The Center for Public Integrity

There simply weren’t enough hours in the day to justify the fees Dr. Angel S. Martin collected from Medicare.

On fifty-three separate days, the Newton, Iowa, general surgeon billed the government health plan for the elderly and other insurers for medical services that would have taken him more than 24 hours to complete, according to federal prosecutors.

The hours made the case a slam dunk for prosecutors. But they weren’t Martin’s only problem. Many patients recalled the briefest of visits with the doctor, even though Martin routinely billed Medicare for long, complicated treatments.

Every year, Medicare pays doctors more than $30 billion for treating patients. For office visits, doctors must choose one of five escalating billing scales — called Evaluation and Management codes — that most closely reflect the complexity of the treatment and the time it takes. The fees range from about $20 to about $140.

Medical groups argue that most doctors take pains to bill accurately. If anything, doctors tend to pick codes that pay them less than they deserve out of concern that they might otherwise get audited and face financial penalties, these groups say.

But cases such as Martin’s reveal what can happen when doctors are tempted to game Medicare by “upcoding” — billing for more extensive care than actually delivered. Raising the code by a single level on two patients a day can increase a doctor’s income by more than $15,000 over the course of a year and is not likely to raise suspicions, experts said.

Upcoding “is a big problem,” said Charlene Frizzera, a consultant who spent three decades at the federal Centers for Medicare and Medicaid Services and served as its acting administrator in the early months of the Obama administration.

Indeed. A jury convicted Martin on 31 counts of health care fraud for manipulating the Medicare pay scales.

The “Cracking the Codes” stories are but the latest in a series of Center pieces that illuminate questionable Medicare practices and policies by marrying traditional shoe-leather reporting with rigorous data analysis.

The foundation of these pieces is the Center’s access to about two terabytes of Medicare claims data — data that was obtained by the Center in 2010 as the result of a settlement from litigation against the Centers for Medicare and Medicaid Services.   

Delving deeply into this data has now helped us expose one of medicine’s dirty little secrets: medical providers garnering extra Medicare fees by “upcoding,” or billing for more extensive care than had actually been delivered. But it wasn’t easy. “Cracking the Codes” is the result of almost 20 months of often-tedious work.

That work began in early 2011, with preliminary analysis by data editor David Donald that summarized changes in hundreds of codes used by doctors and hospitals to bill Medicare over much of the past decade. Center investigative reporter Fred Schulte spent hours sifting those findings for story ideas, and subsequently discovered sharp spikes in higher-cost Medicare billing codes for routine patient visits to doctors. The code patterns indicated that short office visits paying doctors modest amounts had dropped off precipitously, while lengthier and higher-paid visits were rising dramatically. The trends ran counter to much of the medical research; the differences were costing taxpayers billions of dollars. 

Under Donald’s direction, former Center data analyst Elizabeth Lucas then embarked on a six-month journey through millions of Medicare records to determine the extent of the billing anomalies and  quantify the cost to taxpayers. The database was daunting indeed, consisting of scores of tables and thousands of columns, totaling more than 700 million claims.

For this series, the Center for Public Integrity and Palantir Technologies analyzed Medicare claims data obtained from the Centers for Medicare and Medicaid Services (CMS).

For privacy purposes and other reasons, the Center was limited to a 5 percent sample of national Medicare Part B data that contain claims for medical procedures, such as doctor office visits and emergency room procedures, and used mainly by researchers and consultants. Over and above the limitations of sampling, the data have only the quarter in which a procedure was performed, not actual dates. And a permanent federal injunction against the Department of Health and Human Services prevents data users from naming individual doctors who received payment for the claims. Some physicians subsequently contacted by the Center agreed to discuss their billing practices.

For the upcoding analysis, the Center and Palantir used a subset of the data submitted by physicians, hospitals and clinics from 1999 to 2008, the last year available at the time the data were acquired. The year 2002 was not included in the data, and any results for that year are imputed based on averaging 2001 and 2003 data. In addition, the Center and Palantir used CMS formulas for facility fees and co-payments, as CMS publishes formulas and modifier values to determine reimbursement amounts. Finally, Medicare Utilization reports published by CMS were used to look at specific billing codes for 2009 and 2010.

Mitt Romney's selection of Rep. Paul Ryan as his vice-presidential nominee has vaulted Medicare to the top tier of election issues, thanks to Ryan's proposal that the entitlement program be converted to a system of "premium support" that would provide subsidies for elderly beneficiaries to buy insurance on the private market. Judging by the fiery rhetoric from both campaigns, Medicare seems certain to remain a high-profile topic for the remainder of the contest. 

But Medicare is a complex topic, and the charges and counter-charges seem likely to yield more heat than light for a confused electorate. A recent story by FactCheck.org provides a helpful reality check on the finger-pointing, but there's been little of substance illuminating Medicare's increasingly precarious finances and its often-confusing spending choices. 

The Center's Manipulating Medicare series has attempted to fill that void. In the next month, we'll be adding to this reservoir of reporting with new investigative pieces on billing procedures by doctors and hospitals that have added tens of billions of dollars to our Medicare tab.

In the meantime, catch up with these examinations of the Medicare system:

An influential federal task force has finalized its view that men should avoid a controversial test for prostate cancer that was the subject of a Center for Public Integrity investigation last fall.  

