The Facts on Medicare Spending

Analysis from the Kaiser Family Foundation

An excellent interactive explainer from KFF (Henry J. Kaiser Family Foundation) offers a clear and succinct view into the somewhat mystifying universe of Medicare spending. You can scroll to start viewing the interactive. 

Medicare Part A in-out over time

A Depleting Trust Fund

A particularly interesting chart shows how the solvency of the Part A trust fund presents challenges as those workers paying into the system become overwhelmed by the amounts that will need to be paid out (at right). The orange bars represent pay out, while the blue bars represent income to the fund.

I very plain language, when Medicare spends more money on Part A benefits, like hospital stays, than it brings in through payroll taxes, the assets in the Part A trust fund will gradually become depleted, and Medicare would not have enough money to pay for all Part A benefits from that point onward. If nothing is done to prevent it, the trust fund is expected to unravel slowly through the next decade.

What it Bodes

This isn't some doomsday prediction for partisan advantage; this report is based in cold, hard fact. Work should begin now to shore up the Part A trust fund, or the U.S. may face a dire future of rationed and/or restricted care [editor's opinion], where necessary medical care may be withheld and Americans' health will suffer. Other models have shown that when care isn't given when needed, more serious conditions arise and force higher costs, medical bankruptcies, and early death.

Physician Quality Grading for Consumers

Update March 2023: Physician Compare data is available as part of a rich physician database compiled from Physician Compare and numerous other sources. All reported physician/facility affiliations are included, with more than 50,000 medical facilities covered. 

Columbia University Medical Center has just this week [week of 4/12/2016] published a guide to the Physician Compare quality data. While the release of physician quality data has been delayed, expectations are that it will appear in 2017.

CMS will generate star ratings based on data drawn from the Consumer Assessment of Healthcare Providers and Systems (CAHPS), the Physician Quality Reporting System (PQRS), as well as Accountable Care Organization (ACO) and claims data. CMS will set benchmarks based on the Achievable Benchmark of Care (ABC) methodology.

The data will be made available with the intent to help consumers to make informed decisions and to encourage physicians to improve performance, leading to more efficient and healthful outcomes.

CarePrecise will continue to monitor the project, and will begin including physician quality data in an upcoming product, The Authoritative Physician Database™, as it currently does with its product The Authoritative Hospital database™. CarePrecise is a leading supplier of healthcare provider data used in consumer-facing web and mobile applications, through special licensing arrangements.

Medicare Fraud Steals $60 Billion a Year

Six months after a provider performs a particular medical procedure, they can bill it again. And, exactly six months to the day, the provider photocopies the original claim, changes the date, and sends the scammed claim it off to Medicare.

$60 billion worth of fraud is roughly 10% of the total amount Medicare pays out every year on healthcare for 54 million people. According to a March 7 WIRED article, "Since 2007 more than 2,300 providers have been charged with fleecing Medicare, and more than 1800 defendants have been convicted of felony offences, ranging from claiming phantom services to performing unnecessary surgeries."

Among CarePrecise Clients are the Federal Bureau of Investigation and state anti-fraud law enforcement bodies. CarePrecise provides comprehensive data on healthcare providers.

How will ever stop these scams? There are just too many of them for CMS' dedicated investigators to keep up. But the government is getting help from hundreds of citizens: whistle-blower lawsuits allow any medical office staff or other insider to sue their employer and collect 15% to 30% of the settlement. The number of bounty hunters is growing; in 2014 there were 469 such settlements resulting in $2.2 billion in fines.

Professional whistle-blower lawyers can help skittish employees to rat correctly, but they may not have the investigative chops. Now one clever business has begun to turn medical office whistle-blowing into a growth industry. National Healthcare Analysis Group may do more to help recover this money than has been possible in the past by organizing the process and "packaging" it. Read more about it...

Out of the Silos: Combined Healthcare Provider Data

You always knew it was possible to get all of the rich federal data on healthcare providers together in one place, and in a form you could use on your PC. And you were simply ecstatic when CMS released the NPPES database! But then you downloaded it and learned that there is simply no normal desktop software that can make that data accessible to you. Rats!

