Disclosing Doctors' Medicare Pay Might Be 'Pretty Damning'

The Obama administration’s plan to release how much the Medicare system paid individual doctors for specific procedures could blow the lid off one of the most jealously guarded secrets in medicine.

Since a court injunction sealed Medicare’s physician-pay records in 1979, the American Medical Association has successfully shielded physicians from public scrutiny of how much they’re paid by the federal health program for everything from flu shots to brain surgeries. Release of the payment data, coming as soon as Wednesday, should give researchers, journalists, and resourceful consumers their first look at just how much doctors make from ordering all sorts of tests and procedures on their patients—whether the patients need them or not.

“A lot of people on Medicare will drop their coffee cups when they see how much their doctors are making,” says Jean Mitchell, a Georgetown University economist who has published more than 30 studies on how financial incentives drive physicians’ treatment decisions. “People don’t recognize that medicine is a business; the way you make money is by doing procedures. You don’t make money telling people to eat right and exercise.”

As the data are sliced and diced in coming months, some of the most revealing story lines will undoubtedly involve physician groups that excel at what’s called self-referral—the practice of sending patients for tests and procedures that are performed in the doctor’s own office or at an affiliated clinic, Mitchell says. These services include in-house pathology labs to analyze prostate and skin specimens; imaging machines such as MRI and CT scans to check for broken bones, and even high-end radiation devices to treat cancer patients in a urologist’s or oncologist’s office.

While self-referral is illegal under federal law—so that doctors won’t put pay above patients in making medical decisions—several exemptions in the statute have permitted the practice to flourish in the past decade. Multiple peer-reviewed studies on specialties that are rich in procedures, including orthopedics and urology, have shown that doctors with a vested interest order many more tests and procedures than doctors who have no financial stake in providing the ancillary services. “The referring doctors get paid for doing nothing,” says Mitchell.

The AMA’s president, Ardis Dee Hoven, issued a statement last week saying the group supports release of the pay data but is “concerned” the government’s “broad approach” to disclosing the data “will mislead the public into making inappropriate and potentially harmful treatment decisions and will result in unwarranted bias against physicians that can destroy careers.”

It’s still unclear how accessible the pay data will be. In response to questions Friday, a spokesman for the U.S. Department of Health and Human Services said the agency’s Medicare division is planning to release the data in bulk on its website for downloading, as well as in summary files that can be used with Excel. The feds are still exploring how “to make these data easier for consumers to understand,” the spokesman added.

For investigative journalists, any information that sheds more light on doctors’ financial incentives to do controversial medical procedures will be helpful. Until now, we’ve relied on glimpses of physicians’ wealth, gleaned from such sources as property records, divorce filings, and nonprofit tax returns, to give a picture of how lucrative it is for them to do certain medical procedures. The Medicare pay data should provide a much clearer and more direct picture of the income they get from their work.

“For some doctors, this is going to be potentially pretty damning,” Mitchell says.

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