The U.S. Preventive Services Task Force advised men against routine prostate cancer screening using the prostate-specific antigen (PSA) blood test because the test often leads to more harm than good. The group found that, under the best of circumstances, one man of every 1,000 given the test would avoid death as a result, while one in every 3,000 would die prematurely from complications related to prostate cancer treatment. Prostate cancer is common, particularly in older men, and often cancers discovered through screening grow so slowly that they would likely not cause harm.

The task force findings, published Monday online in The Annals of Internal Medicine, follow similar draft guidelines that were issued by the group last fall. The Preventive Services Task Force is a group of 16 primary care providers who review preventive health services and make recommendations — recommendations that are closely watched by the medical profession.   

Not everyone agrees with the findings. The American Urological Association issued a statement saying it is “outraged and believes that the Task Force is doing men a great disservice by disparaging what is now the only widely available test for prostate cancer, a potentially devastating disease.”

Thousands of doctors across the country are billing Medicare for routine medical care at rates far above their peers, potentially costing taxpayers tens of millions of dollars in overcharges, according to a new government report.

The audit released today by the U.S. Department of Health and Human Services Office of Inspector General stopped short of accusing the high-billing doctors of ripping off the government health plan for the elderly. But it stated that Medicare’s payment scales for doctors have been “vulnerable to fraud and abuse” in recent years.

The doctor payment scales are known as “Evaluation and Management” or E/M codes. Doctors choose from five escalating payment levels for treating patients based on the “amount of skill, effort, time responsibility and medical knowledge required for the service.” In 2010, almost 370 million E/M services were provided by about 442,000 doctors nationwide.

The code the doctor chooses can make a big difference to the bottom line. For instance, the Medicare fee for treating a new patient in 2010 ranged from $36.62 to $190.56, depending on the level of service provided by the doctor, and the code chosen for billing.

Using these codes, Medicare paid doctors and other health professionals $33.5 billion in 2010 for services ranging from routine office care to hospital or nursing homes visits.

That billing total represented a 48 percent jump since 2001, though the number of services delivered over the same time period grew only 13 percent. What the data reveal is that many doctors have been gravitating toward the codes that pay them higher fees for these routine services, a practice officials have struggled to understand and curb.

Forget one-size-fits-all advice: Guidelines out yesterday give women choices for cervical cancer testing that depend on their age.

Once recommended every year, many major medical groups have long said that a Pap test every three years is the best way to screen most women, starting at age 21 and ending at 65.

But starting at age 30, you could choose to be tested for the cancer-causing HPV virus along with your Pap — and get checked every five years instead, say separate guidelines issued by the U.S. Preventive Services Task Force, the American Cancer Society and some other organizations.

It's not a requirement — women 30 and over could stick with the every-three-years Pap and do fine, the guidelines say.

Women over 65 can end screening if they have had several negative tests in a row over a certain time period. But women in that age group who have a history of pre-cancer should continue routine screening for at least 20 years.

The question is whether doctors will follow the recommendations. Last year, an iWatch News investigation found 40 percent of Medicare-funded cancer screenings to be unnecessary, especially for the elderly. Though the Preventive Services Task Force is widely-regarded as an industry expert for screening recommendations, the guidelines are often ignored. Already, studies have shown that too many doctors are giving younger women routine HPV tests, contrary to long-standing advice. Even patients have wondered if it's really OK not to get a yearly screening.

The Obama Administration is disputing claims by two Republican senators that Michael Jackson’s physician mistakenly remained eligible to bill Medicare long after being convicted for his role in the singer’s 2009 death. But the lawmakers aren’t backing down.

Sens. Orrin Hatch, R-Utah, and Tom Coburn, R-Oklahoma, on Tuesday sent a letter to Medicare’s administrator alleging that Jackson’s doctor, Conrad Murray,  and at least 34 other convicted felons and unlicensed physicians remain listed as legitimate physicians on the health plan’s provider database. Murray was convicted of involuntary manslaughter in November, which the Senators said should have caused him to be immediately kicked out of the program.

Centers for Medicare and Medicaid spokesman Brian Cook said the senators are mistaken. Conrad’s “enrollments have been revoked and deactivated, and the latest that he billed Medicare was in 2010,” Cook said. The spokesman declined to comment further about the other doctors the senators mentioned in the letter, or to shed light on the precise day when Murray was pushed out of the program.

So far, the senators are not buying the CMS explanation.

Michael Jackson’s private physician, Dr. Conrad Murray, was sentenced to four years in jail Tuesday for his role in the singer’s 2009 death, but so far he hasn’t been pushed out of the Medicare program.

According to a letter two senior Republicans on the Senate Finance Committee sent to Medicare’s administrator on Tuesday, Murray and other convicted felons and unlicensed physicians are still listed as legitimate physicians on the health plan’s provider database, pointing to a serious vulnerability that leaves the program open to fraud and could put seniors at risk.

Conrad’s case “illustrates Medicare’s failure to act in the best interest of seniors,” wrote Sens. Orrin Hatch, R-Utah, and Tom Coburn, R-Okla, in the letter to Health and Human Services Secretary Kathleen Sebelius. A spokesman for the Centers for Medicare and Medicaid Services had no immediate comment.

Murray’s case is a high profile example of Medicare’s failure to remove convicted felons and doctors who have lost their medical licenses from the program, an issue highlighted earlier this year by iWatch News. In Murray’s case, California suspended his medical license in January. In November, Murray was convicted of involuntary manslaughter. Yet Murray is still listed as a Medicare provider in the CMS internal database. “Despite the national media coverage of Dr. Murray’s conviction, he remains a legitimate Medicare provider,” Hatch and Coburn wrote in the letter.