Comment by bhousel | Hacker News Reader

Comment by bhousel | Hacker News Reader

Does any one have a link to the actual data being discussed? They are big numbers but it doesn't necessarily seem to be (except in a handful of cases) outrageous. The numbers are just annual billings, not annual take-home pay, right?

For example, I just had a surgical procedure last week to have an otologist repair my eardrum. The breakdown in cost is:

   Surgeon charge:   7,043
   Facility charge: 10,200
   Anesthesiology:   1,000

Now, the surgeon is very good at what he does and I feel he certainly deserves that $7000. His surgical schedule has him doing procedures twice a week, probably some more complicated than mine, and I'm sure he easily brings in several million dollars to his practice, some non-trivial amount of which comes from Medicare. Other specialties (like oncology and ophthalmology) are obviously going to make up a bigger share of the amount paid by Medicare because they are disproportionately treating older patients.

Until we know more, I think it's silly to be outraged about this.

The numbers being discussed are the physician fees, not the facilities or supplies charges. This is the cash going directly to the docs to compensate them for their time.

They still need to pay malpractice insurance etc and more than one person is often billing to that same number so it's not really direct to doctor pay.

True! It's not a straight salary and docs do have expenses they need to pay out of that money.

I was just trying to call out that the cost of supplies and facility fees are paid by Medicare separately.

This does not include cost of injectable or infused drugs. These are not paid separately by Medicare.

Sure they are! If you're an in-patient then drugs are paid for via the DRG payment (all costs associated with treating the patient). If you're an out-patient, they are reimbursed through ASP.

The physician fee is separate from these payments.

I'm skeptical for these ophthalmologists to be billing those numbers and NOT include the average sales price (ASP) of their injectable drugs.

For those looking in, ASP is how medicare reimburses outpatient drugs. The physician practice buys the drugs up front, then bills Medicare the "average sales price" + 6%. The issue at hand is that Lucentis runs $2120 per injection. If you have a decent or large sized macular degeneration patient population, you'll be doing a lot of these injections. However, the number the practice collects is $320. Out of that number, you have to pay overhead / office staff / supplies etc.

I just downloaded one of the excel sheets and I only see procedures on the list, no drugs, but your suspicion is warranted.

The other thing to remember is that if it did include ASP reimbursement, ophthalmologists wouldn't be at the top, oncologists would. If a cancer doc saw 200 HER2 positive breast cancer patients in one year (16/month), treating them with Herceptin alone would cost $14,000,000. Most docs I've spoken to see 100-200 cancer patients per month (of course not all get treated with expensive drugs).

Yes, but you have to remember that these are Medicare data. The prevalence of 65+ patients getting Her2+ breast cancer AND getting treatment with Herceptin is probably lower than the number of 65+ patients getting ARMD and going on treatment with Lucentis.

Unfortunately, I don't have a good source. The above is merely my speculation.

And keep in mind that facilities fees often go to highly profitable outpatient facilities owned by the doctors.

That's an investment made by physicians who rightfully should share in the profit sharing of their business.

It's also unethical for a doctor to refer patients to a facility he or she owns. This is a huge source of Medicare and Medicaid fraud.

This is actually illegal. See http://en.wikipedia.org/wiki/Stark_Law

I've seen physicians disclose their relationship with said facility, which may or may not be used as a casual referral. I think the communication of the conflict of interest is the important issue here.

Here you go: 1.7GB uncompressed tab-delimited text, as a 414MB zipped download

http://www.cms.gov/Research-Statistics-Data-and-Systems/Stat...

(link goes to the overview download page with context, not directly to the ZIP)

Here's a good overview of the limitations of the data:

http://www.npr.org/blogs/thetwo-way/2014/04/09/300857727/dos...

If that physician did just 3 of those procedures per day, every day, 5 days a week for a year: $7,043 x 3 x 5 x 52 = $5,493,540

Except that OP said he worked twice a week, so even if he did 3 a day (probably more like 2) and assume two weeks cavaction a year, then 7043250 = 704300.

Figure malpractice insurance at $50, and he's netting $650k. Figure 10% for billing and business expenses, accountant, etc, and he's netting $600k/year.

Is that still unreasonable for a highly specialized surgeon?

$7,043 x 2 x 2 x 50 = $1,408,600

But anyway I don't think any of the numbers are unreasonable. These are ballpark estimates, and I'm pretty sure my tympanoplasty was a relatively boring procedure for him, compared to stuff like cochlear implants and other basal skull surgery that he does sometimes. My main point was that I don't think it's unexpected at all for some surgeons to bill several millions to Medicare in a year. They can easily clear several millions already with a very light schedule and, depending on the specialty, some or most of that may be from Medicare patients. Honestly I think there is no story here.

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