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The battle over billing codes

Medical records.

Kai Ryssdal: There are two main things that happen when you go to the doctor. You get your exam or check-up or treatment for whatever ails you. And there's a bunch of paperwork. Some that you do before you get seen -- histories, allergies -- and some the doctor does afterward. Usually a piece of paper with a bunch of numbers on it. Procedure codes. You probably don't pay much attention to 'em. No reason you should. But they're the very heart of the way we do health care because every one of 'em has a dollar amount attached.

Gregory Warner reports from the Marketplace Health Desk at WHYY.


Gregory Warner: Think about all the stuff you do without charging for it. You toss out that receipt you could have submitted for reimbursement. You work late, but don't charge overtime. But imagine you were doing hundreds of things for free worth tens of thousands of dollars a month. Then you'd probably say:

Larry Rabon: Wow! I need to be charging for these things that I'm already doing!

Larry Rabon is a urologist in Florence, S.C. Like every doctor he charges by procedure. Taking out a tumor, there's a code for that. Using a special scope to do it -- that's a different code. If the patient's obese -- the surgery's harder -- that's another code. If the surgery wasn't scheduled or there was a post-operative infection... you get the idea.

Rabon: There's a code for these things! And so that's huge amounts of funds that were just sitting on the table that were not being charged for.

Two years ago Larry Rabon decided to do things differently. He was going to find every code that he was missing, and bill for that. To take on this task he assembled a very loyal team! And here they are:

Geneva Rabon: Dr. Rabon is my husband and my boss.

Geneva Rabon, head nurse. And her daughter:

Lauren Richburg: My name is Lauren and I'm in billing.

And son-in-law:

Sean Richburg: I'm the office manager.

And another daughter.

Rainey Rabon: My name is Rainey Rabon.

Larry Rabon: Well my business has developed into a family affair.

And a family vacation for the Rabons means packing up the Suburban and driving down to Orlando, Fla. -- not to Disney World, but to a hotel right across the street from Disney -- to attend the annual billing and coding conference known as Coding Con.

Barbara Cobuzzi: How's everybody doing? You had fun last night?

Barbara Cobuzzi may not be the greatest at working a crowd...

Cobuzzi: Anybody go to Disney?

But when it comes to medical billing, she's a pitbull.

Cobuzzi: Because nobody is going to pay you if you don't ask. Come on, bring chairs in!

The lecture is packed because Cobuzzi is demonstrating how to squeeze every completely legitimate dollar of reimbursement out of a procedure.

Cobuzzi: So first we bill 24, then we bill 25...

By using the exact right codes in the exact right order.

Cobuzzi: Then we bill the IND, with the 79.

If this sounds impossibly complicated...

David Cutler: There are two things that have made this particularly complex.

Thing No. 1, according to David Cutler, health economist at Harvard...

Cutler: We still pay for medicine the same old way.

Procedure by procedure.

Cutler: So when there were very few things doctors could do they just said look I did X or Y or Z and they got paid for that. Now that there are hundreds of thousands, they have to write down each miniscule thing and get paid for that.

So imagine you're zooming into a photo down to the pixels and then you see those pixels have pixels? That's what medical billing is like. Everything is itemized. There's a price tag on every test and each procedure and exam.

Rabon: There's a code for these things!

Wait, wait! Let's just get one thing straight. Billing codes were invented to make things simpler! Doctor does something, there's a code for that, this is a way for insurance companies and doctors to agree on exactly what the doctor's doing and what should be paid for it. But that brings us to David Cutler's second reason why medical billing has become so complex. It comes down to just two words: shrinking reimbursements.

Cutler: All of a sudden you've got doctors getting paid less for doing something. And they say how am I going to make any money? The way I'm going to make money is by making the number of things that I've done increase.

For instance, knee surgery and rehabilitation used to be all one procedure until hospitals figured out if they...

Cutler: Discharged the patient...

After surgery, and sent them...

Cutler: Somewhere else for rehabilitation...

That somewhere else might be a different floor of the same hospital.

Cutler: Now I've just added another thing I can bill for.

One code becomes two.

Cutler: So that became the norm and still remains the norm.

It became normal for insurance companies and Medicare to say:

Cutler: We're going to pay less for each service!

And the specialists to respond by...

Cutler: Indicating more and more codes for exactly what you did

And that's the reason that the cost of care can keep going up even as the price for any one procedure is held down.

Rabon: Uh, almost like playing chess! Uh, they make a move and we make a counter move because they're trying not to pay us, we're trying to get paid!

And in this game, Larry Rabon has become a grandmaster. He's increased his revenue by 70 percent -- hundreds of thousands of dollars per year.

Rabon: I'm doing the same amount of work.

He's just charging for every little thing he's doing. It's like a code war between doctors and insurance companies. And the hotter this war gets, the more it costs... us. Our premiums and taxes pay for the coding gurus and soldiers on each side. There are now 2.2 people doing billing for every one doctor in America.

Cutler: It's a major part of the health care industry spent just dealing with that back and forth.

