With this short and easy tour of medical billing and previously cast shadows, it's easy to say you have an idea of what's going on with both health care billing and US health care in general That enables you to become more engaged and involved person in the commercial events that will define our times.
In medical billing and the Insurance System in America, everything revolves around the "3 P's"
Patients
Providers (those who provide medical services)
Payers (insurance companies, the patients themselves or administrators of health savings accounts or money intended for medical services (as in the case of work comp adminstrators) )
See how easy this is to learn!!!
PAGE OUTLINE
SECTION 1 - From Appointment Scheduling, to Appointment, to Billing Codes, to Billing and Insurance processing. Ending with a primer on Provider Based Billing Fraud in the USA, Lickety Split...
Appointment Scheduling
The Appointment
Two Types of Billing Codes - A Diagnostic Code and a CPT Code
Let's Bill this the old fashioned way with a "HICFA Form" (aka CMS1500 form)
Let's pretend we are the insurance company now!!
SECTION 2 -- Let's take a pit stop now to get an introduction to fraud perpetrated by Providers and their Billing Agents...
SECTION 3 - Let's take another pit stop now -- would the Physicians and/or their Billing Agents also try to defraud customers too?
SECTION 4 - Case Study 1 - Salinas Valley Radiology and their Texas Billing Agents...
SECTION 5 - Case Study 2 - California Imaging Associates and their Billing Agents...
SECTION 6 - Case Study 3 - Salinas Valley Memorial Hospital Imaging ( a case of commercial monopoly)
Summary
We first have to more fully understand what we are leaving behind to ensure we do not return to it in another form sometime down the road.
A patient has something that makes them feel they need to see a doctor.
If it's an emergency they go to an emergency room with or without the support of an ambulance. With less acute situations they may go to a "Doc in the Box".
Often times, they don't pay attention to "network status" during emergencies. (are the providers "in network" or "out of network"). In countries with socialized healthcare, there are no networks. The country itself is a network. In the US, the "networks" are setup to parse providers and areas much like drug dealers carve up their own turf and distribution channels.
Let's forget about this scenario for now. It's a source of major financial drain on insurance pool funds in the US with ZERO logical oversight. Let's point out some criminality related to our Providers (Doctors) first so we quit blaming the insurance companies for all the malfeasance from the get go given there is plenty to spread around.
If it's not an emergency. a patient with insurance must:
1) Realize/understand they should try to go to a doctor that is "in network" for their insurance policy to receive pricing protection. They can look up doctors in their network via their insurance company website back-end, which requires a user account and a computer...(which many folks have, but few use really efficiently. Hell, most individuals can't even handle an in home printer these days for various reasons).
2) Realize/understand the details of their policy to know if they need to go to a General Practitioner (GP) first for a review or if they can go to a specialist directly if appropriate. They would need to read their policy or call their insurance company to ask for the proper protocol.
Let's pretend I am having LEFT SHOULDER PAIN.
Do I need to go to my GP first for a quick checkup and referral or can I just call up an Orthopedic Doctor for an appointment?
Let's pretend I can just pick an Orthopedic Doctor from a list of "in network" doctors and forgo a GP visit for a referral.
Let's pretend I scheduled an appointment, I showed up and I got seen by a doctor.
Let's pretend I complained of Left Shoulder Pain. Let's pretend the doctor touched the area and did some range of motion tests to determine it was not a big deal. Let's pretend he believed it was just a pull or strain and he prescribed some stretching exercises to close out the appointment.
What happened from a billing perspective after I left?
The Doctor or someone in his/her office familiar with my visit details has to select two types of codes for billing: A Diagnostic Code and a CPT Code.
DIAGNOSTIC CODE
A Diagnostic Code is a code that defines the symptoms and/or the diagnosed problem. Go to https://www.icd10data.com , type in "left shoulder pain". The first item that comes up is M25.512. It can be just that simple.
