The Center for Public Integrity

Politicians who are promising to repeal ObamaCare won’t find any evidence in the Kaiser Family Foundation’s analysis of health insurance costs that the law has caused premiums to skyrocket, as many of those politicians have contended.

On the contrary, premiums have increased on average only 4 percent over the past year, the lowest rate of increase in years, according to Kaiser’s 2012 Employer Health Benefits Survey, which was released last week. Double-digit premium increases were once the norm, especially during the George W. Bush administration. Premiums increased 10 percent in 2004 and 13 percent in 2003.

So the good news is that premiums increased only 4 percent. The not so good news is that, because of all those past double-digit increases, the average premium for employer-sponsored health coverage has reached a record high of $15,745. And because employers have been shifting more and more of the cost of coverage to workers, employees are now paying, on average, nearly 30 percent of that total, much more than they used to. The hike in worker contributions has far outstripped the overall rise in premiums.    

A study published last year in Health Affairs found that the gains in wages U.S. workers made over the past decade were more than wiped out by increases in the cost of health care and health insurance. Kaiser’s annual surveys document that: since 2002, premiums have increased 97 percent, which is three times as fast as wages (33 percent) and inflation (28 percent).

That’s not all the bad news, unfortunately. More Americans are now enrolled in high deductible plans, because that’s frequently all their employers are offering. Kaiser found that the percentage of workers enrolled in plans with an annual deductible of $1,000 or more has increased from 10 percent in 2006 to 34 percent in 2012. The growth has been even greater for employees of small firms.

Mystery in the Fields, a three-part series, explores how a rare form of kidney disease is killing laborers and crippling communities in three different regions, from Central America to Sri Lanka to India. As death tolls mount, researchers remain puzzled, unable to definitively uncover the disease’s causes.

The series is an outgrowth of an earlier investigation, “Island of the Widows,” published last December in the Center for Public Integrity and its International Consortium of Investigative Journalists. In that piece, reporter Sasha Chavkin exposed how chronic kidney disease was so prevalent in some regions of Central America it left communities filled with widows and scientists searching for answers.

Building from that research, Chavkin discovered that the disease had also developed in clusters in India and Sri Lanka. Over several months this year, he and video journalist Anna Barry-Jester traveled to the countries to tell the story from the ground, and pressed governments and leaders of the medical community for answers.

Their report is also being published or aired in news outlets including PRI’s The World, the BBC, The Sunday Times of Sri Lanka and The Week in India.

Project staff

Reporter: Sasha Chavkin

Photographer/videographer: Anna Barry-Jester

Web team: Christine Montgomery, Paul Williams, Sarah Whitmire

Fact-checking: Peter Newbatt Smith

Project Editor: Ronnie Greene

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.

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.