12 August 2010

Impenetrable medical billing journalism

Every news story about the ER just has to begin with a patient story. I think that's in the Constitution, it's such a universal thing. The New York Times had a halfway decent story about ER billing and a couple of minor changes in the PPACA (ie. health reform law). But the obligatory patient story really stopped me right in my tracks:
DURING a snowstorm last winter, my 6-year-old son fell and cut his chin — not outside on the ice, but inside on the tile bathroom floor. My husband walked our son, Charlie, through the knee-high snow to the local emergency room. Charlie’s gash was small, less than half an inch long, but deep. The hospital called in a plastic surgeon, who put 14 tiny stitches into his chin. Charlie called the incident “the worst day of my life” — mostly because he had to spend hours in a hospital instead of throwing snowballs. Weeks later, when the bills arrived, we had our own bad day. The total charges for his minor spill came to $5,398. The largest single charge was a shocking $4,950 from the plastic surgeon.
There are so many WTF elements for this story I don't know what to say:
  • They called in a plastic surgeon in for a 1 cm chin laceration? (either the parents were hyperdemanding or the ER doc was incredibly lame)
  • The surgeon put 14 stitches in a 1 cm laceration? (even for a three layer closure that is an insane number)
  • $4950 for a 1 cm lac?
The last item there is the most staggering. Just for reference, a typical code for the repair of such a laceration would be 12051 -- Intermediate repair laceration face, <2.5cm. This carries a value of 6.57 RVUs (non-facility) and a medicare reimbursement of $236. If there were something truly complex here (highly doubtful based on the description) then a complex repair might be justified -- 13151 -- which carries 10.14 RVUs and a medicare reimbursement of $365. Now it's not uncommon for a physician to set their gross fee schedule at 400% of medicare (which is after all a terrible payer). So "reasonable" charges for these codes range from $1000-1500. For the charge to come out at $5000, one of several things must be the case: either the author omitted a material detail, like maybe there was also a mandibular fracture; the author confused a facility bill with a physician bill; or the plastic surgeon had a fee schedule somewhere north of 1600% of medicare.

I suspect that the facility bill was actually the big one. $5000 is still pretty steep for an ER visit absent major diagnostic work, but it's conceivable. Ultimately, it's an exercise in futility to try to make sense of media reports of medical bills, even in an article ostensibly about understanding your bill! So I'll focus on the one bit which I heartily endorse:

DON’T GO THERE If your situation is not dire — you twisted your ankle or have a persistent sore throat, say, or your child receives a small burn — call your doctor first and ask for advice.

While this might sound obvious, many people routinely head to the E.R. for nonurgent problems. The top three reasons for emergency room visits in 2007 were for sprains and strains, superficial injuries and contusions, and upper respiratory infections, according to Ryan Mutter, a senior economist at the federal Agency for Healthcare Research and Quality. [...] Another good alternative to the E.R. is an urgent care center. There are now 8,700 of them across the country. They are typically faster and cheaper than E.R.’s. Urgent care centers specialize in treating mild injuries like sprains, broken toes and fingers and mild cuts.
Wasn't I just saying something along these lines yesterday? Also good advice:
MAKE AN OFFER If the final bill is beyond your means, it will pay to bargain — particularly if you do not have insurance.

“The majority of hospitals will discount private paying patients’ bills,” Ms. Leone said. “Most hospitals are generous in their discounts.”

You can negotiate even when you have insurance. Negotiate with doctors, too, over their individual bills.

ACT QUICKLY Unpaid hospital bills are usually forwarded to collection agencies that report uncollectible accounts to credit agencies. When faced with exorbitant bills, don’t hesitate to contact the hospital’s billing department and start a dialogue.
Very true. I know we bend over backwards to avoid sending patients to collections. It pisses people off, generates complaints to the hospital and our office, and generally nets us little actual revenue. We will happily take a large amount off the bill if it means we collect something on an account which otherwise would get us nothing.


