Medicare payments to doctors: the big issue is the underpayment for primary care

The Center for Medicare and Medicaid Services (CMS) just published how much money individual doctors get paid from Medicare. This initial version is without names, but undoubtedly the names will eventually be revealed. Enough information is available for Reed Abelson and Sarah Cohen, who wrote the article for the New York Times on April 9, 2014 “Sliver of Medicare Doctors Get Big Share of Payouts”,   to identify many of the specialties and locations. About ¼ of all Medicare payments, the article tells us, go to about 2% of all doctors. “In 2012, 100 doctors received a total of $610 million, ranging from a Florida ophthalmologist who was paid $21 million by Medicare to dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million each that year.” The largest amount of money was accounted for by office visits, $12B, but this was for 214M visits, with an average reimbursement of $57, in contrast to the Florida ophthalmologist, or to the “Fewer than 1,000 radiation oncologists, for example, received payments totaling $1.1 billion.”

Much of the discussion in the article, and in the comments attached, relates to why so few doctors get so much of the $77B Medicare pays out each year. There are, obviously, concerns about fraud; not only is Medicare seemingly fixated on looking for fraud everywhere but there is good evidence that it has occurred, at least historically. For example a highly paid (by Medicare) Florida ophthalmologist is apparently linked to a previous Medicare fraud scandal in which there was some implication of New Jersey Senator Robert Menendez. “The Office of Inspector General for the Department of Health and Human Services, which serves as a federal watchdog on fraud and abuse for the agency, released a report in December recommending greater scrutiny of those physicians who were Medicare’s highest billers.” I would have to say that this is a much wiser, fairer, and probably more productive strategy than simply trying to find largely unintentional errors in coding for outpatient visits, or checking each hospital admission to see if it could have been an “observation”, which is reimbursed less because it is considered outpatient status, as is done by Medicare’s Recovery Audit Contractors (RACs, or as I have called them, bounty hunters). Also, as I have previously discussed, these efforts are harmful to the patient in a direct financial way; as an “outpatient”, a Medicare recipient in the hospital has much higher out-of-pocket costs than if they are admitted as an inpatient. This is, of course, why CMS wishes to limit some stays, but if a person medically needs to be in the hospital, Medicare should pay for a hospitalization, and not play these games that not only financially penalize the hospital and doctors but more importantly the patient.

The other big area discussed is whether, if not exactly fraud, there is substantial difference in practice (e.g., getting CTs before each procedure, using more expensive drugs, etc.) that some specialists who are highly reimbursed by Medicare are doing more of than others. In addition, the question is “are they doing more procedures” or doing procedures with less strict indications? It is worth looking at; there is no guarantee that, even if some doctors are doing more procedures, having looser criteria for them, using more expensive drugs and tests, that this is not the better way to practice, but there is no guarantee that it is the better way to practice. If some doctors are outliers in their specialty, and their practice characteristics “happen” to end up making them a LOT more money than others, then this is certainly a reasonable basis on which to look more closely at how they are practicing, and what is the evidence basis of appropriate practice.

A third issue is that many of the recipients of the most money from Medicare, particularly oncologists (cancer doctors) and ophthalmologists are using very expensive drugs, which they have to buy first and which Medicare reimburses them for. Thus, this skews their reimbursement upward even though the money (or most of it) does not go to the doctor, but rather to the pharmaceutical company. The article refers to a drug called ranibizumab, injected into the eye by ophthalmologists monthly for age-related macular degeneration. It is very expensive, as are many drugs which are made through recombinant DNA (a lot end in “-ab”) used by oncologists, neurologists, rheumatologists, and gastroenterologists as well. One comment notes that he as a physician only makes 3% on the drug. While it can be argued that this is a significant markup (for example, making $3000 on a $100,000 drug), and that this doesn’t include the doctor’s fee for administering it (substantial), it is unfair to count the full cost of the drug as income for the doctor. Of course, it is income for someone (the pharmaceutical company) which suggests there needs to be substantial investigation into pricing of these drugs. And, of course, if a physician is found to be using a lot of a drug where he (or she) makes a 3% markup rather than prescribing an equally effective drug (if there is one) where there is no markup profit, this would be a bad thing.

