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Doctors abusing Medicare could face fines

WASHINGTON – The Obama administration is cracking down on doctors who repeatedly overcharge Medicare patients, and for the first time in more than 30 years the government may disclose how much is paid to individual doctors treating Medicare patients.

Marilyn B. Tavenner, the administrator of the Centers for Medicare and Medicaid Services, said that “recalcitrant providers” would face civil fines and could be expelled from Medicare and other federal health programs.

In a directive that took effect Jan. 15 but received little attention, Tavenner indicated that the agency was losing patience with habitual offenders. She ordered new steps to identify and punish such doctors.

A recalcitrant provider is defined as one who is “abusing the program and not changing inappropriate behavior even after extensive education to address these behaviors.” Cases will be referred to Daniel R. Levinson, the inspector general at the Department of Health and Human Services, who has authority to impose civil fines and exclude doctors from Medicare, Medicaid and other programs.

Federal officials estimate that 10 percent of payments in the traditional fee-for-service Medicare program are improper. That would suggest at least $6 billion a year in improper payments under Medicare’s physician fee schedule. But Malcolm K. Sparrow, a Harvard professor and an expert on health care fraud, has said the losses could be greater because the official statistics “fail to accurately capture fraud rates” in Medicare.

A new section of the Medicare manual encourages the use of fines to penalize doctors who generate a pattern of claims for goods and services that they know or “should know” are not medically necessary. Providers can also be barred from Medicare if they bill the program for “excessive charges” or for services substantially in excess of patients’ needs.

In a new report, Levinson said Medicare officials and contractors should focus on doctors with the highest Medicare billings, because they often received improper payments. He said that about 300 doctors received more than $3 million each in yearly Medicare payments and that one-third of them had been singled out for special reviews because of questionable billings.

Levinson recommended that Medicare officials “establish a cumulative payment threshold” and closely examine claims filed by any doctor whose total exceeded that amount.

Tavenner, the top Medicare official, said, “High cumulative payments are not necessarily indicative of improper payments or fraud,” but she accepted the recommendation.

“Reviewing claims from providers with high cumulative payments could be a valuable screening tool,” Tavenner said, and it may be appropriate to set the threshold at different levels for doctors in different specialties.

Most of the high-billing doctors specialize in internal medicine, radiation oncology or ophthalmology, investigators said.

In a related action, the Obama administration this month scrapped a decades-long policy that broadly prohibited the release of federal data showing how much Medicare paid individual doctors each year.

The administration said it would consider releasing payment data in response to Freedom of Information Act requests. The new policy, which goes into effect March 18, says Medicare officials will, in each case, “weigh the balance between the privacy interest of individual physicians and the public interest in disclosure of such information.”

Thomas S. Crane, a lawyer who used to work at the HHS, said, “The Medicare payment data, combined with data from other sources, could be enormously useful to consumers, researchers and whistle-blowers analyzing patterns of health spending.”