Medicare database offers window into doctor fraud and abuse

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Somewhere in the New York City area there is a family-practice doctor who, government records suggest, pocketed more than $2 million in 2008 from Medicare, the federal insurance program for the elderly.

That made her one of the best-paid family-medicine physicians in the Medicare system. But more noteworthy than the sum is her pattern of billing, which strongly suggests abuse or even outright fraud, according to experts who have examined her records.

This doctor didn’t do typical family medicine. Instead, she administered a wide array of sophisticated tests, including polysomnography sleep analyses, nerve conduction probes and needle electromyography procedures—some of which have been flagged by federal antifraud authorities for special scrutiny. As a doctor of osteopathy, she has certifications for family practice and a hands-on treatment called “manipulative therapy,” but none in neurology. She denies wrongdoing.

The Wall Street Journal is prohibited from naming this physician despite the fact that the paper detected her by mining a database paid for by taxpayers. Known as the Medicare claims database, it is a computerized record of the bills Medicare pays for medical treatment, and it is widely considered the single best source of information on the U.S. health-care system.

Other major insurance pools—including Medicaid, the government program for poor Americans, and individual private plans—provide insight into small slices of the American populace. Medicare, by contrast, insures virtually all Americans 65 and older—a population that consumes roughly a third of all of medical spending.

Federal investigators use the database to find fraud; academic researchers mine it to compare the cost and utilization of various services; and consultants make a business out of analyzing the data for a wide variety of health-care companies. In ways large and small, it offers an unparalleled look at why America’s health-care costs are spiraling.

The Journal focused on one family-practice doctor with extremely high billing and found she had performed in 2008 an unusual array of 29 sophisticated diagnostic tests. Some of these have been flagged by federal authorities as being frequently abused. The numbers here are derived from a 5% sample of Medicare beneficiaries.

For instance, a background check of the 25 other doctors in the nation who performed more than 20 of the same sophisticated tests as the New York-area physician shows that six have links to alleged fraud or have run into professional trouble. Two were charged this year with Medicare fraud, and two others worked in the same company as the defendants. Another has been sued by an insurance company for billing fraud. And a sixth has been disciplined by a state medical board three times since 2008 for misconduct. All denied wrongdoing or declined to answer questions.

But the Medicare data come with a severe limitation: While the services and earnings of hospitals and other institutional providers can be publicly identified, such information is kept strictly confidential for doctors and other individual providers. The reason is that the American Medical Association, the doctors’ trade group, successfully sued the government more than three decades ago to keep secret how much money individual physicians receive from Medicare. The AMA has continued to defend this ruling, including in two cases in which federal appeals courts issued decisions last year.

This means the American public is barred from examining in detail how Medicare spends roughly an eighth of its funds, about $62.5 billion in 2009. While that may seem like a small piece, health-care experts point out that physicians have disproportionate power to direct spending in all the other areas of the system because they admit patients into hospitals, prescribe drugs and order procedures and equipment.

The AMA stands by its position and says little would be accomplished by publishing individual physician billing information.

What’s more, the vast majority of doctors are honest and, far from getting rich off Medicare, tend to believe it pays poorly.

Full story: Medicare Database Offers Window Into Doctor Fraud and Abuse –