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by fitchjo
2864 days ago
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Historically, the US used CPT, which was different than the rest of the world, but since they adopted ICD-10, they use the same billing/procedure codes as the rest of the world. The entire time, though, any provider in the US was using the same set of billing codes. |
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Suppose that this year, Insurer A pays $100 to Doctor B for performing Procedure 12345. Next year, they may only pay $95, and a couple years after that they may only pay $80. The doctor's costs are not going down in that time; if anything, the overhead of being in business (rent, wages for staff, etc.) will increase, at least at the nominal 2% rate of inflation.
So the doctor has higher costs year over year but is getting paid less by the insurer for rendering the same service. What does the doctor do? Turn to the codes!
The doctor finds a creative interpretation of the procedure which allows billing it as two codes, let's say 23456 and 34567. Each of those pays out $50 from the insurer. So the doctor switches to billing that way. Now the doctor gets the same payment as before for the same service as before. Of course, the insurer will start ratcheting down payments for those codes pretty soon, now it's an arms race: how creatively can the doctor find alternative ways to describe the procedure, in order to get paid the same as before, and how quickly can the insurer catch on and reduce its payments?
Except the doctor doesn't have time to do this, so the doctor hires billing-code specialists to come up with the creative ways to describe the procedures. And the insurer expands its department of billing-code specialists to figure out what the doctors are coming up with, and dispute or reduce payments.
And the cycle goes on and on. My first job out of college was at a company that processed health claims, and (manually) handling those claims was part of what I did there. And for the past few years I've been in health care again, on the software side (some of it at an insurer, some of it at a provider). I've gotten to watch this happen, and wondered what the reduction in cost would be if they cut, say, 90% of the billing specialists out of the system entirely and just went back to prior levels of payment.