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As political debate rages in Washington about how to reform the nation’s $509 billion Medicare system, a hearing is taking place in a Florida courtroom today about making data available to the public on how much individual physicians are paid under the program.

Though the Centers for Medicare and Medicaid Services (CMS) estimates that some $48 billion in improper payments were billed last year to the massive federal program–much of which is driven by health care providers including physicians–the U.S. Department of Health and Human Services (HHS) maintains that a 1979 court order bars publication of government records showing the amount that individual doctors bill to Medicare.

Two senators–Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore. have introduced legislation that would make such data available to the public. Their bill, S. 756, would overturn the 32-year-old injunction issued by a Florida court –sought by the American Medical Association, the leading lobby for doctors nationwide, and now being challenged in court by Dow Jones, the parent company of the Wall Street Journal–that forbade the government from making such information widely available.

The senators introduced the bill on the heels of a major investigation by the Wall Street Journal and the Center for Public Integrity using Medicare data they obtained from the Centers for Medicare & Medicaid Services (CMS). Among the findings: billing records of one physician, which totaled $2 million in 2008, showed she ordered several expensive tests that raise concern for federal fraud authorities; an Oregon surgeon who had one of the highest rates of repeat spinal surgeries, and a Miami-based general practice doctor who billed the federal government for more than a million dollars in physical therapy treatments—24 times the national average.

Access to the billing records, argue the senators, can help cut down on Medicare fraud and abuse. “I believe transparency in the health care system leads to more accountability and thus less waste and more efficient use of scare resources,” said Grassley in April on the Senate floor when introducing the bill.

The Wall Street Journal and the Center for Public Integrity paid $12,000 to obtain payment data in a settlement with the agency after suing it under the Freedom of Information Act. But because of the standing Florida court injunction, they were asked to sign an agreement saying that they would not use these data to identify individual doctors’ names. Instead they could only report names if they independently verified the information. They also are not permitted to share the raw data with the public.

In fiscal year 2010, CMS denied 7,600 Freedom of Information Act (FOIA) requests based on the privacy exemption, which was cited in the 1979 court decision—invoking it more than any other agency within HHS. The agency does not provide statistics on how many of these requests were denied to protect physicians’ identities as opposed to patients’ identities. (There is no controversy over keeping private the identities of individuals treated under Medicare.)

The American Medical Association (AMA) is already making noise about the legislation. Congressional staffers say they have heard from the group. Ardis Dee Hoven, chair of the AMA Board told Ameican Medical News, the organization's trade publication, that it “intends to vigorously defend the current injunction, which protects the privacy of physician data while allowing it to be seen by the agencies working to identify fraud.”  In another statement, an AMA official, J. James Rohack, claims that releasing such information could make physicians vulnerable to identity theft.

The group reported deploying 45 lobbyists and spending $22.6 million on federal lobbying last year, as well as contributing $1.1 million to federal candidates, according to the Center for Responsive Politics (CRP). Lobbying reports filed this week showed that the group reported spending $4.3 million on lobbying during the first quarter of this year and its PAC has distributed $123,000.

More than thirty years ago, In Florida…

It was the AMA, along with its Florida chapter, the Florida Medical Association, which successfully argued in court more than three decades ago to keep these data secret.

In 1977, the department of Health, Education, and Welfare, the predecessor to today’s U.S. Department of Health and Human Services (HHS), released the names of providers and groups of providers that had collected $100,000 or more in 1975 from the Medicare program. Plans were also afoot to release all the data on payments to physicians.

But the judge agreed with the doctors' group when he wrote that releasing such information was “clearly unwarranted invasion of privacy,” and violated the privacy exemption—known as 552(b)(6)–under the Freedom of Information Act.

Since then, there have been several lawsuits where parties asked for the Medicare data, the most recent filed this year by Dow Jones, the parent company of the Wall Street Journal. A hearing in that case is scheduled for today, Thursday, April 21.

In December 2009 a federal appeals court overturned a district court decision ordering HHS to release Medicare claims data for four states, which had been requested by Real Time Medical Data. The private company markets data to hospitals, physicians, and other groups that want to analyze how their practices compare to others.

Also in 2009, a federal appeals court reversed another district court decision that had ordered HHS to release Medicare payment data to a Consumer’s Checkbook, a nonprofit consumer organization. The group had planned to used the data to create a free online service that would give consumers information about how often particular doctors perform a specific procedure to help them when choosing a physician.

