Introduction to Medical Billing

Medical Economics
06/30/09 - M.D.O.D by ERDoc85

Read the whole thing. The quote only gives a map and a feeling about the post. Will the best, most caring people continue to choose medicine under these conditions?

[edited] You may want to know how the government determines what to pay physicians. Government involvement is already a major problem in medicine!

As you read through the following (it might be hazardous to your health), consider the vast bureaucracy of people necessary to determine, process, audit, and bill all of this stuff. You will understand why there are so many clipboard carrying, useless flesh-bags in hospitals today.

RVU is Relative Value Unit
RVUwork        = Actual Physician Work
RVUexpense     = Practice Expenses
RVUliability   = Liability Insurance
RVUtotal = RVUwork + RVUexpense + RVUliability

GPCI = Geographic Practice Cost Index
       1.0 to 1.5 according to geographic area

CF = Medicare Conversion Factor
     $36.067 (for 2009) per RVUtotal
   
BF = Billing factor by treatment level 1-5
     or Critical (according to medical records)
   
Medicare Payment = RVUtotal × GPCI × CF × BF

You thought your medical record was only for keeping your medical history, but it also serves for legal defense and billing.

It is a source of medico-legal protection for the health care staff. Your record is replete with exactly what you said, including symptoms you denied having and warnings you were given. Anything you refused or argued about will be in great detail. This isn't for your benefit. It's to protect us from the vultures.

And, it has become your billing template! In order to bill you at any of the 6 billing levels, it must be documented that you were asked certain numbers of questions and examined in a specific number of areas.

( The complicated part is omitted here to protect the sanity of vulnerable readers. You have been warned. Smile. )

Legions of people known as "Medical Coders" sit down with every chart, count these items, and bill accordingly! All of these people make a good living, and their salaries are built into your medical care costs. It is government regulations that cause these people to exist.

Will it be simple to reform the health care system? The government has simplified it so far. No doubt (smile) more government involvement will simplify it further, supposedly lowering expenses without cutting services.

Now you know why your doc has his/her face buried in a chart instead of making eye contact with you. And why your doc spends 5 minutes with you, then excuses himself to sit outside for 15 minutes with the chart.

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The Department of Work and Production

The average guy hasn't seen government control close up, except for those in banking and auto manufacturing. Why can't knowledgeable, fact-based, systematic government oversight bring community and efficiency to everyone? (smile)

A possible encounter of an ordinary guy with a government agency that is going to make his profession more efficient, by saving or increasing his salary.

The Medicare Tomato Market

You Are Living In The Medicare Tomato
06/21/09 - The Happy Hospitalist

Say that tomatoes were declared vital to life and made available free through the Medicare National Tomato Bank. This translates the story of the healthcare market to the tomato market. A long, readable, and informative post. This is only an excerpt.

[edited] The government took over. A midnight Congressional mandate ended the free market in tomatoes, and replaced it with the Medicare National Tomato Bank (MNTB).

The demand for tomatoes took off. Grocery stores everywhere were selling out. Nobody could keep tomatoes in stock. The grocers were ecstatic. They sold their tomatoes and sent the bill to Uncle Sam, who then sent them a check for the market price. The people were happy. They were getting free tomatoes. Entitled Tomato Eaters (ETEs) everywhere loved Congress.

Unfortunately, the MNTB was not happy. They were paying the bill. That $200 billion tomato bill was rising quickly, faster and faster, 10% a year, year after year. The MNTB could not afford to continue paying for free tomatoes for everyone. Congress did something completely anti-American in an effort to control the costs of the MNTB. They took capitalism out of the tomato market.

In their stroke of genius, they tried something that had never been tried before under capitalism. They would lower the cost to the MNTB, not by cutting the demand (political suicide), but by paying only 80% of the market price.

The ETEs remained happy with free tomatoes. The grocers were not so happy.

(skip to near the end)

Access to free tomatoes was dwindling. No longer could the ETEs walk to the grocer down the street. They had to drive miles to get the government mandated access to the tomato market. Known as the emergency tomato grocer (ETG), the MNTB created rules and regulations that forced this group of grocers to stay open at all costs. No matter what. And to accept the price paid by the MNTB.

Grocer after grocer, bogged down by incredible regulatory costs associated with receiving 20, 30, 40 cents on the dollar for their tomatoes, one by one, they all left the entitled tomato market. No longer could you walk into any grocer, grab a bag of your favorite guaranteed tomato, and expect someone else to pay for it.

Moral

The Medicare Tomato is the reality of health care delivery today. It is the backwards approach to the rationing of a service that is finite. Health care is not an unlimited resource, and the policies of rationing will always best be determined by the personal financial stake that everyone has in their health care.

This doesn't mean cash only, insurance only, free care for all, or universal access. It is a rational approach to control demand, whether that be means tested or income dependent. Whether that means balance billing or high deductable policies. Whether that means shopping for service and quality through price transparency. Whether that means strictly catastrophic insurance coverage. Whether that means tort reform to reign in defensive medicine. Whether that means judicious use of a gate keeper Medical Home model. Whatever it means.

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Health Insurance is Not Health Care
High health insurance premiums result from high health care costs. If health care were not expensive, health insurance would not be expensive.