What Medicare pays doctors for services and drugs

In the third round of what's now an annual event, the CMS posted a huge data set that breaks down the $91 billion Medicare paid individual physicians, diagnostic labs, ambulance services and other companies.

And for the first time, the agency included a set of numbers that exclude adjustments for regional factors like wages. The addition of standardized figures is intended to make the variation in payments reflect “physicians' practice patterns and beneficiaries' ability and willingness to obtain care,” the CMS said in a news release. The latest round reflects 2014 claims.

Florida, with its large senior population, had 27 clinicians among the 100 providers that collected the most Medicare Part B payments in the nation, according to a preliminary analysis by Modern Healthcare.

Internists collected more total payments from Medicare Part B in 2014—$9.2 billion—than clinicians in any other specialty. Diagnostic radiologists served the largest number of beneficiaries, receiving $3.7 billion.

Ophthalmologists collected the second-most total payments, at $6.3 billion. That figure was significantly lower—$4.2 billion—after subtracting what the government paid for drugs administered in physician offices. Ophthalmologists administer some of the most expensive drugs in healthcare, and Medicare drug reimbursements to the eye specialists increased 8.6% to $1.9 billion in 2014 compared with 2013.

Eylea and Lucentis, both used to treat macular degeneration, were among the top five Medicare Part B drug expenditures in 2014, according to data previously released by the CMS.

Even though the drug payments mostly cover the cost of the medications—ophthalmologists, along with oncologists and rheumatologists—earn substantial revenue from those payments because they're reimbursed at 6% above the average sales price. The CMS kicked up a storm of controversy this year with a proposal to test a new system for outpatient drug payments designed to remove the profit motive for prescribing high-cost medications. Disproportionate growth in drug spending and huge price increases for some medications have drawn anger from patients and pressure from Congress and presidential candidates.

It's important to note that even though the CMS data includes individual physicians' names attached to many of the 986,000 provider numbers, some of those numbers reflect services rendered by multiple clinicians. Also, the payments go toward business overhead in addition to paychecks. That is, it's wrong to assume the dollar figures listed with an individual's name in fact flowed to a single person as income.

That said, breaking down the payments per provider number shows wide variation across in what physicians with different specialties earn from the program. Internists, for example, received the most total payments because they outnumber their peers in other specialties by a significant margin. Per provider number, internists received $89,000.

Radiation oncologists are at the top by that measure. Medicare paid them $352,000 per provider number, not including drug payments. Next were vascular surgeons at $266,500 and ophthalmologists—again, not including drug payments—at $240,000.

Way down the ranking of overall payments by type of provider were doctors catering to patients in hospice and palliative care. Medicare Part B paid physicians just $21 million for those encounters. But that reflects a 28% increase over 2013.

Comparing the 2014 data to the Part B payments in 2013 appears to reveal changes in practice patterns—or at least raises questions. For example, drug expenditures reimbursed to pain management providers increased nearly 30% to $5.6 million. Total payments to nurse practitioners were up nearly 19% at $1.7 billion.

Total Medicare Part B spending was up about 1% over 2013.

CMS Chief Data Officer Niall Brennan said in a news release that the agency is trying to bring more transparency to Medicare payments to help the public and policymakers identify trends. “This week's announcements underscore CMS' ongoing commitment to releasing data and information to promote a vibrant health information economy,” Brennan said.