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Coding and Health Care Costs

By March 4, 2022Commentary

Health care reimbursement for most services is made via claims filed with a private insurance plan or government plan that covers the patients.  Those claims are required to include codes that describe the combination of the patient’s condition and needs and the services provided by the clinician to treat that condition.  As you might imagine (but government policymakers seem to have trouble understanding) providers are highly motivated to use coding in a way that maximizes reimbursement.  This has led to a decades long battle between providers and their consultants seeking to increase payment and health plans trying to prevent games-playing and limit payment.  When government changes coding, consultants immediately try to help providers figure out how to circumvent any intent to lower reimbursement.  A typical visit to deal with a non-acute payment is often called an evaluation and management visit.  The government, using work done by the American Medical Association, recently revised the guidelines for coding of these visits, which have several levels.  This paper examined what changes in coding occurred following the change in the guidelines.  In a very short period of time, providers began doing reduced coding of less-intensive visits and increased coding of higher-level visits, which led to higher payments.  This constant back and forth, which usually doesn’t achieve the intended goal of reducing reimbursement, is one reason we have so much difficulty in controlling national spending.    (Annals Article)

Join the discussion 4 Comments

  • Cliff Hadley says:

    Dad was a small-town physician in Nebraska. How well I remember him working deep into the night at the dining room table filling out piles of insurance claim forms. The government reimbursed for treatment and followup separately, forcing rural patients to choose — make a long trip to town to talk for five minutes of followup, or simply get it done on the phone. Most preferred the phone. Dad checked off both boxes anyway. “They make me lie because I refuse to work for free!” As he neared retirement in the 1980s, he raised his rates for the first time in 25 years, going from $5 for an office visit to $10 and $10 for a house call to $20. Medicare said that exceeded its parameters, and that he couldn’t make such an increase. It took a U.S. Senator and months of wrangling to make the case that my dad’s rates were still the lowest in the state, even after the increase. Dolts.

  • Cliff Hadley says:

    My father was a small-town physician in Nebraska. Even 50 years ago, third-party payment was a chore, made more so because he had to do all the paperwork himself, whittling down insurance forms piled on the dining room table night after night. Oftentimes the box-checking was in conflict with practicing good medicine. Example: Treatment and followup office visit were separate boxes, thus discrete payments. But dad would give rural patients the choice, either drive 50 miles round-trip for the followup visit, or it could be done over the phone. Most chose the phone option. Dad still checked that they came for a second office visit. “If I don’t lie on the form, the patient and I waste time and money,” dad explained. “And then I have to work for free.”

    Bureaucratic blindness drove dad crazy at times. As he neared retirement, he decided to raise his basic rates for the first time in 25 years, with a $5 office visit going to $10, and a $10 house call going to $20. Medicare wouldn’t let him do it, because the increase as a percentage exceeded the agency’s fee parameters. It took months and the help of a U.S. Senator to convince Medicare that dad’s new rates, even though they exceeded the agency’s fee formula, were still the lowest rates in the state. They still objected, but reluctantly allowed dad his new rates.

  • Cliff Hadley says:

    Sorry to all about the double post.

  • JT says:

    Another layer of the tangled business of C19 above.

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