  1. An addendum to the advice of "Don't go there:" in Reno, where my wife and I live, there is also the option of Urgent Care... I assume this is also an option in other areas.

    Urgent Care fits somewhere between calling your doctor and heading to the ER. The hours are better than most doctors in the area, and they are set up to deal with urgent, but not immediately life threatening, medical problems.

    While we have insurance, and only pay a small co-pay, I would also assume that Urgent Care charges significantly less than the ER. It also seems to be mostly staffed by nurse practitioners, with only one or two MDs, so staffing charges may be less, as well.

    So, in the interest of avoiding the ER, Urgent Care may be a viable alternative in many places.


  2. Maybe there was a conscious sedation involved? And an anesthesiologist?

    Thank you so much for writing about this -- I read this when it came out a few days ago and found the numbers preposterous.

    I can't imagine putting 14 stitches in a 1 cm cut -- I also can't imagine a mother UNDERestimating the size of the cut. I was always taught more stitches = more scar and I only put in enough so that all edges are opposed. In a 1 cm chin, I would think 2-3 of 6-0 would be perfect.

  3. Agree that 14 sutures seems a bit much for a short laceration- as does the bill for $4k plus...but...who 'enabled' this situation in the first place?

    1. Did the ER doc suggest to the patient that a plastic surgeon is on call and available?
    2. Did the parents demand a plastic surgeon?
    3. Did the ER doc punt this to a plastic surgeon because he/she was too busy?

    If I get called in for a patient like this- the bill is at least $1000- just to get me into the parking lot. The charges are based on a 'usual and customary' fee schedule we use for all patients. We don't accept insurance, so are free to set our own fees. We're out-of-network with all insurance plans.

    I'd charge about $2500 for this repair. I always code for a complex repair if the dermis is violated. They all need some debridement and a multi-layer closure.

    Health care is not free.

  4. Anon 11:14

    It seems unlikely that an ER doc would "suggest" a plastic surgeon for this sort of thing. It's easy money to do it yourself, and it's a huge PITA to call in a surgeon in most cases, and it ties up the bed for way longer. If the ER doc was the one who drove this bus, I would roundly criticize him or her. I suspect it was the parent -- that's the usual way.

    As for your charges, there's no other word I can use for that other than "gouging." I agree that a plastic surgeon should *not* be called in for trivial cases or the patient's preference. You describe your charges as "usual and customary" but the accepted format is UCR -- "Usual, customary and REASONABLE." $2500 is more than surgeons get for an appendectomy, and it's reprehensible to charge such a ridiculous fee for a trivial procedure.

  5. Urgent care is not an option every where. I live in a rural community serviced by a critical access hospital. We're a popular vacation area, so our population doubles during the summer.

    I wonder, of all of the semi-emergent and non-emergent patients, which ones truely have a choice of not using an ER. In our area, how many are vacationers who sprained an ankle, got an ear infection, etc. What does a snowbird do who has access to primary care in Florida, but not up here do when they have a chronic condition flare up?

    I know our local hospital depends on the cashflow from the summer months to stay viable. Taking away all the vacationer sprained ankles and chronic condition flare ups would bring the viability into question. Also, primary care is very impacted here, so it's not possible to accomodate all those people in the existing primary care structure (especially since we only have specialists like ortho for only a couple of days a week).

    Shadowfax, what do you think ought to be done in rural, underserved areas? I don't live in a poor area by any stretch, but I do live in an underserved area. Reducing the greens and blues in the ER doesn't seem possible without having to change the entire medical infrastructure in the area.


  6. Well, I guess this is why this plastic surgeon is not Bill Gates. I would find it difficult to charge more than $500 for a 1 cm laceration. I can't imagine using more than 1-2 stitches deep and 1-3 well placed stitches superficial.

  7. I hope I can boil this way down. I had an admission to the hospital that resulted in about $15,000 of charges from a variety of sources. I had insurance. However, the insurance tried to say that it was a pre-existing condition and would not pay for it. I tried like hell to negotiate with the docs, hospital, lab, and other contractors. Most would not even budge. One was willing to provide a 10% discount if I paid in full within 10 days. I tried to show that I didn't have insurance and did not have $15,000 sitting around to pay these bills.

