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How Well Visits Are Billed and What Happens if a Problem is Found?

Written by David Sprayberry MD

In a previous post, I tackled the subject of what constitutes a well visit. Today I will try to explain the way well visits are billed and what happens if a problem is found and/or addressed at the same visit.

Medical billing is quite complex and is based on a process called coding. I will see if I can explain it in a way that makes sense. Let me know if I was successful.

Think of your medical bill for an office visit as being similar to the bill you receive at a restaurant. Each service, procedure, lab, and screen is billed separately just like each menu item is billed separately at a restaurant.

When you go to your doctor for a visit, he or she is required to follow certain rules, called CPT and ICD-9 rules, for describing what happened during the visit (unless he does not accept any insurance and is paid directly by the patient for the visit).

Each thing that is done during the visit has a code and each diagnosis has a code.

The physician must report these codes to the insurance company in order to get paid for the work that was done. There are codes for well visits, codes for sick or problem visits, codes for each test, codes for each vaccine, and codes for each procedure.

If these codes are not reported correctly, your doctor will not be paid for the visit.

Many times they are reported correctly and your doctor still does not get paid correctly by the insurance company (which is generally due to a “mistake” by the insurance company).

Most medical offices have one or more employees whose entire job is to report these codes and to make sure the insurance company or patient actually pays correctly for them.

At a well visit, the typical codes that are reported to the insurance company are the well visit code, codes for each vaccine, codes for the administration of each vaccine, and codes for each test or procedure (like hearing, vision, hemoglobin, lead testing, developmental screening).

These codes are all linked to the diagnosis “well child”. Depending on the insurance plan, some or all of these codes are “covered services” and are paid by the insurance company.

Sometimes the insurance company requires the patient/parent to pay for all or part of a visit (either in the form of a co-pay, deductible, or because the insurance company doesn’t cover a particular service).

This depends completely on the contract between the patient/parent and the insurance company. The physician’s office is required to collect from the patient/parent whatever the insurance company didn’t pay.

What often causes confusion is when there is an illness or other problem that is addressed or treated at the same visit.

For example, if I were to find an ear infection and treat it, I would be required to submit a code that told the insurance company I had taken care of a problem and done more than just the well visit. This is where the confusion for parents may start and here’s why:

Many, if not most, insurance plans require the patient to pay for a portion of any services that are not part of the well visit. Depending on the plan, the patient may need to pay a co-pay or may pay the entire amount of the extra service if they have not met their deductible.

Whether they need to pay this is determined by their insurance company, not their physician. The insurance companies have intentionally designed this system to create tension between the patient and physician, when, in reality, the insurance company has caused the need for the parent to pay the extra amount.

The physician merely did her job and described the visit accurately to the insurance company.

To summarize, the physician reports the codes that describe what occurred at the visit to the insurance company. The insurance company reviews the codes and determines if the patient owes any additional fee to the physician.

Whether the patient owes anything depends entirely on the patient’s contract with the insurance company, not by the physician.

I hope this helps clarify the issue. Please feel free to share your comments or questions.

Dr. Sprayberry is a practicing pediatrician and believes there is more to medicine than shuffling patients in and out the door. To read more about Dr. Sprayberry’s medical trips to Kenya, visit his blog, Pediatrics Gone to the Dawgs.

Photo Credit – Dr. Nan

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Paying for your restaurant bill and your doctor’s bill is not that different

Written by Brandon Betancourt

I got a call from a mom recently. She wanted to know why she was being charged for both a preventive wellness visit and an office visit on the same date of service.

For those that don’t know, most visits to a pediatrician’s office are either considered an office visit, which generally include visits where the patient is sick, and wellness visits – which are those visits where the doc does a more comprehensive head to toe assessment of the child otherwise know as a physical.

This particular patient came in for a wellness visit, but the doctor also documented and addressed a heart condition that the patient has. The heart condition assessment triggered an office visit in addition to a yearly physical. In other words, our office submitted a claim to the patient’s insurance stating that both an office visit and a physical occurred during the encounter.

