How Medicare is Destroying Private Practice

Medicare is inducing more doctors to join large health-care systems in a manner that continues to push up costs:

Medicare, the U.S. government’s health program for the elderly and disabled, pays a hospital $400 for an echocardiogram, $180 for a cardiac stress test and more than $25 for an electrocardiogram, according to data from the American College of Cardiology. At a private physician’s office, Medicare pays $150 for an echocardiogram, about $60 for a cardiac stress test and $10 for an electrocardiogram.

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  1. Tyler says:

    This is awful.

  2. Linda Gorman says:

    Yes, the federal government loves big centralized medicine and does all it can to reward it.

  3. Arnold Banks says:

    The so called non-profit religious groups, like Catholic Charities and Jewish Foundations are making millions of dollar. They claim to be helping the poor when in reality they are stealing millions of dollars from tax payers. I hope an elected official, who really cares about our country would look into this scam.

  4. Dorothy Calabrese, M.D., says:

    Bloomberg; “If this was government’s solution to reducing health-care costs they should have their heads examined because it is probably increasing health-care costs,” Alexander said. “This is an unfortunate consequence of bad planning.”

    This is definitely NOT bad planning!

    Very powerful doctors and doctor lobbies have successfully planned out exactly how to control the marketplace,
    1. while hiding behind abuse of government & contractor sovereign immunity
    2. using HIPAA as an iron curtain to hide their abuses
    3. subverting FOIA by being non-responsive and illegally claiming privacy exceptions &
    4. ordering ridiculous #’s of patient tests & retests instead of THINKING logically and explaining diagnosis and treatment logically to patients
    5. making intentional gross misrepresentations to patients while supported by powerful specialty groups

    Top law firms are making huge fortunes positioning their physician ACOs, their hospital clients and their govt contractors so they gobble up enormous ridiculous profits from the ACA and Medicare… while annihilating solo practitioners. . . like me.

    Americans need and deserve:
    -> complete TRANSPARENCY
    -> physician DIVERSITY
    -> the TRUTH.

    Dorothy Calabrese MD
    Allergy & Immunology San Clemente, CA

  5. Bob Hertz says:

    Medicare’s fee schedule is itself a great cause of Medicare’s inflation. The fee schedule has hundreds of niches that can be manipulated for higher fees, and there is an entire industry of consultants who show hospitals and clinics how to game the system.

    But posts like this one remind me of another question I have had for several years.

    Neither the hospital’s payment nor the doctor’s payment for these heart tests is lavish. The great majority of Medicare’s payments are not lavish at all.
    So my persistent question is this — how does Medicare spend $11,000 per beneficiary, when each payment is so low?

    Imagine a patient with heart disease. He sees his doctor 5 times a year, had 3 or 4 diagnostic tests,and takes some drugs like Plavix and Lipitor.

    This is nowhere close to $11000 a year!

    To answer this, I would have to see Medicare claims data, which is largely unavailable to the public.

  6. Dorothy Calabrese MD says:

    Bob writes: “To answer this, I would have to see Medicare claims data, which is largely unavailable to the public.”

    But WHY is complete, accurate, specific “anonymized” claims data is largely unavailable in a timely way?

    It is because the Supreme Court ruled that secret bidding on government contracts is legal. The pot-of-gold at the end of the rainbow in these CMS contracts remains secret.

    In our Region IX, in 2007 National Heritage Insurance Corps NHIC lost their continuation as the Medicare contractor – denied a $700 million CMS contract. NHIC is a wholly owned subsidiary of Electronic Data Systems, Inc. a $22 billion company. NHIC lost their rebidding protest. GBA Palmetto won that $700 million contract. Now GBA Palmetto has lost renewal of that contract and filed a protest. $22 billion corporations like EDS and their “partners” are fiercely competing for these contracts among a very small number of competitors with the right “super-computer”

    CMS rewards contractors in the bidding process for RAC and other audits recoveries. Contractors and their partners are aggressively collecting 10% – 25% off-the-top of “overpayments” from hospitals, physicians and other providers. And states can reward CMS contractors for bringing jobs with a $700 million contract to their state.

    This is why John Goodman’s work is so important.

    Dorothy Calabrese, M.D.
    Allergy & Immunology, San Clemente, CA

  7. Linda Gorman says:

    Medicare does make detailed claims data available for research use in the Standard Analytic File. To access one has to file a proposal with the Research Data Assistance Center, resdac.org.

    This is the way that datasets containing information detailed enough to personally identify participants have been handled for decades.

  8. Dorothy Calabrese MD says:

    This point is very well-taken, Linda. I thank you. However, resdac states the data you receive is based on several factors you need to provide in advance plus cash to buy the results, including:
    >> # of quarters/years
    >> file types
    >> cohort size
    >> cohort customization criteria
    >> reusing data under an existing DUA

    Unfortunately, the data itself is likely not complete and when released goes through a panoply of computer filters at the sole discretion of resdac. You are forced to “guess” relevant parameters while blind to the raw data. It will not meet data criteria that I need because it is designed with a different purpose. If the information was available to the general public then there would be no need for secret CMS contract bids. The balancing of interests by SCOTUS, can be pierced by Senate /House subcommittees. . .but not the American public. The information is held closely by major CMS and contractor players who have the CMS “little-black-book” They then push the public-private revolving door and launch multi-million dollar top executive careers with companies [such as Foley Hoag LLP in the case of NHIC] and K street law firms, where the information is essentially resold to their high-end clients to selectively suck the air out of Medicare.

    Dorothy Calabrese, M.D.
    Allergy & Immunology, San Clemente, CA

  9. Bob Hertz says:

    I am probably being naive, but why would it matter to CMS or a claims vendor if, for example, the general public could find out how much Medicare paid on 25,000 heart transplant cases? (with patient names deleted of course)

    I can understand why some hospitals would not want the public to know how much they received……..
    but claims vendors? I thought they were paid on the sheer number of claims, not the total payments.

