“The acronym HCPCS originally stood for HCFA Common Procedure Coding System, a medical billing process used by the Centers for Medicare and Medicaid Services (CMS).”
“Prior to 2001, CMS was known as the Health Care Financing Administration (HCFA).”
HCPCS was established in 1978 to provide a standardized coding system for describing the specific items and services provided in the delivery of health care.
The cost of Medicare and Medicaid became so high that the government decided to start knowing what it was paying for and standardizing the payments.
“Such coding is necessary for Medicare, Medicaid, and other health insurance programs to ensure that insurance claims are processed in an orderly and consistent manner.”
This coding system has been dysfunctional since the government developed it for Medicare and Medicaid in 1978.
The unspoken goal was to decrease reimbursement for services provided for Medicare and Medicaid patients.
The government wanted to commoditize can reduce reimbursement by the evaluation of physician and hospital usage of procedure and services.
Initially, use of the codes was voluntary, but with the implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) use of the HCPCS for transactions involving health care information became mandatory.[2]
Ms. Rosenthal’s story is about how this poor woman, Wanda Wickizer, got trapped in the dysfunction of the healthcare system’s coding system.
Wanda Wickizer should have been insured through Obamacare. However, through the inefficiencies of the government or Ms. Wickizer lack of understanding of Obamacare she did not have insurance.
The healthcare system makes no provisions for billing the uninsured.
There are multiple prices charged for treatments and procedures. Hospital systems and physician groups have their own individual retail prices for services and procedures.
These providers negotiate prices with the government and the healthcare insurance industry.
There are many different prices negotiated by many different providers with the healthcare insurance industry. A healthcare insurance company negotiates many of the government’s final prices. The healthcare insurance company acts as the surrogate for the government.
None of these prices are transparent.
There is no one that negotiates price for the uninsured. The uninsured are responsible for the retail price of the services rendered unless they can negotiate a better price.
- $16,000 from Sentara Norfolk (not including the scan or the E.R. doctor), $50,000 for the air ambulance.
- Her local hospital
- By the end of January, there was also one for $24,000 from the University of Virginia Physicians’ Group: charges for some of the doctors at the medical center. “I thought, O.K., that’s not so bad,” Wickizer recalls.
- A month later, a bill for $54,000 arrived from the same physicians’ group, which included further charges and late fees.
- Then a separate bill came just for the hospital’s charges, containing a demand for $356,884.42 but little in the way of comprehensible explanation.”
The uninsured are the only people who are responsible for the original retail prices. All the rest of the payment providers, namely the government and various members of the healthcare insurance industry pay their negotiated fees.
Shouldn’t the government pass a law requiring hospitals and doctors to charge only Medicare prices to the uninsured? It would eliminate Ms. Wickizer bill, a bill that reflects retail prices for services rendered.
The big mistake the University of Virginia made was that it did not provide her with a line item bill identifying the price of each service and procedure.
The University of Virginia subsequently refused to provide a line item bill to the patient. It was as if the university was hiding something.
Any thoughtful hospital administrator would have solved the problem in a minute.
It must be remembered that each provider has a different retail price per procedure and service. The reasoning is that they are trying to collect the highest amount they can.
There is something called a “chargemaster price.” It could help the uninsured figure out the wholesale price for services and procedures if they knew what the line item services and procedures they were charged for were.
The patient could then figure out what Medicare pays for those services and procedures.
However none of these line item charges are in the patients (EOB) Explanation Of Benefits. The EOB is impossible to interpret.
A simple rule should be passed by congress or issued by CMS saying a clear explanation of charges is required for payment of the bill.
The Obama administration knew about this uninsured billing problem. It did nothing about it because it wanted to force patients into buying Obamacare insurance even if they couldn’t afford it or didn’t need it.
I believe Tom Price M.D. (President Trump’s head of CMS) is aware of the problem. He also understands this simple way of solving it.
The healthcare insurance industry and the government get a detailed EOB for services rendered through the CPT coding system first established in 1978.
The Obama administration added 74,000 new codes to the CPT coding system. The government and the insurance companies wanted to know what they were paying for in detail.
This led to the requirement for Electronic Medical Records (EMR) and then meaningful use EMRs. Physicians and hospital systems will not get paid if they do not have a meaningful use EMR this year.
This led to a very expensive EMR development industry. EMRs were expensive. They did not function as meaningful use EMRs. They had to undergo extensive upgrades.
An EMR function should really be a teaching tool, teaching physicians how to upgrade their services to the best evidence based medicine practices.
Instead it has become a tool for the government and the healthcare insurance industry to punish patients.
The EMRs are unaffordable to many physicians. It has force them to sign up to become hospital system employees.
The government should have built a universal EMR in the cloud and charged physicians by the click.
The increase in codes led to an expensive coding industry. People are trained to teach physicians and hospital systems how to use the new 88,00 codes correctly.
The industry essentially teaches those providers how to how to game the healthcare system so that they can collect the most money for their services from the government and the healthcare insurance industry.
The goal of the government is to reduce reimbursement to providers.
Where is the consideration for patients in all of these maneuvers?
Where is the consideration for the uninsured patients?
Ms. Rosenthal’s main point is that CPT gaming by the medical professions and hospital systems are driving up healthcare costs.
However, missing from her argument is who developed the dysfunction CPT system.
Why was it developed?
Why was coding made so complex that it drives users of the coding system to game the system?
Ms. Rosenthat gives a few examples of coding driving the costs up.
“In order to code for the more lucrative code, you have to know how it is defined and make sure the care described in the chart meets the criterion, the definition, for that higher number.”
“Each billing, then, can be seen as a battle of provider coder versus payor coder.
The coders who work for hospitals and doctors strive to bring in as much revenue as possible from each service, while coders employed by insurers try to deny claims as overreaching.”
Hospital based physicians are taught how to up-code to generate the most income. They have little say in the coding process. Patients have no way of knowing if a procedure or service is coded.
- In a doctor’s office, a Level 3 visit (paid, say, at $175) might be legally transformed into a Level 4 (say, $225) by performing one extra maneuver, like weighing the patient or listening to the lungs, whether the patient’s illness required that or not.
- E.R. doctors have been taught that insurers might accept a higher-reimbursed code for the examination and treatment of a patient with a finger fracture (usually 99282) if — in addition to needed interventions — a narcotic painkiller was also prescribed (a plausible bump up to 99283), indicating a more serious condition.
The actual cost and expertize that might go into these services are never discussed or considered by bureaucrats decision and policy makers.
Price transparency for the patients would make a world of difference to costs. It would drive the cost of care and healthcare premiums down.
It might even result in the development of competitive pricing and a free market system.
I am sure the Trump administration is aware of this defect in the dysfunctional healthcare system.
President Obama ignored the problem as he tried to control hospital systems and physicians. He simply down coded services.
He probably figured that a single payer system would make everything much easier.
All I can say is look at the government run Veteran Administration Healthcare System.
Why most politicians ignore the coding defect in coding is beyond me?
The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone.
All Rights Reserved © 2006 – 2017 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE
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