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AMA challenges accuracy of Medicare data dump

Recently released data about Medicare payments to doctors is missing large amounts of information, badly undercutting its usefulness for analyzing Medicare spending and making reforms to the government-funded system, the American Medical Association (AMA) charged Thursday.

The AMA said that up to 40 percent of medical provider billing codes that should have been included in the huge data dump were missing "entirely," presenting a potentially skewed picture of Medicare spending in different areas of the country and misleading the general public.

One example was the fact that the data dump identified zero Medicare claims for cases in 2012 of "closed treatment of shoulder dislocation, with manipulation; without anesthesia," according to the AMA. In fact, there were 14,685 such Medicare claims, according to other data released earlier by the federal government.

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The AMA also suggested that many of the billing codes, which identify the types of medical services provided, were significantly under-counted in the release of 2012 Medicare reimbursements, when compared with the actual uses of those services.

Last month's data release, which the AMA had long opposed, detailed $77 billion of reimbursements to 880,000 doctors and other providers by the government's health insurance program for tens of millions of Americans ages 65 and older.

"In our view, the lesson to be learned from the release of raw 2012 physician-specific Medicare claims information is twofold; it requires not only access to data, but understanding the scope, exclusions, and limitations of the information," AMA CEO Dr. James Madara wrote in a letter laying out the allegations to Marilyn Tavenner, administrator for the federal Centers for Medicare and Medicaid Services (CMS).

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"Without this context, conclusions and analyses are likely to be wrong," Madara wrote. "A continued focus on publication of raw claims data would only stand in the way of true transparency efforts."

Madara called on CMS to hold off on any plans to release Medicare claims data from past years because of the risk of compounding the damage from missing information. He demanded that doctors be allowed to "correct and explain their data," and said that the government should issue "conspicuous" warnings of the data's limitations.

The AMA boss also urged CMS to focus on creating and releasing "a more selective data set that could help patients and physicians make better care choices."

CMS received the letter, but had no comment Thursday when asked about it.

Decades of opposing release

The AMA for decades had opposed the release of data identifying how much individual physicians and other providers are reimbursed by Medicare. In fact, the AMA in 1979 obtained a federal court injunction barring the release of such information, on physician privacy grounds.

But that injunction was overturned in 2013, and on April 9, the reimbursement data from 2012 was released by CMS.

Initial news stories focused on the fact that a tiny percentage of doctors accounted for nearly 25 percent of Medicare reimbursements for that year, and highlighted some of those individual big earners, including the biggest, a South Florida physician who had received $21 million in payments.

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However, questions about the accuracy of at least some of the information immediately arose. There was evidence that some doctors had not performed many of the procedures they were identified as having billed for, but that their unique provider identifier number had been used for billing purposes. Such use is not necessarily illegal, or indicative of fraud.

On the day of the release, CMS officials told the media they hoped that researchers and reporters would comb through data, and uncover fraud and waste, as well as variations in treatment between geographic regions that could indicate a need for reform of reimbursement policies.

"We believe the public has a right to know this information," said Jonathan Blum, CMS principal deputy administrator at the time. "It has not been made public for too long."

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The AMA, in its letter Thursday, said CMS in its release of the data had failed to follow the organization's advice to notify the public of "likely problems and limitations" of the data.

The AMA also wrote that, "Ironically, in many ways this new data set is less complete than other [CMS] data sets that have been available for years."

The group noted that when the AMA made a "code-by-code comparison" of the Medicare individual provider reimbursement data with another set of comprehensive 2012 Medicare payment claims, it "found that codes for nearly 3,300 or 40 percent of the physician services" that appeared in the other set of payment claims "are missing entirely from the new data file."

"When combined with other codes, where significant numbers of claims are missing, 70 percent of codes have less than 50 percent of their utilization represented, and 80 percent have less than 75 percent of their utilization included," Madara wrote.

For example, the data dump indicated that there were about 105,000 Medicare claims by individual providers in 2012 for emergency endotrachael intubations. In fact, the more comprehensive data set indicated that there were 284,713 such claims.

Read MoreDoc who 'received' $12M from Medicare: Not so fast

On the other hand, a type of cataract removal was reported in the data dump as occurring at a rate of nearly 400 percent of what the actual rate was, according to the AMA's comparison of data.

"Admittedly, CMS pointed out that the recently released data include only $77 billion or 86 percent of the $90 billion of services delivered by physicians and others covered in this data release," the AMA wrote. "This understates the scope of the problem, however, and untrained observers nonetheless are using the data to make flawed regional, specialty, and other comparisons that CMS should do more to discourage."

Madara also wrote, "Having released the 2012 raw data, CMS is now obligation to correct and explain it."

"Instead of new insights into health care, the recently released data have brought a series of sensationalist new stories, the majority of which inaccurately reported on the data, confused the public, and in some cases may have encouraged patients to make care changes that were not in their best interest," he said.

By CNBC's Dan Mangan.

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