Looking at the top Medicare billers in today's massive data dump, the big dollar amounts are hard to ignore. (Full data here). The top 10 doctors alone received a combined $121.4 million for Medicare Part B payments in 2012.
But not all of these doctors are pocketing millions. A clear trend emerges from the data and from interviews with these physicians: The high cost of drugs is a huge driver of the robust Medicare payouts. Indeed, slightly more than half of the Medicare payments to these 10 doctors — $61.9 million in total — went toward drugs and "other costs."
Some doctors said they were just passing through the payment to drug companies. But the Medicare payment system also incentivizes physicians to choose more expensive drugs, since they’re reimbursed for the average price of the drug plus 6 percent.
In the interviews, the doctors also said there was much more behind the numbers. Some said they were unfairly singled out even though they were billing for an entire practice. Others disputed the accuracy of Medicare data.
To be sure, there appears to be fraud going on as well. As the Washington Post reported Wednesday morning, federal investigators have scrutinized payment to three of the top 10 earners. One faces federal fraud charges.
The Post reached out to the doctors who billed Medicare Part B the most in 2012. The Post received the information Monday but was not allowed to contact the doctors until 12:01 a.m. on Wednesday. Many of their responses are below. Not every doctor in the top 10 has responded so far.
What they're saying
Reported by David S. Fallis, Sandhya Somashekhar, Lena H. Sun and Peter Whoriskey.
Michael McGinnis, a pathologist who received the third-highest payout from Medicare in 2012, said the numbers provided by CMS don’t tell the whole story. He is the medical director for PLUS Diagnostics, a New Jersey-based company. He said because the company uses his medical ID number to do all the billing, the $12.6 million in Medicare funds billed in his name actually represents the work of 26 pathologists, each of whom can complete hundreds of tests in a day. Biopsies account for much of that work, he said.
“The money doesn’t come to me,” McGinnis said. “It goes to the company. It goes to PLUS Diagnostics.”
Franklin Cockerill, a doctor for the Mayo Clinic in Rochester, Minn., is No. 4 on the list with $11.1 million in reimbursements. As the government-recognized director for Mayo Clinic Laboratories, Cockerill is routinely listed as the billing physician on more than 23 million tests a year, a Mayo spokesman explained.
"When anything is billed out to Medicare, it will have Dr. Cockerill’s name on it,” said Andy Tofilon, marketing administrator with Mayo Medical Laboratories. “He is the chair of a large laboratory medicine practice and the buck stops at his desk.”
Cockerill has been at the Mayo Clinic for more than 30 years and held his current position for more than five years, Tofilon said. Cockerill is salaried and has “no financial stake by being included in all of these reports,” Tofilon said.
The laboratory performs testing for Mayo Clinic patients and clients nationwide, and Cockerill does not personally review or approve each test, according to Tofilon. “No human could look at this much paperwork,” he said.
Tofilon said the number of tests billed through Mayo Clinic Laboratories is especially large because the vast majority of the clinic’s testing is done in Rochester. Other labs, he noted, often have locations scattered across the country.
“His name is submitted on all the claims,” Tofilon said. “Anytime someone puts in a request to Medicare and we did the test at Mayo Clinic, they will include his information on the claim.”
Vasso Gadioli, a vascular surgeon from Bay City, Mich., is No. 6 on the list with $10.1 million. He said he gets paid about $3,000 per procedure for inserting stents in his office, but he said he is still saving Medicare money. If he did the procedure in a hospital, he gets $500 and the hospital receives $8,000, Gadioli said.
About 70 percent of Medicare payments to Gadioli went to overhead. Then he has to factor in other costs, like employee salaries and taxes.
“Roughly a surgeon will take home 10 cents a dollar," said Gadioli, who has been in practice 12 years. "If I earned for myself one-tenth of [$10 million], that’s pretty good."
Jean Malouin, a family practitioner in Ann Arbor, Mich., and the highest-ranking woman on the list, suggested her perch at No. 17 is misleading. "I am most definitely not a high volume Medicare biller!" she wrote in a email.
Malouin said that she has a small private practice but is also the medical director of an experimental University of Michigan project trying to improve care and cost-efficiency at nearly 400 clinics across the state. All the project's claims are paid in her name, which probably explains why the data show she treated more that 200,000 patients and collected about $7.6 million from Medicare.
Minh Nguyen, a hematologist-oncologist at Orange Coast Oncology in Newport Beach, Calif., was listed as the 10th-highest biller of Medicare in 2012. He said all the billings for chemotherapy drugs at his five-physician practice were under his name.
“It looks like I’m getting paid $9 million ... but it’s a pass through,” he said. “The majority of the billing goes to pay the drug companies."
John C. Welch, an ophthalmologist in Hastings, Neb., ranks eighth on the list of top billers. Like most ophthalmologists on the list, a majority of his billings come from the shots he gives patient with macular degeneration — and that money is passed onto the drug companies, he said.
He said he bills so often because he is only one of a few local doctors who can perform the procedure. That generally keeps him working a 12- or 13-hour day.
“I service a large rural area,” he said. “I’ve been trying to recruit another doctor out here for years.”
He also notes: “I don’t control what Medicare decides to pay the drug company.”
Asad Qamar, a cardiologist who banked the second-highest Medicare payout in 2012 at $18.2 million, drew scrutiny last year when Reuters reported he made a major donation to Organizing for America as he complained to government officials about the Health and Human Services review of his billing practices. A lawyer representing the Institute of Cardiovascular Excellence in Ocala, Fla., defended Qamar in a Wednesday evening statement.
"ICE and its principal physician, Dr. Asad Qamar, an interventional cardiovascular subspecialist, serve a heavily-concentrated Medicare population by providing a variety of state-of-the-art cardiovascular interventional procedures and services to patients with advanced peripheral vascular arterial disease," wrote Tracy Mabry, an attorney for ICE. "All of ICE’s Medicare claims for such procedures and services are subject to thorough pre-payment review of supporting medical documentation by Medicare’s designated contractors serving Florida, and those claims must meet established coverage policies of the Medicare program prior to and as a condition of their payment to ICE by Medicare."
This story was updated at 7 p.m. with Mabry's statement.