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Government Medicine The Almighty Buck Science

Medicare Bills Rise As Records Turn Electronic 294

theodp writes "As part of the economic stimulus program, the Obama administration put into effect a Bush-era incentive program that provides tens of billions of dollars for physicians and hospitals that make the switch to electronic records, using systems like Athenahealth [note: video advertisement] (which made U.S. CTO Todd Park a wealthy man). The goal was not only to improve efficiency and patient safety, but also to reduce health care costs. But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care. Hospitals received $1 billion more in Medicare reimbursements in 2010 than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms, according to a NY Times analysis. There are also fears that features which can be used to automatically generate detailed patient histories and clone examination findings for multiple patients make it too easy to give the appearance that more thorough exams were conducted than perhaps were. Critics say the abuses are widespread. 'It's like doping and bicycling,' said Dr. Donald W. Simborg. 'Everybody knows it's going on.'"
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Medicare Bills Rise As Records Turn Electronic

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  • Sounds like... (Score:2, Informative)

    by fustakrakich ( 1673220 ) on Saturday September 22, 2012 @03:31PM (#41422997) Journal

    Mission Accomplished!

  • by salesgeek ( 263995 ) on Saturday September 22, 2012 @03:52PM (#41423133) Homepage

    The issue is changing from an E&M to an intensive care E&M. Same procedure, higher payout. Same goes for taking a common tests that are bundled and breaking them into smaller component tests. A few wears ago I met with an Ausie founder of a startup that was talking about how revolutionary their software was that would optimize billing codes to ensure maximum revenue per procedure by basically scanning a billing batch and re-coding it using more lucrative codes for the same procedures. I waked on doing any development for them.

  • by Cipster ( 623378 ) on Saturday September 22, 2012 @03:57PM (#41423173)
    Physician here. Medicare/Medicaid is tied to really arcane and often inane rules. You must document X of this and Y of that and word it in a specific way to get paid. What you actually do for the patient does not always matter but the way you document it makes a big difference. EMR has made it easier to conform to the rules and makes sure you write notes that can be easily billed for. It has simplified documenting for things that are tedious to do on paper (like review of systems, and counseling).
  • i don't have to change the constitution. what the constitution says about gun ownership has nothing to with what certain morons believe it justifies

  • by Anonymous Coward on Saturday September 22, 2012 @04:36PM (#41423449)

    Sticking to wealthy countries (source []):

    Country | % Health spending/GDP | % Public health spending/Total health spending
    USA 17.9 53.1
    Netherlands 11.9 79.2
    France 11.9 77.8
    Germany 11.6 77.1
    Switzerland 11.5 59.0
    Denmark 11.4 85.1
    Canada 11.4 70.5
    UK 9.6 83.9
    Sweden 9.6 81.1
    Japan 9.5 82.5
    Norway 9.5 83.9
    Finland 9.0 75.1

    I'm fairly certain that the total U.S. government spending per capita on health care is more than the UK spends per capita for its universal system.

  • by pesho ( 843750 ) on Saturday September 22, 2012 @04:42PM (#41423477)
    The type of fraud described in the article is not restricted by medicare but is pretty much standard practice in most medical offices that use electronic billing.It is a simple play on the "power of the default" that makes it difficult for doctors to behave honestly even if they don't intend to carry out fraud. The way it works is that when a doctor or a nurse pulls a page for a particular task, all possible tests and procedures are checked by default. In many cases there are a dozen or so check boxes that the doctor will have to actively uncheck if he/she needs to just take the pulse of the patient. Naturally, doctors don't have neither the time nor the patience to click around the screen. They also don't have the incentive to reduce their income while wasting their time. An obvious and simple solution would be to set the default to all procedures unchecked and require manual input for to check the boxes. If I remember correctly this is how electronic records are handled in the Keiser hospitals. Another thing that should be required is to retain and provide unique tracking information for every sample and test being done. This is also not difficult because the sample tracking is already part of the software. Finally it should be legislated that the medical records belong to the patient, not the medical office. I don't see why I have to repeat the same panel of tests and fill same questionnaires every time I choose to ask for a second opinion or if due to various reasons I seek help from a different practitioner.
  • Re:The real fraud... (Score:4, Informative)

    by ScentCone ( 795499 ) on Saturday September 22, 2012 @05:12PM (#41423659)

    Republicans like to bang the malpractice is causing all the problems drum but they are at least honest it's a minor addition of costs.

    You are (deliberately, it seems) missing the big picture. It isn't malpractice, per se. It's the enormous use of people, supplies, fantasitcally expensive equipment, time, space, and a mile-long wake of paperwork that comes from practicing over-the-top procedures, tests, and drug use designed to fend off spurious malpractice suits. So something like a $10 urine dip-stick test that could be done a couple of times over a couple of 5-minute office visits becomes a $2500 speciality lab visit to the hospital so that the doctor's favorite specialist can do a bladder exam ... so that one in a hundred thousand people who might have more than a the normal drop of blood in their urine and also happen to have something else you might catch through the multi-thousand-dollar exame might be caught sooner, though not likely.

