A Critical Look at Healthcare Charges: Understanding the Costs
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Chapter 1: The Importance of Scrutinizing Healthcare Bills
It's essential for everyone to meticulously review any invoices related to services, tests, or other healthcare expenses. The costs associated with healthcare can often be surprising or, at times, even alarming. One might wonder if it's wise to assume that any bill, whether for medical care or a simple repair, is accurate without question. The most sensible answer is likely "no." While errors can occur, some discrepancies may be intentional, making it crucial to examine all bills with care.
To illustrate this point, I share a personal experience from my extensive career in healthcare. A well-regarded young physician, involved in significant research that brought substantial funding to his hospital, experienced severe chest pain while at a friend's retreat. Suspected of having a heart attack, he was swiftly transported to a prominent hospital.
After several days of tests and mostly resting, the diagnosis revealed that he had merely strained a muscle while chopping wood, and his heart was healthy. Upon receiving the bill weeks later, he took the time to review it and discovered charges for tests he never underwent. When we discussed this, he remarked, "As a physician, I know the tests that were performed, and this one was not among them."
Determined to rectify the situation, he reached out to the billing department the following day to dispute the erroneous charge, but his efforts proved futile. After numerous phone calls and escalations to various supervisors, he was met with a dismissive response from one representative who told him, "Doctor, just pay the bill." This experience left him disillusioned, akin to the old joke about "Sam, just pay the $2."
Another healthcare professional shared a similar story concerning a hospital in a different state. Serving as a board member overseeing hospital finances, she was taken aback when the finance executive disclosed that they charged for six meals per patient. The lack of scrutiny over such a practice was astonishing, prompting her to resign from the board.
Following my own significant surgery years ago, I received my bill and casually glanced through it. To my surprise, I found charges for nine Tylenol tablets, which I had never received during my three-day hospital stay. Like my colleague, I opted not to engage in a lengthy dispute and simply paid the bill. Additionally, I was charged for three surgeries when I had only undergone one, as the surgeon indicated there were specific follow-up procedures. Was this an instance of "unbundling?" (More on that later.)
While it’s important to recognize that not every billing error is part of a larger scheme, we must also address the issue of coding procedures. This is where the details become critical.
One troubling practice is "upcoding," where healthcare providers assign codes for more severe conditions than what was actually diagnosed to increase reimbursement. A colleague noted that another specialist was particularly adept at this practice. In 2015 alone, Medicare lost an estimated $60 billion due to fraudulent claims associated with upcoding.
Upcoding has been observed in various areas, such as admissions for infections, diagnostic-related group (DRG) coding, and both emergency room and clinic billing. This process can become convoluted, especially when a patient notices a charge for a 45-minute appointment that only lasted 15 minutes.
Healthcare providers utilize around 7,800 Current Procedural Terminology (CPT) codes to represent all treatments, conditions, and medications that insurers will currently reimburse. Each code has a corresponding cost for both patients and insurance companies, which varies based on the urgency of the issue and the number of decisions the healthcare provider must make.
Another common method of upcoding involves "unbundling." This occurs when separate procedures that are typically billed together under a single CPT code are instead billed individually. By submitting each CPT code separately to Medicare or Medicaid, providers can inadvertently create redundant charges, leading to multiple payments for the same procedure.
The takeaway here is simple: always scrutinize your Explanation of Benefits (EOB) for any questionable or inaccurate charges.