Blow Up Medicare and Start From Scratch

Medicare is so horribly screwed up, so out of control, that the best thing to do might well be to blow it up and start again from scratch. Honestly, I don't know if that's possible. But it sure is necessary.

The following is based on a report issued August 9 by the Office of Inspector General, Department of Health and Human Services, on "Prevalence and Qualifications of Nonphysicians Who Performed Medicare Physician Services." [OEI-09-06-00430] Sounds dry, I know. But stick with me for just another paragraph. Get this:

The study examined services provided by physicians "for days that Medicare allows more than 24 hours of services billed by a single physician." Now, that's not even the news. But read that again: Medicare allows a physician to bill for more than 24 hours of services in a single day.

So we start with the premise that it's legal, that it's acceptable, that it's within regulatory bounds for a single physician to bill for more than 24 hours of service in a day.

Now, Medicare Part B pays for services that are billed by physicians but are performed by nonphysicians. These services are often called "incident to" services. The HHS OIG report dryly notes: "'Incident to' services may be vulnerable to overutilization and may put beneficiaries at risk of receiving services that do not meet professionally recognized standards of care." You think? And maybe it puts the taxpayer at risk, too?

And here we start getting to the root of the problem. The report found that "When Medicare allowed physicians more than 24 hours of services in a day, half of the services were not performed personally by a physician." The report elaborates:

Physicians who were allowed services that exceeded 24 hours of physician worktime in a day personally performed approximately half of these services. Nonphysicians performed the remaining services, which physicians may have billed as "incident to" services.

The numbers, from the study's sample of 202 physicians for a 3-month period in 2007, found that "Medicare allowed $105 million for approximately 934,000 services that physicians personally performed and approximately $85 million for approximately 990,000 services that nonphysicians personally performed."

But, OK. At least, maybe, the services were performed by qualified non-physicians? Uh uh. No way. Again from the report:

Unqualified nonphysicians performed 21 percent of the services that physicians did not perform personally. In the first 3 months of 2007, Medicare allowed $12.6 million for approximately 210,000 services performed by unqualified physicians. These nonqualified physicians did not possess the necessary licenses or certifications, had no verifiable credentials, or lacked the training to perform the services. Nonphysicians with inappropriate qualifications performed 7 percent of the invasive services that physicians did not perform. [emphasis added]

So: Medicare allows physicians to personally bill for more than 24 hours of services in a day. It allows for billing by nonphysicians. And this study found that 21% of those services were performed by unqualified nonphysicians.

Out of curiosity, you might be wondering what sort of services these nonqualified nonphysicians were performing that the physicians then billed to Medicare.

Let's take "Invasive Procedures." Nonphysicians performed 62% of all invasive procedures: 96% of routine venipunctures, 73% of non-oral drug administration and chemotherapy, and 12% of surgical procedures. And how many of these were performed by nonqualified non-physicians? Fifteen percent were performed by nonphysicians with "no formal medical training" (which includes both on-the-job training and no relevant qualifications).

Let's take "Noninvasive Procedures." Nonphysicians performed 46% of all noninvasive procedures. Examples: Nonphysicians performed 81% of physical and occupational therapy evaluations, 46% of opthalmological diagnostic imaging and eye photography, and 48% of noninvasive cardiovascular services. And how many of these were performed by nonqualified non-physicians? Opthamology: 37% Rehabilitation therapy: 49%. Cardiovascular: 15%.

And I know I'm overwhelming you with facts and figures. But here's something interesting. Remember that this survey sampling looked at physicians who personally billed more than 24 hours of services in a day (which is permissible by Medicare). Still, what did they bill? 25 hours? 30 hours? No way. The average (the mean) billed by these 202 physicians was 37 hours. One billed 157 hours.

And how much did they bill for? The average amount billed by these 202 physicians was $9,816. The maximum billed was $45,055.

So let's recap:

• Physicians are allowed to bill for more than 24 hours of services performed in a day. Many do.
• Many of these services are performed by non-physicians.
• Over 20% of these services are performed by nonqualified non-physicians.

And a footnote: The number probably really is a lot higher. The OIG sample started off with 221 physicians. Four of those 221 were already part of an active OIG investigation, so they were removed from the sample. Another 15 physicians didn't respond to the OIG's request for information. (Hmmm. Wonder why?) So a full 10% either already were in trouble or may have felt hesitant about supplying the information.

You can find the report at http://oig.hhs.gov/oei/reports/oei-09-06-00430.pdf