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You are here: Home / Anderson On Health Insurance / What’s that code?

What’s that code?

by David Anderson|  May 22, 20157:03 am| 13 Comments

This post is in: Anderson On Health Insurance

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Billable procedure codes are the difference between a provider making a good living and the provider making a really good living.  Every fee for service claim that is submitted to an insurer (private, public, government) has to have a few key pieces of information on it. The claim must have who the service was performed on, who performed the service, where the service was performed, where the check should go and what actually was done.  The last part is covered by procedure codes.  One of the common coding books is the CPT-4 while ICD-9 and soon to be ICD-10 will also be used for procedure as well as diagnosis codes.

Billers will look at provider notes from the doctor, the nurses and the usage of certain supplies to determine what was done.  Good, revenue analyst friendly Electronic Health Record systems will often suggest codes or force providers to affirm that they performed a suggested code which then feeds the data to billers who create the claims.  Revenue maximizing coding is very common and there are plenty of opportunities to do so.  Billers and providers get good at maximizing their net revenue.

For instance there are five emergency room outpatient codes.  They range in severity from Level 1 (minor/WTF are you going at the ER) to severe where it is a flip a coin decision to admit the patient to the in-patient unit (Level 5).  Level 1 tends to pay out at a quarter or less than Level 5.  One would expect that every now and then billers will submit a Level 1 or Level 2 claim as people occassionally show up to the ER for no reason other than they are bored or have an ear infection combined with a low co-pay.  However, Level 1 and Level 2 ER claims are remarkably rare. Level 3 claims make up less than a claim on the Monday night of a long weekend  at a busy ER.  Level 4 claims are the dominant ER claim with more Level 5 claims than all non-Level 4 claims put together.

These instances are usually accepted by the insurer and paid out quickly as no one is going to question why every emergency room visit is a severe visit when we know that quite a few ER visits are safely divertable to urgent cares, PCP offices, or can wait until tomorrow or never needed to be made.

The same type of upcoding will occur during hospital stays.  Some low level codes will require that a doctor observe and monitor a patient while if they also take a short history (How you feeling?  Let me look at your knee…) they can upcode the interaction for an additional $21.

 

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13Comments

  1. 1.

    Jim

    May 22, 2015 at 7:42 am

    I assume that’s why insurers support the proliferation of emergi-care clinics, which take care of the lower-level emergencies and are much less expensive than emergency rooms in hospitals. I for one like to use them when it’s hard to get an appointment with my primary care provider. But won’t their increased use result in those large relative numbers of Level 4 and 5 procedures becoming even larger, by taking the Level 1-3 procedures off the emergency rooms’ hands? How does the insurer balance these effects?

  2. 2.

    Richard Mayhew

    May 22, 2015 at 7:45 am

    @Jim: If the ER claims are “honest” 4s and 5s, with the Urgicares taking the legit 1, 2,3 which occur before 9:00pm on weekends that would be amazingly a good thing. Appropriate care at the least cost — a good thing.

    The issue is that ERs which do not have an urgent care within 20 miles of them are still submitting 95% 4+ claims. The system has been gamed to upcode.

  3. 3.

    WereBear

    May 22, 2015 at 7:51 am

    Not only that, we have a situation where people don’t have an illness unless “there’s a code for it.”

    This is fine for falling into a combine, where I’m sure the whole thing has codes already. Putting people back together after a traumatic mass x speed event is one of the things we are spectacularly good at.

    But mental and chronic illness tends to be put in these tight boxes, with tight treatments, when that’s not good enough, most times.

  4. 4.

    Wag

    May 22, 2015 at 9:04 am

    @WereBear:

    There is a code for everyone. A simple cough? There’s a code for any symptom imaginable. Symptom based codes don’t generally reflect the complexity of thinking unless the probider’s note suggests complexity, and are often down coded. This leads to the peverse incentive to increase the number of diagnoses submitted with each visit, akin to throwing everything at the wall to see what sticks.

    In an ideal word there would be a bell shaped curve of visit codes.

  5. 5.

    RobertB

    May 22, 2015 at 10:34 am

    @Wag: What Wag said about downcoding. My brother the NP tells me he generally doesn’t avail himself of the granularity available under ICD-10. Where ICD-10 can code “Wolverine bite on second metacarpal on left hand,” he’d just code it, “Animal bite, left hand.”

