A post last week addressed the influence of medical coding changes on billing practices and costs – net was providers are being paid more due to more sophisticated coding.
The care isn’t different, the patients aren’t sicker, it’s just the way the providers are coding their services.
Th NYTimes just published a piece that provides a lot more detail on the issue. Here are a few of the findings of their rather extensive analysis.
- Hospitals received $1 billion more in Medicare reimbursements in 2010 than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms
- 1,700 of the more than 440,000 doctors in the country — cost Medicare as much as $100 million in 2010 alone, federal regulators said in a recent report, noting that the largest share of those doctors specialized in family practice, internal medicine and emergency care.
There are two drivers behind the issue – for hospitals it is CMS’ switch to MS-DRGs from DRGS a couple years back. By adjusting reimbursement based on severity, the new payment methodology encouraged hospitals to more accurately, or as some would suggest – more creatively code and bill. CMS determined total costs went up around four percent due to the change, so they reduced reimbursements by about the same amount.
The other driver is CMS’ ongoing effort to get physicians to use electronic medical records (EMR). While this will drive administrative costs down and provide much more accurate data for analysis and development of outcomes data, over the near term EMR vendors are selling their software in part on its ability to increase billing and reimbursement. As the NYT reported, “In an online demonstration, one vendor, Praxis EMR, promises that it “plays the level-of-service game on your behalf and beats them at their own game using their own rules.”
That’s not exactly…consistent with what actually happens. Turns out that some of these applications allow docs to simply check boxes indicating services were delivered without verifying the services actually WERE delivered.
As a result, payers – and yes, that includes you – are getting bills for services that did not occur.
So, what do you do about it?
First, look at your data to identify the providers whose billing has changed significantly at some point over the last couple years. Next, identify that inflection point, and find out if that occurred when they changed billing software/vendors. Third, look carefully at a few of the providers’ bills before and after the inflection point, figure out what’s happened, and then sit back and discuss next steps.
These could include:
- call to the provider asking what’s going on
- claim file audit
- referral to internal fraud and abuse
- onsite visit to provider
- flagging of provider’s future bills for special review