CPT CODE
CPT stands for "Current Procedural Terminology". Many doctors may not remember what the acronym stands for. It's just "CPT Code".
A CPT code is a number that specifies what the doctor did. It's like a Chinese Menu system. A number represents an procedure or a product.
Some of the codes simultaneously specify things about the procedure as well as the patient too. For example, a code may specify it was a routine 15 minute visit (the procedure), but part of it may identify the patient as being a 'new' or 'existing' patient.
For starters we are going to keep this incredibly simple. "E & M Codes" (Evaluation and Management Codes) are the most commonly used subset of CPT codes. Here is what you need to know...
=== New Patient ===
99201 (8-15 min appt)
99202 (16-23 min appt)
99203 (24-31 min appt)
99204 (32-39 min appt)
=== Existing Patient ===
99211 (8-15 min appt)
99212 (16-23 min appt)
99213 (24-31 min appt)
99214 (32-39 min appt)
A Provider needs to spend the time quoted with the patient AND with each increasing appointment length, there is a theoretical requirement of recording more and more objective patient information, even if that information is not deemed necessary by the Medical Provider
The easiest way to understand medical billing is to look at the old fashioned paper forms that Providers sent to Payors to get paid for services before the Digital Age. These forms are referred to as "HICFA Forms" (pronounced "hick-fa"). They are also referred to as CMS1500 forms (see-em-es-fifteen-hundred forms) .
It's a single page and anyone could handle this with relative ease with just a few minutes of education!! In another two minutes, you too will be an ADVANCED medical biller!!
Without going into every cell on the form below, let's use some common sense.
This form was the only form that is sent from the Provider (the Doctor) to the Payer (the insurance company) to get paid and it is one page long. If the info can't fit on this form, it's not used for billing. Thus, this form needs to identify:
1) The Patient Name and his/her Insurance Member ID so the insurance company can verify the patient is their insured...
2) The Provider information so the insurance company knows who to pay. This information will also tell the insurance company if the provider is in or out of network.
3) The Date of Service (DOS) {The date of the appointment}
4) The DIAGNOSTIC CODE (what was the major complaint or what was wrong)
5) The CPT CODE (how long did you take to examine them and/or what procedures were done during the appointment)
Just skim this form and then read on below. We'll show you what you need to focus on in the next section...
The area of this form we want to focus on most for the DIAGNOSTIC CODE and CPT CODE is the bottom third. Don't let the image below scare you, it's easier than it looks at first glance...
1) Date of Service - start date and end date (which is the same for most typical appointments, this was not a hospital stay)
2) CPT Code - What did you do for the patient. In this case the 99202 not only indicates how long the provider was with the patient, it also tells us this was a new patient appointment.
3) Diagnosis Pointer? -- Instead of putting the Diagnosis Code on the line, only a reference is made to "A"? That refers to a line "A" above that has the full Diagnosis Code
4) The reference letter for the Diagnosis Pointer
5) The Diagnosis Code
The only thing that might be confusing here is the pointer to "A". Why is the pointer to "A" used instead of just entering the Diagnosis Code in Section 3?
Imagine if I came in with Left Shoulder Pain (M25.512), Left Arm Pain (M79.662), and Left Hand Pain (M79.642). I'd have THREE Diagnosis Codes and all those numbers would not fit on that single line. Thus, this is how this works...
And let's take this one step further just so you can get a feel for the only other expanding possibility here...
What if in addition to the 99202 exam, the provider also completed a procedure that he could bill more money for?
That's easy. We just add another CPT code and we specify which diagnosis codes it was related too...
In the image above, a 16-24 minute Exam was performed (99202). All three of the issues (left shoulder, left arm and left hand) were discussed or addressed. The doctor gave verbal recommendations for stretching for the shoulder and arm, which don't get any specific credit outside of the 99202 code. The doctor then gave a 15 minute acupuncture treatment (97810) for the left hand (pointer C which points to M79.642)
NOTE: there is a technical billing detail here which is not correct.
