Gaming the codes to increase medical profiteering

The American medical system is built on codes, codes to classify illness and procedures. And these codes can be gamed to increase profits; one can even take courses in how to do this. Writing in the NYTimes Magazine, Elisabeth Rosenthal says:

What’s less understood is the extent to which our current medical-billing system itself is responsible for the high prices patients are charged. There are, of course, many factors that have led to the United States’ record-breaking $3 trillion health care bill: runaway drug prices, excessive testing and sky-high charges for even the most basic medical interventions. But all of those individual price increases have been enabled — indeed, aided and abetted — by the complex system of billing and coding that underlies bills like those sent to Wickizer. That system, with its lines of alphanumeric codes and arcane medical abbreviations, has given birth to a gigantic new industry of consultants, armies of back-room experts whom medical providers and insurance companies deploy against each other in an endless war over which medical procedures were undertaken and how much to pay for them. Caught in the crossfire are Americans like Wanda Wickizer, left with huge bills and indecipherable explanations in languages they cannot possibly understand.

Thus:

Seemingly subtle choices about which code to use can have large financial consequences. If after reviewing a hospital chart of, say, a patient who has just had a problem with his heart, a hospital coder indicates the diagnosis code for “heart failure” (ICD-9-CM Code 428) instead of the one for “acute systolic heart failure” (Code 428.21), the difference could mean thousands of dollars. “In order to code for the more lucrative code, you have to know how it is defined and make sure the care described in the chart meets the criterion, the definition, for that higher number,” says one experienced coder in Florida, who helped with Wickizer’s case and declined to be identified because she works for another major hospital. In order to code for “acute systolic heart failure,” the patient’s chart ought to include supporting documentation, for example, that the heart was pumping out less than 25 percent of its blood with each beat and that he was given an echocardiogram and a diuretic to lower blood pressure. Submitting a bill using the higher code without meeting criteria could constitute fraud.

Each billing decision, then, can be seen as a battle of coder versus coder. The coders who work for hospitals and doctors strive to bring in as much revenue as possible from each service, while coders employed by insurers try to deny claims as overreaching. Coders who audit Medicare charts look for abuse to reclaim money or fraud that needs to be punished with fines. Hospital coders teach doctors — and doctors pay to take courses — to learn how they can “upcode” their charts to a more lucrative level with minimal effort. In a doctor’s office, a Level 3 visit (paid, say, at $175) might be legally transformed into a Level 4 (say, $225) by performing one extra maneuver, like weighing the patient or listening to the lungs, whether the patient’s illness required that or not.

Lambert Strether provides further commentary at Naked Capitalism, concluding:

When Medicare for All is finally passed, there will still be a place for medical coding, redirected toward its original purpose, to deliver health care. (HR676, at least provides for retraining.) And I can’t help but think that when the medical coders don’t have to screw people over for profit any more, they’ll feel much like the cleansed soul described in The Screwtape Letters:

Just think … what he felt at that moment; as if a scab had fallen from an old sore, as if he were emerging from a hideous, shell-like tetter, as if he shuffled off for good and all a defiled, wet, clinging garment.

But as for the phishers of people who invented “strategic coding,” and did the training, and awarded the credentials, the people who ran the for-profit schools and the professional organizations, and cashed the fat checks, and built the system that tried to take the money Wanda Wickizer had saved for her kids to go to college, what of them? The corruption of this “creative class” is surely of a different order from the coding foot-soldiers; this creative class is not only corrupt, but enables corruption in others (“aid and abet”). If I were to wish that everything that happened to the West Virginia coal-miners happened to them, starting with the loss of their jobs and the savage destruction of their communities, would that make me a bad person? Probably. So instead, I’ll wish that they find continuing useful employment in the medical field: Emptying bedpans, for example.