Mom wanted to know why the two charges since she was under the impression that checking a patient’s heart should be part of the physical.

I understood where the mom was coming from. Medical billing is very complicated and in many instances doesn’t make any sense. Not because the doctor or her office makes it complicated, but because the insurance companies designed it that way.

Here is how I explained it to her.

When you go to a restaurant, and order a dish, generally the meal will come with side foods. So, let’s say one is ordering a pasta primavera. The expectation is that in addition to the pasta, the dish is going to come with vegetables, which are included in the price of the dish.

Let’s say one decides to add chicken to the pasta primavera and the server says, “sure, but that will be extra.”  Meaning, she will have to charge extra for the added chicken. When asked what you’ll like to drink, 9 out of 10 times, beverages will also be extra. And so will appetizers.

Healthcare is like an a la carte restaurant where some things are included in the price of the visit, but others are not.

But here is where it get a little complicated. Unlike the the restaurant, patients don’t pay for their bills directly to the doctor; insurance companies pay the doctor. And insurance companies, in an effort to provide more shareholder value, prefer to pay for the least amount of claims possible because the less they have to pay, the more money they make.

Thus, they require physicians to document everything that happened during the visit so they can determine how much they have to pay based on the policy purchased by the patient. In other words, they won’t take the doctor’s word for it. They want to see and review everything that was discussed during the visit  with the patient so they can decide what should and should not get paid.

During this particular patient visit, I explained to the parent, in addition to the wellness visit, the doctor also assessed the child’s medical condition, which required the doctor to prescribe medication, order x-rays and a consult with a specialist.

Just like the appetizers and the added chicken is billed as “extra” at a restaurant, the assessment on the child’s condition was extra work for the doctor that is not included with the wellness visit payment.

And in her documentation, the doctor described to the the insurance company that the patient had required an “appetizer” and “chicken,” thus they should pay her more.

Essentially, the doctor was simply documenting the visit with everything she did in order to demonstrate to the insurance company what was done. And the heart condition assessment documented by the doctor triggered an office visit.

The parent appreciated the analogy and said that it was perfectly reasonable explanation. I was happy. I was able to communicate without insurance jargon and was understood. In my world, this is considered a good day.

Brandon is a practice administrator, speaker and blogger. He blogs regularly at PediatricInc.com

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The Cost of Servicing Your Child

Written by Suzanne Berman MD

Several years ago, when I took my car in for servicing, I noticed this clever message printed on the back of the mechanic’s invoice:

This simple, honest explanation of my bill impressed me so much that I kept the invoice. More recently, I’ve thought about using a similar illustration for patients who ask, “I don’t understand why my pediatrician’s bill is so high – I only saw the doctor for about 10 minutes!”

Using the auto mechanic’s model, I’ve taken our practice’s actual expenses for 2010 and broken them down by category, as well as percent of our total budget, to give you an idea of where the money goes.

So with apologies to the creator of the automobile piece, here’s what goes into the cost of servicing your child:

