Tuesday, September 18, 2012

Our Problems With Codes

Oh, that clever Center for Public Integrity.  Look what they've gone and done now!  My, oh my.  According to the article, doctors are much of the the problem, billing "billions" of Medicare upcharges according to the center.

But what if the medical coding game itself is flawed?  Stop for a moment and imagine what it would look like if lawyers billed like doctors.  Suddenly, we see how bizarre the world of government billing codes and chart-completion mandates has become.

Not long ago I asked the blog-o-sphere what my time is worth on a per-hour basis.  Collectively and independently, the blog-o-sphere settled on a number of about $500/hr (see the comments).  Now look for a moment at what Medicare pays, even at its highest level of billing for a physician's time for evlauation and management of a medical problem: for 40 minutes of a physician's time, it's $140 (or $210/hr) before taxes.  Again, we see another disconnect as to how doctors are valued in our current system.

Doctors are working long hours to collect these fairly low fees from Medicare while jumping more hoops than ever to do so.  They have become pseudo-experts at the coding game, trying to get as much money for their extra efforts as legally possible.  But these fees paid by Medicare do not cover payments for time spent on phone calls, e-mails, and working insurance denials.   These services are still considered by our system as gratis. To partially counteract this coding problem, doctors realized (and the government insisted) that doctors use electronic medical records.  But when independent doctors set out to implement these records they quickly discovered that the expense and long-term maintenance costs of local office-based EMRs could not compete with more sophisticated systems already in use by their neighboring large health care systems.  Because of ever-increasing cost-of-living and overhead costs, not to mention the threats of large fee cuts, doctors have migrated to large health systems faster than ever.  With the fancier electronic record at those systems (streamlined for billing, collections, and marketing) fields required for higher billing codes (but not always material to the problem at hand) are completed in less time.  So are doctors really the problem?

It depends on who's looking.  Since every medical test and order is tied to a doctor's name, then of course it looks like doctors are the problem.  And yet it's the government who has mandated the codes, the requirements for chart completion, and the electronic records to which our electronic signatures are attached.  But we should ignore these facts; in the eyes of the Center for Public Integrity, of course its the doctors' and hospitals' fault. 

And what do you think the government's response is to all of this? 

Why, get get ten times the number of billing codes, of course!

So take a moment and imagine a world without codes might look like.  A world where doctors are paid for their level of expertise, time with patients, time with communication for those patients, and time their connected to the EMR to enter codes, document, e-mail, and care for patients.  No codes, just time-based billing at a level of commensurate with their skills.  If we can track billing codes, we can track doctors' time.  Gosh, it's sounding sane isn't it?

If we really want out of this coding and billing conundrum, we should stop the coding schemes.  Pay doctors for what they are worth in today's market.  Pay doctors for their time as well as their productivity.  Throw away the codes, the consultants, the code licensure fees, and the nonsense.  Compared to current administrators of these coding schemes, people might actually discover that doctors and hospitals are the path to salvation for excessive health care costs rather than the instigators of coding fraud.



Anonymous said...

FWIW, I think the $210/hr in the system matches pretty well with the $500/hr as an independent contractor.

That $500 includes all of the overhead, which is typically billed separately from the Dr fees on the bills I receive. We talking the office space, marketing, parking lot, computers, phones, record keeping, an so on.

On the bills for our family, the facility charges usually cost about as much as the expertise.

I think most people are shocked by the overhead costs for independent contractors, even in low overhead businesses (like offering expertise).

Overhead is easily half of what is charged in many cases. In my little part of the health care world, overhead is billed separately (and woe unto the patient if the Dr moves his office next to a hospital - your overhead fees just doubled for no apparent reason).

And yes - codes are an unintelligible mess.

Anonymous said...


You are 100% incorrect. I have no idea what doctors you are seeing but Medicare and insurance do not give two hoots about my overhead costs or the fact that they go up 5-7%/year and their reimbursements to me have gone up 0% in the last 2 years.

$210/hr is gross practice income. Out of that comes all overhead.
My mid-sized family medicine/internal medicine office runs about $250/hr for overhead per doctor.
Level 5 visits that actually take 40 minutes literally lose money as they don't cover the cost of keeping the doors open.
The time codes are valued entirely too low.
4 level 3s pay roughly $265/hr if you actually take 15 minutes each(the 'recommended time' per CMS). That leaves enough for the doc to take home $15/hr or roughly $30,000/year.
Basically a Family/internal doctor makes his money on doing the work quicker than the recommended times and on stuff like EKGs/spirometry and procedures(pay way better per unit time).


Anonymous said...

I think Anonymous #1 assumes that Dr. Wes is paid the full $210 and the facility fee covers all the executive perks and lobby fountains.

Guess again.

Anonymous said...

Anon 1:13 here.

I appreciate the pricing feedback. It's interesting to see what goes on in different parts of the healthcare world.

My numbers are based on my personal office visits to an EP. I go to a big facility whose name you would recognize. They bill me for the visit. The Doc bills me separately for his part of the deal. After BCBS knocks the price down to negotiated rates, I'm paying each of them (the Doc and the facility) more than $250 each.

I understand it's not the same at a GP/FP. We have those bills in our family too. Since Dr Wes is an EP, I started there.

Anonymous said...

Or, as in the pharmacy sphere, retail pharmacists are reimbursed pennies or minus pennies for each script filled. Drugs do cost money, by the way. Despite the mega chains selling prescription medications for 'freeeeee'.

Anonymous said...

ANon 1:13, you are going to an EP that gets a facility fee. The facility fee does not go to the doctor unless he owns the facility. Then it depends on who pays the nurses/ligght bill/malpractice cost/EMR maintainance fees/etc on how much of that $210/hr the doc actually gets.
Facility fees for docs that are owned by the hospital is one of the biggest(legal) scams going. Same work done by same type of doctor but bill is $766 instead of $66.
Wall Street Journal( I think, maybe NYT) had an article on this within last week or so)


Anonymous said...

Agree. The "facility fee" (which is sometimes charged when the doc's office is on the other side of the county from the facility)is the lowest hanging, easiest to reach fruit for Medicare cost savings, but too many vested interests like it.

Anonymous said...

Anon 1:13 -

$250 for your visit to (presumably) a board-certified cardiologist/electrophysiologist seems more than fair. What does your auto mechanic charge for a "typical" auto repair/maintenance? I once had a patient tell me he felt his BMW technician deserved to make more per hour than a physician, because the "technology is complicated".

Anyway as far as medicare & electronic billing "fraud", what do the following have in common:

a) speed trap on a short stretch of road w/50mph limit, between two highways that have a 65mph limit
b) medical malpractice lawsuit
c) medicare accusations of overbilling

answer: they all generate fear among the MAJORITY of participants.

As my wise parents always used to say, when a rule/law affects more than a tiny group of outliers, the problem is with that rule/law.