  6. 6.

    Richard mayhew

    May 22, 2015 at 10:55 am

    @RobertB: icd 10 has some fascinating codes

  7. 7.

    Richard Mayhew

    May 22, 2015 at 11:00 am

    @RobertB: Also point #2 — there is a significant different in Procedure Codes and Diagnosis Codes.

    Dx Codes tell us what happened (Animal bite, left hand)

    Procedure Codes tell us what the provider did as a result of that (Set hand, disinfect hand, observe, take history, use judgement etc)

    Procedure codes are what drives direct claims payment for Fee for Service claims.

    Dx Codes may be used as part of a risk adjustment process (Medicare HCC, or Exchange modified HCC etc) to shift payment for capitated providers in either private ACOs, gain shares, or public open enrollment programs, but that money won’t show up for a year or more after the claim is submitted. (okay, a risk adjustment post has started to marinate in my head for next week)

  8. 8.

    Richard Mayhew

    May 22, 2015 at 11:01 am

    @Wag: I don’t think it would be bell shaped, as we should see more lower level codes than high level codes, but some type of predictable distribution would be useful.

  9. 9.

    Lawrence

    May 22, 2015 at 11:11 am

    I used to be a business analyst for the pro fee group at a pediatric teaching hospital. God, typing that out it sounds like “I’m logged in to an online MMORPG”. Anyway, I did study the coding, mostly because the docs were on an RVU based comp plan, and I was pretty sure many of them had ther thumbs on the scale. The ER visit codes actually plotted like a normal distribution curve. They were not, at the time, a trauma center, which I would guess would push the coding up. There were a few docs in the other specialties that never billed less than the highest complexity visit/consult code. We had a coding analyst whose job was to rubber stamp the fraud and keep the docs happy. But, hey, as long as Blue Cross isn’t threatening to cancel our contract over it, who cares?

  10. 10.

    The Raven on the Hill

    May 22, 2015 at 11:58 am

    @Lawrence: everyone’s making money at it, including the insurance companies, who pass it along in their premiums and take a cut. No incentive, anywhere on the line, to reduce spending.

    Some of the “urgent care” centers won’t accept patients with minor but real emergencies, sending them on to ERs instead. I’ve actually brought a family member to one of those places and been turned away. I won’t use them again; in a serious emergency someone could die while they’re being transported to a place where they do actual patient care, rather than just skimming a bit more money out of the system.

    Oath? What oath?

  11. 11.

    piratedan

    May 22, 2015 at 12:37 pm

    The gaming of the coding system is part and parcel of the entire healthcare system, everything from the initial contact by EMT’s doing the first care form for the ambulance ride to how to classify the services rendered and diagnosis provided when your PCP submits their billing to your insurance. In my long career in healthcare on the financial and IT side, if you don’t use the correct code, you don’t get paid

  12. 12.

    tazj

    May 22, 2015 at 1:11 pm

    My husband is an ER physician who also works at an urgent care center. After finishing a shift at urgent care, he often complains about people who come in with complex medical problems who are acutely ill and how they never should’ve been brought to the urgent care to begin with. These are usually elderly people who are taken there by their children or spouses. It has been his habit to try and work them up as much as possible so they can be directly admitted to the hospital. This has led to him being chastised by administration because they will of course have trouble billing for it, and the care center ends up being backed up with patients if the PA is also overwhelmed.

    He also understands this, after all these centers were set up to take care simple problems and the rest are to be transferred as quickly as possible to the hospital ER. However, he feels that it’s not always best for the patient (93 year old with pneumonia and heart problems)to be transferred and then wait again. I’m sure he worries about his license too.

    Just like people end up in the hospital ER for things that should be taken care of in the urgent care center or a doctor’s office, people go to an urgent care center who are acutely ill, many times I think because of fear of the hospital. I think many people especially the elderly really fear going back into the hospital but the family can convince their loved ones to go to urgent care hoping they’re really not that sick and not knowing the centers lack the equipment and staff they’ll need.

  13. 13.

    Richard Mayhew

    May 22, 2015 at 2:42 pm

    @tazj: definately a problem; most of the Urgic-cares near me are within 10 minutes of the ER on a slow donkey, so it is not something that I’ve thought too much about.

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