WASHINGTON – An analysis of government data released Wednesday shows that the cost of drugs administered by doctors accounts for a growing piece of Medicare’s spending and varies widely from region to region in the United States, raising questions about whether some physicians may be misusing the pharmaceuticals.
Most of the 4,000 doctors who received at least $1 million from Medicare in 2012 billed mainly for giving patients injections, infusions and other drug treatments, those records show.
The data, an unprecedented trove of millions of billing records from Medicare – as well as interviews with doctors – highlight the role of pharmaceuticals in the nation’s staggering health care costs.
Of the $64 billion that Medicare paid to doctors in 2012, $8.6 billion was used to cover drugs, an amount that has been rising for years.
Many of the physicians who have submitted multimillion-dollar bills to Medicare blame high drug prices and say the pharmaceutical industry is taking most of the money. Typically, Medicare reimburses a physician for the price of the drug plus 6 percent.
The data reflect what appears to be an astonishing variety in how and when physicians in different parts of the country use drugs.
Medicare doctors around Huntsville, Ala., for example, annually bill for nearly $600 in physician-administered drugs per Medicare patient. This is about the same as places such as Sarasota, Fla., and Fresno, Calif.
But that amount is about five times what Medicare doctors around Boise, Idaho, and Mason City, Iowa, bill for drugs, according to a Washington Post analysis of the data.
There could be differences in the rates of disease, “but that’s not enough to explain a $500 difference” between what Medicare pays for drugs in those cities, said Jonathan Skinner, an economist at Dartmouth College, where researchers were the first to analyze geographical variations in medical practices.
Jeremy Hon, 63, one of a dozen oncologists at a Huntsville practice, received $4.26 million in reimbursements from Medicare in 2012, about $880,000 of that for administering Neulasta, which helps fight infection during chemotherapy.
“We take care of high-risk Medicare patients with numerous medical problems,” he said Wednesday. “We’re a little more liberal in the way we’re using it,” he said of the drug.
If some patients aren’t treated aggressively, he said, they don’t survive as long. By using “a little more” of the drugs, “our patients live longer.”
Hon said he doesn’t deal with the business aspect of the practice and doesn’t factor the drug cost into his thinking, because that would cause bias and be unfair to patients.
“We run an honest operation and we are proud of it,” he said.
Likewise, Constantine Saadeh, a rheumatologist in Amarillo, Texas, played down the amount of money he received from Medicare.
He received about $1.4 million from Medicare for his use of Remicade, for moderate to severe rheumatoid arthritis. He stands among the most prolific dispensers of the drug in the Medicare records, the data show.
“If you want to know who makes the money, it’s the drug company and the middleman,” he said.
Saadeh said he receives a discount for using large volumes of the drug but dismisses the notion that there’s much money for physicians who administer it. He notes that another practice in the area routinely sends Medicare patients to him for the drug and keeps the patients who have private insurance.
“We are not doing this because we make tons of money,” he said. “We are taking the referrals that no one wants.”