Medicare pay data shock and anger many doctors listed as high earners
Newport Beach oncologist Minh Nguyen woke up Wednesday wearing a dubious distinction: Medicare’s highest-paid doctor in California and one of the top physicians nationwide.
Some of his patients and fellow physicians immediately called him wanting an explanation of why newly released federal data show he got paid $11.3 million for treating Medicare patients in 2012.
Like dozens of other doctors across the country, Nguyen was unwittingly thrust into the spotlight as federal officials listed for the first time what the government pays individual doctors to treat elderly Americans. Some of those with the highest billings had already drawn public scrutiny as part of government investigations into healthcare fraud.
But many more doctors were shocked to see where they ranked, since Medicare hadn’t shared the data with physicians before publication. Many of the doctors who sit atop Medicare’s list say they support the government’s historic move to make physician payments public, but they expressed anger about the possibility of being unjustly vilified over their pay.
For his part, Nguyen, 39, said his Medicare payout is misleading because all five physicians at his oncology practice bill under his name, and much of that money overall is reimbursement for expensive chemotherapy drugs on which he says doctors make little or no money. Other high-volume doctors voiced similar complaints about the data.
“Without an explanation, it looks like doctors are making a gazillion dollars,” Nguyen said. “Holy smoke, if I made $11 million I would have a private jet. It’s ridiculous the government can release these numbers and make me look like a bad guy. I make a good living, but I’m not making seven figures.”
Medicare officials said disclosure of this data was long overdue because the public has a right to know how billions of tax dollars are being spent. But they also cautioned people from jumping to a conclusion about individual doctors based on the financial figures alone.
The Obama administration posted the provider payment data online at cms.gov.
“Taxpayers have the right to understand what is being paid for,” said Jonathan Blum, principal deputy administrator for Medicare. “We want the public to help identify spending that doesn’t make sense and that appears to be wasteful and fraudulent.”
The federal government’s public database covers $77 billion in payments to about 880,000 healthcare providers for 2012. The data show a small number of providers account for an outsized share of Medicare’s spending. Overall, 2% of healthcare providers are responsible for 23% of the Medicare fees, federal data show.
The data cover Medicare Part B services, which include doctor visits, lab tests and other treatments typically provided outside a hospital. Medicare officials said they would look at releasing additional payment data on doctors for other years besides 2012 as well as more information on hospital charges.
Oncologists and ophthalmologists were two specialties that stood out for large Medicare payments in the new data. Overall, those two fields accounted for 13% of these Medicare reimbursements.
Blum said so many of those doctors received relatively high payouts because of reimbursements for very expensive drugs they administer in their medical offices. He said under federal law physicians are generally reimbursed for the average sales price of those drugs plus a 6% margin.
“People should not jump to a conclusion because they see a spike in spending,” Blum said. “The goal is to have a more informed conversation not just within Medicare but the broader healthcare community.”
New Jersey pathologist Michael McGinnis was stunned to hear he ranked third nationally in Medicare payments, at $15.9 million. That includes what the program itself pays and what providers receive from patients for deductibles and coinsurance.
“Are you sure that’s me?” McGinnis said in an interview. “That’s not the money I’m making.”
McGinnis said his 2012 Medicare billings included as many as 30 other pathologists working at the same lab company, similar to Nguyen’s complaint in Newport Beach.
Wednesday, Medicare officials criticized the practice of multiple medical providers billing under one person’s national provider identifier, or NPI number, but they didn’t say it was forbidden.
“In general, providers should not be using other providers’ number to bill Medicare,” said Niall Brennan, acting director for enterprise management at Medicare. “From a program auditing perspective, we would like to encourage them to use their own NPI number whenever possible.”
The vast bundling of claims under one name appeared to be a major reason that a Mayo Clinic laboratory executive ranked in the top 10 of Medicare payments nationally.
The federal data showed that Franklin Cockerill, director of the Mayo Clinic Laboratories in Rochester, Minn., received $11.7 million in Medicare payments for 2012.
A spokesman for the Mayo Clinic said that because Cockerill is laboratory director, a large number of claims are submitted under his name as the billing physician. Last year, more than 23 million lab tests were performed there. Mayo officials added that Cockerill is on salary so there’s no financial incentive for him as the billing physician.
The American Medical Assn., which had long opposed the release of the Medicare data, complained that doctors were not allowed to check the information for inaccuracies before its publication. Medicare officials said errors are possible but they defended the overall accuracy of the database.
Health policy experts said doctors would need to quickly get accustomed to such intense public scrutiny, because it will only intensify.
“These doctors are taking taxpayer dollars, so that requires public accountability,” said Cheryl Damberg, a researcher and expert on healthcare payment policy at Rand Corp., a Santa Monica think tank. “This is a really good first step, and it will help put the spotlight on some of these outliers.”
At his Newport Beach medical office, Nguyen said he typically works 10-hour days and sees 20 to 25 patients each day. He treats a range of cancer cases and also oversees his medical group’s infusion center for chemotherapy drugs.
“I think it’s good to have this transparency so people will be able to start discussing where all this money is going,” Nguyen said. “But we need to pull in all the parties — health insurers, drug companies, medical device companies. It’s not just me.”