Then CarePrecise created a version of that data -- our flagship product, CarePrecise Access Complete (CPAC), so you could use all 4 million provider records on your computer. Yay! But then you found that it was hard to get around in all that data. Rats! So CarePrecise released the CP ListMaker software that makes getting at the data you want a walk in the park. Excellent! And you wanted some way to know which providers were sanctioned, or that they were eligible to bill Medicare, so CarePrecise integrated data from the PECOS (Medicare) database and the LEIE (List of Excluded Individuals and Entities). Fantastic!

Then you wanted more than the single practice location and fuzzy practice group data that the NPPES gave you, so CarePrecise integrated all of the Physician Compare data with CPAC. Cool! And you wondered how would you ever tame all of that hospital data, so CarePrecise integrated a de-duplicated list of hospitals and the Hospital Compare data, and while we were at it, we included hooks into the hospital quality data and the upcoming physician quality data. And all of it -- the NPPES, PECOS, LEIE, Physician Compare, Hospital Compare (plus some really nice additional stuff like proper-cased name and address fields, provider service area wealth data, and urban/rural/suburban designations) -- all integrated into a single relational database, linked by the NPI number. And you though it couldn't be done.

Now we call that sweet package of data heaven by a weird name: The CarePrecise Total Bundle. And as we integrate upcoming federal data releases, will we be tucking them in there too? You betcha. That's what CarePrecise is all about: healthcare provider data integration and application.

It's brand new and available now: The only 360 degree view of U.S. healthcare provider data. Total Bundle pricing is just $689. That's less than 2/100ths of a penny per record for the most complete physician database / hospital database / dentist database... available anywhere.

You're welcome!

Physician Payment Data Is Coming

A Friday article in Modern Physician states that, despite vigorous protests from physician organizations against releasing physician-specific data on Medicare payments, "the dike appears to be crumbling."

Public release of payment information has been prohibited by a 1979 court injunction. But on March 31 the injunction was vacated by U.S. District Judge Marcia Morales Howard, and the way is now legally clear to release doctors' payment data. The challenge now is to settle on a method of dissemination that protects patient privacy.

CMS also plans to release physician quality data soon, as required by law - another action opposed by physician groups. In July, CarePrecise released new components that link the CarePrecise Access Complete U.S. healthcare provider database directly to the forthcoming physician payment and quality data, to facilitate value computation, healthcare delivery research, consumer advocacy and other applications. Hospital quality data is also linked through the new components, which comprise the Extended Professional, Group and Hospital (EPGH) dataset, including relational key crosswalks between all of the relevant datasets. CarePrecise specializes in bringing healthcare provider data from multiple silos together into a single dataset, and is the only source for these combined data at the present time.

15 Types of Medical Billing Fraud & Abuse

Estimates of U.S. medical fraud and abuse go as high as $80 billion. It contributes significantly to rising healthcare and insurance costs.  The complexity and fragmentation of the American healthcare billing landscape is frequently a culprit makes fraud and abuse easier to commit and more difficult to detect.

One of our long-time clients, PayerFusion, has just published an article on its blog highlighting fifteen different forms of fraud and abuse, including upcoding, cloning, phantom billing, and a dozen more. Read the article for useful and timely information on this important subject.

CarePrecise provides software, data and services employed by law enforcement, including the Federal Bureau of Investigation, in ongoing investigations. To report fraud or abuse, go to http://oig.hhs.gov/fraud/hotline/
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CarePrecise encourages you to attend the Big Data for Healthcare Forum, April 29 - May 1, 2013.

The Sunshine List

As lawmakers continue to push CMS to implement the Physician Payments Sunshine Act, and CMS mildly demurs out of concern that drug and equipment manufacturers won't be able to comply any time soon, CarePrecise has been busy getting prepared for a run on the databank.

As most of the players are beginning to realize, an accurate and up-to-date source of provider information will be a necessity in reporting payments properly. The CarePrecise master provider list contains all the hooks required to positively identify specific providers, and connects provider licensing and NPI numbers to such pertinent information as PECOS enrollment, Medicare billing eligibility, and the Office of Inspector General's excluded providers database. The current version of the CarePrecise Access Complete database identifies multiple providers practicing at a single location, using super-conformed location coding.

