Medicare data release shows Illinois’ biggest billers

April 11--Dr. Alexander T. Kalk agreed in 2009 to surrender his license to practice medicine in Missouri in lieu of possible disciplinary action by that state.

He set out for Texas but didn't stay long, according to public records.

By 2011, Kalk had moved to Illinois and began working for an Elmhurst company called Advanced Health, according to state records and the practice.

By agreeing to stipulations put forth by the Illinois Department of Financial and Professional Regulation, Kalk could keep his Illinois license intact, albeit in a state of indefinite probation. Kalk could not drink; he was not allowed to practice medicine alone, according to an Illinois consent order.

In this new setting, focused on nonsurgical treatments for joint problems, Kalk received one of the highest reimbursement totals in Illinois from Medicare during 2012, federal records show. He billed the federal health program for the elderly $11 million and was paid $3.5 million, making him Medicare's second-highest-paid family practice physician nationwide and the eighth-highest in Illinois among all doctors.

Like thousands of other doctors across Illinois and the U.S., Kalk this week found his Medicare billings subjected to public scrutiny, as federal officials for the first time released data on what the government pays physicians to treat senior patients. Until Wednesday, this information was veiled from public view.

Newly released records from the Centers for Medicare & Medicaid Services detail the $3.4 billion paid to Illinois providers in 2012 under Medicare Part B, which includes doctor visits, laboratory tests and other treatments generally administered outside of a hospital.

The data show the kinds of procedures performed, drugs administered and the number of patients treated. The vast majority of this sum -- about $2.9 billion -- went to 35,000 individual doctors like Kalk, a Tribune analysis shows.

The data only cover the sums submitted to and paid by the federal government, aggregated by the type of service. The information contains few clues, if any, about physicians' costs or profits for treating patients.

Critics, including medical groups like the American Medical Association, have fought for years against the release of the data, saying the information lacks the context required to separate doctors who may be abusing the system from those who engage in complex treatments with high overhead costs, such as oncology and ophthalmology. Billings from other providers in a group practice, such as a nurse practitioner, also could be attributed to a single physician who owns controlling ownership of the group.

The data dump "has significant shortcomings regarding the accuracy and value of the medical services rendered by physicians," said AMA President Dr. Ardis Dee Hoven. "Releasing the data without context will likely lead to inaccuracies, misinterpretations, false accusations and other unintended consequences."

Some physicians and practices noted that some of the Medicare payments were passed through directly to drug companies, used to buy and maintain equipment, and pay for other business expenses.

Medicare officials said the release of the data provides the public with a window into how billions of dollars of taxpayer money is spent, as well as long-overdue transparency for health care consumers.

"Taxpayers have the right to understand what is being paid for," said Jonathan Blum, principal deputy administrator for Medicare. "We want the public to help identify spending that doesn't make sense and that appears to be wasteful and fraudulent."

But Medicare officials also cautioned against drawing conclusions on individual doctors based solely on the payment data.

Health insurance plans, researchers, large business groups and others cheered the data release, saying it offers better transparency.

"More information about the cost and frequency of medical services can help consumers make more informed decisions about their health care and ultimately improve health care quality," said Gary Loveman, chair of the Health and Retirement Committee of the Business Roundtable, a large-business trade group based in Washington.

Kalk did not respond to Tribune inquiries seeking more information about his practice and his billings.

In a voice message left for the Tribune late Wednesday, a man who identified himself as Kalk said: "For the record, I'm employed full time as a procedural physician. I receive a very modest salary and I do not benefit from any Medicare payments."

Advanced Health does business as Osteo Relief Institute, state records show.

Osteo Relief Institute, in an unsigned emailed statement, said, "We don't see any connection between Dr. Kalk's past issues and being named on Medicare's list. A causal relationship is inferred when in fact there isn't one, and this is misleading accordingly. The fact is he has moved on, he is in full compliance with any probationary stipulations, and he has been able to help many patients who suffered from joint pain."

A subsequent email from Osteo Relief, again unsigned, said Kalk is not employed by Osteo Relief. "His involvement is with Advanced Health S.C. since he is employed by that entity and any billings are under that entity," it said.

Kalk agreed to surrender his medical license in Missouri in summer 2009 after a state investigation found him in violation of several laws regulating the handling, storage and dispensing of controlled substances, including prescription drugs.

The Missouri settlement agreement did not restrict him from applying for a medical license in other states. Kalk admitted to mishandling narcotics, according to the agreement.

According to the Medicare data, in Illinois Kalk did not provide services that were particularly expensive. The priciest one -- an injection to increase the visibility of a knee joint under X-ray -- averaged less $200 per treatment.

But the family practice physician charged for more of those injections than any other individual doctor in the nation, receiving more than $920,000 for about 4,700 procedures, according to the Tribune analysis.

Kalk also was paid more by Medicare than any other practitioner in the country for three additional treatments: injections of sodium hyaluronate, known by brand names like Hyalgan and Supartz, which is used to treat osteoarthritis; procedures involving a live knee X-ray to guide the placement of needles used for biopsies, injections or aspiration; and a contrast X-ray of the knee joint.

