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How Code Creep Boosts the Price of Health Care


Trudy LiebermanAbout 30 years ago I had my first run-in with code creep.'  A urologist I had visited for a garden-variety urinary tract infection billed $400 to determine that this was what I had.'  The price seemed excessive, and then I looked at the bill.'  The good doctor has 'unbundled' his services.'  He charged for every single thing he did'inserting a catheter, taking a urine sample, writing a prescription and finally adding a fee for a general office visit.'  I had thought all those things were part of the office visit.'  I protested.'  He reduced his charges, and I never went back.

Physicians discovered that there were riches to be had in unbundling their services and charging individually for each one.'  Each part added up to a much greater whole.'  Alas, I had to succumb and pay the requested prices for all other doctors who were doing the same thing.'  Insurance companies did too.'  In the intervening years, the national tab for health care zoomed up as the medical community refined the art of coding.

All this became clear recently when I examined solicitations from an outfit called The Coding Institute, which advertises their products to orthopedists, cardiologists, ophthalmologists and other specialists.' ' '  The idea is to help their office personnel do a better job assigning the Current Procedural Terminology (CPT) codes, which identify the medical services performed, on the bills they send to insurance companies and the government on behalf of patients.'  Selling ways to bill using CPT codes that command higher reimbursements is big business and partly explains why some specialists such as orthopedists do so well.

The pitch tells the docs that The Coding Institute can make their job easier, their claims more accurate and their practice more profitable with a newsletter called 'Orthopedic Coding Alert.'' '  In the pitch, the docs learn that 'more than 1,500 of your fellow orthopedic coders have discovered a stress-free approach to orthopedic coding.'' '  How?'  'They have a secret weapon that gives them the tips and tools they need to cash in on the latest revenue opportunities and sidestep fraud allegations in just 20 minutes each month.''  That weapon, the Orthopedic Coding Alert is 'chock full of insider tips, sample forms, and handy cheat-sheets' to help file more accurate claims.'  One bit of advice doctors get:'  'Don't overlook this key factor when coding arthroscopic and open procedures for one RCR patient'or pay the price.'' '  What doctor would want that to happen?' 

Neither Medicare nor insurance companies have been able to stop code creep.'  In fact, the government health care payers and most insurers have gone along with it.'  One managed care executive told me that if Medicare refuses to pay for something, the docs pay code games by getting an insurer to pay for something and modify a code that makes that possible.'  When one carrier goes along with that, it's hard for their competitors to do the opposite.'  Up go the prices.

That's why it's important to see where the movement toward bundled payments, sometimes called 'global payments,' is headed.'  Doctors would be given one payment to cover all the services a patient needs for a particular illness.'  Maybe that will stop code creep and the coding games, maybe not.

In Massachusetts, Gov. Deval Patrick has proposed a scheme of global payments to stop the medical price inflation that threatens the state's health reform law.'  The docs and other stakeholders in the medical-industrial complex are already raising the predictable red flags. The president of the Massachusetts Medical Society argues that global payments may hurt primary care doctors who serve the poor.'  She does not say that such payments might hurt doctors and hospitals that serve wealthy people with rich insurance benefits.

Global payments would return to the world that existed before my unfortunate encounter with the Manhattan urologist.'  That was the world of rotary telephones and typewriters with backspaces.'  We won't go there for sure.'  But what happens if we don't return to bundled payments, which some experts believe are our last hope for controlling the cost of health care?

More Blog Posts by Trudy Lieberman

author bio

Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website,, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.

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Journal Love Blog says
August 1, 2011 at 12:15 PM

Orthopedic Coding Alert...

[...] vices.  He charged for every single thing he didâ??inserting a catheter, taking [...]...