E and M codes were seemingly originally intended to be the only thing done in a day. When a procedural code like 97810 for 15 minutes of Acupuncture is done the same day as an E and M Code, a "modifier" is required on the E and M code to say that it was NOT the only thing done that day. The modifier for this situation is "25" and it was hand written in below...
Some companies still allow providers to mail in these forms. Others require digital submission through a software vendor and most are phasing out the ability to mail in a form. When one could mail in a form, they'd fill out forms with all their office info, make copies of that, and then just fill in patient specific information. It really was not very complicated.
Doing all of this via computer software is in fact FAR HARDER and far more cognitively confusing than just filling out a form. All the time is spent in training for that figuring out the software and how it handles submissions. Very little is spent on the actual details of the data needed for the form as we just covered that in under 10 minutes.
We just received the form above in the mail.
We received the form that had both the E and M code (99202-25) code for all three complaints and the Acupuncture Treatment for the right hand (97810 for M79.642).
As the insurance company we do the following in order...
We verify the patient is our insured.
We verify the CPT codes are allowed for that patient. For example, does their policy cover Acupuncture.
We verify the Diagnosis Codes are applicable for the CPT codes presented. For example, Cigna Health care allows for Acupuncture to address physical pain like shoulder pain, but they will NOT reimburse for acupuncture for gynecological issues, headaches, or other things Acupuncture has been proven to treat equally as well.
As the insurer, once we decide that the patient is ours and the services rendered were inline with the insurance policy, we need to decide 1) how much the provider is allowed to make and 2) who is going to pay the provider.
To do this, we start by figuring out if the Provider is IN OUR NETWORK or NOT IN OUR NETWORK. (Has the Provider signed up to be an in-network provider). There is no cost for a provider to become an "in-network" provider. For being in network, the provider gets "free" advertising in the form of being listed as an in-network provider. In exchange for being in network, the provider must blanket accept the reimbursement rates for all procedures he or she may do, and that is typically expected to be done without being told what those rates are before signing up. (Seriously...). Originally, the reimbursements rates in-network providers were governed were "lower" than the cash rates the providers were charging. The providers looked at the discount as an "advertising fee" and insurance patients viewed the discount as a "group discount" kind of thing.
1) IF the provider is "in network", we, as the insurance company generally ignore the amount the provider said he or she wanted for each CPT Code. The number they specified they wanted is totally arbitrary and irrelevant. We assign values we are willing to allow the provider to collect and the provider is then only allowed to collect that amount from us (the insurance company) and/or the patient combined. In Network providers may not collect more than we (the insurance company) dictate for covered services. Our adjustments will be presented on an "Explanation of Benefits" (EOB), which is a document sent to both the Provider and the Patient. More on this below.
2) IF the provider is "NOT in network", we, as the insurance company, generally ignore the amount the provider said he or she wanted for the service and we dictate how much we are willing to pay the provider and/or credit the patient as part of "out of network services" for the service. Because the Provider is OUT OF NETWORK, we as the insurance company can NOT dictate how much the Provider can collect from us and the patient combined. In this case, the provider is free to bill the Patient for as much as they'd like after we return the "Explanation of Benefits" (EOB) to the provider AND the patient with our adjustments. When Patients go to "out of network" providers, they get no pricing protections at all.
NOTE AND CORRECTION: In both situations above, the insurance company generally ignored the amount the Provider specified for the service. That isn't totally correct. If in fact the provider asked for LESS THAN what the insurance company was willing to pay, the insurance company would pay the lower amount. THIS SILLINESS IS WHY PROVIDERS ALWAYS PUT RIDICULOUSLY HIGH PRICING ON THEIR INITIAL BILLS. THEY CAN ONLY LEAVE MONEY ON THE TABLE AND THEY DON'T WANT TO DO THAT, AND THERE IS NO PENALTY FOR PUTTING RIDICULOUSLY HIGH PRICING ON INITIAL BILLS. Initially high pricing typically terrifies patients if and when they see it, but Providers don't generally care about that.