Dr. Andrew D. Bunta, vice chairman of the department of orthopedic surgery at Northwestern University'sFeinberg School of Medicine and at Northwestern Memorial Hospital in Chicago, said it's difficult to draw firm conclusions based on the data.

But, he said, Kalk's procedure volume and national rankings are "far beyond what is usual and customary."

Aside from Kalk, the family practitioner, the other 14 of the top 15 Illinois doctors in terms of 2012 payments from Medicare worked in either ophthalmology or oncology, the records show.

Of the 151 Illinois physicians paid at least $1 million from Medicare in 2012, 68 are cancer doctors and 43 are eye doctors, according to the Tribune analysis.

The Illinois figures mirror those nationwide, where those two fields accounted for 17 percent of Medicare Part B reimbursements, largely because physicians in those disciplines tend to use more expensive technologies and drugs to treat patients.

At the top of the list in Illinois was Dr. David Dodwell, a Springfield retina specialist who received $5.8 million in Medicare payments in 2012, the data show.

Dodwell said the Medicare data "alone will offer a distorted view of the revenue generated by retina specialist practices," which generally have higher costs because they use more advanced, expensive technologies than most doctors.

He also said the high-cost drugs he provides to patients aren't typical prescriptions they can get at a corner pharmacy. Instead, his office buys the drugs and is reimbursed by the Medicare program, counting toward his total payments in a given year.

"As a result, the claims data will be skewed higher for a practice such as mine," Dodwell said.

About $2.4 million, 40 percent, of his Medicare payments were for a macular degeneration drug called ranibizumab, more commonly known by the brand name Lucentis, federal records show. According to its manufacturer, Genentech, the drug costs about $1,950 per 0.5 milligram vial and is typically injected into the eye to prevent vision from deteriorating.

Genentech also makes a drug called Avastin, which is approved by the U.S. Food and Drug Administration to treat certain types of cancer.

Avastin, which the Medicare data say costs about $50 per dose, was shown in a 2011 National Institutes of Health study to work as effectively as Lucentis in preventing vision loss in patients with macular degeneration.

Some physicians nationwide adopted the off-label use of Avastin to treat the condition, records show. In 2012, 1,450 ophthalmologists billed Medicare for Avastin under its specific treatment code, compared with about 1,580 who billed for Lucentis, according to the Tribune analysis. Some billed for both.

But in Illinois, Avastin is billed to Medicare almost exclusively for the treatment of cancer. Dodwell and other doctors continue to use Lucentis, despite its higher cost.

"We ... take our (patients') safety very seriously and since 2011 prefer to use on-label FDA approved medications, which are unfortunately more expensive, but inherently safer," Dodwell said in an email.

He also said his malpractice insurer recommends that he use only FDA-approved drugs for various conditions.

Dr. David Orth, president of the region's largest ophthalmology group, Illinois Retina Associates, was a principal investigator in the NIH study that ultimately concluded that the cheaper Avastin works equally well as Lucentis.

But in 2012, the year after the study was published, his Harvey doctors group billed Medicare exclusively for Lucentis, collecting $11 million for the drug, more than half of the doctors' total Medicare Part B payments. The 12 Illinois Retina Associates doctors represent about one-third of the total Medicare payments for Lucentis in Illinois in 2012, according to the Tribune analysis.

According to the data, the doctors did not appear to bill Medicare for Avastin, the significantly less expensive drug that Orth earlier helped determine was equally effective.

In a statement, Orth said the practice supports the government's efforts to make the Medicare program more transparent. But, like other providers, he pointed to the high cost of specialty drugs and equipment used to treat complicated eye conditions.

"Drug costs are by far the largest expense for many practices," he wrote.

Dr. Philip Rosenfeld, a professor of ophthalmology at the University of Miami'sBascom Palmer Eye Institute who pioneered the use of Avastin for macular degeneration, said the choice to use off-label or FDA-approved drugs is a personal one.

"Everyone has a different take on this situation," Rosenfeld said. "It's a choice the physician and the patient have to make, whether they want to use an off-label drug."

Other Illinois physicians among the top-paid by Medicare include Dr. Yagnesh Oza, an oncologist in rural Mt. Vernon, who ranked ninth-highest of Illinois doctors reimbursed by Medicare.

Oza, who the Medicare data show received $3.3 million in Medicare payments in 2012, said it makes sense that cancer doctors are high on the list.

"These chemotherapy drugs are extremely costly," Oza said, adding that he buys them upfront and Medicare reimburses his practice at about 6 percent above the price of the drug. "It's not a huge markup. It looks on paper like I was paid $105, but $100 is for the drug. I'm getting paid only $5. ... So actually it's the pharmaceutical industry that has the bigger share."

Refat Baridi, an oncologist with his main office at Pronger Smith Medical Care in Tinley Park, ranked third with $5.1 million, according to the Medicare data.

Oncology practice manager Brian Wydra said Baridi has five other midlevel physicians' assistants and nurse practitioners bill for procedures under his name.

"That could be a significant reason why the numbers are high," Wydra said. "Instead of looking at Dr. Baridi as one individual, you should incorporate the five midlevels."

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