That back and forth -- you'd know this if you've ever been caught up in it -- means reams of extra paperwork and referrals and authorizations and denials and appeals and this costs an extra $360 billion a year. That's according to the Institute of Medicine. Which is to say, if we could just shave off one seventh of the extra bureaucracy...

Cutler: That's well more than it would cost to bring insurance coverage to every single American who is now uninsured.

So can we get rid of the codes? Well, some doctors and hospitals are already signing up for a new program under the health care reform law that would pay doctors by a lump sum instead of per procedure. But other doctors don't want to give up their independence. Larry Rabon and his family have gotten used to playing the chess game. And if every doctor played as well as they do, then our deficit would really be in trouble.

In Orlando, Fla., I'm Gregory Warner for Marketplace.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.
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Larry Rabon should be saluted to, not for the army of billing he assembled, but for that he stepped forward and used his own story to let people know how nasty the coding battle is.

Gregory Warner writes a very glib piece of work which totally muddies the topic and has gotton it mostly wrong. True there are codes and it is also true that payment relies on correct coding. But the coding was 1.) invented by doctors and 2). is controlled by doctors who publish "CPT-Current Procedural Coding". It is also true that insurance companies do their best to reduce reimbursement. But it is unethical and may be even fraudulent to do what the article recommends. Even CPT says the presence of a code does NOT mean the code will be paid. CPT also says that post op recovery is paid for as part of the surgery. So if you code separetly you are unbundling (coding things separetly that should be part of the procedure). Congress has taken a firm stand on such coding as being fraud as part of the HIPAA law. I hpoe that the Office of The Inspector General reads the article and audits the.. http://www.fal11.com/vb/

This piece was so good and so instructive that I have shared it with my doctor relatives with people I know who staff doctors' offices. Thank you!!

Barbara, My hat is off to you!
You stated so clearly what needed to be said, the truth about the current circumstances physician's are in today. It's always the few rotten apples that spoil the whole bushel! As one who's worked in the coding world for the past 32 years, I can see the negative effects of managed care, and immense compliance burdens placed on physicians. Some of it has been good, and necessary, but balance is key. The pendulum has swung to the extreme! Are they being allowed to practice medicine because healing and alleviating suffering was their passion that got them through medical school? Or are they being forced to practice as an "MBA", with patient care as a secondary issue? Unfortunately, I feel the latter option describes the majority of physicians practices, but only because they have a healthy fear of penalties!
I am concerned about what the future of medicine will look like, if some type of balance isn't restored. In the end, bashing opponents, and twisting the truth is a dead end, surefire way to lose. I'm sorry you had to experience this firsthand, but am again thrilled with your response! There still are physicians practicing with integrity, and that is something that, in the end, always wins! I'm sorry if my response seems to be all over the place, but I couldn't remain silent. The message of the truth on so many issues needs to be heard loud and clear, firm, but with kindness.

Catherine Fast, CPC

And by the way, the new system, where the lump sum payment is going to be used, called Accountable Care Organizations, which Greg mentions, still requires coding, for the allocation of the lump sum, so, that system will not have codes go away.

And diagnosis coding only continues to get more and more complex as the government uses the providers as a conduit to collect their statistics. We are moving to ICD-10 for diagnoses, they are not going away. So, the Emergency Room Provider will not only have to document that the patient broke their femur, but they will have to document that they broke their RIGHT femur, INITIAL, (or sequlae), SPORTS INJURY, WHAT TYPE OF SPORT, SOCCER, FOOTBALL, BASEBALL, ETC, That level of detail has to be collected from the patient by the provider and included in the diagnostic coding. Providers are not paid to collect this data for the government, but they are used for this data collection

I am the Barbara Cobuzzi that is heard in this piece. I spent a large amount of time with Gregory Warner, being interviewed and recording, explaining how coding and billing worked. I told him how doctors canNOT unbundle and cannot bill for every little thing and that compliance dictates what is billable and codeable. I explained how complex the coding system is and that just because a payer reduces reimbursement the provider can't just bill for another thing to offset the losses, they end up taking it on the chin. I showed him how the third party payers continue to increase premiums and reduce payments to providers at the same time and providers, particularly when they participate with the payers cannot increase their fees. Even though a provider may have their own "fee schedule", it means little when they participate since the provider is subject to whatever the payer says they are willing to allow for the service. So, as costs increase due to HIPAA, EHRs, ICD-10 implementation, additional staff for compliance, etc, the doctor still sees reduced income while the third party payer increases their premiums to the insured.

I cannot understand why people think that the doctors are rich and the 1 percenters abusing the system? Doctors don't even get to start earning real money until they are in their 30's. They leave medical school deeply in debt, to the tune of $300-400,000. They work insane hours, starting at 5am and finishing at 7pm if they are lucky. They have intense stress, because although people sometimes make a mistake in their jobs, a doctor dare not make a mistake ever, never ever, because their patient's life, function, limb, etc hang in the balance. We as patients expect our doctors to be super beings, computers, but add in a dash of compassion, bedside manner, and at the same time we think they do not deserve to be paid well. Well for one, I want the doctor treating me to not worry about money, not worry about how he or she will pay the rent on his or her office, meet payroll, and pay his or her mortgage, because ladies and gentlemen, that is what they are worrying about. I want my doctor to be totally focused on me, the patient.

