Archive for category Fair Payment/Balance Billing
Trying to define the market value of someone’s professional services is difficult when those services are typically paid at vastly different rates, depending on the payer, especially when the party paying is usually not the direct recipient of the service. So when an emergency physician provides clinical services to a patient, how are those services valued by different payers, and what does that say about the reasonable market value of those services?
For example, let’s say that you come to the emergency department with an acute asthma attack: you can’t breath well, and your inhaler hasn’t helped to break the attack. A pretty straight-forward case, really: your ER doc does a history and physical exam, orders up some oxygen and a few respiratory therapy treatments, some steroids, perhaps an IV to rehydrate you and get access in case your condition worsens and you need IV meds, and returns to re-evaluate you every 15 minuets to make sure the treatments are working. Two hours later, you are able to go home with a script for three days of Prednisone and a refill for your Ventolin inhaler as the one you have is running low. You get instructions on how to care for yourself at home, when to see your primary care doctor, and what you should do if the wheezing comes on again despite the treatment. Chances are, you will likely get a charge for this service from the physician for 99284 level care for around $320, give or take, if you live, let’s say, in central California.
If you didn’t have insurance, you would be expected to pay the full charge. Unfortunately, many patients can’t afford to pay; or could afford to pay but are just irresponsible, and don’t pay anything. If the patient pays nothing, the emergency physician may be able to recover about $45 from California’s EMS Fund, a tobacco settlement funded program that pays on average about 15% of the emergency physician’s fee.
However, if you were uninsured with a family income at or below 350% of the federal poverty level; or you are insured and have incurred high medical costs (greater than 10% of family income over the prior 12 months) with a family income at or below 350% of federal poverty, and you submitted a request for a discount; you would (by virtue of California law) only have to pay 50% of median billed charges of a nationally recognized database of physician charges, probably around $150.
If you were covered by your County’s new Low Income Health Program (a family of 4 making less than $41,000/year), the county may pay the emergency physician about 30% of the Medicaid rate, or a whopping $21.
If you were covered by California’s Medi-Cal program, one of the lowest paying Medicaid programs in the country: $68.
If you were covered by Medicare: the federal program would pay about $125.
If you had HMO coverage, but had to go to a closer out-of-network ER, your HMO would pay the ER doc between $140 and $250.
If you had PPO coverage, the plan would pay between $175 and $240, minus any co-insurance payment, and you would have to pay the rest up to the $320 charge.
So, for a $320 emergency physician service, the emergency physician might receive anywhere from the full $320 down to $21, and about 10% of the time – nothing. The average emergency physician in California provides about $140,000 a year in unreimbursed care.
Of course, in order to provide these services, the emergency physician has to spend $10 to pay for malpractice insurance, $30 for billing services, and additional costs for other overhead amounting to a total of about $55 for every ED patient treated (even if the payment is $0)
So, what’s the real market value for an emergency physician’s services? I would argue that it is the full amount that the emergency physician charges, as long as these charges aren’t significantly higher than what other emergency physicians in the same area charge, but then I just paid a heating technician $175 for 10 minutes of maintenance on our furnace. Others would argue differently, but their estimate would be based on their particular agenda: protecting those living in poverty, reducing costs for the employer, dealing with government budget deficits, or making higher profits for the insurer. Unfortunately, none of these advocates actually provides emergency care to anyone.
By the way, if you were suffering from a heart attack or serious injury, and the emergency physician (and his team) actually saved your life (it happens hundreds of times every day), the emergency physician’s charge would be around $800 to (rarely) $2000. So, what’s the real market value of YOUR life?
This post also appears on the blog The Fickle Finger www.ficklefinger.net/blog/
Recently, Anthem in Kentucky (and other states), Harvard Pilgrim, and other plans (so I hear), have established policies to reduce by half payment for Evaluation and Management (E&M) services when accompanied by a -25 modifier and billed in combination with some 150 specific (and commonly used) preventative and procedure codes. The -25 modifier is supposed to indicate that these services are ‘separately identifiable’, according to AMA CPT coding rules. The rationale for this 50% reduction is that the plan does not want to pay twice for ‘the overlap of overhead expenses in the RVUs of the code combinations’. Anthem KY also plans to ‘make improvements in (their) primary care fee schedule allowances for office E&M codes’, but it is not clear to me if these improvements are intended to compensate for some or all of these reductions (don’t count on it).
Initially, I was not sure whether this policy would apply to both office based and facility based providers, so I contacted Anthem in KY to see. Though there was some confusion about this at first, the latest response I got from Anthem KY was that “Emergency Room Physicians will NOT be affected by the 50% reduction in payment”. I do not know at this point whether or not this exception also applies to other facility based providers. When I initially saw the policy statement from Anthem, I replied to them that:
I do not believe that ANY portion of the RVUs assigned to the E&M service should be ignored, deleted, modified, or considered duplicative to the RVUs assigned to the additional procedure when separately identifiable services are coded on the same claim. This is what CPT means by ‘separately identifiable': it means ‘distinct from’. The overhead expenses associated with an E&M service are likely to be completely separate and independent of the practice or overhead expenses associated with the procedure: incremental rather than overlapping. For example, the major practice expense for an office-based practitioner associated with the performance of an ultrasound is the cost of the machine and the cost of the training to perform the service. Neither of these are necessarily duplicative of, or overlapping with, the practice expenses associated with the provider’s E&M service.
In the case of facility based providers, like emergency physicians, the practice expense component of the E&M services are likewise separate and distinct from the practice expenses associated with procedural services by these providers, AND IN ADDITION, the practice expense component of the emergency physician’s E&M services represent a very small component of the overall RVUs assigned to the E&M service – certainly far less than 50%.
I indicated that this policy was inappropriate whether or not it was applied to office based or facility based providers. It is my understanding that several plans have initiated or are planning to initiate this same sort of payment policy. The AMA has also responded to this development. The fact that Anthem in KY is apparently not going to apply this strategy to emergency physicians, and perhaps other facility based providers, and the argument above against this practice, is an opening that other providers can use to push back when faced with these payment reductions. The unilateral decision by health plans to re-invent or re-interpret CPT claims coding rules on the fly, using rationales that appear more like rationalizations, begs for adoption of standardized, universally applied coding/payment rules for all payers.
This post also published in The Fickle Finger