    I would think that the HCFA has to make detailed reports to Congress. I just cannot find any of them.

  10. Dorothy Calabrese, M.D., says:

    This is a wonderful point – because except for the ton of bogus contractor RAC audit “overpayment” monetary recovery rewards – that SHOULD be true.

    So why can’t Bob, me and all Americans simply see anonymized data? Because this data has enormous value to be privately “exchanged” to insiders as quid pro quos. Transparency takes away the powerful insider advantage.

    Our lobbyists last week at our annual meetings boasted in closed sessions, they won getting reimbursement for observation of oral food challenges inside doctors’ offices even when there is no history of severe reaction. Those CPT codes and “services” will be now be bilked to the hilt because that was how it was promoted. Reimbursement for this was never necessary in the past decades because if a patient did an in-office OFC and had an adverse response, you billed for treatment of the allergic reaction. It is uncontested that patients do not NEED this reimbursement – but our lobby had to perform and this was the best they could do in 2012 – an outrage. This “service” was created only as “booty” to bring back to our membership.

    But when it came to protecting very sick outliers, our lobbies refused meaningful help because it benefits so few. . . the ones the majority physicians won’t care for.

    If you really have a reason to believe eating an egg will lead to an emergency, you can hard boil eggs, go sit in your local medical center and eat your eggs for free. You could even bring your own epinephrine – epipen – or other rescue med.

    If claims data were anonymized – which is easy to do given the huge capability of the contractor’s supercomputers [such that there are only a handful of these supercomputers they're so powerful] – the American public could see this new coding and track it. The abuses would be exposed quickly. We’d then be able to ask, which contractor director wrote a coverage determination allowing this medically unnecessary billing or who in CMS Baltimore created it or who in the AMA added the CPT code. Individual accountability is necessary.

    A simple example is in the public record: Dr Bruce Quinn MD, PhD, MBA was the National Heritage Insurance Corps Medical Director, an Electronic Data System Inc employee. He lectured to closed sessions of National Venture Capital Association billionaire members. It is uncontested that he volunteered to write them Local Coverage Determinations so they could send all their lab samples to California so as to get reimbursement under the coding he would establish for them – so they avoided millions of dollars associated with them having to do a National Coverage Determination. Contractors can set reimbursement rates for this and wink and nod on all their “special friend” claims as they roll through. These closed sessions were for Foley Hoag LLP clients only. . . .

    and at the same time Dr Bruce Quinn wrote retroactive Local Coverage Determinations, excluding outlier Medicare seniors and disabled from their longstanding life-saving custom immunotherapy approved and regulated as medically necessary by the Medical Board of California for these patients. . . who suffer terribly deprived of their rightful benefits.

    And surprise. . . Dr Bruce Quinn then moved on with his Medicare insider little-black-book and quid pro quos, to become a Medicare specialist top executive at Foley Hoag LLP.

    HHS refuses transparency not because of patient privacy or its potential impact on contractor secret rebidding – but because it will expose rampant crony capitalism. This does not happen like this in other non-security federal agencies because they have PUBLIC hearings open to all Americans.

    Dorothy Calabrese MD
    Allergy & Immunology San Clemente, CA

  11. seyyed says:

    interesting. this may also be why private physicians are beginning to opt out of Medicare.

  12. Devon Herrick says:

    I believe there are a couple factors at work. Increasingly, doctors aren’t willing to work 70 hours a week as a sole proprietor. In the days back when most doctors were men, and most affluent wives did not work, male doctors often worked long hours to maximize family income. Now that half of new doctors are women, both male and female doctors are balking at the notion they should see patients 12 hours a day, while being on call evenings and weekends. Many doctors welcome the chance to let someone else manage the firm while they see patients and get paid well for it. Hospital may be willing to buy practices because of the opportunity to bill Medicare at higher rates, but Medicare should not put up with this tactic. .

  13. Arnold Banks says:

    Devon Herrick says:

    November 26, 2012 at 9:16 am

    “I believe there are a couple factors at work. Increasingly, doctors aren’t willing to work 70 hours a week as a sole proprietor”

    While health care cost has risen exponentially, doctors income have steadily decreased. Our profession has been inundated by non-medical profiteers. Some of the worst are lawyers, insurance CEO’s, over-priced medical equipment manufacturers, social workers, career politicians, government regulations, (along with their ubiquitous bureaucracy) and electronic medical record equipment suppliers. Doctors are struggling to survive while outsiders prey on the profession. Working for a medical degree is tougher than ever, however, the rewards for practicing medicine are going to someone else. For the most part, the autonomy to diagnose and treat patients is out of doctors hand. Currently there is a high level of burnout and negativity amongst practicing physicians. We can’t wait to retire or find something else to do.

  14. Dorothy Calabrese MD says:

    Arnold is spot on: “For the most part, the autonomy to diagnose and treat patients is out of doctors hands”

    It reminds me of the famous switch line in the 1982 David Mamet “The Verdict.” The nurse Kaitlin Costello, who was forced out of a Catholic hospital in a patient care cover-up, testifies to the court as to why she kept a copy of the inculpatory patient admittance form:

    “After the operation, when that poor girl she went into a coma, Dr. Towler called me in. He told me that he’d had five difficult deliveries in a row and he was tired… and he never looked at the admittance form. And he told me to change the form. He told me to change the ‘1’ to a ‘9’… or else… or else he said, he said he’d fire me. He said I’d never work again. Who were these men? Who were these men? I wanted to be a nurse!”

    Dorothy Calabrese, M.D.
    Allergy & Immunology San Clemente, CA