The biggest share of 2012 Medicare payments in Western New York went to internists, the front-line doctors for many patients, but a handful of radiation oncologists and ophthalmologists individually ranked as the most highly reimbursed doctors here.
The most common service Medicare paid for in the region was the office visit. The roughly 660,000 office visits for new and returning patients that year cost the federal health program for the elderly more than $35 million.
As a group, internists were paid $25.3 million, more than any other type of medical provider, followed by ophthalmologists and family practitioners.
The findings come from a Buffalo News analysis of federal data released Wednesday about payments to physicians and other health professionals who participate in the traditional Medicare Part B program.
The data’s release marked the first time the federal government provided such detailed information to the public.
Among the other findings:
• An ambulance company, Rural/Metro Medical Services, received $5.1 million, making it the highest-paid Medicare provider.
• Dr. Michael Duff, a Cheektowaga radiation oncologist, received $1.9 million, the most among the region’s physicians, followed by Dr. W. Sam Yi, a Williamsville radiation oncologist, $1.6 million; and Dr. Ik-Sung Kwon, a Warsaw ophthalmologist, $1.4 million.
• Hospital care, emergency room visits and an ambulance transport that required advanced life support each generated at least $5 million in Medicare payments to area providers.
The release of the Medicare physician payments is part of a trend in health care of providing more data to help consumers make informed decisions about their care.
“I believe transparency is good, as long as it’s useful to patients and that patients understand where the data’s coming from and what the data means,” said Dr. John Fudyma, chief of the division of general internal medicine in the University at Buffalo’s School of Medicine and Biomedical Sciences.
The release came over the strong objections of the American Medical Association, which cited a host of limitations with the data.
Important context is missing, such as patient demographics, and the data could contain errors, critics said.
Physicians must pay for office overhead, staff salaries and other costs, said Christine Ignaszak-Nadolny, executive director of the Medical Society of Erie County.
“They are not pocketing that money and walking away with it,” she said.
The former AMA president, however, supported the information’s release.
Caution about data
“Although this is raw claims data and lacks context, it is a good thing. It’s about having better transparency in medicine,” said Dr. Nancy H. Nielsen, a senior associate dean at UB’s medical school.
The federal Centers for Medicare & Medicaid Services released the data on more than 880,000 physicians and health care professionals, 6,000 procedures and $77 billion in overall national Medicare spending in 2012.
At least $177 million in payments reimbursed Western New York medical providers, according to The News’ analysis.
The government wants the public and researchers to examine the millions of records and look for patterns and signs of waste or fraud.
“For too long, this information was not made public. It was protected, which raised many questions what the program was spending, how it was spending, and the value provided to the programs beneficiaries,” Jonathan Blum, the centers’ principal deputy administrator, said Wednesday in a conference call with reporters.
Blum cautioned against reading too much into high payments to physicians. He said the data release doesn’t say anything about the quality of care provided.
“Folks should not jump to conclusions simply by seeing spikes in spending, but they help to define questions and to dig several levels deeper. But really the goal is for us to have more informed conversations, not just within CMS but through the broader communities,” Blum said.
Rural/Metro is top recipient
Others also cautioned the data does not include patients in the Medicare Advantage program, which covers more than half of the Medicare enrollees in the region.
Nor does it include patients with private health insurance.
The largest recipient of Medicare spending in the eight counties of Western New York in 2012 was Rural/Metro, an ambulance company.
“We’re transporting Medicare patients, and we’re the largest provider of ambulance transportation in Western New York,” said John Karolzak, a company spokesman at Rural/Metro’s Scottsdale, Ariz., headquarters.
Medicare reimbursed Rural/Metro received $5.1 million for its Western New York service, including $534 for each of 131 transports that required specialty care and $707,692 for 122,016 miles driven, a $5.80-per-mile rate.
Two other ambulance companies placed among the top recipients of Medicare dollars in the region: WCA Services Corp. of Jamestown, $2.31 million, and Twin City Ambulance Corp. of the City of Tonawanda, $1.89 million.
Duff, the doctor who received the most Medicare money in the region, did not respond to a request for comment.
Duff, a radiation oncologist with Cancer Care of Western New York, was reimbursed $1.9 million. More than half of those payments were for 3,065 sessions of intensity-modulated radiation therapy.
The treatment uses sophisticated technology to vary the levels of radiation delivered to the target area, at a cost of $337 a session.
Yi, medical director of CCS Oncology, received the second-highest amount among physicians.
There’s a good reason for the high payments in radiation oncology, Yi said. The specialty comes with costly overhead: high-tech equipment, a protective vault for the radiation therapy machines and a team to deliver the care.
‘A lot of capital investment’
In addition to physicians, the team includes medical physicists, a dosimetrist to determine exactly how to deliver the prescribed radiation dose, radiation therapists and nurses.
“There is a lot of capital investment needed to be state-of-the-art,” Yi said.
Kwon, an ophthalmologist with University Eye Specialists in Warsaw, received $1.36 million in Medicare reimbursements, ranking third among the region’s doctors.
Half of the money paid by Medicare to Kwon went toward the cost of medication to prevent macular degeneration in his elderly patients, primarily ranibizumab, known under the brand name Lucentis, said Terry Reynolds, the practice’s financial officer.
The practice paid the manufacturer $1,950 for a 0.5 milligram dose of Lucentis in November 2012, and the Medicare allowance for that amount of the drug at that time was $1,991.55, Reynolds said, allowing $41.55 to cover the doctor’s time, office costs and staff pay.
Kwon injects Lucentis directly into the patients’ eye once a month in what is a highly delicate procedure, said Paula Kelly, an administrator in Kwon’s practice, which employs 65 and has five locations.
“I know that we work hard here for our money. And so do the doctors. He works a 10-hour day, and he works hard. And, you know, he’s saving people’s sight,” Kelly said. “The drugs are sight-saving.”
Ignaszak-Nadolny, executive director of the Medical Society of Erie County, suggested physicians and providers here may generate higher Medicare bills because of the region’s demographics.
“We have a heavily elderly population,” she said.
Another reason doctors may have a high level of Medicare reimbursements is because their practices have a greater proportion of Medicare patients, relative to their private-insurer patients, and the federal data doesn’t indicate this “payer mix” for the listed providers.
UB’s Nielsen said the much of the scrutiny of the data will likely focus on the number of services or procedures doctors provide.
“The question is how much is too much?” she said. “And what was the outcome of the care, and was the service needed in the first place?”
Expensive drug therapies
Internal medicine generated the highest level of Medicare reimbursement among specialties, at $25.3 million, followed by ophthalmology at $13.3 million and family practice at $10.6 million, according to The News analysis.
Diagnostic radiology, cardiology and radiation oncology also were among the most-costly specialties.
Blum told reporters it’s not surprising ophthalmology and various forms of oncology generate the highest reimbursement levels.
“Both for ophthalmology and for cancer care, very expensive drug therapies tend to be a treatment of choice. By law, we pay for those drugs through the physician fee schedule,” Blum said. “So the reasons why you’re going to see ophthalmologists, oncologists, so high on the relative scale is due to those payments for very expensive drugs.”
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