times. The data do not include revenue derived from the Medicare Advantage health plans.
And while CMS touted its release as a boon to consumers, it was presented in a format that made it difficult for individuals to access. The raw data, which detailed $77 billion in payments that were made in fiscal 2012, contained more than 9 million lines of information and could not be opened in an Excel spreadsheet. A dozen separate files contained the data by provider name, but individuals such as Salomon Melgen, M.D., a Florida physician who billed Medicare for more than $20 million and had his medical offices searched multiple times by the Federal Bureau of Investigation as a potential suspect of health care fraud, was absent from those files, as were other high-paid physicians. The data in a spreadsheet that listed aggregate payments to providers also appeared to contain inaccuracies.
CMS spokesperson Rachel Maisler said the agency does not comment on the billing practices of individual providers and would not provide an answer when asked if the data in the Excel spreadsheet format were complete and accurate.
Using a database to search the information created by the
Wall Street Journal,
Laboratory Industry Report was able to determine that Quest Diagnostics, the nation’s largest national lab, was also the biggest recipient of Medicare Part B fee-for-service payments, which totaled $669.8 million in 2012. LabCorp was a close second, at $633.4 million. A LabCorp spokesperson said the North Carolina-based company derives about 12 percent of its revenue from the Medicare program. Its revenues were $5.8 billion in 2013.
| Amounts Laboratories Were Paid by Medicare In 2012 |
| Provider Name |
Amount Paid by Medicare, 2012
|
| Quest Diagnostics |
$669.8 million
|
| LabCorp |
$633.4 million
|
| Millennium Laboratories |
$190.0 million
|
| Health Diagnostic Laboratory |
$139.1 million
|
| Unilab |
$124.1 million
|
| Ameritox |
$99.6 million
|
| Bio-Reference Laboraroties |
$95.1 million
|
| Solstas Lab Partners |
$77.9 million
|
| Natural Molecular Testing Corp. |
$70.3 million
|
| Clinical Pathology Laboratories |
$62.4 million
|
| Lab One |
$60.2 million
|
| Myriad Genetics |
$54.1 million
|
| Genoptix |
$50.2 million
|
| Genomic Health |
$49.3 million
|
| Sonora Quest Laboratories |
$45.8 million
|
| Aegis Sciences |
$36.2 million
|
| Miraca Life Sciences |
$33.8 million
|
| Clarient Diagnostic Services |
$32.5 million
|
| Shiel Medical Laboratory |
$29.8 million
|
| Physicians Choice Laboratory Services |
$24.9 million
|
| Source: Centers for Medicare and Medicaid Services via Wall Street Journal |
Quest and LabCorp, which control about 20 percent of the entire laboratory market, dwarfed the other labs in terms of the payments they received. They were more than triple the size of the third-highest payment recipient on the list, San Diego-based Millennium Laboratories.
The data regarding individual physicians were more controversial. Ophthalmologists tended to be the highest billers, but many have indicated that they were often billing in their name on behalf of a group practice and that their payments included near-cost reimbursements for macular degeneration drugs that can cost as much as $2,000 for a single dose.
| Highest-Paid Pathologists In Medicare program, 2012 |
| Provider Name |
Location
|
Amount Paid by Medicare, 2012
|
| Michael C. McGinnis |
Wrightstown, N.J.
|
$12.6 million
|
| Franklin R. Cockerill |
Rochester, Minn.
|
$11.1 million
|
| Robert M. Aportela |
Delray Beach, Fla.
|
$5.2 million
|
| Jon Keller |
Palo Alto, Calif.
|
$4.2 million
|
| Ann Anderson |
New Hyde Park, N.Y.
|
$4.2 million
|
| Brian A. Babbin |
Fort Myers, Fla.
|
$3.9 million
|
| George C. Kalemeris |
Fort Myers, Fla.
|
$3.6 million
|
| Mary Kay Vaske |
Springfield, Mo.
|
$3.5 million
|
| Tanner L. Mattison |
Dallas
|
$3.1 million
|
| Albert Cohen |
Delray Beach, Fla.
|
$3.0 million
|
| Source: Centers for Medicare and Medicaid Services via Wall Street Journal |
“These payments are practice revenues that must cover business expenses, including pay and benefits for practice staff, billing and other professional services, office rent, utilities, professional liability insurance, medical equipment and supplies,” the AMA said in a statement meant to clarify the meaning of the payment data.
Although pathologists do not prescribe medications for the most part, their practices tend to have high overhead expenses compared to other medical practices because of the ongoing need to purchase reagents in bulk, as well as often pricey diagnostic equipment. And they often practice in groups as well.
“The raw Medicare payment data cannot be fully understood without proper context and will lead many to draw false conclusions,” said Gene N. Herbek, M.D., president of the College of American Pathologists. “For instance, a single pathologist’s billing number may be used by a laboratory to bill for several pathologists’ work, as well as the laboratory’s technologists, but the data attributes all of the laboratory’s Medicare payments to that one pathologist. In these circumstances, identifying an individual pathologist as receiving millions of dollars in Medicare pay is inaccurate and misleading, but that is the impression the public receives with raw Medicare data.”
The highest-paid pathologist in the Medicare program in 2012 was Michael C. McGinnis, M.D., who practices with Plus Diagnostics and Pathology Corp. of America. The two entities include 12 pathologists with offices in Rahway and Freehold, N.J. McGinnis did not immediately return a phone call seeking comment.
Takeaway: The provider-specific payment data released by the Centers for Medicare and Medicaid Services include a massive amount of raw information but little clarity in the way that laboratories and pathologists conduct their businesses and practices. 