However, the most important thing revealed by this data, I believe, is the enormously skewed reimbursement by specialty. It is an excellent window into the incredible differences in reimbursement for different specialties, with the ophthalmologists, radiation oncologists, etc. making huge incomes while primary care doctors (and nurse practitioners) are making $57 for an office visit. This is major. The fact that Medicare pays so fantastically much more for procedures (and, as a note, it is likely that all of the doctors, including the 202 family doctors in the highest-paid 2%, are getting it for doing a lot of procedures) leads to private insurers paying similarly more. And makes these specialties very attractive to medical students because they are lucrative (and often, though not in the case of many surgical specialties, involve fewer hours of work). Which leads to fewer primary care doctors, and a dramatic shortage in this country.

Medicare could change this. It could dramatically, not a little bit, change the reimbursement for cognitive visits to be closer to the payment for these procedures. If it did, so would private insurers. If the income of primary care doctors was 70% of that of specialists (instead of say, 30%) data from Altarum researchers and from Canada suggest that the influence of income on specialty choice would largely disappear. More students would enter primary care, and in time we would begin to see a physician workforce that would be closer to what this country needs, about 50% doctors actually practicing primary care.

It is fine if CMS and the OIG look at these highest billing doctors to make sure that they are not committing overt fraud. It is also fine to look at them and see if they are using criteria for procedures that are not supported by current evidence, or doing too many other tests, or taking kickbacks. It is also a good idea to look at the cost of drugs, especially the portion going to the drug company, as well as the markup for physicians, and to re-present the data excluding that portion of the money the doctor does not get (goes to the pharmaceutical company) from their income.

But the most important result of this report should be to be shocked at the way Medicare enables the continued practice of reimbursing for procedures at such high levels, and to kickstart a complete revision of the Medicare fee schedule to bring reimbursement for different specialties into better balance.

That would be a great outcome!

Medicare, falls, families, and risk: "Qualifying" to be in a safe place

Older people are, like all people, a widely varied group. Some are healthy and independent and can live on their own until very old age, while others have diseases that make them infirm at chronologically much younger ages. Some live with family members or have family members living with them. Most of those are well cared for, but some are exploited or even abused. Some elders live in assisted living facilities or nursing homes. A lot more of them are women than men, a reflection of differences in life expectancy. And most of them will, sooner or later, have an adverse event occur that leads them to be hospitalized. Sometimes it is almost routine, getting admitted for a complication of an existing condition such as chronic lung disease or heart disease; sometimes it a surprise, as when a 90-year old who has lived alone and been healthy falls and breaks her hip. The first time something happens, I find myself often repeating to these people and their families, is always the first time, whether at 20 or 90.

Whenever I am the attending physician on our inpatient service, we have a number of such people admitted, but in the last two weeks the number of people admitted who were what my residents call “little old ladies” seemed especially high. They ranged in age from their late 60s to 104; some lived in nursing homes, some with family, and some lived alone (including the 104 year old!). Some were admitted to the hospital for the first time, while others were “frequent fliers”; some had families hover around and others seemed to be left alone even when their family lived in town. A lot of them had falls, sometimes with broken bones (most commonly hip fractures, but others as well), sometimes, fortunately without. Some had moderate to very severe dementia, from Alzheimer’s or other causes, and may know only who they are (or not even that); others are “sharp as a tack” – at least when we can fix the dehydration or whatever else has brought them in.

One characteristic shared by many of these people is that they are unlikely to be safe returning to their homes. If they have fallen, they are likely to fall again. If they avoided a hip fracture this time, they may not next time. We do tests to see if there is an “explanation” for why they fell that might be treatable. Did they have a stroke? Should they be on blood thinners that make another stroke less likely but make the possibility of a bleed into their brain much higher if they do fall and hit their head? Heart rhythm problems? Maybe a pacemaker. Low blood sugar? Are they taking too much insulin? Maybe they “just” tripped: on the cat, on the rug, on the hem of their pants (which might be because those pants are hanging low from the 40 lbs they have lost since they were last seen a year ago -- really? I have been eating. I never noticed I was losing weight!) But, while anyone can trip, if it happens more than a couple of times, they are at risk of something bad. Sometimes it is possible for a health worker or family member to the home and help get rid of clutter, area rugs, and such, but sometimes that isn’t enough.

