Medical coding driving costs up

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


Montana’s making progress

In Montana this week to deliver the keynote at the annual Governor’s Workers Comp Conference and get in a good bit of hiking in the mountains around Big Sky as well.

Truth be told, I hadn’t been tracking goings-on in the Big Sky state’s workers comp system, but in prepping for the conference, I learned a good deal.

MT has some state-specific challenges; doctors can be few and far between in many areas, making direction of care a significant challenge.  The culture is very labor-friendly which can lead to courts confusing over-treatment with good care. The growth in the energy sector in eastern Montana is adding jobs with potential for higher-severity injuries.

Then there are the similarities; the over-prescribing of opioids is likely as big a problem here as in most states.

Over the last couple years, a lot of progress has been made:

– hired a Medical Director for the Department of Labor and Industry’s Workplace Relations Division (equivalent to the work comp division in other states)

developed and implemented medical treatment guidelines based on a combination of Colorado and ACOEM

– enabled employer direction of injured workers to specific physicians

– allowed payers to close some claims after sixty months (there’s a lot of detail here, but suffice it to say this was a big problem in MT)

While it is still too early to fully understand the impact of these changes, there’s no doubt these reforms will help improve care while reducing employers’ and taxpayers’ costs.

And Montana has been smart enough to ban physician dispensing of drugs to patients, a prescient stance that has protected injured workers, employers, and taxpayers from the “let’s see how we can soak employers for as much money as possible while pretending we’re all about patient care” set.


Upcoding for medical care – it’s everywhere

“Thousands of doctors and other medical professionals have steadily billed higher rates for treating elderly patients on Medicare over the last decade — adding $11 billion or more to their fees and signaling a possible rise in medical billing abuse.”

That’s a statement from a study of Medicare billing and coding practices released by the Center for Public Integrity, and is the lead on a lengthy and well-documented article detailing the dramatic increase in higher-complexity medical codes billed to Medicare over the last decade.

The implications for taxpayers, private insurers, workers comp and auto payers are obvious.  If docs and their billing departments are upcoding for Medicare office visits, they almost certainly are doing the same for all patients.

Interestingly, the increasing use of electronic medical record systems by many physician practices may be a contributing factor, as the systems “make it easy to create detailed patient files with just a few mouse clicks.”  These details are essential to demonstrating and documenting the level of work and time commitment involved in specific office visits.

That said, just because a doc has mostly higher-level office visits doesn’t mean they are doing anything wrong. Some providers’ patients are just sicker (“higher acuity”) than others’, requiring more time and effort.

What does this mean for you?

It is highly likely your mix of E&M codes has trended towards the more complex over time.  You may well want to identify those docs where the mix has swung dramatically at some point as that may indicate inappropriate billing.


The RIMS Conference and workers comp

While the annual Risk Insurance Management Society Conference is among the largest property and casualty conventions, if you’re looking for the latest information re workers’ comp you will have to go elsewhere.

[disclosure – I’ve keynoted the two main WC conferences over the last year, and was heavily involved in programming for one of them]

I’ve come to this conclusion after attending a dozen or more RIMS shows over the years and working with several entities submitting conference sessions; almost all were rejected.  This year, the Conference planners rejected a session entitled “Attacking the Opioid Crisis in Workers’ Compensation”. This “thanks but no thanks” led me to conclude RIMS just isn’t that interested in, focused on, or perhaps aware of issues relevant to workers’ comp. [more disclosure – I was one of the speakers proposed for the opioid session]

There is no issue more salient, timely, or significant than the opioid crisis, and exposing risk managers and industry executives to this issue would have helped them understand just how critical the situation is.

Reports from the major research institutions linking opioid use to increased medical costs, longer disability duration, and poor outcomes have certainly raised the profile of this issue; The Workers Compensation Institute had several sessions on the topic; the New York Times has seen fit to publish a major article on the impact of opioids on claimants and payers; the National Workers’ Comp and Disability Conference has an entire track on opioids; the American Insurance Association has made addressing the issue a top priority; NCOIL had a lengthy session on the issue at their last meeting and is doing the same at their next get-together.

That’s not to say RIMS doesn’t have some quality sessions – this year’s overview of health reform was well done- but in general WC sessions are few and tend to be basic.

That may well be intentional; RIMS’ audience tends to be less-work-comp-specific than the attendees at the other major conferences cited above.

That said, opioids’ impact on workers’ comp is a topic worthy of attention by the leading P&C industry conference.