Utilities and rent: 10% We spend a tenth of our budget just keeping the lights on, the telephone ringing, the heat and A/C running, and the rent paid.
Supplies: 9% Nearly another tenth of our expenses go to supplies, both clerical (appointment cards, copy paper, and pens) and medical (gauze pads, diapers, and casting supplies.) The largest single supply expense we have is vaccines; it’s not uncommon for a busy pediatric practice to have many thousands of dollars in vaccine inventory at a time.
Clinical staff: 13% Our nurses and medical assistants are busy from open to close – they weigh and measure our patients, draw blood, give shots, answer medical questions, complete school and camp forms, return phone calls, coordinate referrals, talk to the home health agency, refill prescriptions with the pharmacy. All these astute individuals are friendly and talented; we want to keep them, so we try to pay them well.
Receptionists: 5% Our front office staff answer the phone, verify insurance, check in patients, distribute paperwork, send and receive medical records, mail and fax documents, process co-payments, confirm appointments, order supplies, and more.
Insurance jockeys: 4% We don’t have “car jockeys,” but we do employ three full-time staff who could be described as “insurance jockeys.” These longsuffering individuals send claims to insurance companies (a big task) and argue with insurance companies when payments aren’t made properly (an enormous task, as it’s estimated that 20% of insurance payments are wrong.) They try to keep up with policy changes in the 200+ insurance plans our office sees in a year. They also work with families who need to establish payment plans, need to get insurance, or who are having trouble navigating their insurance plan.
Supervisory staff: 8% All our other staff have to be trained and supervised. Someone has to approve their mileage forms, overtime requests, time clock totals, and benefits changes. Someone has to negotiate scheduling squabbles, process payroll, conduct staff meetings, plan the office’s Christmas party, write policies (then rewrite them when they’re unclear), meet with vendors, fix the computers when they’re acting up, call a plumber when a toddler accidentally flushes a toy down the toilet, and about 384 other major and minor things to keep our office running. These staff also have associated professional costs, like dues and subscriptions.
Building maintenance: 4% Keeping our office clean and well-maintained is hard work for the husband-and-wife team who spend several hours 5 evenings a week cleaning, disinfecting, dusting, vacuuming, waxing, touching up the paint, wiping fingerprints from walls, emptying the trash, getting bugs out of the light fixtures, and more. Seasonally, we also pay a landscaping service (to maintain our grass and plantings) and a guy with a big truck (to salt and de-ice our parking lot). This also includes budgeting for major repairs, like resealing and restriping our parking lot every couple of years, fixing leaks in the ceiling, and cleaning up fallen debris after a bad storm.
Specialized physician training: 22%. This represents the salaries for the pediatricians in our practice and, yes, paying the doctor is the largest single expense in a practice. Much of this goes to the doctor’s personal overhead: Physicians now graduate med school with an average of $150,000 in educational debt.
Capital investment: 6% We use electronic medical records at our office, so all of our staff have their own computers, and there are computers in each of our exam rooms. Computers have to be replaced every few years, as do other electronics, furniture, appliances, and tools.
Taxes: 6% The largest part is payroll taxes for our employees and self-employment taxes for our physicians – but also unemployment tax (federal and state), property tax, professional privilege (license) tax, and sales tax.
Insurance: 7% We pay malpractice insurance for our professional employees, of course, but also insurance on our building and equipment, health/dental/life/disability for our employees, worker’s comp insurance, and some other odds-and-ends premiums.
Fringe pay: 5% This includes vacation/sick pay, holiday pay, and our company’s contributions to our staff retirement plan.
Wage and hour regulations: 1% Overtime wages for our employee constitute nearly 1% of our total annual expenses.

 

When you pay your pediatrician’s bill, your pediatrician certainly takes home a portion of that, but most of it goes to other things to keep the office ready and running. While our practice isn’t necessarily representative of all pediatric practices – and I know from published benchmarks that our practice is atypical in at least a few ways — this hopefully gives a rough idea of where the pediatric healthcare dollar goes.

Suzanne Berman is a practicing general pediatrician in rural Tennessee.

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What I Wish Parents Knew About Medical Billing

Written by Brandon Betancourt

One of the things that I do a lot here at our practice is talk to parents about their health insurance coverage. The conversation is usually about why they have a balance on their child’s account.

Health insurance is very complicated. At our practice, we deal with health insurance all the time and even for us, it gets to be very complicated sometimes.

Today, I had a conversation with a patient’s parent regarding medical billing issues. After explaining some in-and-outs about why we do certain things, the parent mentioned she had no idea things were the way they were and now understands why doctors’ offices have to do what they have to do.

She also mentioned that we should do something to spread the word. She said, “I think it is important for other parents to know this. Otherwise, how are things going to get better?”

I thought her idea to spread the word was very good. Therefore, I decided to summarize our conversation in an effort to help other parents understand, at the very least, a portion of medical health insurance.

Coding — a lot of what doctors do

At a restaurant, generally you’ll get an itemized check that shows all the things you’ve ordered. Doctors do the same thing, but they do it in the medical chart.