No one wants to go to a nursing home, especially compared to some idealized vision of being better and functional at home. Few families want to send their parents or grandparents to a nursing home, feeling that it is abandonment, or undignified, or irresponsible. Occasionally, there are complicating social issues, as nursing homes will take the Social Security check that family members are living on or Medicaid will require the sale of the house that family members are living in. And nursing homes are not a panacea; some are better than others, and folks get sick enough to require admission back to the hospital even from the best. But often they are a safer option, even when the family is committed to care. A person may be hospitalized by the family for a minor change that makes the Alzheimer’s victim even harder to care for; the primary care doctors may have already discussed admission to a nursing home, and, as one put it, “their voices said ‘no’, but their eyes and body language said ‘yes’.”

Medicare will pay for a period of time in a “skilled nursing facility” (SNF), where a person who was hospitalized but no longer needs to be in an acute-care hospital can get time to recover, get physical therapy, get to the point where they in fact, often with home health and a supportive family, go home. It works for someone who just had surgery, or someone who broke a bone and either had it surgically repaired or not. But to get this “benefit” the person needs to spend 3 midnights in the acute care hospital. Whether they need acute care or not. Indeed, if they don’t “meet Medicare criteria” for an inpatient hospitalization, they are not even officially “admitted” but are in a fantasy world of “observation status” where they are in the hospital, but are officially outpatients. And those nights don’t count toward “qualifying” for a SNF. So if you (or your father, or grandmother), “just” tripped and hurt themselves, and didn’t break a hip this time (sometimes they have already had both hips repaired), and is “just” bruised, and may have a “little” disorientation but no new stroke, and a little difficulty caring for themselves, and could really benefit from a month of skilled nursing, you better be able to pay for it, because Medicare won’t because they didn’t have 3 nights of “qualifying”.

This is crazy. I am a huge fan of “Medicare for All” rather than the nonsense patchwork of often-inadequate private insurance plans (and people who are uninsured) that we currently have. But that Medicare for all – and right now, for those who are on it – needs to have a rational payment and benefit structure. I understand the financial challenges facing Medicare (and the whole health insurance system – it is not a “Medicare” problem, it is a medical care problem) and believe that we need to save money by spending it rationally. This means, perhaps, not paying for every drug that the FDA approves even when it is not better than an existing, cheaper drug. This means not doing fantastically expensive interventions on people whose quality and duration of life will be marginally affected. It does mean placing people in the settings in which they can get the most appropriate, cost-effective care, whether at home with or without home health, in a skilled nursing facility, in a long-term care facility or in an acute care hospital. It does not mean requiring that someone who would benefit from a stay in an SNF first have to “qualify” by being in an acute care hospital overnight.

My local paper recently had a big front-page article about the fantastic new technology being employed at our hospital using GPS to map the location on the heart where an abnormal rhythm is being generated, so that it might be able to be fixed. Congratulations to the cardiologists and engineers who have developed this, and to the PR department that got it in the paper. It might be a big help for a few people, and will almost certainly be very costly (and profitable for the hospital). But as we develop all these expensive new technologies that might help a few people a lot and might help a few more a little, it is insane if we save money by not providing what we already know is the right thing in prevention and intervention for the conditions that affect the many. Right now, Medicare is trying to save money by identifying “fraud”; they do this (this is absolutely true!) by contracting with bounty-hunter companies called “RAC”s to discover when a patient has been “admitted” when their condition didn’t technically qualify and they should have been on “observation” status. They should be saving money by not paying for expensive high-tech procedures which offer little benefit.

A rational health care system, as we have discussed before, means that people are getting the right care in the right setting; this is the ostensible promise of health-care integrated systems. But, just as we will never have enough primary care doctors doing prevention and early treatment as long as we pay them a fraction of what we pay those doing heroic (and often ineffective) intervention for far-advanced disease, we will not have a rational health care system if we pay for huge high-ticket items but not for people to be in the right setting for them to receive the care that they need.

