The U.S. Department of Health and Human Services (HHS) announced on April 9th  a “historic” release of Medicare payment data to provide consumers with “unprecedented transparency on the medical services physicians provide and how much they are paid.”  The Centers for Medicare and Medicaid Services (CMS) declared its intent to make such data available in an April 2nd letter to the American Medical Association.  CMS stated on its blog that “[p]roviding consumers with this information will help them make more informed choices about the care they receive.”  The new data set covers more than 880,000 health care providers in all 50 states, the District of Columbia, and Puerto Rico, who collectively received $77 billion in Medicare payments in 2012 under the Medicare Part B Fee-For-Service program.

The data set includes information on the provision of services by physicians and how much they are paid for those services and is organized by provider (National Provider Identifier or NPI), type of service (Healthcare Common Procedure Coding System, or HCPCS, code), and place of service (either facility or non-facility). The data set also includes the number of services, average submitted charges, average allowed amount, average Medicare payment, and the number of unique beneficiaries treated.

To protect the privacy of Medicare beneficiaries, any aggregated records which are derived from 10 or fewer Medicare beneficiaries are excluded from the data set.

This release of Medicare physician payment data is not surprising.  In May 2013, a federal judge overturned an injunction that had been in place since the late 1970s prohibiting HHS from disclosing information about Medicare payments to individual physicians. The injunction was initially issued at the request of the Florida Medical Association, which argued that release of information on what Medicare paid the physicians constituted an unwarranted invasion of personal privacy, reasoning the judge found “no longer equitable” when vacating the injunction.

After the injunction was vacated, and as we reported in June 2013, CMS began publicly releasing Medicare claims processing data, including hospital charge data for specified outpatient and inpatient treatments.  CMS promised at the time that additional health care data would be forthcoming.

In January 2014, CMS announced that it would release Medicare expenditure data on specific physicians under the Freedom of Information Act (FOIA).  As we wrote at the time, the policy permits disclosure of individual physician payment information under FOIA Exemption 6 and was seen as a small step toward transparency.

In HHS’s announcement about the Medicare data set release, CMS Administrator Marilyn Tavenner stated: “Data transparency is a key aspect of transformation of the health care delivery system….While there’s more work ahead, this data release will help beneficiaries and consumers better understand how care is delivered through the Medicare program.”

The data release was covered by most major U.S. newspapers, most of which focused on identifying the highest compensated Medicare providers identified in the data.  In addition, the Washington Post reported Medicare officials’ hope that “the data will expose fraud, inform consumers and lead to improvements in care.”

The American Medical Association and other physician groups have long opposed the release of the data due to concerns that inaccuracies or misinterpretation of the data might unfairly affect physicians.

CMS cautioned on its website that the data may not be representative of a physician’s entire practice, as it only includes information on Medicare fee-for-service beneficiaries. CMS also stated that the data is not intended to indicate the quality of care provided and is not risk-adjusted to account for differences in underlying severity of disease of patient populations.

The data will be used in a variety of ways.  It is already apparent that this data set alone can provide powerful information that will be useful to journalists and researchers to spot outlier payments.  Some classes of physicians, like ophthalmologists who use expensive drugs, are already on the defensive.  More important in our view is the potential ability to link this data set with other sources that can look at broader patterns.  As just one example, starting later this fall, CMS will start publishing payment information under the Sunshine Act whereby the public will get to view the varying financial arrangements between pharmaceutical and medical device manufacturers and physicians.  Surely, the combination of these two data sets will provide even more powerful information.  As a result, pharmaceutical and medical device companies may wish to start looking at this payment data set now to see if there are significant financial arrangements they have with physicians who may be viewed as receiving very large Medicare payments.

Other potential users will likely be whistleblowers looking to supplement qui tam false claims filings with evidence that targeted health care providers actually submitted Medicare claims for payment, or that such providers receive very large Medicare payments for specific procedure codes.  For many years, prosecutors have already used this data in such a manner.  But it may not be a boon for individuals looking to mine the data for potential qui tams. Since the data is publicly available, providers may be able to argue in some situations that whistleblowers are not the original source of allegations gleaned from the CMS data, especially if they overly rely on payment data as the real proof fraud has been committed.

The physician Medicare payment data set is available here.