Show Us the Money: Medicare Data Disclosure Highlights Expensive Treatments

In an unprecedented action, on April 9, 2014, CMS publicly released data disclosing Medicare payments made to physicians in 2012. CMS Principal Deputy Administrator Jonathan Blum  told the media on the morning of the release that the reasons behind the disclosure were three-fold: (1) because the public had a right to know; (2) to help understand geographic variation in spending; and (3) to aid in the identification of fraudulent activity. Yet, in the flood of responses to the release, different patterns in the data became evident and other, maybe unanticipated, discussions arose. Many have noted that oncologists and ophthalmologists make up two of the three most highly billed types of providers on the data list. Blum and other CMS representatives acknowledged this pattern and stated that these higher numbers were due to more expensive drugs. In addition, recent reports have emerged that highlight these treatments and question their necessity in the presence of less expensive alternatives.

Data Disclosure

According to an analysis by the Washington Post, the Medicare data revealed that, in 2012, the highest Medicare-paid specialists were ophthalmologists, oncologists, and pathologists. While the report noted that many factors could explain that trend, including “costly overhead” that necessitate costs to be forwarded to pharmaceutical companies or medical device manufacturers, the piece focused on the role fraud might play in explaining the extremely large reimbursement amounts received by some physicians. In general, most other reports on the subject also evaluated the disclosure as a means of fraud detection. A Reuters story noted the ecstatic reaction of lawyers representing whistleblowers in Medicare fraud cases that now may have potential incriminating evidence at their fingertips. Yet, viewing these numbers in light of other recent findings with regard to and in response to allegations of overspending on certain types of treatments in the field of oncology and ophthalmology, perhaps the investigative lens should be widened to analyze these trends in treatment as well.

Treatments Questioned

Although not directly related to the Medicare data disclosure, a recent perspective published in the New England Journal of Medicine is relevant to this discussion. According to this piece, high cost cancer drugs are dominating patient and provider options. The study’s authors reference estimates that reveal that one year of treatment for cancer per patient using new drugs costs over $100,000. Further, the article indicates that this cost is both borne by the patients and other payers and that these high prices form barriers to comparative effectiveness trials that could establish the efficacy of alternative, cheaper drugs. In this light, these authors might argue that the extravagantly high Medicare payments made to oncologists evident in the 2012 data is a function of this new cancer drug market that protects itself against cheaper interlopers.

Similarly, Boston University reported on the dominance of the macular degeneration treating drug Lucentis® in the field of ophthalmology. This treatment is ranked as one of the most heavily reimbursed procedures by Medicare and many ophthalmologists have blamed their high fees on the cost of this single drug which is six times more expensive than an alternative product, Avastin® that is typically used to treat cancer but is used off-label for macular degeneration as well. The BU report described the findings of  Professor Manju Subramanian, who says that while treatment with Lucentis costs $50,000 per year, Avastin, which Subramanian claims works equally well, rings in at $650 per year. Both Lucentis and Avastin are owned by the same company, which would stand to lose millions if providers begin to prescribe the less expensive option.

Oncologists Respond

The flood of response and reactions to the Medicare data release included formal statements released by several professional associations in the oncology field, including the American Society of Clinical Oncology (ASCO), the American Society of Hematology, the American Society for Radiation Oncology, and the Association of Community Cancer Centers. While each of these groups affirmed their support for greater transparency in Medicare payments to physicians, each entity also expressed concern over the release of the data without context or explanation of the details of the payment system. For instance, the statement released by ASCO asserted that “[m]ost of the amounts shown in the Medicare database for oncologists are not, in fact, revenue to oncology practices. Instead, these Medicare payments merely cover the upfront costs of purchasing drugs for patients.” While these statements certainly may quell debate about over-the-top reimbursements as to doctors’ salaries and, perhaps, even foreclose allegations of fraud, they do not address the root of the problem, which is that expensive treatments appear to dominate certain fields, causing staggering, and perhaps, unnecessary reimbursement amounts.