Sunshine Incoming

CarePrecise can process incoming lists of payments to providers using the advanced record-linking technology we use to build our master databases. Whether companies have NPI numbers or not, our system can use other data to identify payees.

CarePrecise data is already in use is installations where states have various types of Sunshine laws in place, and where organizations are preparing for the federal act to take effect. When we can all finally see who's paying what to whom (to whatever extent that will be truly possible), CarePrecise data will be part of this vital next step in controlling healthcare costs and abuses of influence.

ICD-10 Selling Coding Systems

Are those coders in the basement about to see their pink slips? Maybe so, within the coming two years, as roughly half of inpatient providers say they expect to buy automated coding solutions over the next one to two years.

According to a new report released by KLAS Research, many healthcare providers are seriously considering purchases of inpatient computer-assisted coding (CAC) systems during the coming 24 months, despite the ICD-10 deadline delay to a recently proposed date of October 1, 2014.

Providers say that encoder/grouper integration is particularly important. 73% of providers reported that they are considering 3M, which currently holds a 50% market share and three quarters of the inpatient encoder market.  OptumInsight and Dolbey have also generated strong interest among providers.

Interest in CAC is being driven by concerns about the productivity impact that ICD-10 will have on providers' practices in both outpatient and inpatient settings. The transition to ICD-10 cranks up the number of diagnostic codes to 68,000 from 13,000 in the ICD-9 code set. Codes for inpatient procedures will shoot from 11,000 to 87,000 codes.

91 Charged With $295 Million Medicare Fraud

Ninety-one doctors, nurses and others were charged in a blockbuster sting operation, with arrests unfolding over three weeks and culminating in 70 arrests last week. In 2007, a strike force was set up between the Department of Justice and the Department of Health and Human Services to identify and build federal fraud cases to fight criminal abuse of federal healthcare programs. U.S. Attorney General Eric Holder said that arrests were made in eight US cities involving more than $295 million in stolen funds.

Almost half of those charged were part of a Florida ring that recruited healthcare providers to refer patients to a mental health center, in some cases threatening residents of a halfway house with eviction if they refused the unnecessary care. Another case involved $3.4 million in unnecessary physical therapy by two Brooklyn physicians.

On September 1, officials in Detroit charged 18 physicians, nurses, clinic owners and other medical professionals for submitting $28 million in false claims to Medicare. Just one day earlier, the owner of a Houston, Texas durable medical equipment business was sentenced to 97 months in prison for his role in a Medicare fraud scheme.

In all, the strike force, known as Health Care Fraud Prevention and Enforcement Action Team (HEAT), has charged 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.

When providers have been convicted of fraud and certain other infractions and delinquencies, their names are placed on the List of Excluded Individuals/Entities (LEIE) database. CarePrecise compiles this data into its comprehensive database of U.S. healthcare providers, identifying excluded providers' NPI numbers, phone and fax numbers.

Read the full story on the HHS website.

U.S. Doctors Earn Big, Drive Up Costs

According to a new study published in Health Affairs, America's approximately 1.1 million physicians are paid dramatically higher fees than those in all of the other more than 230 Organisation for Economic Co-Operation and Development countries. Per capita, our physicians are paid $1,599; other countries averaged significantly less than that -- about 81% less -- or about $310. The difference, nearly $1,300, is a major factor in driving up U.S. healthcare costs, and, according to the report, is the the main cause of higher overall spending in America on physicians' services.

The disparity comes into stark focus in the area of specialists' fees. While U.S. primary care docs earned significantly higher than their foreign counterparts -- averaging $186,582 annually -- orthopedic physicians earned $442,450. As an example, the study compared physicians’ fees paid by public and private payers for hip replacements in Australia, Canada, France, Germany, the United Kingdom, and the United States, finding that much higher fees were paid to U.S. orthopedic physicians for hip replacements (70 percent more for public payers, 120 percent more for private payers) than public and private payers paid these specialitsts in other countries. The study concludes that "the higher fees, rather than factors such as higher practice costs, volume of services, or tuition expenses, were the main drivers of higher U.S. spending, particularly in orthopedics."

According to August, 2011 CarePrecise data, of the approximately 1.1 million U.S. physicians, about 35,500 practice as orthopedists and orthopedic surgeons, with another 378,000 specialists practicing in the high fee taxonomies. Only about 160,000 U.S. physicians serve in family practice.