Virtually every doctor who accepts health insurance uses codes (called CPT codes) that are assigned to every task they and their staff performs. Everything from a simple blood draw, to immunizations, to the ear check, to specimen handling — all these things are “coded” separately.

Why do docs do it this way?

These codes are used by the patient’s health insurance company to determine the payment amount that the doctor will receive for his or her services. In other words, the health insurance company (the one actually paying for the services) wants to see what was done during a patient’s appointment. Hence, everything the doctor and the staff does has a code.

For example, if you are coming in for a child’s well visit, the pediatrician will submit a “claim” to the insurance company using the following codes:

  • Established Well Visit – 99392
  • Developmental Testing – 96110
  • Hemoglobin – 85018
  • Finger/heel/ear stick – 36416
  • Lead Testing -83655
  • Hearing Screen – 92587

If the child gets immunizations, those have codes too.

  • DTAP-IPV – 90696
  • Flu – 90660

Vaccine administration also uses a distinct set of codes. To further complicate things, some vaccines have a single administration code used with them, and others have multiple administration codes for a single vaccine.

  • Admin – 90460
  • Admin – 90461
Oh, by the way…

Let’s say while you are in the examining room, you ask the doctor, “Ya know doc, little Lisa here has been pulling on her ear lately… she may have an ear infection. Can you check that for me really quick?”

This question requires the doc to perform an entirely different assessment than the well visit the child was getting.

The doctor, in order to show the insurance company that she did a completely different assessment, codes the ear pain diagnosis and adds a 99213 – which is an evaluation and management code that documents in the chart and on the claim to the insurance company that the doctor also checked the patient’s ear.

But we feel like we are being squeezed for every penny

Parents often think when they are looking at the bill that the doctor is nickel-and-diming parents, when in reality, it is the insurance company that requires the doc to show their work in this matter.

The health insurance company doesn’t accept the doctor telling them, “I did a well visit — pay me our agreed-upon fee.” They want to know all the things the doctor did during a patient’s visit so they can decide how much they ought to pay the doctor for his/her services.

Since most patients (or in the pediatrician’s case, parents) don’t pay the doctors directly, but rather the health insurance company, they want to know what took place during the visit so they know how much they ought to pay the doctor.

It is the same as going to the restaurant and getting billed for all the side and extra orders. Although the main meal is accompanied by other things, like french fries or a salad, refills, side orders, substitutions and additions to the order are billed as extra.

Health care services are a la carte as well. 

Why then do patients have balances if insurance ought to have paid?

The insurance policy that a patient has chosen may not pay for all the services the doctor performed. So when the doc’s billing staff submits a claim for a visit, the health insurance company often comes back and says, “We are not responsible for these codes/services; these are the member’s responsibility per the member’s health insurance policy. ”

For example, the health insurance company may say, the policy your patient chose pays for a vision screen, but not for a hearing screen. Or they may say, we cover the well visit code, but not the ear ache code at the same time as the wellness visit.

Doctors get stuck with the bill

The doctor, already having performed services, now has to go to the patient and say, “Hey, remember that school physical I performed and you asked me about little Lisa’s earache? Well, your insurance says that the policy you have doesn’t cover the earache part, so I’d like to be paid for the work I perform in assessing your child’s earache.”

Of course, doctors don’t actually say that, but when a parent gets a bill for the earache, that is in essence what the doc is trying to say to the parent. And if one looks carefully at the  explanation of benefits (that document that the insurance company sends after they process a patient’s claim) one will notice they give an explanation as to why they are not going to pay the doctor for the service.

Funny how things work

Here is an interesting, but crazy fact. In many cases, had the doctor deferred the earache question and told the mom to make another appointment to address that issue during another appointment, the health insurance company would have most likely paid for the office visit.

However, had the doctor done that, the patient would have most likely gotten upset at the doctor.

By treating the earache question during the wellness visit, the doctor runs the risk of not being paid despite doing the work. On the other hand, not addressing the ear ache, the doc runs the risk of upsetting the parent, who will probably think the doc is trying to squeeze another $30 copayment, which is clearly not the case.

