Why Can’t You Tell Me What It’s Gonna Cost? Part 3

     In the early 1990s, when I submitted a claim to the insurance companies, all I needed to supply was the CPT and ICD codes.  There were no other supporting documents.  Our chart notes were handwritten and often abbreviated with symbols and terms only the doctors understood.  These were our personal medical notes on…

     In the early 1990s, when I submitted a claim to the insurance companies, all I needed to supply was the CPT and ICD codes.  There were no other supporting documents.  Our chart notes were handwritten and often abbreviated with symbols and terms only the doctors understood.  These were our personal medical notes on patients meant for the doctor.  When insurance companies requested records, they could not easily be deciphered by anyone except the doctor that wrote them.  Often, a note would only say something like “biomicroscope- within normal limits,” usually abbreviated as SLE-WNL.  That meant something to that particular physician.  The physician knew that meant they did a complete evaluation with the slit lamp, which involved perhaps 10 or 12 different elements of the exam.  It meant, “Yes, I looked at and examined the lids and lashes, the sclera, the conjunctiva including the fornices, the cornea (including the epithelium, stroma, and endothelium), the anterior chamber, and the lens.  Yet, all our note stated was SLE-WNL.  The insurance companies weren’t buying it.  They told us that if you want us to pay for a complete exam, you will have to show us a little more than SLE-WNL.  In other words, we could not just show our answer; we had to show our work.  Just like back in school when you had a long math problem.  You could not just write down that the answer is 4; you had to show how you arrived at that answer in order to get any credit.

     In 1995, that’s precisely what the government did.  In an effort by the insurance companies and the AMA, Congress passed a law introducing Evaluation and Management Codes, more commonly referred to as E/M codes.  These were now required in order to get any reimbursement from Medicare, Medicaid, or any private insurance companies.  Remember, most doctors now accepted assignment and dealt directly with the insurance companies without the patient as the middleman.  Unfortunately, figuring out the E/M code became a nightmarish process involving a bloated government bureaucracy and forms that were impossible to figure out.

E/M Coding

     Above is a graph attempting to describe how E/M codes work.  If you have ever tried to figure out tax forms, you have some idea of what figuring out E/M codes is like.  Most people go crazy just trying to do taxes once a year.  Imagine doing something like that for every patient we see. We cannot tell you what your visit will cost until we determine an appropriate CPT code.  We cannot determine your CPT code until we figure out all of the elements of your E/M code.  This is why your doctor sits with their back to you, facing their computer, feverishly typing away.  They are trying to figure out all of the necessary elements of the E/M code.  It has gotten to the point where we spend as much time satisfying bureaucratic requirements as practicing medicine.  Sadly, the patient has taken a back seat to the computer.  If we fail to complete requirements for the E/M coding correctly, everything breaks down, and the insurance company denies the claims.  Dr. Abraham Verghese describes the patient being replaced by the iPatient.  The unfortunate part is that we only have to document the elements of the E/M code.  No one is looking over our shoulder to see IF WE ACTUALLY DID THE EXAM.  I recently spoke with one of my relatives who visited their doctor and was billed a level 5 exam.  The doctor never had them undress, never listened with the stethoscope, and never even touched them.  Yet, according to the E/M code, all elements were satisfied for a level 5 CPT code.  Think of how insane this really is.  Physicians were not trusted to submit bills for medical services honestly, so an elaborate system was designed to provide evidence supporting their insurance claims, USING THE HONOR SYSTEM.

     We cannot tell you what the cost will be until after we figure out all of the elements involved in the E/M code.  Determining the proper coding level is just the start.  Do you have a co-pay?  Insurance companies do not want you going to the doctor every time there is any minor problem; otherwise, they would be paying far more in claims than they collected in premiums.  Copayments were introduced to provide a little disincentive to visiting the doctor for every problem.  Each time you visit the doctor, you must pay a small amount no matter what the problem.  I have seen copayments range from $5 to $100. 

     Let’s not forget about the deductible.  Most insurance plans have a deductible.  That means that every year, you are responsible for paying a certain amount before the insurance company pays anything. Let’s imagine that you have a plan with a $2,000 deductible.  You visit a doctor early in the year and are charged a level 4 exam that generates a $500 charge.  Also, let’s imagine that the allowed amount for this visit is $350.  You, as the patient, will be responsible for paying that $350.  The insurance will not pay anything until the allowed amounts add up to your deductible of $2,000.  It is not until this point, once you’ve accumulated enough allowable amounts, that your insurance will start covering all future allowed amounts (minus copayments).  Deductibles are incredibly confusing for many patients who cannot determine why their insurance company is not paying.  It is not that the services were not covered; the claim was applied to their deductible.  Even more confusing is that deductibles are applied in the order claims are received.  It is not important when you had your visit, but rather when your claim was submitted.  For example, you see Dr. A in January, and your insurance covers the visit.  You see Dr. B in February, yet the charges go toward your deductible.  How can that be?  Remember, claims and deductibles are applied in the order they are received.  Dr. A may have sent in their claim sometime after Dr. B sent theirs.

     Because Dr. B’s claim came in first, the deductible was applied to that bill, even though you saw Dr. A first.  As a practicing physician, I have no idea of your deductible status and where you stand with bills from other practices and hospitals.  Technically, we are supposed to be able to look up your deductible and have a real-time update as to where you stand at the time of your visit.  Unfortunately, these updates are often inaccurate and behind, leading to even more consternation. This is something to remember when you are purchasing medical insurance.  Every company and plan has different copayments and deductibles.  Sometimes, those plans with low monthly payments can cost you a fortune in copayments and deductibles.

Coding Book

     Confused? I’m not surprised.  Medicine has spawned an entire industry devoted to figuring out these codes.  There are coding books, coding seminars, coding webinars, and even coding camps.  Practices spend thousands of dollars sending their staff to these educational events.  Most practices hire personnel just to handle coding and billing issues.  Hospitals have entire wings of their buildings devoted to coding and billing. Yet, despite all of our efforts, we still can’t tell you upfront what it’s gonna cost.

     This newsletter does not constitute medical advice.  Make sure to contact your healthcare provider if you experience any of these conditions.  Do not make any changes to your medications before consulting your physician.

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