In that ruling, a majority of the Court said releasing the data would violate physicians’ privacy because it would be possible to calculate a physician’s total income from Medicare.

Center for Public Integrity and the Wall Street Journal’s saga

David Donald, the data editor for the Center for Public Integrity, had wanted to collaborate with the Wall Street Journal on a big investigative project. So in 2009,  when at a conference on computer assisted reporting, he and Maurice Tamman of the Journal, came up with a plan.

They would go after Medicare data—because “it’s the biggest baddest database that nobody has ever messed with,” says Tamman.

Donald prepared a FOIA request. When the agency stalled and never officially responded (although in a conversation, Donald was told the information was “not FOIA-ble”), CPI filed a lawsuit under FOIA.

Soon CPI got a call from the Justice Department. The attorney was interested in settling by providing detailed data to the two groups, but for a hefty fee, and stipulating they would not reveal physicians’ names. The first cost estimate came in at around $97,000, which CPI negotiated down to $12,000.  “Most news organizations would not be able to afford that,” says Donald about the fee the two organizations paid.

The two groups then received an enormous amount of information—some 2.3 terrabytes worth, according to Donald. Some of the tables have more than 1,600 columns. Even then, what they got, subsets of information called Limited Data Set Files, represent only a random selection of five percent of Medicare recipients. Because certain of these files are considered to supply information that could be traced to individual doctors or patients, recipients must sign a privacy agreement with the agency. The agreement also prevents them from making the raw data available publicly.

In the months that have followed, the two organizations have published numerous stories based on the data. For example, CPI reported here on how Medicare claims for older women for digital mammography have skyrocketed, despite the fact that such technology is not proven to detect cancers in this population.

This WSJ report on how home health care companies–including the nation's largest, Amedisys–may be gaming the reimbursement system prompted an investigation by the Justice Department, the Securities and Exchange Commission, and a Senate committee.

Journal reporters were even contacted by state auditors and CMS itself to give advice on how to use the data.

However, what is even more notable are stories that the WSJ and CPI cannot do because of limits imposed by their use agreement with CMS. For example, the WSJ's lawyers say that its reporters could not identify a psychiatrist who has billed the program for physical therapy treatments at a level 25 times above the standard deviation of the average of all physicians who specialize in in such therapy.

In another story, the WSJ was able to point to a hospital which has one of the highest rates of spinal fusion surgery in the nation–and also is the workplace of five surgeons who were among the largest recipients of payments from the medical device company Medtronic Inc. Because of the use agreement, the WSJ could not reveal details about Medicare payments to these physicians.

"The cases in which the Journal was able to name providers was the exception, not the rule," reads the Dow Jones motion.

Who uses these data?

While CPI and the Wall Street Journal had to work hard to obtain these vast stores of data, and even then at a price that would bust most news budgets, CMS regularly provides such detailed data to researchers and others who purchase it and agree to abide by use agreements. (See web page order form here.)

Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Health, says that the school first acquired Medicare claims data since 1983, and pays about $10,000 a year to update it. The data allowed him to study the number of people with multiple chronic conditions who seek care under Medicare. He found that two-thirds of Medicare spending by beneficiary goes to people with five or more chronic conditions.

While Anderson does not find the arrangement with CMS onerous, he is supportive of efforts to make the data available more widely. “I believe the more information the better, so for you to be able to look at how much your doctor charges and how they do things—I don’t see any downside to it.”

When the Sunlight Foundation asked CMS what entities purchase these data and how much the agency collected in fees for it, we were told we would need to file a FOIA. (We did.) 

Recently, HHS has begun to provide some data to the public at the new site healthdata.gov. For example, CMS now provides data known as "basic stand alone" files, at no charge. These are Medicare claims files that provide information on treatments that individuals have received. However, the data are scrubbed of both personal identifying information about patients (which is not controversial) and provider information (which is).

"We are working very energetically to liberate every database we can, but we are subject to legal restraints," says Todd Park, chief technology officer for HHS.

About the data

What: Medicare payments to individual physicians
Where: Centers for Medicare & Medicaid Services, which is part of the U.S. Department of Health and Human Services
Availability: not available; agency cites 1979 Florida district court injunction
Usability: some data available for purchase but users must sign agreement not to reveal individual physician or patient information and not to make raw data available publicly