Medicare agency to post payment data on public Web site

The Obama administration plans to launch a Web site in December that the public can use to monitor Medicare payments, but some health care specialists say it will be difficult for the application to expose fraudulent payments and protect privacy at the same time.

The Web site will allow people to view the number of health services performed and payments, organized by state, diagnosis and hospital, according to officials at the Centers for Medicare and Medicaid Services.

"Controlling wasteful spending in health care is one of the ways of fixing our health care system -- at the same time it's critical that protections be in place to make sure the information provided by this tool doesn't [reveal details] that can be attached to a person's name," said Larry McNeely, a health care reform advocate at U.S. PIRG. The organization works to defend public health, consumers and privacy.

The CMS initiative is part of a governmentwide push to root out waste in federal spending through public Web sites that track the money. Such tools include Recovery.gov, the stimulus monitoring site, and the IT Dashboard, which aims to shed light on investments that are over budget or behind schedule. By recruiting Internet users as volunteer watchdogs, the government is attempting to establish citizen trust and convey a sense of transparency and accountability.

In a related development, CMS late Tuesday night reported the error rate of Medicare claims for inpatient hospital services more than doubled in 2009. The higher rate -- now 7.8 percent, or $24.1 billion, compared with 3.6 percent in 2008 -- is attributed to a calculation change to reflect a more complete accounting of improper payments, according to officials.

McNeely said it would be useful to view the number of MRIs a hospital orders to determine whether the institution is abusing payments to cover the cost of equipment.

But he noted that diagnosis coding for individual hospitals -- even if stripped of patient identifiers -- could compromise privacy when the illness indicated is rare. Federal officials should ensure diagnosis descriptions are not too specific or else exclude extremely rare illnesses, McNeely said.

Releasing details on atypical diagnoses is less of a problem at the state level, but state-level data generally is not as revealing as hospital-specific information, other specialists said.

Privacy could be protected if the sample size is large enough and the data is stripped of patient names, addresses, phone numbers and at least the last one or two digits of a 5-digit ZIP code, said John F. Quinn, a senior executive with the health care practice at consulting firm Accenture.

"I am not too concerned about patient privacy as long as a qualified statistician is employed to review and analyze the type of data being gathered and certifying that the selection processes in fact meet the requirements of ensuring patient privacy," he said.

But that is not a simple feat, Quinn added, echoing concerns about the ability to trace back through claims for a relatively rare diagnosis to reconstruct a patient's identity. "So it does take some skill" for statisticians and officials to protect information properly, he said.

Another challenge for the government will be the tendency to jump to conclusions about anomalies -- relatively expensive surgeries or repeat orders -- without all the facts, said Steve Findlay, senior health policy analyst at Consumers Union, publisher of Consumer Reports.

"That outlier hospital might tell you, 'We see the most complicated cases.' That's generally not true. That excuse doesn't hold water most of the time," he said. "But you can't automatically call it fraud. You have to look into it."

The public, and government officials, likely will need more information than what the site offers to understand the complexity of cases, Findlay said. For example, the aberrant hospital might have only performed a costly procedure five times for especially severe illnesses.

Government watchdog groups have limited expectations for the site.

"Given the level of waste, fraud and abuse in Medicare and Medicaid, the new data could be a useful method for oversight of tax dollars, but I wouldn't expect miracles," said Pete Sepp, spokesman for the National Taxpayers Union, a group that advocates for lower taxes and smaller government. "Waste can be a systemic problem, but fraud and abuse are human acts, which can be more difficult to discern by simply searching through a database."