And They Were So Close to Canada!

Looks like some Medicare patients will go to any lengths to escape the high cost of U.S. prescription drugs. Even if only through opium-induced euphoria.

Michigan: Twenty-six persons have been charged by Federal investigators in a Medicare fraud scam that took in more than $58 million in fraudulent billings and illegally acquired more than 6 million doses of pricy medications. Drugs were used to entice Medicare patients to play along.

The brains of the gang, one Babubhai Patel, ran a network of 26 Michigan pharmacies that bribed physicians to write the prescriptions, many of them opiates and other frequently-abused pharmaceuticals. Physicians recruited grandmas as mules. Medicare patients would knowingly fill the illicit prescriptions, keeping the drugs and handing over their Medicare and Medicaid billing information to the conspirators. Four doctors and ten pharmacists, as well as some of the patients and others, were indicted in the federal grand jury action.

Ryan Plan Dies in the Senate

"The Republican plan to kill Medicare is part of a plan to balance the budget on the backs of seniors," Senate Majority Leader Harry Reid said before yesterday's vote. That plan, originating in the House authored by Republican Paul Ryan, would have dismantled Medicare guarantees in favor of a private system that would force seniors to shop for health plans.

Republicans forced a vote on the Obama Administration's budget as a ploy to show the lack of support among Democrats for it. The 97-0 vote roundly defeated the President's budget.

Nearly 3000 Excluded Providers Still Practicing

You might wonder if, and if so, why, healthcare providers who have been convicted of Medicare fraud are still practicing medicine, writing prescriptions, and billing health plans (except, presumably, Medicare). Well, it's a good question. Apparently such a conviction may not get a provider's NPI deactivated.

For several months the number of providers that appear on both the HHS Office of Inspector General's excluded providers list and the current National Plan and Provider Enumeration System (NPPES) have hovered around 2,700.* But for December the number jumped to 2,925. Of that number, more than 1,400 are physicians.

For the past several months, CMS has dropped only 400 to 500 providers each month for various reasons; not all dropped NPI records are due to fraud convictions. Interestingly, the December NPPES dropped more than 1,000 records, while still including more than 2,900 providers listed in the LEIE (List of Excluded Individuals/Entities), the federal database primarily of healthcare providers convicted of fraud or other crime, for patient neglect or abuse, felony controlled substance conviction, or whose licenses have been revoked, suspended or surrendered. A small number of providers are included on the list for less serious reasons, including refusal to provide required information to HHS, and default on a federal healthcare education loan. An inquiry sent to CMS requesting information on the matter has not been answered.

Each month, nearly 30,000 new records are added to the NPI database, primarily representing new healthcare providers. On average, 33,000 records are updated (by the providers themselves in nearly every case). The December NPPES database includes 3,277,833 healthcare provider records. All HIPAA-covered U.S. healthcare providers are required to obtain an NPI record. For all practical purposes, a physician's NPI number, along with a DEA number, is required to write a prescription because pharmacies generally require them. Theoretically, at least, if a pharmacy could not find a valid NPI number, it could refuse to fill the prescription.

CarePrecise compiles federal healthcare provider data for use in research, clinical trial provider pool development, fraud prevention and marketing. Clients include health plans, educational institutions, drug companies, marketers, law enforcement, health systems and individual providers.
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* Source: CarePrecise research data. Methodology involves cross-referencing the two databases using proprietary algorithms to affix NPI numbers to providers in the fraud database; the fraud database (LEIE) does not include NPI numbers, making it difficult to track against practicing providers. Actual number of providers on both lists may be higher; the cross-referencing algorithm is used conservatively.

PHR-Lite for Medicare Members

The Centers for Medicare and Medicaid Services has launched a new "Blue Button" feature on its MyMedicare.gov website. The app makes it possible for the 47 million Medicare members to access, print or download specific medical information. "Having ready access to personal health information from Medicare claims can help beneficiaries understand their medical history and partner more effectively with providers," the agency says. Having access to Medicare claims means having access to a virtually complete record of your healthcare incidents, the next-best thing to a personal health record (PHR), and it's updated for you by the government. Sweet!