Court sides with doctors on privacy of Medicare claims, reverses 2007 ruling

Washington -- A federal appeals court said physician privacy dictates that a consumer group is not entitled to receive and publicize Medicare physician claims data. The court added that the information would not be of use to patients anyway.

Consumers' Checkbook/Center for the Study of Services sued, in 2006, the Dept. of Health and Human Services under the Freedom of Information Act to obtain selected physician claims data. The organization hoped to provide patients information on the number of major procedures performed in 2004 by each Medicare physician in four states -- Illinois, Maryland, Virginia and Washington -- and the District of Columbia.

The appeals court's Jan. 30 decision reverses a district court ruling of August 2007. It prevents both the data release and the publication of a free public resource that Checkbook/CSS had planned to produce using the information. The American Medical Association was successfully added to the case as an additional appellant after it urged HHS to challenge the lower court's ruling. While the appeal was pending, the release of the claims data was put on hold.

The AMA called the latest ruling a "major victory" for preserving physician privacy and for protecting patients who otherwise could have received bad data.

"We are in favor of patients having information that's evidence-based and statistically balanced, but the problem with the request by Consumers' Checkbook is that it's raw billing data, which could be misleading to society," said Jeremy A. Lazarus, MD, a psychiatrist from Denver and speaker of the AMA House of Delegates. "Unless it's tied to quality measures and an adequate patient size, then it could be damaging."

Checkbook/CSS anticipated that a patient could use the information when seeking a physician for a specific procedure. A patient could find out how many of these procedures a given doctor performed over the course of a year and choose a more experienced physician.

But that is not the only factor to consider when finding a physician, said Cynthia A. Markus, MD, an emergency physician and president of the Washington State Medical Assn. "Sheer volume of cases does not necessarily ensure quality. It may in fact indicate just the opposite."

The information requested by Checkbook/CSS "does not serve as a ratings system," said K. Edward Shanbacker, the Medical Society of the District of Columbia's executive vice president.

"It would have been misleading to patients if they had tried to extrapolate data from the Medicare program on a per-procedure basis. It doesn't speak anything about the physician's competence or quality," he said.

The U.S. Court of Appeals for the D.C. Circuit agreed in a 2-1 decision. The court weighed the "nonexistent public interest against every physician's substantial privacy interest" and concluded that exposure of the data "would constitute a clearly unwarranted invasion of personal privacy."

For instance, the data elements Checkbook/CSS sought included the diagnosis, type of procedure, place of service and the Medicare ID number of the physician who performed the service. Because related physician personal information is all publicly available online, as are the Medicare fees a doctor receives for performing a specific procedure, an individual could use the Checkbook/CSS resource to calculate the total yearly Medicare payments made to a specific physician, the court said.

Seeking greater transparency

Checkbook/CSS, a nonprofit that rates firms and services for subscribers, said the decision denies the public a powerful tool that could be used to assess the quality performance of doctors and the quality performance of the Medicare program.

"In the world of free speech, more information is better than less," said Robert Krughoff, president of Checkbook/CSS. "The court is way off track by saying people might misuse the information. Sure, it's a possibility, but it's not something that should be stopped."

Krughoff said his organization is considering its options and may request the court to re-hear the case "en banc," meaning all the members of the appellate court would weigh in. While its initial request under the Freedom of Information Act only included the four states and the District of Columbia, he said interest in obtaining claims data likely would spread to other states.

Because Medicare officials have launched initiatives to ensure quality health care through accountability and public disclosure, Krughoff questioned why the government chose to fight this disclosure. "Governments are not always enthusiastic about transparency when it means their own performance will be judged."

But the court did not buy that connection. "We fail to see how the requested data will allow the public to evaluate the performance of any specific quality-promoting programs [Medicare] has a statutory duty to undertake," the ruling stated.

An HHS spokesperson said the department has no comment on the court's Jan. 30 ruling because the pending suit has not yet been dismissed. But the department has stated a commitment to making Medicare claims data available as allowable by the law. In challenging the suit, it cited a 1979 ruling by the U.S. District Court for the Middle District of Florida that prohibited it from disclosing Medicare pay data that would have identified individual doctors.

Krughoff lamented the AMA's impact on the case.

"I wish the AMA had come out on the other side of this," he said. "They have been strongly against it. But I don't think that means all individual physicians oppose it. I don't know if the government would have appealed without the AMA's involvement."