As the insurance company, our next step is to determine if we (the insurance company) need to pay anything to the provider (for in network visits) or to the patient (for out of network visits) and we need to figure out how to allocate fees to deducible amounts, and out of pocket maximums for cumulative accounting.
Next we send out an EOB (Explanation of Benefits) to the Provider and the Payer with checks attached (or not), and our job is done!
That said, the "Explanation of Benefits" (EOBs) which are the billing statements sent out by insurance companies to the Patients and Payers clarify the details to a high enough degree to be understood by anyone who's taken the time to learn the information presented above.
Some mistakes are made in EOB presentation, but they are relatively low.
Most of the errors with those are related to uneducated reader errors and older EOB formats which were poor to start with.
One startling omission on some EOB's is clarity related to whether a provider was in or out of network. After decades of doing this, Blue Shield, for example still does NOT clearly specify if a provider was in or out of network. Why would they omit such a critical but of data?
1) The provider can bill for services for someone they never saw. A doctor has a fishing buddy, and the fishing buddy agrees to allow the doctor to bill for a weekly or monthly visit that he never makes to the office. The Doctor then treats the fishing buddy to free bait and tackle when they go on fishing trips. The insurance company generally has no way to protect from this fraud. In a "Medicare-for-All" system this fraud would be easier to deter e as it would be a federal offense to mis-bill with intention. As of now it's only a civil offense and the insurance company would have to care about it, which they kind of don't for reasons we'll cover later.
2) The provider can and will over bill for E and M codes all the time. One of the MOST COMMON forms of fraud is over billing for E and M codes. I'd say 50% of the Providers I see bump up the E and M code at least one step if not two steps past the actual appointment time and services rendered. In a system in which a doctor may be billing multiple insurance companies for a day's work, the doctor could bill three insurance companies for 6 hours of work each for a single day and none would have any ability to audit or refute without a lot of legal work. In a "Medicare-for-All" system, this fraud would be far easier to manage because there are only 8 hours in a normal work day and the doctor would not be able to bill for more than 8 hours.
3) The provider can bill for services or products he/she did NOT render. The provider can just add a CPT code the list of codes because he or she can. This seems to happen a lot in hospital billing more so than private practice because in hospital billing there are often a lot of line items where as in private practice the list is shorter and the fraud stands out more to the patient if not to anyone else. In a "Medicare-for-All" system, a small amount of basic education enables the Patients to keep providers in check, if any similar style of billing is even used, which in most cases it would not be.
4) The provider can modify a CPT code from a low cost item to to a high cost item with the flick of a pen! - Imagine that a chiropractor did a manipulation technique that should pay out $15, but he modified one or two digits of a code that he knew was a $50 manipulation? Few would ever catch that and it happens all day long every day across all modalities.
5) The provider can modify a CPT code from a low cost procedure to to a very, very high cost procedure and garner $1,000's or $10,000's or more with the flick of a pen!! Image the CPT code for a surgery for a bone spur was 99887 and imagine that typically paid $6000. Now, imagine the CPT code for an Ankle replacement was 99898 and that typically paid $25,000. By changing only two numbers, an office can make an additional $19,000. In theory, this is not overly likely to happen without more fraud, because in theory, an authorization is given prior to a surgery by an insurance company for a specific procedure. And in theory, the billing should need to match the initial authorization. However, what if that pre-authorization system was not synced up with the billing system? Or what if those calling for the pre-authorizations actually started the fraud with the pre-authorization process? This is what is most likely going on with Global One and the Monterey Surgery Center, for example. And what they've seemingly done is inserted a middle man biller for other strategic reasons too.
With this understanding, can anyone explain why the EOB's for Medicare are not being produced with treatment codes?
My Mom has complained about that numerous times. My mom was a great letter writer in her day. I picked up my "letter writing" from her and expanded on that idea just a little.
