Physician Compensation: How Medicare Reporting May Create Risk

April 22, 2014

Physicians are now potential targets for fraud and abuse inquiries. Here are a few simple things your practice can do to protect itself from unwanted litigation.

For years, compensation issues have been a key concern for many doctors I work with nationally, as compensation rates have steadily declined. Today I will discuss what doctors in various specialties are actually making, how some of that is being reported by Medicare under the Affordable Care Act and how some attorneys may be responding and targeting you to churn business for themselves.

Who's making what?*

•Male physicians still make more than their female counterparts; on average earning over fifty thousand dollars more in 2013.

•The top five earning specialties are, in descending order: orthopedics, cardiology, urology, gastroenterology, and radiology with average incomes ranging from $340,000 to over $410,000.

•Those who perform procedures continue to earn more than those who manage chronic illness and compensation has not changed much. On average nephrologists had the largest decrease at about 8 percent and most other specialties were down only slightly, even, or up slightly. Rheumatologists had a good year, and were a conspicuous flyer, up an average of 15 percent in overall compensation.

• Forty-six percent of you spend less than 40 hours a week seeing patients and the majority of you report spending 13 minutes to 20 minutes with each patient overall.

Your numbers are now public

 CMS recently released detailed data on what every doctor, nurse practitioner, and all other providers billed Medicare in 2012. This data on your practice is available to any member of the general public. According to a recent story by MedPage Today's David Pittman, the CMS report provides detail, "by name, address, national provider identifier, specialty, number of Medicare patients, number of services billed, submitted charges, and - most importantly for the voyeurs - the total Medicare payment." These numbers were released wholesale over the protests of the AMA that actually considered, but failed to file, a lawsuit to stop their publication.

Following the release the press jumped onboard and sensationalized some of this data that lacked context and detail, that would most certainly help shape the public's understanding of what the numbers actually mean - with many stories actually implying if not making outright accusations that highly compensated advisers were doing something wrong or fraudulent. The 4,000 plus doctors that billed over the magic dollar limit of $1 million to Medicare are now especially high profile regardless of any actual wrongdoing, charges, or due process.

Cue the damn lawyers

As soon as the data became public a specialized group of attorneys began mining the data looking for indications of fraud and overbilling. While I certainly support measures that identify and prosecute fraudulent billing I feel that using this data as some sort of "smoking gun" on its own simply penalizes and stigmatizes doctors and practices for their success, and in some cases for being good at systematizing their practices and being more efficient than some of their competitors. This sentiment is echoed by the AMA. President Ardis Dee Hoven as quoted in a recent Reuters' article  on the legal ramifications said, "Releasing the data without context will likely lead to inaccuracies, misinterpretations, false conclusions and other unintended consequences." Some lawyers who were interviewed felt that the data would produce leads and evidence on cases they were already pursuing against doctors. Perhaps more frightening for the thousands of honest doctors out there, others felt that the data may also provide leads for new cases based on certain (subjective) "red flags."

Why are the lawyers e-mailing this data to each other with great glee and excitement? Because whistleblowers may receive up to 30 percent of any government recovery, and nearly half of that reward typically goes to the whistleblower's lawyer.

Basic steps for staying out of harm's way

•Don't commit fraud or engage in aggressive billing at rates above the local averages and published scales.

•Have your billing and coding practices reviewed and pay for an audit of your own practice; it's better you find any innocent mistakes on your own and report and correct them.

•Make sure all your employees have required certifications to bill as you do, and make sure your drug treatment and compliance policies have been updated.

•Get RAC Audit insurance in place in case of any innocent mistake, controversy, or false claim; we've seen many retaliatory complaints falsely filed by employees over the years with devastating costs and results.

*Source, Medscape Physician Compensation Report 2014, over 24,000 physicians in 26 specialties surveyed nationally.