Medicare data raises questions over massive doctor billing

For dozens of doctors, Medicare is providing a multimillion dollar boon.

Take Dr. Salomon Melgen, a Florida ophthalmologist whose practice was paid $20.8 million in 2012 by Medicare, according to a database released by the Obama administration. The program, which provides health insurance for the nation's senior citizens, is the country's biggest purchaser of health-care services. In 2012, it paid $77 billion to physicians and health-care providers.

Melgen, who ranked as the highest-paid doctor by Medicare in 2012, isn't alone in billing millions to the agency, according to the database. That year, almost 4,000 doctors were paid more than $1 million each, according to a data analysis by the Washington Post. The agency, for its part, is asking for the public's help in flagging potential wasteful spending.

"The program is funded by and large by taxpayer dollars. The public has a right to know what it is paying for," Jonathan Blum, principal deputy administrator for the Centers for Medicare & Medicaid Services, said in a Wednesday conference call. "We know there is fraud in the system. We are asking for the public's help to check, to find waste, and to find potential fraud."

But the dataset -- which includes 10 million lines of data -- should be approached with caution because it could be simple to misinterpret the data, Urban Institute senior fellow Stephen Zuckerman told CBS MoneyWatch. The data includes "how many services physicians are providing, but you don't know how large their practices are, and you don't know how specialized they are toward Medicare patients," he noted.

The release of the data comes after consumer groups had requested the government program to provide more transparency about billing. It's the most detailed look yet at physicians' billings provided by the Centers for Medicare & Medicaid Services.

Melgen's attorney, Kirk Ogrosky, said in a statement emailed to CBS MoneyWatch that the billing was made "in conformity with Medicare rules." Melgen, who operates four offices and employs 30 staff members, billed $11.8 million alone for injecting Ranibizumab, a drug used to treat macular degeneration, according to Medicare data analyzed by The Wall Street Journal.

"While the amounts in the CMS data release appear large, the vast majority reflects the cost of drugs," Ogrosky said. "The facts are that doctors receive six percent above what they pay for drugs, the amount billed by physicians is set by law, and drug companies set the price of drugs, not doctors."

The American Medical Association, for its part, is warning that the database could mislead both patients and the media.

"Medicare claims data is complex and can be confusing," the AMA said in a statement. "The manner in which CMS is broadly releasing physician claims data, without context, can lead to inaccuracies, misinterpretations and false conclusions."

The group, which represents physicians, warned that the data doesn't include information about a physician's patient population, such as how many of the doctor's patients are on Medicare or context about the practice's patient demographics.

Still, it's likely that the data will provide rich material for health insurers, researchers and fraud investigators, The New York Times notes. One astounding factoid is that just two percent of doctors received 25 percent of total physician payments, or about $15 billion, the publication notes.

"There's a lot of potential for whistle-blowers and justified worry for fraudsters," attorney Steven F. Grover told The Times. He predicted, "There's going to be a lot of litigation over this."