09 July 2007

Perverse incentives

Byzantine \By*zan"tine\ (b[i^]*z[a^]n"t[i^]n),
a. Of or pertaining to Byzantium.
A highly intricate system characterized by bureaucratic overelaboration bordering on lunacy
c. Relating to medical billing processes

I recently reviewed a chart for a patient who had been in a car accident. It was an old man who had sustained multiple injuries and was seriously ill, admitted to the ICU with multiple consultants. I was struck by one feature of the chart -- the bill was absolutely huge. Far beyond what is typical for even a serious trauma.

There were the standard items:
Critical Care, 30-74 minutes, $596
Chest Tube, $574

So a pretty sizable bill just there -- $1100. But that was in fact the smaller part of the bill. The balance:
Fracture care: Shaft of clavicle, $489
Fracture care: Nasal bone, $79
Fracture care: Rib, $239 x 3 ribs fractured
Fracture care: Metacarpal bone, $490
Fracture care: Pelvis, $1157
Fracture care: Medial mallelous of ankle, $705
So, for fracture care, the total sum was a princely: $3600

Now I should point out that these are gross charges (gross, indeed!), and actual collection on these charges may vary from 90% (in a commercially insured case) to about 30% (Medicare) to 0% (no insurance). But even so, look at the disparity! The fracture care is more than triple the cost of the actual life-saving treatment this patient required.

Just to be clear, the patient had sustained a head injury (fortunately, a minor one), requiring CT scan of the head and neurosurgical consult. There was the chest injury requiring the ER doc to cut a hole in the chest wall to let out trapped air and release the pressure which was preventing the heart from filling with blood. Internal injuries in the abdomen required consultation with a general surgeon. And the patient was elderly and frail, with other medical conditions and was in shock. The ER doc spent over an hour on this case alone, and did a tremendous job pulling someone's grandfather through the "Golden Hour." It's a Medicare patient, so he'll probably get $300 for his efforts.

BUT, he put on a few splints, x-rayed the right body parts, and did a very careful dictation noting all the injuries. And for that, he'll get three to four times the remuneration he did for the hard, scary, critically important life-saving efforts.

So, for the health policy types:
The system is fundamentally and irredeemably broken. Fix it now.

For ER interns:
In order to compliantly bill for definitive care of a fracture in the ED you must be sure to document:

  • The name of the broken bone, the anatomic location of the fracture, and whether it was open or closed
  • What interventions you performed (i.e. reduction, splint, strap, analgesia, ice, etc)
  • Post-intervention assessment (i.e. neurovascular status, pain level)
  • Follow-up plan
In order for the ER doc to legitimately bill for this service, you must actually provide the same care which would have been provided by a specialist. If follow-up with a specialist is required (say, for cast placement), the reimbursement will probably be split, with the majority going to the initial physician.

Sheesh, no wonder the average salary of an orthopedic surgeon is twice that of an ER doc, which is itself half again that of a family practitioner.


  1. All I can say is wow! Coming from the UK the cost of a procedure in the ED never crosses my mind - it is either needed or it isn't. I'd love a list of average costs to show to patients so they could get some idea of the cost of their treatment if (when?) we move to a more market based system.
    And I agree how wrong it is that an MC fracture - XR, tape, review, discharge costs nearly the same as a life saving consult and procedure.

  2. Hi, I'm a medical biller and so can possibly explain the fracture fee's extravagance. It's what is known as a global fee. So the full cost of all fracture care is covered in the inital cost--all of the follow up, etc...So the large fx cost is designed to cover the standard follow up for this fx. you'll see this on surgeries as well as other fx.

  3. So tell me, will your ER fee cover not only your services as initially administered but three months' followup in your ER for those problems? That is what is expected of the orthopedic consultant for his charges which, as you correctly note, will probably be discounted by 70%. Suppose our patient needed an ORIF, and suppose, because the patient is older, there was non-union or some other not-so-rare complication requiring an additional procedure. Would that give our consultant surgeon something else to bill for in the original post-treatment period? Perhaps, but instead of that 70% markdown, there would be maybe an 80% markdown, and then the 90-day clock would start over. What a deal!

  4. Good Gawd : and folks wonder where US based private medicine is going ?

    Close on $ 500 for figure 8 strapping a clavicle fracture ?

    $ 80 for I asssume icing an uncomplicated nasal fracture ?

    $ 717 for symptomatic "care" related to 3 rib fractures (excluding the chest tube and pneumothorax of course ) ?

    Thank God for Canadian universal healtcare ( I shudder at the thought of privatisation of our system ).

    IMHO these types of charges would be daylight robbery, irrespective of who is paying. C'mon - 500 bucks for a clavicle fracture ??!!

  5. Anon 3:20,

    I don't make the rules, I just follow 'em. You are right, the orthopod gets fucked when the ER doc provides definitive care. But really, in the 90% of cases which are uncomplicated, does the orthopedist deserve the full fee either? Fuck no! $500 for a collarbone? $1100 for a NON-operative pelvis? $239 for a rib (each!).

    This is the problem against which I rail -- It's not "who should get the bigger cut," it's "why are fracture care codes so ridiculously over-compensated?"

  6. I would think that there would be some friction amongst your group and the Orthopedists in the hospital if you are capturing all of those charges. This patient was obviously admitted, and I would bet the admitting team would like to have Ortho come evaluate the patient once clinically stabilized.

    But once the Ortho groups figure out that you are capturing most of their charges, I wonder why they would bother to see these consults in the hospital. Why don't they suggest that YOU come take care of these problems, since you billed for them?

    I'm just wondering how you get away with it, that's all. Most hospitals will bend over backwards to keep their Orthopods happy, so disagreements like this usually favor them. How do you do it?

  7. Scalpel,

    Mostly, the orthopods don't care, since they derive the *vast* majority of their revenue from procedures in the OR. Occasionally, we get a little griping about a case, but it's never been a major point of contention. I am also not certain they really pay attention to what gets billed & collected on these cases. When push comes to shove, we utilize the hospital compliance office to review disputed cases. If we did provide the service, which is defined as the "same service as would have been provided by a specialist," CMS generally favors the ability of the ER docs to bill.

    However, you are right that it's all political. In this case, truly the orthopedists just don't want to be bothered by the ER cases, and if letting us bill for fracture care is what it takes for us to leave them alone, they seem to be willing to pay the price.

    They also have pushed for us to do all routine reductions and fracture manipulation in the ED. We don't really mind the revenue and they don't want to come to the ER. A symbiotic relationship?

  8. Thanks; another inspiring post.


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