    Multiply that scenario by thousands of other conditions and tests, mostly involving entire teams of people operating hideously expensive radiological devices or blood sniffing devices, and all of the record keeping, etc., and you've got your ridiculous costs. And it's all done to avoid making malpractice insurance premiums go even higher, because of slimes like John Edwards who get rich over nonsense suits. The suits are down because spending to head them off has gone through the roof, by untold billions of dollars.

  • by russotto ( 537200 ) on Saturday September 22, 2012 @05:19PM (#41423697) Journal

    Because the whole system is idiotic. It's not like doctors and hospitals have prices for (non-emergency) procedures, tell you what those prices are in advance, tell you what the procedures they will be performing on before in advance, and get agreement on price before doing anything. They don't even do so much as give you an estimate.

    No, instead, assuming an insured patient, they do an exam and get a flat fee from you. Then depending on what they did during the exam, they bill for everything they did (according to the standard set of codes) at some totally fictitious rate that maybe one sucker in a million pays. The insurance company or Medicare then looks at what they did (according to the codes), ignores completely the amount they charged, and pays them whatever they, the insurance company or Medicare, feels like paying. So basically, a doctor who doesn't code the most expensive codes he can based on what he did is leaving money on the table for no reason.

  • by Anonymous Coward on Saturday September 22, 2012 @06:09PM (#41424039)

    The current American system isn't so much open to exploitation as it is designed to punish those without insurance. The insurance lobby has made it illegal to bill an uninsured patient a price different from what they would charge an insurance company. This sounds fair enough on paper, after all its not exactly fair to charge an insurance company $14000 and then go and charge $3000 dollars to a patient without insurance for the same procedure. After all, that drives the prices for insurance up for everybody.

    The reality, as you found out, is that the person without insurance will be billed $14000 and the insurance company will only be billed for $3000. The medical provider starts high and then billable costs are negotiated with each individual plan. So each plan will be paying whatever low price they negotiated and contracted the provider to, while those without insurance are stuck with the extreme highball price. Charging the uninsured patient anything else would be insurance fraud. And that's one of the dirty little secrets of the current American system.

    I work in pharmacy, and as Cipster said here [], Medicare has a very complicated system where if you forget to dot even one i, you will not get paid. We primarily only bill Medicare for diabetes testing supplies. Though we've always only billed them electronically, we can get a paid claim at the time a patient gets their $200 wholesale worth of testing supplies, and then Medicare decides arbitrarily they aren't going to pay for it 6 months later. We can appeal, but we're burdened with getting all chart notes from the prescriber on the patient from 6 months out to the date the patient picked up their supplies, a dated certificate proving the patient has been properly trained how to use their meter, a form signed by the patient that they ordered the strips and was nearly out when we filled the prescription, a copy of their testing logs from 6 months out to date of pick up, and now the date on the pick up signature has to match the date the presciption was filled. So Medicare patients can no longer call the prescription in to be filled and come in two days or a week later to pick it up. We can't get the prescription ready until they are there to pick it up. All this has to be faxed to them within 30 days, and if anything isn't perfect, we are out the $200.

    From that experience, I believe Cipster's assessment is correct. Medicare arbitrarily decides not to pay a claim and make it very difficult to have a successful appeal in the hopes of not having to pay out. The new electronic system available to providers makes sure all asinine documentation is obtained and available to retrieve at time of service, leading to more accurate billing and successful appeals, meaning Medicare has a much lower success rate in claim denials.

  • by Just Some Guy ( 3352 ) <> on Saturday September 22, 2012 @07:52PM (#41424587) Homepage Journal

    Then depending on what they did during the exam, they bill for everything they did (according to the standard set of codes) at some totally fictitious rate that maybe one sucker in a million pays.

    Furthermore, insurers typically calculate their reimbursement for procedure #123 based on a percentage of the average "retail" price of procedure #123 across all physicians in the local area. For instance, say the average price for a strep throat exam in your suburb is $100. An insurance company might say that they'll reimburse at 40% of the local rate for a billing code, so any given doctor will get paid $40.00 for that exam whether their invoice price is $20 or $200. Is your doctor a med school near-dropout or the guy who invented the exam procedure used worldwide? Doesn't matter. $40.

    Because of that, doctors almost universally raise their rates regularly, not to increase the amount they'll get paid for each invoice but to bring the local average rate up. In case you're wondering, that 40% in the example is particularly generous. Most insurance companies reimburse at significantly lower multiples. Medicaid has notoriously horrible reimbursement rates, to the point that my wife (a podiatrist) would literally get paid less for many common procedures than she spent for consumable supplies. Every patient she treated like that took money out of her pocket - it's hard to make money when you get paid $15 to do a procedure that costs you $20 to perform (assuming your time is free) - but she saw them anyway because she feels morally compelled to help sick people regardless of their circumstances.

  • by Just Some Guy ( 3352 ) <> on Saturday September 22, 2012 @08:04PM (#41424649) Homepage Journal

    Somebody at Medicare should be looking at the billing records and saying, "It can't be right for every procedure to be billed at the highest possible code when they're a regular full-service hospital. These people are cheating us and I have a red phone on my desk to the Department of Justice Prosecutor's office."

