In 1979, a federal court ruling barred the public from seeing what individual physicians earn from Medicare. The case stemmed from a lawsuit filed by the Florida Medical Association (FMA) and the American Medical Association (AMA). President Carter’s administrator had sought to publish a list of the annual Medicare reimbursements to all doctors. The FMA and AMA sued to block that release. The Medicare claims database is widely considered to be one of the best tools for identifying fraud and abuse in the $500B federal health-insurance program for the elderly and the disabled. This case has long been the basis for judges to shield that data on the grounds that a physician’s right to privacy outweighs the public’s interest in knowing how tax dollars are spent.
In April 2011, a rare combination of senators – a Republican and a Democrat – introduced legislation to effectively overturn the 1979 court decision. Senator Chuck Grassley (R-Iowa), the bill’s co-sponsor, said that Medicare claims data regarding payments made to any provider of services or supplies should be available to the public. In addition to making government more transparent, the bill also includes other provisions to fight Medicare fraud. He and Senator Ron Wyden (D-Oregon) both maintain that the bill will keep patient-related data private to protect patient privacy. Senator Wyden stated that “hiding information on how taxpayer dollars are being spent is not something we do in this country”[1]. The AMA has released a statement opposing the proposed legislation which it says will harm a physician’s right to privacy. The bill is currently under review in the Senate Finance Committee[2] (see Schoolhouse Rock: I’m Just Bill for a refresher is you need one)[3].
Health care expenditures are under increased scrutiny particularly due to rampant cost escalation that has now made them a large portion of the gross domestic product. Barring national security implications, in general, taxpayers and watchdog groups have a legitimate interest in knowing how tax revenue is spent, particularly where there is potential for fraud and abuse. Information about physician Medicare reimbursement dollars is held only by a few, namely the Centers for Medicare and Medicaid Services (“CMS”) and physicians. Taxpayers, due the involvement of tax dollars, are a part of this transaction but remain in the dark.
This is a classic example of the health economics theory of market failure. One reason why a market failure can arise is if access to information is restricted or prohibitively expensive.[4] If private enterprise is unable to resolve this issue, one way to mitigate such a failure is for the government to step in and take corrective action. In this case, the judiciary blocked access to CMS data and it will likely take an act of Congress to overturn the decision (of course, the Supreme Court could change its mind but that is unlikely in this situation). While the controversy is far from over – after all, it did legislators a mere 32 years to finally act on this issue – this bill will make the government more transparent and will allow taxpayers to see how some of their tax dollars are spent.
We’re in an era of partisan politics, incessant bickering and gridlock in Washington, and for Republicans and Democrats to finally agree on something these days is no small feat. Now the only question is – will this bill survive the AMA’s wrath?
[4] Getzen, T. (2010). Health Economics and Financing. John Wiley & Sons, Inc.
