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Are Payors Changing What They Pay For Medical Billing Codes To Adjust For Supply and Demand?

Startup Mojo from Rhode Island writes:

Hey there, maybe THCB readers can weigh in on this one. I work at a healthcare startup. Somebody I know who works in medical billing told me that several big name insurers they know of are using analytics to adjust reimbursement rates for  medical billing codes on an almost daily and even hourly basis (a bit like the travel sites and airlines do to adjust for supply and demand) and encourage/discourage certain codes.  If that’s true, its certainly fascinating and pretty predictable, I guess.

I’m not sure how I feel about this. It sounds draconian. On the other hand,  it also sounds cool. Everybody else is doing the same sort of stuff with analytics: why not insurers? Information on this practice would obviously be useful for providers submitting claims, who might theoretically be able to game the system by timing when and how they submit. Is there any data out there on this?

Is this b.s. or not?

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Kill the Codes

Oh, that clever Center for Public Integrity.  Look what they’ve gone and done now!  My, oh my.  According to the article, doctors are much of the the problem, billing “billions” of Medicare upcharges according to the center.

But what if the medical coding game itself is flawed?  Stop for a moment and imagine what it would look like if lawyers billed like doctors.  Suddenly, we see how bizarre the world of government billing codes and chart-completion mandates has become.

Not long ago I asked readers what my time is worth on a per-hour basis.  Collectively and independently, they settled on a number of about $500/hr (see the comments).  Now look for a moment at what Medicare pays, even at its highest level of billing for a physician’s time for evlauation and management of a medical problem: for 40 minutes of a physician’s time, it’s $140 (or $210/hr) before taxes.  Again, we see another disconnect as to how doctors are valued in our current system.

Doctors are working long hours to collect these fairly low fees from Medicare while jumping more hoops than ever to do so.  They have become pseudo-experts at the coding game, trying to get as much money for their extra efforts as legally possible.  But these fees paid by Medicare do not cover payments for time spent on phone calls, e-mails, and working insurance denials.   These services are still considered by our system as gratis. To partially counteract this coding problem, doctors realized (and the government insisted) that doctors use electronic medical records.

But when independent doctors set out to implement these records they quickly discovered that the expense and long-term maintenance costs of local office-based EMRs could not compete with more sophisticated systems already in use by their neighboring large health care systems.  Because of ever-increasing cost-of-living and overhead costs, not to mention the threats of large fee cuts, doctors have migrated to large health systems faster than ever.  With the fancier electronic record at those systems (streamlined for billing, collections, and marketing) fields required for higher billing codes (but not always material to the problem at hand) are completed in less time.  So are doctors really the problem?

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