Did Medicare waste $275 million?

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In 2005, a yearlong federal government study paid cancer doctors a combined $275 million for assessing their patient's side effects from chemotherapy. Now many other doctors and lawmakers feel that the study was a waste of money and that its findings will be of no real use to healthcare providers.

In a report released yesterday, the inspector general for the Health and Human Services Department questioned whether the money was well-spent and the integrity of the submitted data.

"We identified numerous anomalies and gaps in the data and collection methods," says the report from IG Daniel Levinson. Levinson concluded the report by calling the data "unreliable."

Chemotherapy providers were given $130 every time they assessed a Medicare patient's pain, fatigue and nausea. The payments were designed to encourage doctors to report information that might one day lead to improved care for cancer patients. While the federal government will foot the bill for most of the data, senior citizens and disabled Americans on Medicare paid, too, because they were charged $26 each time their doctors billed Medicare for submitting information about their side effects.

About 90 percent of eligible healthcare providers participated in the program. The median amount paid to each physician was $23,000 but some doctors got a lot more. The top 10 billers, whom the IG declined to identify, received more than $270,000 each.

The chairman of the Senate Finance Committee, Sen. Charles Grassley (R-Iowa), said taxpayers and beneficiaries were "bilked" because they paid for services that physicians are already supposed to provide.

Medicaid officials defend the program, saying it successfully managed to get doctors to report on quality data that can lead to process improvement and better outcomes in the future.