Who exactly is controlling the EOB printing formats and printing policies for Medicare? It sure sounds like it's a group who doesn't want the general population to be able to cross check medicare billing. That seems an odd fact unless it's a trap that's been laid by the Department of Justice to bust people for fraudulent billing? It seems odd they are making multi million dollar and even billion dollar medicare billing fraud busts while not providing the public the tools to help out at all. That part is all a little confusing...
I was born in 1970.
In 1992, when I was 22, I was turned down for health insurance. I got a first hand experience with our US Company store as it relates to health care with that lightening strike. I was basically informed that if I could not get that decision reversed, the only way I'd be able to get affordable coverage between age 22 and 65 was if I worked for a company large enough that it had health care benefits, where pre-existing conditions were excluded. If the pool of corporate employees was large enough to absorb pre-existing conditions, the pool of all Americans, which is far larger than any insurance pool, would be able to absorb that too, right? YES. It would, but the pools of people have been and are artificially chopped up in a way that forces creative folks who would be otherwise self employed to work for companies. See how that works now? That's one way they forced very creative folks to "work for the man".
Since 1995 when I started transitioning from immortal to mortal with a bouquet of health issues that have resulted in 17 surgeries and counting, I started to witness billing manipulation at all levels. It was and is depressing to realize these people we grant authority to in white coats often have severally marginalized ethics and values. It's a hard thought to really comprehend, but hopefully it will become easier with this publishing.
This year, 2019, I am going to end up having 3 to 6 outpatient medical procedures. So far this year I've seen a nice handful of fraudulent billing and I've seen some fully illogical authorization declines, all of which made for the impetus and fodder for this site.
On the "Complexity and Corruption" page of this website, I'm going to document every single EOB and Bill I receive this year. What I'm expecting to show is that 80% or more of the medical billing done is grossly flawed or fraudulent. The fraud from the Providers and their Billing Agents will be both against Insurance companies and patients like me...
Below are two short case studies which are documented in more detail in links available from the "Complexity and Corruption" page.
These are here as a simple primer to get you thinking more conspiratorially, as that is going to be required for us to dig out of this very, very deep pile of human created poo we call the Western Medical System.
On 5/20/2019 I got an MRI of my left humerous (1)
On 6/1/2019 Salinas Valley Radiologists billed Blue Shield (2) (we don't see the bill here, but assume it was on a paper HICFA form as you learned above).
On 6/5/2019 Blue Shield issues an EOB to Salinas Valley Radiology and me (3)
Blue Shield allowed and adjusted line items 1 and 3 and they did NOT allow line item 2. (4)
The amount I owe for these services is $112.
No where on this EOB does it clearly state Salinas Valley Radiologists are "in-network". I has to be surmised by the "Network Savings" comment and the reduced allowed amounts and adjustments.
Ignore the first line item on this bill. For some reason a claim wasn't filed on time for that.
Just look at the next three with 5/20/2019 dates. They align with the EOB.
Adjustments are made to line items 1 and 3 as expected and those feed into the $112 total due on the bill.
But what's that $415 line item doing? According to this company, the procedure was not covered by Blue Shield and "PLEASE REMIT PAYMENT".
PROBLEMS: 1) they are in network provider. If B/S didn't approve it they can't charge it. 2) B/S did not put it into the "non-covered" column on the EOB which would have made it more grey...
This is a soft example of billing fraud. If they can get 1 in 4 or 1 in 10 people to pay a line item they are not obligated to pay, that adds up to big bucks. This one is couched in a way that they could try to claim it was an accident or a mis-understanding if challenged.
Is this the kind of confusion you'd like to deal with when you are seeking medical services??? See the full case example for more information...
On 1/22/2019, one MRI's were was done by Salinas Valley Medical Clinic. (1,2)
The MRI was sent to California Advance Medical Imaging to be read.
On 1/24/2019, California Advanced imaging submitted a bill to B/S (7) and they dis-positioned it in a day (8).