Aetna CFO on workers’ comp

Aetna’s presentation at an investor conference addressed the acquisition of Coventry and provided just a bit of insight into their plans for workers comp

Here’s what CFO Joe Zubretsky  – who some have said is “no fan of workers’ comp) said…

“The second point I would make — so there is specialty revenue. The second point I would make is, and we didn’t count this as well, but I’m quite excited about it, because it’s been a vision of ours for many, many years, to unlock the value of workforce optimization by combining the skills of long-term disability, health care, and workers compensation. And when you think about it, all of those three lines of business and coverages intersect with the healthcare system, and somebody is not at their desk every day.

They have the best and largest workers compensation platform in the industry. We have dabbled in that industry over the years, but we’ve never been able to unlock its secret of profitable growth. So now that we have a fantastic long-term disability platform, what we think is the industry-leading healthcare platform, and now with the world’s or the US’s largest worker’s compensation platform, we believe we will be able to embark upon a strategy of workforce optimization, presenteeism that has not been seen before. But that’s probably out a ways and may be a futuristic view, but we think there is value there.”

[emphases added, thanks to for transcript]


Managed Care Matters – new and improved

With this morning’s post, we’ve moved to WordPress as the publishing platform.  We’ve also updated the look and feel of MCM to make it a bit “sleeker”, easier to navigate, and more user-friendly.  Julie Ferguson and Chris Miller (boss at Artefact Design) have done all the work; I just write the checks (and the posts).

MCM has been around for eight years now, a lifetime in the brave new world of social media.  Over those years, we’ve published 2471 posts, all accessible via the search function on the home page (yup, kept my unfortunately wrong ones too; Rob Gelb you haven’t been forgotten).

We’re up to 3471 subscribers (after cleaning up the list a bit) and average around 1700 readers a day (with pretty wide swings).

Couple things worth noting

What is ‘publishable’

Folks either are a) eager to get their name/company/new product-customer-idea published in MCM or b) anything but.  Many of my conversations with industry execs start with “this is confidential, right?”  The answer is always “Yes”.  I could not survive in the consulting world if my clients feared they’d appear on MCM (without their express approval).

At the other end of the spectrum, I am often approached by people eager to use MCM to get some publicity.  Mostly, I gracefully decline (ok, sometimes not so gracefully).  Occasionally the approach is professional enough, and the ‘thing’ topical enough, that it merits publication.

MCM ‘attitude’
Every now and then I get myself into a bit of hot water (sometimes an ocean’s worth) over a post, a characterization within a post, or an honest mistake. I’ll continue to retract and apologize for errors. I will also continue to opine assertively when I think the issue merits assertive opining. When I hear something that’s newsworthy, I’ll post it (after verifying thru at least two sources). And of course you can always rely on MCM to debunk stories, press releases, and flat out BS, with the tone and histrionics directly in proportion to my level of outrage.

Comment policy
You would not believe the spam comments I get – over a hundred a day, and sometimes two hundred. We’ve tried everything to ensure your comments get thru (even ones I take issue with) while blocking spam; for now I have to review all comments before they go thru. Hopefully this new platform will help.

As always, rants and comments disagreeing with me will not be posted unless opinions are backed by sources cited accurately. That’s not to say I won’t post different opinions; always have and always will.

What’s coming up.

The election season – also known as the Silly Season – is upon us (painful sigh).  My politics are well known (sometimes to my detriment) but I won’t hide my views.  If you don’t like my stance, I’m happy to hear from you – keep it professional and courteous.  If you are tempted to insult, I’d suggest you consider this.

About a year ago, I received a particularly nasty string of emails from someone on the opposite end of the political spectrum calling me, among other things, a commie, socialist, leftist, idiot, liar.  This person’s boss’s boss is also a subscriber and has become a friend – even though he’s also very conservative. He offered to discuss the issue with my antagonist; I declined.

The internet is forever, folks.  Be smart, be professional, be respectful.




Health Wonk Review is posted

For his third time up to bat, Jared Rhoads is hosting Health Wonk Review over at the Lucidicus Project. Get the latest bi-weekly dose of health wonkery from the best and the brightest of the health policy blogs. Thanks Jared!


Fresh Health Wonk Review awaiting your perusal

In Joe’s absence, no need to go without your regular health care policy fix. He lent me the keys to his kingdom so that you could be alerted to a fresh edition of Health Wonk Review posted by Paul Testa at The New Health Dialogue Blog.
– Julie Ferguson