Medicare begins posting physician price information online

Washington -- As promised, Medicare officials have started making public the prices the program pays physicians for certain services -- information they say has remained largely unknown to many patients.

As part of a price and quality transparency initiative that President Bush launched earlier this year, the Centers for Medicare & Medicaid Services in November posted online payment information for selected services performed in physician offices and hospital outpatient departments. Medicare posted similar data for inpatient hospitals in June and ambulatory surgical centers in August.

For the physician office setting, as a starting point, federal officials chose 19 commonly performed services and listed the average prices for each Medicare locality in all of the states. In some states, the program pays the same no matter where the patient receives the care. In others, the amount can differ depending on where the physician is located.

CMS also listed the number of the services in each area in a year, which could serve as an indication that physicians have more experience with the procedures and thus might be providing higher quality care.

The agency posted payment information for more than 70 other procedures usually performed by physicians in settings other than the office. The numbers correspond to what Medicare pays the lead doctor alone, not the facility or the anesthesiologist who might be required.

The American Medical Association supports the concept of physicians posting their prices. But the AMA also said CMS' drive to unveil its data will be of little use to patients unless all payers -- not just Medicare -- make public the discounted rates that they demand from doctors accepting their insurance products.

The federal initiative has limited use as a shopping tool for consumers because Medicare largely dictates what all doctors in a certain area get for services. The days in which physicians were largely free to set their own prices are gone, the AMA said.

But in certain cases, Medicare patients might find that they can get a better deal on care if they are willing and able to travel to elsewhere in the state to receive it, CMS said. Because beneficiaries pay a set percentage of the final bill through deductibles and co-payments, a lower-priced area would translate into cost savings for both patients and the government. Conversely, health consumers can choose to remain in a pricier area because they perceive the doctors there to have more experience in a certain type of service based on the annual procedure count tallied by CMS.

Medicare patients are not the only ones who could benefit from comparing prices and total numbers of services provided, the agency said. For instance, uninsured people could use what Medicare pays as a starting point for negotiations with doctors and hospitals on how much they will charge.

The real ultimate benefit of posting all of this information will come when beneficiaries start comparing treatment options across potential sites of service, the agency said.

"In all areas of care -- hospitals, physicians, nursing homes, health plans and prescription drugs -- we are supporting collaborative efforts that are providing unprecedented information to help people get the best quality care for the best price," said CMS Acting Administrator Leslie Norwalk.

Beneficiaries who shop around for lower prices might realize, for example, that they can get a better deal on care in a physician office setting than they would in a hospital outpatient department, or vice versa. Alternately, a service might cost more at ambulatory surgical centers in some regions, but the higher price tag might be worth it because these facilities perform the procedures more often and therefore presumably provide higher quality care.