In South Florida, routine office visits cost Medicare more than any other medical service in 2012, paying physicians and other healthcare providers about $331.7 million, according to data released last week by the federal health insurance program for the elderly and disabled.
The data, unveiled for the first time in Medicare’s 50-year history, provides the most detailed information yet about how much money Medicare is paying out, the types and volumes of procedures performed, and the numbers of patients treated by physicians and other providers.
Among the early findings: Salomon Melgen, a West Palm Beach ophthalmologist, was paid $20.8 million by Medicare in 2012 — more than any other physician who billed the taxpayer-funded program that year.
After routine office visits, and certain hospital and institutional care, such as nursing facility evaluations, the procedures that Medicare spent the most for in South Florida in 2012 varied by county, according to analysis of data for Miami-Dade, Broward and Palm Beach counties by the Florida Center for Investigative Reporting.
Although some consumer advocates hailed the data release as a step toward greater transparency in healthcare, there also were a lot of cautions from medical groups about how to interpret the information.
The American Medical Association, which represents physicians nationwide, has for years opposed the release of Medicare payment data, arguing that the information could be taken out of context and potentially mislead patients and the public.
Jeff Scott, general counsel for the Florida Medical Association, said the group’s physician members are concerned that the data could contain errors, that quality of care can’t be determined from the information, and that the numbers do not reflect the severity or complexity of patients.
“We have specific concerns about just reading things into raw data without the appropriate background information as to why the numbers are what they are,” Scott said.
Analysts are still parsing the data, looking at payment trends, service volumes and provider caseloads. Consumers groups could use the data to identify physicians, their patient volumes and most common procedures.
In Broward and Palm Beach counties, the data shows Medicare spent $15.1 million and $23.8 million, respectively, for injections of a costly drug, ranibizumab, sold under the brand name Lucentis, to treat patients suffering from macular degeneration, a retinal disease.
Nearly half of the payments in Palm Beach County went toward reimbursing Melgen for his injections of Lucentis.
In Miami-Dade, Medicare spent $18.9 million on tissue exams by pathologists, and about $7.4 million for the Lucentis eye injections, according to the data, which details how the federal program paid out roughly $77 billion to about 880,000 doctors and other healthcare providers nationwide.
In total for 2012, Medicare paid South Florida physicans and other healthcare professionals about $1.87 billion, with Palm Beach County-based providers receiving the most: $752.6 million.
By comparison, Medicare paid healthcare professionals in Miami-Dade about $585.9 million, and those in Broward about $537.5 million. That’s despite the fact that, in 2012, Miami-Dade had more beneficiaries enrolled in the supplemental medical insurance program known as Part B: 401,000, compared to Broward’s 268,335 beneficiaries and Palm Beach’s 276,444.
But the geographic variation in Medicare payments to healthcare professionals — and the types of services most commonly provided — comes with a caveat: payments reflect where the provider is based and not where the patient resides.
A physician’s location can affect the mix of patients that provider sees — and the treatment options that doctor chooses, said Steven Ullmann, director of the University of Miami’s Center for Health Sector Management and Policy.
Doctors in low-income neighborhoods, he said, might draw more local patients who do not have easy access to transportation, while doctors in affluent neighborhoods might draw from a wider geographic area.
The type of care a doctor provides also might vary by regional medical “culture,” Ullmann said, noting that treatment options “tend to be geographically specific.”
For instance, he said, cardiologists in one region might provide medicated stents — tubes inserted to open arteries — to their patients more often than regular stents, which cost less and receive a lower reimbursement or payment from Medicare than medicated ones.
“You’ll have a culture within an area where you’re going to do the more expensive process,” Ullmann said.
Under the fee-for-service system used by Medicare Part B, physicians and providers have an incentive to deliver more and costlier care because they are paid for each service, not for quality or outcomes. Those factors might help to explain why certain physicians appear as outliers in the Medicare data, outpacing their colleagues in frequency of certain procedures or choosing more expensive options.
For example, the amount that Medicare spent for costly eye injections in Palm Beach can be largely attributed to Melgen, who performed the procedure more than 37,000 times — for which he was paid about $11.7 million of his total $20.8 million — in 2012, according to the data.
His prolific use of that drug is at the center of the U.S. attorney’s criminal investigation into Melgen’s thriving practice, which is based largely on payments from the Medicare program.
Kirk Ogrosky, an attorney for Melgen, issued a statement April 9 denying that his client has defrauded Medicare and saying that although the payment appears “large, the vast majority reflects the cost of drugs.”
Healthcare policy experts agree that payment data alone can appear misleading, since it reflects not just the provider’s service fees but also overhead costs.
Specialists such as ophthalmologists or oncologists typically use expensive drugs to treat patients, so the amounts paid by Medicare can appear deceptively large, said Jonathan Skinner, an economics professor at Dartmouth College and co-author of the 2008 Dartmouth Atlas of Health Care.
“Oncologists have to pay quite a bit for their oncology drugs, and only get 6 percent on top of the costs,” he said in an email. “So their billing would tend to appear to be large — it’s revenue, not salary!”
Another important warning about the data: It does not include privately insured and uninsured patients. Nor does it list patient co-payments, or the amounts that Medicare paid to hospitals, which is covered under Part A, or the amount the program spent directly on prescription drugs, which is covered under Part D.
No easy task
While federal officials urged patients, physicians and others who review the Medicare payment data to be vigilant for examples of waste, abuse and fraud — persistent problems in Miami-Dade — such findings are not easy to identify without personal knowledge or deep dives into the data.
Jack Hoadley, a health policy analyst and political scientist with Georgetown University’s Health Policy Institute, said the best use for the new Medicare data — at least at the outset — might be for physicians to reflect on their practice.
“Doctors like to compare themselves with others, and if my mortality rate and my use of a particular procedure is much higher than many of my peers, some of them may look at it and say, ‘That’s the way I’m making money,’ ” he said. “But some of them will look at it and say, ‘Is that the best way for me to practice? Am I doing the best by my patients?’ ”