December 12, 2019

Are these 5 types of medical billing 'fraud by any other name'?

Daily Briefing

    Elisabeth Rosenthal, a physician and editor-in-chief of Kaiser Health News, in a New York Times opinion piece recalls her husband's recent experience navigating the U.S. health care system and argues that "[m]uch of what we accept as legal in medical billing would be regarded as fraud in any other sector."

    Infographic: What patients want in billing and collections

    The accident

    This summer, Rosenthal's husband, Andrej, was injured in a bike accident. He suffered six broken ribs, a collapsed lung, a broken finger, a broken collarbone, and a broken shoulder blade.

    The treatment her husband received was "great," Rosenthal says, but the problems began "when the bills started arriving."


    Rosenthal continues, "To be clear, many of the charges that I would call fraudulent—maybe all of them —are technically legal (thanks sometimes to lobbying by providers), but that doesn't make them right."  

    She explains, "What I'm talking about … were the bills for things that simply didn't happen, or only kind-of, sort-of happened, or were mislabeled as things they were not, or were so nebulously defined that I couldn't figure out what we might be paying for."

    5 medical bill charges that would be considered 'fraud' in other sectors

    The experience prompted Rosenthal to take a close look at what the health care industry considers legitimate charges. She outlines five types of medical charges that "are technically legal" but that "no one would accept … if they appeared on bills delivered by a contractor, or a lawyer, or an auto mechanic."

    1. 'Medical swag'

    Medical equipment companies are allowed to bill for "durable medical equipment," but that can lead to large charges, such as $120 for a sling that you can get at your local pharmacy for $15, Rosenthal writes.

    When Andrej was in the trauma bay, he received a hard brace on his neck until it was confirmed he hadn't suffered a serious spinal injury, Rosenthal writes. The brace was removed within an hour.

    The medical equipment company that provided the brace billed $319, of which the insurer paid $215 and Rosenthal and her husband were responsible for $24.

    2. 'The cover charge'

    Since 2002, Rosenthal explains, EDs have been able to charge a "trauma activation fee," which the Trauma Center Association argued was needed so facilities could be compensated for maintaining a state of "readiness."

    "Some have likened trauma activation fees to a cover charge for being wheeled into an ED with major trauma," Rosenthal writes. "But does a cover charge typically cost more than the meal?"

    For Andrej it did. His ED bill included a $7,143.99 charge for a trauma activation fee, which Rosenthal writes was "the biggest single item" on the bill.

    She notes that, along with the trauma fee, her husband was billed $3,400 for a high-level ED visit, $1,030 for treatment from the trauma surgeon, and between $1,400 and $3,300 for five "purported" CT scans that were completed during a single trip into a scanner, Rosenthal writes.

    3. 'Imposter billing'

    "We received bills from doctors my husband never met," Rosenthal writes. Some of those bills, like one for the radiologist who read his scans, "were understandable," but others were for treatment from doctors that "never came anywhere near the bed to deliver the care," Rosenthal writes.

    For example, Andrej received stiches from a surgical resident at the hospital. However, his $1,512 bill for the stitches came from a senior surgeon who hadn't done the work, Rosenthal writes.

    Many health providers are allowed to bill for the work of stand-ins working under the supervising doctor, called "extenders," but "if an assistant did the work, shouldn't it be billed for less?" Rosenthal asks.

    4. 'The drive-by'

    Before Andrej left the hospital, a physical therapist spoke to him and asked a few questions, a visit that translated into a $646.15 bill recorded as a physical therapy evaluation, Rosenthal writes.

    That bill, Rosenthal writes, implied services were rendered that were not actually provided. "[The physical therapist] said he was there for 30 minutes, but he was not. He said he walked Andrej up 10 steps with a stabilizing belt for assistance. He did not. There was no significant health service given. Just an appearance and some boxes checked on a form," Rosenthal writes.

    5. 'The enforced upgrade'

    After his hospital stay, Andrej's pain levels rose, but he was out of pills, so he and Rosenthal met Andrej's trauma doctor in the ED to get a prescription because the trauma clinic was closed, Rosenthal writes. The interaction was billed at $1,330 because it occurred in the ED, Rosenthal writes.

    Similarly, when Andrej needed to have his finger splint adjusted, "someone took a pair of scissors and cut off the upper half of the splint and taped the lower half back in place," Rosenthal writes. "That translated into a $481 charge for 'surgery,' in addition to the $375 charge for the office visit and a $103 facility fee."

    Why these charges happen

    Why do insurers pay these charges when they may be unwarranted? "Partly because insurers have no way to know whether you got a particular item or service," Rosenthal writes. "But also because it's not worth their time to investigate the millions of medical interactions they write checks for each day."

    EHRs may have made this worse, Rosenthal writes, as they auto-fill billing boxes, which could lead to charges for things that didn't necessarily happen.

    "[T]hese are all everyday, normal experiences in today's health care system, and they may be perfectly legal," Rosenthal concludes. "If we want to tame the costs in our $3 trillion health system, we've got to rein in this behavior, which is fraud by any other name" (Rosenthal, New York Times, 12/7).

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