Medicare can, and should take the lead. For seniors, it is our national health program. Others will follow. 

Cardiac stents and profit-driven corruption: do anti-fraud rules address the problem?

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Turns out that Baltimore may be the McAllen, Texas of cardiac stents. An article published On Monday, December 6, 2010 in the NY Times, “Doctor faces suits over cardiac stents”, by Gardiner Harris, describes the case of Dr. Mark Midei of Baltimore, who is now the target of a Senate Finance Committee investigation following a series of articles in the Baltimore Sun alleging that he put cardiac stents in many people who did not need them. Dr. Midei apparently put in as many as 30 stents per day, 1200 stents per year, in his hospital – numbers that matched hospitals 4 and 5 time as large in the northeast, and the Senate report indicates at least 585 were medically unnecessary, for which he charged Medicare $6.6M and was paid $3.8M. While the hospital, St. Joseph, is also being sued, apparently it and Dr. Midei are accusing each other of being at fault, and of trying to destroy each others’ reputations. Meanwhile, Abbott Laboratories, which manufactures the devices, is lavishing millions of dollars in favors upon Dr. Midei, a small portion of the enormous revenue he has generated for them. The report says that “The serious allegations lodged against Dr. Midei regarding the medically unnecessary implantation of cardiac stents did not appear to deter Abbott’s interest in assisting him.”

There is a lot more to say about this particular case, including a great quote: “After one particularly critical story in The Baltimore Sun, David C. Pacitti, an Abbott executive, wrote in an e-mail, ‘Someone needs to take this writer out and kick his ass.’”, but it would be a mistake to focus too much on this one; there are a lot more corrupt doctors, hospitals, and drug and device manufacturers (Abbott is both) out there.

First, the evidence. While the Times article cites “A landmark 2007 study published in The New England Journal of Medicine showed that many patients given stents would fare just as well without them,” they don’t indicate the article they are referring to (no author or reference given; the link is not to the article), but presumably it is the Swedish study by Lagerkvist, et. al, that showed increased recurrent MI (heart attack) and death with the use of drug-eluting stents compared to bare metal stents.[1] However, there are several articles in the March 8, 2007 issue of NEJM that address the safety of drug-eluting stents (i.e., stents impregnated with a drug to keep them from getting re-clotted, which as a group do not provide a consistent picture. Spaulding, et. al., from Paris, found that there was no difference in outcomes from patients with stents with the drug sirolimus compared to bare metal[2], while Stone and colleagues from Columbia found that drug-eluting stents with both sirolimus and paclitaxel had greater rates of re-thrombosis (though not heart attack or death) than bare metal.[3] Meanwhile, Kastrati and colleagues from Germany, reviewing 14 studies of sirolimus-eluting stents, also found no increase or decrease in heart attack or death, but less need for re-intervention, although at least as much re-thrombosis (clotting) as bare metal stents.[4] There are also two editorials; Farb and Boam, the official one from FDA[5] conclude “The safety and effectiveness of drug-eluting stents as compared with those of alternative treatments deserve continued study.”, while Maisel, head of an FDA committee that reviews these devices, writes “Drug-eluting stents represent an important advance in the management of coronary artery disease and have benefited many patients.“[6]

None of these articles compared stents to no stents, and there is no question that that many, many patients with coronary artery disease benefit greatly from them, getting relief of symptoms without having their chests cut open for surgery (coronary artery bypass grafting, or CABG, pronounced “cabbage”. Cute, huh?). Drug-eluting stents now require the patient take an anti-coagulant, and so the complex decision of whether they are better than bare-metal must be made for an individual patient, based on a variety of patient, stent, and anti-coagulation-risk characteristics. It is also worth noting that either stents or CABG only bypass (or stent open) already-narrowed areas in the coronary arteries. Therefore the risk of recurrent heart attack (MI) and associated death is not only from re-stenosis but the rupture of a cholesterol-laden plaque that might not previously been causing significant obstruction. These are the “sudden” MIs, which account for a larger number of heart attacks than those that come after increasing, gradual narrowing of a coronary artery (and the associated increasing chest pain, called angina pectoris).

