Ambulance rides a costly chunk of Minnesota’s Medicare payments

April 15--The federal Medicare health insurance program winds up paying the fare for many of the ambulance rides provided by the city of St. Paul.

That's why the city in 2012 was one of the largest single recipients of Medicare payments among non-hospital health care providers in the state, according to data released this month by the federal government.

Out of more than 19,000 health care providers during 2012 who cared for Medicare patients in Minnesota, the city's take of more than $2 million was the ninth largest individual sum.

Whether they were providing ambulance rides or treating illnesses, the state's non-hospital providers collected less money on average in 2012 than their peers across the country, according to a Pioneer Press analysis of the data.

Health care experts say relatively low payments in Minnesota make for a familiar story, since low use of health care services here means doctors and other providers tend to collect less overall from Medicare.

"We tend to not only have lower prices here, we tend to have lower utilization," said Mark Sonneborn, vice president for information services at the Minnesota Hospital Association. "Where a physician somewhere else might see a patient six times per year, we see a similar patient four times -- it's just our way."

The data release from the federal Centers for Medicare and Medicaid Services (CMS) covers 6,000 different types of health care services, including many provided by physicians both inside and outside hospitals. The numbers show payments to more than 880,000 health care providers across the country; collectively, they received $77 billion during 2012 from the Medicare Part B fee-for-service program.

The tally doesn't include Medicare Part A payments, which typically go to institutions involved in a patient's care such as hospitals and nursing homes. Released on April 9, the new data set is unique because it shows how much Medicare paid to particular physicians by name. But interpreting the numbers can be tricky.

The Medicare release makes it look like Dr. Franklin Cockerill, the chairman of the pathology department at the Mayo Clinic, is the highest-paid Medicare physician in Minnesota -- with a whopping $11.6 million in payments during 2012. But Cockerill didn't personally receive the money, said Bryan Anderson, a Mayo Clinic spokesman.

Instead, the payments represent total fees for all patient specimens tested at Mayo laboratories during the year. Cockerill's name appeared on all claims because he the supervising physician for the clinical laboratory tests, Anderson said. But that doesn't mean he got the money.

"Like all Mayo clinic physicians, Dr. Cockerill receives a salary," Anderson said in a statement. "He doesn't receive commissions on tests performed by Mayo laboratories."

In Minnesota, 19,364 health care providers collected a total of nearly $633.6 million from Medicare during 2012. That works out to an average of $32,720 per provider, according to a Pioneer Press analysis.

In Wisconsin, 19,601 providers collected a total of $926 million for an average of $47,254 per provider, the analysis shows. The national average was nearly $88,000 per provider, according to the analysis, while service providers in Florida topped the list with an average payment of $144,205.

Interpreting the numbers is difficult because they aren't adjusted for factors that could explain why Medicare pays some physicians more than others, said Jim Chase of Minnesota Community Measurement, a nonprofit group in Minneapolis that publishes reports on health care costs and quality.

Some doctors might collect more from Medicare simply because a larger share of their patients happen to be covered by the federal program, Chase said. Others might collect a lot because their Medicare patients are sicker, and require more costly services.

The data could be useful to researchers, however, because it could point to cases where physicians or other service providers collect a lot of money because they aren't being efficient.

"It's going to give people an opportunity to dig," Chase said. Researchers could address questions such as: "Are you using the most effective (supplies) at the least cost available?"

Patients shouldn't use the new data to make judgments about the quality of care provided by doctors, said Cindy Firkins Smith, president of the Minnesota Medical Association.

Also, patients shouldn't look at the numbers and think the tallies show a doctor's profit from Medicare, Firkins Smith said. The Medicare revenue covers the cost of providing services, which in some cases includes expensive medications that are administered by physicians in hospitals and clinics.

In some cases, she said, the Medicare revenue might not fully cover all of a doctor's costs.

"When it comes to overall payments to physicians, Minnesota physicians seem to be paid less," Firkins Smith said. "Is it because we charge less? ... Are physicians ordering fewer tests or charging less expensive things to Medicare? We're just guessing."

While it's difficult to interpret the new data, the numbers seem to fit with previous studies showing relatively low use of services by Medicare patients in Minnesota, said Sonneborn of the Minnesota Hospital Association. Those studies, Sonneborn added, don't suggest that Minnesota patients are suffering as a result. On the contrary, health outcomes in the state are relatively good, he said, so past studies of Medicare patients have led to a perception that doctors and hospitals in Minnesota deliver high-value care.

The new numbers don't include fees paid by Medicare for patients covered through Medicare Advantage health plans, which are operated by private insurance companies. That's a big gap in Minnesota, because about half of all beneficiaries in the state are covered through Medicare health plans.

The new numbers show about $37.4 million in total payments for ambulance services in Minnesota during 2012 -- the fifth largest category of care costs here.

Among ambulance companies, the two biggest recipients were Gold Cross Ambulance Service in Rochester and the Allina Health System, which operates its medical transport service out of St. Paul. Each service received more than $6 million from Medicare during 2012.

The city of St. Paul's ambulance service received about $2.15 million -- the ninth highest tally among individual service providers in Minnesota.

"About 25 percent of the revenue that we collect is for Medicare" patients, said Steve Zaccard, the city's fire marshal, adding that total Medicare revenue in 2013 was $2.9 million. "It's probably the biggest single payer."

Other reports have suggested that Medicare winds up paying less for ambulance services in Minnesota than in other parts of the country, said Buck McAlpin of the Minnesota Ambulance Association. Those other reports have noted how Minnesota health systems do a relatively good job, McAlpin said, helping patients get care in the most efficient setting, which often means outside the emergency medical system.

"The health care system is doing some good care coordination," McAlpin said. The coordination "reminds folks that there are other options than calling 911 for an ambulance."

MaryJo Webster, senior data reporter for Digital First Media, contributed to this report. Christopher Snowbeck can be reached at 651-228-5479. Follow him at twitter.com/chrissnowbeck.

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