Physician Medicare Data: Has the Drought Ended?

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After 34 years, a federal district court in Florida has overturned a 1979 injunction which prevented the Centers for Medicare and Medicaid Services (CMS) from releasing to the public Medicare data related to physician billing and payments.

In 1978, the Florida Medical Association (FMA) and several individual physicians filed suit against the U.S. Department of Health, Education and Welfare (now Health and Human Services (HHS)) to enjoin the release of annual Medicare reimbursement paid to individual physicians. The plaintiffs alleged that the release of such data would violate the Freedom of Information Act (FOIA), the Privacy Act of 1974 (Privacy Act), 18 U.S.C. § 1905 (Trade Secrets Act) and the U.S. Constitution. In 1979, the district court permanently enjoined HHS "from disclosing any list of annual Medicare reimbursements [sic] amounts, for any years, which would personally and individually identify those providers of services under the Medicare program."

The court, at the time, found that disclosure of Medicare payment information that included information individually identifying physicians was exempt from FOIA's mandatory disclosure requirement under FOIA Exemption 6. Exemption 6 permits an agency to withhold disclosure of "personnel and medical files and similar files" that "would constitute a clearly unwarranted invasion of privacy." Because the physician reimbursement was determined to fall within Exemption 6, the Privacy Act prohibited disclosure of the information without the "prior written consent" of each physician. Several courts have also upheld HHS's refusal to disclose information regarding physician reimbursement under the Privacy Act.

The U.S. District Court for the Middle District of Florida overturned its prior order based upon changes in the law and factual circumstances. First, the court held that the interpretation of the Privacy Act upon which the 1979 injunction was based is "no longer good law," and therefore the injunction "rests upon a legal principle that can no longer be sustained." Specifically, the court found that the scope of the injunctive relief available under the Privacy Act no longer permits injunctions against future disclosures of information. This was a considerable change from the interpretation of the law in effect at the time the injunction was issued. The court held that a significant change in the interpretation of the Privacy Act rendered "continued enforcement of the 1979 FMA Injunction inequitable and detrimental to the public interest." The dissolution of the injunction, however, will not result in the automatic release of the data.

Individuals desiring the physician payment data will have to file the FOIA requests to access the data, and HHS then will be forced to decide whether the data is exempt from release under the FOIA. HHS historically has maintained that individually identifiable physician payment data should not be released under FOIA Exemption 6.

In addition, the American Medical Association (AMA), which continues to oppose the release of physician payment data, is likely to appeal the ruling, thereby slowing the release of information. The AMA's concern could be heightened if the Medicare data will be used to rank doctors based solely on cost, does not employ risk adjustment measures to assure more accurate physician comparisons and does not provide prompt appeal mechanisms to verify and correct data believed inaccurate, as was the case with the insurer ranking systems the AMA has opposed over the past several years.

The court's ruling comes amid CMS's recent disclosure of hospital charge data for the 100 most common inpatient procedures and 30 outpatient procedures from hospitals across the country. In making the release, HHS Secretary Sebelius stated "[a] more data driven and transparent health care marketplace can help consumers and their families make important decisions about their care." Consequently, it remains to be seen how CMS responds to requests for physician payment data.

In addition to CMS's potential shift in position, it should be noted that after the court's ruling, Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Oreg.) indicated that they plan to reintroduce the Medicare Data Access for Transparency and Accountability Act (Medicare Data Act) in the U.S. Senate. The Medicate Data Act would require HHS to create searchable Medicare databases for public use and would specifically provide that information regarding Medicare payments to physicians would not be protected by an FOIA exemption.

Despite the uncertainty surrounding CMS's response to its newfound ability to release physician reimbursement data, providers should consider requesting data regarding the physicians in their markets to understand their own medical staff's medical practices more intimately, but perhaps more importantly, to obtain a much more in-depth understanding of their competitors' market position. This data also may assist accountable care organizations (ACOs) in identifying members to be included and perhaps members to be excluded as a result of their practices.