The allowed amount was set at $80.78 (4) and that amount was assigned to me as a copayment/coinsurance requirement (6a)
On 1/22/2019, a day later, two MRI's were done by Salinas Valley Medical Clinic.
The MRI's were sent to California Advance Medical Imaging to be read.
On 1/28 they submitted billing. Again the allowed amounts for each were set at $80.78. Blue Shield paid 61.56 on the second one (for some reason), leaving me with the balance of 100.
On 2/4/2019, I had yet another MRI and the image was sent again to California Advanced Imaging Associates for a read.
This time, they seemingly messed up the billing request, and the allowed amount was zero.
They should have re-billed correctly, per the note from Blue Shield, but it does not appear as if they ever did that.
The bill arrived 4 months later...
The bill indicates my account balance is $404.78.
The red note at the bottom states: "YOUR INSURANCE HAS APPLIED A PORTION OF YOUR BILL TO YOUR COPAYMENT. PLEASE REMIT PAYMENT".
RED Balance >> $404.78
YET...
There are only three line items on this bill, not four? One of those is an adjustment record, not a line item.
They've only adjusted one line item per the EOB, not all three...
Curiously, there is a note that says "Current Patient Responsibility of $80.78". And in fact, based on the adjustemnts they have applied here, that is the amount due, not the $404.78.
The problems here related to billing fraud under the guise of negligence are plentiful.
See the full case example for more information...
If you dig into this site a little more, you can find a situation in which a 3 minute CT scan, which medicare reimburses at $80 to $150, was paid out at over $3600 and in an non-emergency situation.
I wasn't already at the hospital in need of a scan. This was a scheduled appointment where a non-hospital provider could have been chosen but wasn't, because the hospital owns the clinic I goto, and referring to the hospital owned imaging center creates $3000 in profit for a 3 minute scan. Greed and monopoly abound in astounding ways.
Yes, they were paid 20 to 40 times the going rate for a 3 minute scan, which amounts to a bunch of x-rays done all at once.
How does that happen?
How do we stop that?
I don't have any standing to sue the hospital for over billing, as I've signed my rights for payments over to my insurance company.
My insurance company is the only one who has standing to sue.
Why don't they sue?
What happens if they don't sue?
What happens if they don't care?
What happens if we try to follow the money here?
What do the commercial teams really look like in this private health insurance system where the insurance companies and the hospital owners are on the same team, cleaning the coffers of all?
You ALREADY know what's coming... You just can't bare to utter it yet. Its time for change. The clock is now upon us. This type of "billing" simply can't continue as is. It's far too much of an insult for those of us who can follow funny money and basic math.
How many of you could have easily identified these problems?
How many of you know what to do when facing these problems?
How many of you feel like we should be supporting an industry where these problems can run rampant without any reasonable or logical balance mechanism (ever)?
These problems shared above are TINY examples of billing fraud. Tiny compared to all the others in play, they just make for easy examples to get you thinking appropriately.
Under Medicare for All, medical insurance mal-practice will see a lot more reasonable and rational caps. Attorneys will be out of work and courts will see less business.
Under Medicare for All, the entire workman's compensation industry will cease to exist as we know it (thank you hesus, god, allah and mother nature too! ). Attorneys will be out of work as will be 1000's upon 1000's of case managers and billing review nurses and agents (some of which have been great, but many... many have been... just great at their roles).
Under Medicare for All, most employed by the private insurance industry will be out of work.
Under Medicare for All, all the IT folks creating duplicate records management systems which really suck right now will be put out of work.
If you are worried about "robots" upsetting the economy and creating a need for Universal Basic Income (UBI), you are grossly overlooking a more humane problem related to shutting down a mafia based system that is now supporting about four to six times as many people as it should.
In order to get to Medicare for All, it is imperative that everyone starts talking about job support -- or better yet, just plain old funny money magic support -- for those who will be put out of work when Medicare for All arrives.