And the doctor worries about his or her documentation and coding, because a governmental authority can accuse them of fraud or abuse when in reality they were just bad documenters, focusing on the patient. They walk this thin line being put under the microscope where the payers and the government is looking for the criminals and there are criminals out there, but they are usually not your corner doctor, they are the mob, one who buys medicare numbers to bill for services never provided, etc. Not the guy who just did not write everything down.

Most doctors do not upcode, unbundle and think about how to game the system. They go to coding conferences like the one where I spoke at to learn how to code correctly, how to make sure they are not leaving any fairly earned compliant dollars on the table and most importantly that they are meeting all the strict and complex rules set about for coding, which are not only set by the AMA, but then re-set by Medicare and just about every payer, every one has their own interpretation as to how to use the codes.

So, instead of going to classes to stay up on the latest and greatest in clinical issues, the doctors and their staff have to stay up with the latest and greatest in coding and compliance regulations. Running and working in a medical office is not clerical and is not child's play.

I spent a lot of time with Greg (yes, that is what I call him after all the time we spent together including dinners and lunches) and I educated him. We also emailed back and forth after the conference, where I answered any question he had. But I think that Greg had an agenda when he came to CodingCon and it did not matter what he was told during his introduction and education into the Coding and Reimbursement in the Medical field by myself and my colleagues. I think he wanted the piece to fit his agenda in the end. I am disappointed because I did not think that Greg would do this based on what he had learned.

Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CENTC, CHCC

Gregory Warner writes a very glib piece of work which totally muddies the topic and has gotton it mostly wrong. True there are codes and it is also true that payment relies on correct coding. But the coding was 1.) invented by doctors and 2). is controlled by doctors who publish "CPT-Current Procedural Coding". It is also true that insurance companies do their best to reduce reimbursement. But it is unethical and may be even fraudulent to do what the article recommends. Even CPT says the presence of a code does NOT mean the code will be paid. CPT also says that post op recovery is paid for as part of the surgery. So if you code separetly you are unbundling (coding things separetly that should be part of the procedure). Congress has taken a firm stand on such coding as being fraud as part of the HIPAA law. I hpoe that the Office of The Inspector General reads the article and audits the Doc. Then Mr. Warner can print a retraction and explain he was wrong. Hopefully, both he and the Doc can play gin rummey together as they await trial.

I thought it telling that the segment on medical coding came right after a story on the debt. The vast majority of our debt problem – particularly the liabilities we face in the future – comes from Social Security, Medicare, and Medicaid. And here we have a story about a doctor who, without apparently doing much more work, has increased his gross income hundreds of thousands of dollars by figuring out how to game the coding system. Yes, it is all (apparently) perfectly legal, but exactly where do we think those dollars are coming from? The last line of the story says it all: “And if every doctor played as well as they do, then our deficit would really be in trouble.”

I have no particular beef with folks earning a high income, but when the income of medical professionals – generally the “one percenters,” to use a current fashionable label – is derived from a private medical system whose costs are bankrupting individual Americans, and from government programs that are bankrupting the country as a whole, something is clearly wrong. Eisenhower warned about the “Military-Industrial Complex.” I think we are being raped by the “Medical-Industrial Complex.” I am surprised that in all the commentary about medical costs precipitated by the “Obama Care” debate, little has been said about the vast transfers of wealth from society as a whole to the medical community in particular. We hear often that “entitlement” spending is a problem. It surely is. But what about the medical community's apparent belief that it is entitled to excessive wages and profits? Unless and until that part of the equation is addressed – hopefully by some market competition on quality of care and service, rather than arbitrary fee schedules set by insurers or government - medial costs will continue to spiral upward.

This article really paints a good picture of what medical professionals have to deal with when it comes to coding and billing regardless of how they run their practices. No doubt the providers have challenges with this billing monster which, unfortunately over time, trickles down to the patients in the form of added costs. Ironically, through sites like Sprig Health (www.sprighealth.com), the uninsured or underinsured can get straightforward health care at more realistic prices and the provider gets paid up front with practically no administrative costs involved. The provider spends more time doing what they were trained to do and getting paid for it and less time worrying about how they can work the codes to accomplish that!

Interesting story. A lot of people complain that insurance companies have made the billing process complex and administratively burdensome. I think its important to point out that the codes used to determine payment for physician services, known as Common Procedural Terminology (CPT) are owned and maintained by the American Medical Association. As you can imagine, the AMA has mastered the art of disecting every single movement made by a physician into a unique CPT code. Given the political clout of the AMA, even CMS has resisted taking control of the coding process.
This has been lots of discussion recently about the concept of bundled payments as a way of reducing costs. Reducing the number of CPT codes would align with this concept and help reduce the administrative burden as well.

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