    Cut to the chase, I was able to appeal and the insurance company reversed their decision and agreed to pay. That doc that was only willing to give me a 10% discount when it was coming out of my own pocket, took a 60% reduction hit from the insurance company. The hospital and lab got the same treatment.

    So in the end, when paying out of my own pocket, with money I didn't have, they want huge rates and will not discount. When a billion dollar insurance company pays the bill - then they discount by 60% or greater.

    Now, that is what really sucks about our healthcare. Should it not be the other way around? Should someone like me without the means to pay get the 60% discount - rather than the huge insurance company?

  8. Maybe the plastic surgeon was already in the department and volunteered. What parent would turn that down?

  9. Shadowfax, I'm sure your advice is sound, but there are problems in the implementation. If I go to the local Immediate Care Center, the bill looks like I was across town in the ER at the hospital. And, we usually get a call from "collections" before we even get a bill.

  10. If we can agree on a consensus figure of $1500, the next question is, what did the patient's insurance pay?

    I went to an annual exam with my gynecologist, who charges $700 (including a sonogram). He is not a participating provider (in anything), so in theory I would have paid him $700, submitted his bill to my insurance company, and maybe received reimbursement.

    I was told not to worry, because they would bill my insurance and accept whatever they paid. I was just to endorse the check and send it when it arrived.

    The explanation of benefits listed about $4500 worth of services. My insurance company disallowed about $2800 and paid 70% of the rest, or about $1200. When I asked about the wild bill, the office manager told me that she had assumed that I hadn't met my deductible yet and so she had assumed they would also deduct $500. In other words, she had carefully calculated what to bill to get the $700.

    This is wrong, yet effective.

    So, did the $5000 bill yield a payment of $1500?

  11. holy crap, $5000? negotiate? man it would suck to live in the States...

  12. There was a successful class action suit illegal for hospitals to bill self pay patients more than they bill insured patients. Several Oregon hospitals had to refund money to private pay patients.

    If you contract with an insurance company for example for $1000 for an ER visit you can't bill a private pay patient $5000.


  13. You really can find anything blogged about - Very informative :)

  14. In British Columbia Canada that is a 13611 for laceration under 5 cm, for $63 and a 1851 for single system emergency room assessment at $29 x %50 because it is billed with a procedure....for a grand total of $77.50.
    If you sedate the kiddo with Ketamine (and therefore do an examination of the airway, cardiovascular and respiratory system and take an anaesthetic history) you could bill a 1852 at $52x50% and make an extra 10 buckaroos!
    If you are a US citizen vacationing near my hospital I will bill the recommended private pay codes for a total of about $150 to $200.
    We have no plastic surgeon, so any demands for such are irrelevant.
    Just for contrast......makes me think about picking up a few shifts across the border!

  15. I manage the chargemaster in an acute care hospital in N.CAL. Charges are not relative to costs. They are a conglomeration of historic shots in the dark, optimizations based on payers provided by consulting firms, the attempt to keep up w/ the Jones or to get the most from an insurer. It's rather disgusting let alone frustrating. Don't come here for your mandatory middle aged diagnostic colonoscopy because we will bill you $4600! I admit to embracing my "commie liberal" moniker. Why can't we cap our rates at let's say 35% above cost for insurance & cap pharmaceutical companies, & medical suppliers at the same rate... or some fixed rate to accommate R&D, upgrades in equip & tech... profit...I can hear your arguments already but I don't buy most of them. We make things so much harder than they need to be protecting the rights of a limited number to make a financial killing. Some things should be managed for humanity sake... food, basic utilities, & healthcare. I'm climbing down now.

  16. Doc at Israeli for-profit urgent care center. Private pay would be:

    Office Visit: $125 (it was less until the dollar tanked)

    Suture: $60.

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