Summary

On April 9, 2014, the Centers for Medicare and Medicaid Services (“CMS”) released the Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File (the “Data File”). The Data File contains information related to utilization, payment, and submitted charges in the Medicare fee-for-service program, and catalogs approximately $77 billion of Medicare payments made to 825,000 professionals in 2012. The Data File is organized by National Provider Identifier (“NPI”), Healthcare Common Procedure Coding System (“HCPCS”) code, and place of service. The Data File and related information can be retrieved here.

The release of the Data File follows the lifting of an injunction that was imposed in 1979. Immediately upon release of the Data File, newspapers from across the country began analyzing its contents.  In its April 9, 2014 edition, the Wall Street Journal noted that “The top 1% of 825,000 individual medical providers accounted for 14% of the $77 billion recorded” in the Data File. The same Wall Street Journal article noted that, “Medicare paid 344 physicians and other health care providers more than $3 million each in 2012.” USA Today’s April 9, 2014 edition listed the five most common procedures/services and the most expensive procedures performed in 2012. The April 9, 2014 Los Angeles Times story on the Data File listed the five highest physician Medicare Part B recipients in California and the nation.

Proponents of the release of the Data File laud this as an important first step in the goal of advancing “transparency” in health care. Opponents of the release of the Data File suggest the Data File is an incomplete analysis that can lead to flawed conclusions.

The implications of the Data File are far-reaching, indeed. As a threshold matter, the following is a summary list of five key takeaways from this important event and its potential ramifications.  

Transparency is here to stay. The Data File is the latest step by the federal government to shine a spotlight on health care costs and spending. In combination with the release of data under the federal Sunshine Act [here and here], there will be a great deal of data available to interested parties to analyze as they see fit.

Transparency does not equal clarity. Upon release of the Data File, the American Medical Association has issued a series of releases explaining how the Data File may lead to inaccurate conclusions. See, for example, here. CMS’ release of the raw data can provide hours of opportunity for researchers, analysts, reporters and other interested parties to learn more about some of the costs inherent in the health care delivery system. The Data File, on its own, will not end the discussion relating to Medicare expenditures. It will likely intensify the debate.

Fraud and abuse investigations could increase. CMS believes that the release of the Data File will enhance the public’s interest in and understanding of Medicare fraud, waste and abuse (see, here). Giving members of the public increased access to physicians’ data may result in direct questions by beneficiaries.  Investigations by the media could portray a physician in a manner that could invite state and or federal scrutiny of the physician’s billing practices. In addition, whistleblower claims could increase if a physician’s staff person uses the Data File to suggest inappropriate conduct.  Defending against any of these types of matters is an expensive and distracting proposition for a physician.

Will physicians opt out of Medicare?  Physicians do not have to participate in the Medicare program. If payments for Part B services do not increase on a consistent basis, a physician could decide that continued participation in the fee-for-service program is not advantageous from a business perspective, particularly if there are negative articles published with respect to the Data File. While the Data File included aggregate payments received by a physician, it did not include any information related to the costs that a physician incurs in providing services to a Medicare beneficiary (e.g., staff, supplies, overhead).

Quality outcomes remains a priority. The Data File does not include information that relates in any way to the quality of care being provided by a physician. As commercial payors increasingly move to pay-for-performance and accountable care initiatives, however, the temptation will be to equate lower costs with higher quality. In addition, the Medicare Shared Savings Program is premised on the interconnection between cost and quality. Providers should carefully review their third party contracts and understand the connection, if any, between payment for services provided and outcomes measurement.

The release of the Data File and the initial publication of Sunshine Act data later this year will continue the trend of transparency in health care spending. Transparency, however, must be carefully balanced with clarity to ensure that any conclusions reached are not one-sided or inflammatory in a complex health care delivery system.