On January 17, 2014, the Centers for Medicare & Medicaid Services (CMS) announced a reversal of long-standing agency policy, and will begin to release Medicare billing data of physicians in response to Freedom of Information Act (FOIA) requests, on a case-by-case basis.  The policy will take effect on March 18, 2014.  Under this policy, researchers – and data miners of all sorts – may gain access to previously unavailable information on physician coding and billing patterns.

Background

Thirty five years ago, the Florida Medical Association and six individual physicians brought a successful class action suit against the Department of Health, Education and Welfare (now the Department of Health and Human Services) to enjoin the release of information regarding the amount of Medicare reimbursement received by physicians.  Florida Medical Association, Inc., et al. v. U.S. Department of Health, Education and Welfare, et al. (M.D. Fla. 1979).  The district court reasoned that the release of such information would violate physicians’ statutory and constitutional rights to privacy, and issued a permanent injunction barring the Department of Health, Education and Welfare from disclosing physician-payment data in a manner that could individually identify those physicians.  Following the district court’s finding of a compelling privacy interest on the part of the physicians, the Department adopted a policy that it would not disclose physician Medicare payment information in response to FOIA requests. 

Over the past few years, media outlets – most notably The Wall Street Journal – began to press for the release of physician Medicare reimbursement data.  In 2010 and 2011, CMS released to The Wall Street Journal, a data set that contained 5 percent of Medicare physicians’ claims, but under the condition (as part of a legal settlement) that the newspaper could not reveal specific physician names.  The Wall Street Journal used the data to publish a series of articles on alleged fraud and abuse by physicians.

Dow Jones & Co., the owner of The Wall Street Journal, then filed suit to overturn the permanent injunction issued in Florida Medical Association.  The Department of Justice reversed its previous legal position and sided with Dow Jones.  On May 31, 2013, the Middle District of Florida dissolved the 1979 permanent injunction, ruling that physicians’ privacy concerns no longer outweighed the public interest in gaining access to the data. 

After seeking comments, CMS announced its new position on January 17.  The new policy will take effect on March 18, 2014.

Takeaways

Under the new policy, the CMS will decide how to respond to FOIA requests on a case-by-case basis, in light of Exemption 6 of the FOIA.  Exemption 6 protects from disclosure under FOIA “personnel, medical, or similar file[s]” whose release “would constitute a clearly unwarranted invasion of personal privacy.”  5 U.S.C. § 552(b)(6).  Although it remains to be seen how CMS will implement its new policy, physician practices should be prepared for the possibility that their coding, billing and reimbursement patterns will become the subject of public scrutiny.