    If there are two legal, legitimate ways to code for a given procedure, why would a clinic not bill for the more expensive of the two? Medicare - not the hospitals - sets the reimbursement rates and defines the codes. If they didn't intend for the higher code to be billable, they should have written the definition so that it wasn't.

    There are also lots of coding seminars that teach doctors things like "if you ask question X during the history and physical part of their exam, you can bill code #123-2 instead of your normal #123-1. You're already doing 95% of the work to qualify for #123-2, which pays double of #123-1, so why not do the extra 5% and double your income?". Again, Medicare and the insurance companies are settings those standards. Sucks to be them if health care providers decide to play by the rules that have been dictated to them.

    Let's put it in tax terms. Suppose that if you give $10,000 to charity, you get a $5,000 tax break. Your accountant notices that you've already given $9,500 to charity and advises you to donate $500 more before the end of the year. You do so, and that $500 turns into a $5,000 benefit for you. Are you cheating? You didn't make the rules. You're playing entirely within the codes that Congress has set. It would ring a little hollow for Congress to complain that you're defrauding the IRS of $5,000 by going along with the procedures that they put in place.

  • by Anonymous Coward on Saturday September 22, 2012 @08:28PM (#41424809)

    If you are slightly to the left of Romney you mean. Only nazis are more right-wing that "rightist" americans and whole world is left of "leftist" americans. A more unbalanced people is hard to find, "free speech" my ass, you are all about propaganda you yourself can't even differentiate between lies and truth. Even hyperbolic statements about you americans are turning out to be true.

  • Re:This is silly (Score:4, Informative)

    by Green Salad ( 705185 ) on Saturday September 22, 2012 @09:30PM (#41425127) Homepage

    Making billing and payment systems electronic reduces processing costs.

    Wow. I don't know where to begin. This is a lot more variable than you'd think.

    I think the following statement is much more accurate.

    Making billing and payment systems electronic has the potential to reduce processing costs.

    Keep in mind that the adoption of E-mail did not eliminate mail fraud or reduce the labor involved in processing mail.

    I'd argue I spend more time processing my mail than I did in the 80's. It might have reduced the costs of sending an individual letter using a stamp. Your actual results may vary. Do did you buy Microsoft Exchange server, Outlook? Oh's not a purchase...its a temporary license. Did you have to renew the license? At what cost? Did you send 90 letters out last year? 200 letters? How about when measured as "cost per correspondence" that year? When you renewed software licenses under the new version, could you continue to use your orginally purchased hardware? ...or did you have to upgrade your hardware as well? Was your labor cost free? If you used a "free" provider, such as Yahoo, how much time did you spend fiddling around, following animated Yahoo links. Does your time have value?

    Medical billing system goals and project architectures vary. There's a lot more to this than coding medical procedures or reducing the human clerical involvement in working with Medicaid. I analyze and track the success of various medical IT projects and there are too many failures sold as successes and the costs shifted around, but ultimately paid by citizens, self-insured customers, quality of care, quality of non-medical service. Definitions of "success" vary from person to person and many are not based on objective, measurable criteria.

    Keep in the mind the labor for regulatory compliance, developing and managing electronic systems runs $35-$230/hr. Accounting clerk and medical-coding labor runs $16-$40/hr and "maintenance" involves periodic training. The labor cost ranges can actually be wider depending on the economy of that region. Think New York City vs. Podunkville, WV. Keep in mind that there are often unplanned and improperly budgeted costs such as security and maintenance. The medical coding and accounting clerk labor typically is not eliminated, but retrained to use the new system and often given a raise to retain them after the training, because they are in more demand. The transaction labor time is often increased in the new system and the transaction errors harder to detect and diagnose because of the increased specialization and fragmentation of knowledge about the system.

    Some of the billing labor requires maintaining industry certifications. As standards become more internationalized, there's potential for labor savings by exporting the jobs and broader sharing of expertise. Sometimes these savings are offset by increased coordination and communication costs (not long-distance fees, we're talking subtle mis-communication with big impacts resolution of business outcomes) caused by the shift from localized clerical work to exported clerical work.

    I've seen many implementations where total operating costs, per unit of the same function, dramatically increased AND it created new costs, hidden by being created in other departments, such as, Legal, Customer Service and Communications.

    (Did lawsuits increase? Was there more confusion about work-products? Was resolution of the confusion easier or harder? Did we have to "educate" our customer on our system with PR campaigns? What did that cost? Was it effective?)

    If we ignore all the issues that come with new implementation projects and switch our focus to the new power of having more (and better?) data to sift...that's easier to analyze, there are two sides to that coin.

    1. Automated algorithms make it easier to detect some types of fraud. (in email analogy, spam)

  • by jamstar7 ( 694492 ) on Saturday September 22, 2012 @10:40PM (#41425453)
    What gets me is everybody throwing the 'M-word' around who obviously have never read Marx. Socialism and Communism have as much in common with classical Marxism as my Cocker spaniel has with Congress. But, in the US, at least, if you wanna shut somebody up because their opinion isn't your opinion, point at him, scream 'MARXIST!!!' and it's job done.

"Yeah, but you're taking the universe out of context."