Medicare is a $500 billion program that's been identified for years as high-risk by the Government Accountability Office for its susceptibility to improper payments—everything from mistaken billing to overpayments to dubious upcoding to outright large-scale fraud. And yet since the program's inception, the public, including most medical policy researchers, has never had anything like complete access to its payment data.
That changed yesterday, when Medicare released a trove of data on its 2012 payments to physicians for anyone, or at least anyone with enough computing horsepower, to see. The single-year data set is anonymized to protect patient information, and certain rare procedures—those performed on fewer than 11 patients—don't show up. It's not for everyone. The set is big enough that it's not easy to work with on a typical desktop computer; but for researchers, policymakers, and journalists who can arrange for database storage and access, it's a pretty big deal.
It's going to take a while to fully process all this information, but a couple things stand out already from the stories that have been written so far. One is the sheer scale of the payments involved. The data set doesn't cover anywhere close to the entire Medicare program, but it offers a look at $77 billion worth of payments to 880,000 medical professionals in the year 2012. From that group, The Washington Post notes, about 4,000 physicians billed the program more than $1 million. And a handful billed in excess of $10 million.
It won't surprise many people that the highest billers are concentrated in the sunny state of Florida. The state has a heavy concentration of seniors. It's also a haven for Medicare fraud. And the data suggests a possible correlation between unusually high billing and payment funny business. According to The Post, "three of the top 10 earners already had drawn scrutiny from the federal government, and one of them is awaiting trial on federal fraud charges."
But bad billing, including fraud, isn't just a matter of a few folks at the top. The program is rife with bad payment. In fiscal year 2012, the fee for service portion of Medicare made $29.6 billion in improper payments—meaning that about 8.5 percent of all payments made were problematic somehow. And that was a pretty good year, relatively speaking, the product of a decline from 10.8 percent in 2009. The improper payment rate shot back up to 10.1 percent in 2013.
The point is Medicare blows tens of billions of dollars on bad payments every year, some of which is a result of administrative ineptitude, and some of which is just people scamming the system. But until now, most people have never really had an idea of what the overall picture of that payment system looks like. This isn't all the information we might want—it would be great, for example, to have more years available so we could see how payment trends change over time. But it's a good start.