Five ways CMS screwed up last week's release of Medicare payment doc data

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The Centers for Medicare & Medicaid (CMS) last week missed the mark when it released the 2012 Medicare data on how much it paid doctors for their services. 

CMS' nearly lazy indifference in regards to how it handled this important issue was the anticlimax to a legal battle that lasted decades.

The American Medical Association (AMA) was able to obtain a civil injunction in 1979 that kept news organizations from naming doctors in connection to how much money they received from the Medicare program. That began to end in 2010, when the Wall Street Journal reported a cabal of surgeons at a small Kentucky hospital were grinding out hundreds of spinal surgeries each per year, and essentially enriching one another through various patents on the devices used during the procedures. After the Journal named the doctors but not their Medicare billings, the newspaper went to court and finally got the injunction overturned last year.

In an effort to increase transparency, CMS last week released the data on services provided by doctors who participate in Medicare. Here are the main ways it screwed up:

1. The agency botched its own announcement. The statement was entitled"Historic release of data gives consumers unprecedented transparency on the medical services physicians provide and how much they are paid." I don't think I've seen a more inaccurate press release headline. The data is neither consumer-friendly nor transparent, as I will soon explain.

2. The agency botched its own press conference. Although I am on the CMS press list, I never received an invitation to the conference announcing the data release. Apparently I wasn't the only one, since CMS actually provided a replay of the event in its entirety to journalists, something it almost never does.

3. CMS couldn't bother to take the simple steps to present its own data in a straightforward manner. The agency could have released this data in an interactive database so that any consumer could look up his or her own doctor's name. Instead, it released the information in a raw form that only an organization with a sophisticated IT system and a database administrator can use, and in 13 Excel spreadsheets with tens of thousands of entries apiece. That the New York Times, Wall Street Journal and Los Angeles Times had their own databases up and running the day of the release suggest how simple it would have been for CMS to create its own interactive version--an easy way to show that HHS had put its past IT disasters behind it.

4. CMS' Excel-formatted data apparently has significant gaps--and it provided an explanation to match. The Excel spreadsheets, which are the only way an individual who is not a Silicon Valley programming geek can look at the data directly from CMS on his or her own, presents providers in an alphabetical format, and an aggregate billing and payment format. 

I found that glaringly absent from these spreadsheets was Salomon Melgen, M.D., the Florida ophthalmologist who is the nation's largest recipient of Medicare largesse, Minh Nguyen, M.D., who was the single-biggest recipient in California, and many others. And I also found that the billing data for large clinical laboratories such as LabCorp and Quest Diagnostics was at odds with what was reported in the raw data. 

When I asked CMS spokesperson Rachel Maisler why there were discrepancies, she told me that the agency doesn't comment on specific providers. When I asked if CMS was denying there were discrepancies, she told me to check the methodology sheets provided with the data--something I had already done. When I asked a third time for a specific statement from the agency regarding its position on the Excel data, I got no response at all.

For those of you keeping score at home, the non-answers are leading the denials 3-0. I urge my colleagues to press for the answer I never got.

5. CMS did not clearly explain what the data actually meant. The only lucid explanation about the meaning of the data the day it was released came from the AMA, which issued a guide to reporting on the raw numbers. That was somewhat ironic given the role it had played for decades keeping the data secret. Nevertheless, the AMA made some telling points. "The data does not account for patient mix or demographics. It also does not point out that a significant share of Medicare payments is used to cover such costs as office overhead, employee salaries, supplies and equipment. To make matters worse, the data includes reimbursements for physician-administered drugs but fails to explain that these payments are compensation for the price of the drugs themselves, many of which are very expensive," the organization cautioned. Indeed, many news organizations, no doubt a little skeptical of the AMA's claims, wound up doing first-day reporting on the payments itself. It only began delving into what the payments meant--and talking to the chagrined doctors--the following day.

That's exactly what happened in the L.A. Times. Nguyen was front-page news on Wednesday.His  rational explanations as to why he received more than $11 million from Medicare appeared in the Times' business section the following day.

That leads me to an amiable chat I had late last week with W. James Gealy, M.D., an ophthalmologist who practices in Templeton, a sleepy town on California's Central Coast. Why I wound up speaking with him is entirely CMS' doing.

CMS' Excel spreadsheets listed Gealy as the third-highest paid individual Medicare recipient in California, which turned out to be wrong. "I thought I was somewhere in the weeds," Gealy told me. Given how tiny Templeton is, that one of the highest-paid Medicare providers in California was practicing there raised my eyebrows.

Although Gealy said the raw data was probably correct, the Excel spreadsheets released by CMS were "grossly incorrect," as he described it.

"These are the same people who came up with HealthCare.gov," Gealy drily observed.

Over the course of the next 20 minutes, Gealy methodically explained why he was paid $2.5 million by Medicare in 2012. Sixty-eight percent of those payments covered the administration of drugs for the treatment of macular degeneration, many of which he injects directly into his patient's eyeballs. It's a procedure so delicate that Gealy is the only member of his seven-member practice who is willing to do so. Some, such as Eylea and Lucentis, cost between $1,800 and $2,000 a dose. Medicare pays about 4 to 6 percent above cost, which covers the cost of administering the drugs and related overhead.

Unlike large swathes of the medical community, Gealy does support CMS' release of the payment data. "Some transparency in this whole process in the payments is potentially a good thing," he said. "But it is not a good thing when the data is released to the general public in a form the people can't understand. Because all it does is cause guys like me to have to scramble and explain ourselves to the irate people in our communities."

Better yet, CMS should explain why it managed to screw this up as badly as it did, and whether its transparency efforts in the post-Sebelius era are going to improve. - Ron(@FierceHealth)

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