Coding for dollars

For every diagnosis and procedure you have at a hospital or at the doctor’s office—no matter how insignificant—a code is assigned. It’s how they get their money from insurers. Listen to the heart: code; insert a line: code; take blood pressure: code; and so forth. The more they code, the more money they receive from insurers. The more procedures, the more codes.

Hospitals and doctors have learned to game the system by “upcoding” to a higher diagnostic level. For example, a code designation of 428.21 (“acute systolic heart failure”) instead of 428 (“heart failure”) can make a difference of thousands of dollars. This is called “creative coding.” Coders can and do offer suggestions to hospital staff for ways to upcode.

Insurance companies also employ coders who battle the hospital coders to bring costs down. As you can imagine, coding is a growth enterprise and coders' salaries account for a sizable share of medical costs. Membership in the American Academy of Professional Coders has risen to more than 170,000 from roughly 70,000 in 2008.

If you are uninsured, such that no one is negotiating on your behalf, you will pay 2.5 times more for your hospital treatment than people who are covered by health insurance and three times more than the amount allowed by Medicare. Here’s an example: an uninsured woman had a subarachnoid hemorrhage—blood leaking into the space between her skull and brain. She received a hospital bill of more than $350,000 (this does not include around $150,000 for doctor and other fees). She was a resourceful person and was able to get various experts (pro bono) to help her fight the bills. Their research showed that, were she on Medicare, the cost would have been $80,000; if she were a vet, it would have been $70,000. The case went to court.

I don’t know about you, but I think this system is wrong.

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