Probably even more important are the complex interplay of financial rewards and government regulation that impact on the use of these and other devices, as well as all kinds of other treatments and interventions. There can be no justification for the obviously excessive stent placement by Dr. Midei, or the encouragement of it by Abbott and probably the hospital; as the Times article notes ”… far from questioning cardiologists who perform an unusually high number of stent procedures, many hospital executives celebrate these doctors because of the revenue they bring, which can be more than $10,000 per procedure.” In this context, the reported statement of Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, that “Hospital patients expect their care to be based on medical need, not profits…Even more disconcerting is that this could be a sign of a larger national trend of wasteful medical device use,” sounds heroic, but is it?

The hospitals have a point too, in their criticism of government regulation. Not all of the investigations by HHS, Medicare, and other government agencies are really meant to uncover such gross overuse or fraud, although this is how they are portrayed. Many of them are just about getting money for the Federal government as aggressively as possible, and if it can be called “fraud” as opposed to a “mistake” they can get huge penalties as well as refunds of Medicare money spent. A major Medicare initiative is Recovery Audit Contractors (RACs), essentially bounty hunters given a license to investigate certain hospitals for fraud. Great, except most of their work seems to be on finding whether patients were (and this is going to seem like a technical subtlety) officially “admitted” to the hospital, when the severity of their illness could have allowed them to be placed in the hospital for a day or more on “observation” status, where they are officially outpatients and reimbursed at a lower rate. If a hospital or doctor were systematically admitting people who should obviously be “observed”, this might be real fraud, what are probably honest minor errors (or differences of opinion) in the assessment of patient condition are blown up so that the RAC (and Medicare) can recover big penalties. Far from trying to systematically defraud Medicare, my hospital, the University of Kansas Hospital (which is very happy with its high cardiac-care rating by US News and is truly one of those hospitals that enjoy the large amounts of money interventional cardiology procedures provide) is spending a bunch of money to have each admission audited by an outside firm to ensure that they don’t violate these criteria and make themselves vulnerable to RAC recoveries.

So who is the “white hat”? Certainly not the drug and device makers, who are really “only in it for the money”, often not the hospitals, and sadly not always (although, honestly, most of the time) the doctors. But also not the government, seeking money to fund its wars in a down economy. Senator Baucus, famous for taking huge amounts from drug companies himself, may not be the one whom we should be trusting, but his statement that “Hospital patients [and, I would add, all patients!] expect their care to be based on medical need, not profits” is certainly a sentiment that I would endorse. Of course, the making of these profits is why the drug companies paid him. Some suspect that this might be partly why his committee, and the Congress overall, and the administration, did not pass a health reform bill that would achieve that result. Fraud is bad, and uncovering fraud is good, but RACs are not an answer to a flawed, profit-driven, health system.

[1] Lagerqvist B, James SK, Stenestrand U, Lindbäck J, Nilsson T, Wallentin L; SCAAR Study Group., Long-term outcomes with drug-eluting stents versus bare-metal stents in Sweden., N Engl J Med. 2007 Mar 8;356(10):1009-19. Epub 2007 Feb 12.
[2]Spaulding C, Daemen J, Boersma E, Cutlip DE, Serruys PW., A pooled analysis of data comparing sirolimus-eluting stents with bare-metal stents., N Engl J Med. 2007 Mar 8;356(10):989-97. Epub 2007 Feb 12.
[3] Stone GW, et al., Safety and efficacy of sirolimus- and paclitaxel-eluting coronary stents, N Engl J Med. 2007 Mar 8;356(10):998-1008. Epub 2007 Feb 12.
[4] Kastrati A, et. al., Analysis of 14 trials comparing sirolimus-eluting stents with bare-metal stents, N Engl J Med. 2007 Mar 8;356(10):1030-9. Epub 2007 Feb 12.
[5] Farb A, Boam AB., Stent thrombosis redux--the FDA perspective.,N Engl J Med. 2007 Mar 8;356(10):984-7. Epub 2007 Feb 12.
[6] Maisel WH., Unanswered questions--drug-eluting stents and the risk of late thrombosis, N Engl J Med. 2007 Mar 8;356(10):981-4. Epub 2007 Feb 12.