Medicare spending data helpful, but keeping it secret was wrong
During the health care reform debate, it was often said that Medicare was more cost-efficient than private health insurance companies. Most studies do put Medicare administrative costs at 2 percent compared with 10 percent or more for private health insurance companies.
It's true that the multimillion dollar salaries paid to top health insurance company officials and the hundreds of millions spent on marketing can seem wasteful.
But with the early April release of Medicare spending data, it looks like Medicare should spend more on administration — at least when it comes to catching questionable payments.
The release of Medicare payment data, for 2012 only, was made possible by a Freedom of Information Act lawsuit by the Wall Street Journal. The data revealed many questionable payments, some hinting at fraud, others at doctors gaming the system.
Taxpayers, including Medicare beneficiaries, should ask why the federal government fought to keep Medicare spending data secret for three decades.
Keeping Medicare spending secret most likely made it easier for fraudulent schemes to continue because scrutiny by the media and others of outlier doctors' practices was not possible.
The Medicare data report, which looked at just 2012 payments to doctors, made headlines with reports that one Florida ophthalmologist was paid $20.8 million by Medicare in that year alone.
The Government Accountability Office estimates $48 billion a year in Medicare payments are wasted due to fraud or improper billings.
The Medicare data is now being examined by journalists and others. Earlier this week, the New York Times profiled a modest physical therapy office in Brooklyn that received $4.1 million in Medicare payments in 2012. The newspaper reported that physical therapy has become a “Medicare gold mine,” accounting for $1.8 billion in annual billings.
The Times found that the Medicare payment data revealed this one small office treated 1,950 Medicare patients, providing 183,000 treatments a year, which works out to 500 a day or 21 an hour. Clearly, this raises questions. Why didn't someone at Medicare raise these questions before? For how many years have these questionable, if not fraudulent, Medicare billings been going on?
It's hard to say, because Medicare, with lobbying by the American Medical Association, kept the spending data secret.
The MSN.com website reported that doctors who have lost their medical licenses in one state are getting millions in Medicare dollars after moving to another state. Would we be learning about this without public release of Medicare spending data? Probably not.
Granted, Medicare is a highly complex program dealing with 880,000 doctors. And it's also true that law enforcement efforts cracking down on Medicare fraud have had some successes. But keeping the spending data secret for decades provided a cover of darkness for those doctors committing fraud or otherwise scamming the system by charging for more procedures than they could possibly perform or that they never performed.
The Kaiser Family Foundation, which studies health care issues, suggests that substantial Medicare savings could have found if this sort of spending data to doctors had been available earlier, particularly in the 2000s. Seeing questionable trends or payments, Medicare officials might have changed policies or increased fraud investigations.
To a certain degree, the Medicare spending problem is seen in most areas of government; they are spending OPM — other people's money. The incentives to crack down on fraud and waste is not the same as if the same people were monitoring how their own money was being spent, like people in private companies do because they have to earn the money rather than just have it flow in every year through taxes.
Medicare spending, like all government spending, should be transparent. This release of 2012 spending data was a good first step, even if decades overdue.
