Covering Medicare Spending, Part 3: Tips from The Wall Street Journal's Secrets of the System

When Dow Jones & Co., publisher of The Wall Street Journal, announced it was suing to gain access to information about individual providers in the Medicare claims database, investigative reporters everywhere started salivating.

Detailed information of the type to be found in the database excites investigative reporters the way monsters excite Guillermo del Toro.

After maximizing the use of just 5% of the claims data for the series "Secrets of the System," the Journal (via Dow Jones) is attempting to open the entire database for everyone to see. As Ian Thomas on the Law 360 newswire explained:

"Over three decades ago, this court entered an injunction that still serves as a nationwide gag order, severely limiting access to essential information about one of the most important and expensive government programs - Medicare," Dow Jones wrote in its motion. The injunction was put in place after the Florida Medical Association and the American Medical Association filed suit in 1979 to prevent the Department of Health, Education and Welfare - now the Department of Health and Human Services - from releasing Medicare data on reimbursements for all Medicare providers, according to Dow Jones' motion.

So let's fantasize a little bit about the possibilities. Here are three stories I hope will come out of the data when, or if, the database finally is unshackled.

1. How much really is being lost to waste, fraud or abuse? Those last four words have been used a lot in the health care reform debate. And, in the Journal series, former Republican House Speaker Newt Gingrich raised the specter of fraud as a reason to open the database. "It's very hard to defend ignorance and willful hiding of data in the 21st century," Gingrich told the Journal. "Our estimate is that the federal government, in Medicare and Medicaid alone, loses between $70 billion and $120 billion a year to crooks. You ought to be able to identify those."

I think finding the crooks would be great, too, but it would be even more interesting to better pinpoint those numbers. The difference between $70 billion and $120 billion is enough to fund a lot of health programs. Digging into the details of the database the way the Journal has started to do would allow reporters to distinguish between careless waste of public funds, fraudulent claims made by unscrupulous providers and abuse of the public safety net by patients. My guess is that the findings might surprise Gingrich and other critics of the system; there might be a lot more waste than outright fraud and abuse.

2. How well are private contractors managing the nation's health information? Barbara Duck at the Medical Quack is one of the few health writers I have seen who thinks this data should be kept secret. In arguing her position, she makes a good point. "Yes there is a big massive data base for claims, but the running of the processing of medical claims is not done by Medicare. It's administered by contractors who are nothing more than insurance companies or subsidiaries thereof, and of course we know this applies to Part D too. This is yet one more profit arm for the health insurers." It would be fascinating to look at the data and see whether its accuracy has improved over the years as more of the data management has gone private. How many errors are there really? The Journal cited one stunning case in its series, where a doctor was accused of charging $115 million when really he'd only claimed $115,000. But that was in the 1970s.

3. Are the government watchdogs working efficiently or at cross-purposes? In defending the secrecy of the database, the American Medical Association has taken the tack that doctors already are subject to a huge amount of scrutiny. According to Leigh Page at Becker's Hospital Review:

In a statement, AMA President Cecil B. Wilson, MD, argued that physicians have a right to keep complex payment data, which is subject to misinterpretation, out of the public domain. "Physicians who provide care to Medicare patients are already subject to widespread governmental oversight, including scrutiny by Medicare carriers, the Office of Inspector General and 53 quality improvement organizations," Dr. Wilson said. "These federal agencies and contractors have access to the full-range of Medicare data and are aggressively ferreting out improper claims."

Are they? The Journal only had access to 5% of the data, and it found repeated instances where providers were caught using questionable billing practices by Medicare, by Medicare contractors or by other agencies - and yet they continued to receive millions in payments.

Part of why the Journal's reporters were able to do this was because they are NOT government agents. When the reporters went to interview providers such as Aleksandr Kharkover and Dr. Christopher Wayne, instead of lawyering up, they talked:

Mr. Kharkover and two people familiar with his practice said he sees patients only in their homes. Fraud experts say this makes it virtually impossible for him to have legitimately billed such high amounts.

Investigative reporters have a long history of uncovering the problems that regulators either fail to see or willfully ignore. They often can turn up the heat on an issue that has been well documented by regulators with little action at the legislative level.

We shouldn't hold our breath, of course. Lawsuits tend to take years to resolve. But I know that I'm going to be making a point of buying the Journal to help fund a worthy cause.