Cutting cost — not always a good idea

One of the major problems with this is that patients don’t understand what they are financially responsible for. Or, it’s often the case where patients don’t understand what type of health insurance they’ve purchased.

Just like with anything else, you get what you pay for. But patients overlook this issue when purchasing health insurance. They usually look at the monthly premiums and choose the lowest one. But by doing that, they are often reducing the amount of coverage, which means patients will get stuck with larger portions of their medical bills.

Growing trend to save cost

The health insurance company, in an effort to keep their premiums low, have shifted the cost to customers and their doctors. While in the past health insurance companies may have covered 100%, now they are reducing the monthly premiums but only covering 70% of one’s medical expense. Hence allthe high deductible plans out there.

Why wasn’t I told they insurance doesn’t cover?

In our practice – which is a small three-provider practice – we see on average 60 to 75 patients daily.

Add to that there are virtually thousands and thousands of different health plans. In fact, we have patients whose parents work for the same company, but because they are at different pay grades, have different insurance plans.

The answer is, we don’t have enough manpower or time to sit on the phone verifying every single patient’s healthcare coverage. I know of practices that do, and God bless them. But as a practice we believe it is the patient’s responsibility to find out what is covered and what is not covered. The more time we spend on the phone with a patient’s insurance company, the less time we are able to spend providing health care for our patients.

Moreover…

As a practice, we consider that treating patients based on what the insurance covers and what it doesn’t, instead of treating by what the patient actually needs, is an unethical way to practice medicine.

Although most doctors that I know will take into consideration health insurance stipulations, they will not compromise a child’s health as a result of health insurance restriction and cheap health insurance coverage plans.

I hope this post will give all that read it some insight and perspective on medical billing. If you have a question, or don’t understand why doctors’ office do medical billing, feel free to leave a comment and we will try to address it.

Oh, and thanks for reading…

Brandon Betancourt is a practice administrator for Salud Pediatrics. You can follow him on Twitter  @pediatricinc

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If a patient can charge for her time, why can’t the doctor charge for his?

By Brandon Betancourt

Today I came across an article on CNN Health that talked about a woman that billed her doctor for the time he made her wait.

“It’s ludicrous — why would I wait for free?” said the woman that billed her physician. She billed the doctor $100.

I work at a doctor’s office and I think billing the doctor for the time she makes a patient wait is a great idea. But why should we stop with doctors?

Why not bill everybody that wastes our time?

For example, I could bill the IL Tollways for the hours I sit in traffic thanks to their tollbooths. They are huge funnels, thus creating unnecessary traffic jams. Pay for tolls and wait too? Ludicrous.

We could also bill restaurants that tell us it will be 5 to 10 minutes for a table when in fact, it is really 20 minutes before me and my family gets to sit down. You know? Who they think they are? Our time is valuable too.

How about if we bill the movie theaters? Movies don’t start when they say, but rather roll advertising and previews for 20 minutes. I paid to see a movie on time, damn it! By the time the movie begins, I’ve already eaten all my popcorn. That ain’t right!

Oh, and let’s not forget amusement and parks like Disney. Waiting for “It’s a Small World” for over an hour… “pay up Mickey!” My kids’ time is valuable too.

Doctors should be able to get in the game too. How about if doctors charged patients when patients wasted the doctors time with unnecessary questions or for questions that already have been answered, phone calls, filling out forms, sending out pre-authorizations, calling the pharmacy, billing the insurance on the patient’s behalf or waking up in the middle of the night because the patient is not feeling well and can’t wait a couple of hours to be seen in the morning?

How about we do this…

If the patient takes up more than 15 minutes (the patient’s insurance company doesn’t pay for more) we bill by the minute which is paid at the time of service.

One last thing, when doctors run late, it usually isn’t because the doctor was doing something for themselves, but rather because they were doing something for another patient.

Perhaps an even better idea is to have patients like Elaine Farstad (the woman in the CNN story) that want to bill their doctor for the “wasted” time, bill all the other patients the doctor saw before her. Because in fact, they are the reason the doctor was running late for her appointment.

Brandon Betancourt is a practice administrator and blogs regularly at PediatricInc.com