Jan 12
2023
Medical Billing Needs To Catch Up with Modern Medicine
By Darren Ghanayem and Maria Turner, managing directors, AArete.
America boasts the greatest advancements in medical research in the world: more Americans have received the Nobel Prize in medicine than Europe, Canada, Japan, and Australia combined, which together have twice the American population. America has potential to lead the globe in cutting edge medical care, delivering service that is paid for fairly, accurately, and efficiently. It’s time our payer system caught up with our world-class talent and facilities.
The process of connecting the American healthcare ecosystem’s 3Ps (Payer, Provider, and Patient) has been marred with inefficiencies and inconsistencies. Nowhere is this more evident than in the billing area, where inaccuracies and disputes are commonplace. Resolving these issues is both time consuming and labor intensive—payers often have to jump through hoops to get to the real essence of a provider’s claim and translate accurately the real costs to providers and what to collect from patients. Such billing challenges, or even simple opacity, are not isolated instances—they are embarrassingly prevalent. A 2016 study by the Medical Billing Advocates of America found errors in three out of the four bills they reviewed.
These inefficiencies have added to a fractured, disconnected healthcare ecosystem; patients harbor animosity toward health insurance payers when they are billed more than they expected, while payers and providers are in constant dispute over reimbursement and shared payment arrangements. As a result, the tension can be felt across all constituents.
What’s behind these billing errors? Provider administrators sometimes enter incorrect procedure and diagnostic codes. A simple typo might exponentially increase the cost of the claim. For example, with a single misplaced or misread digit, an X-ray on an ankle might incorrectly register as an image of the blood flow to a brain. Many of these inaccuracies can be attributed to well-meaning human error—and payers need to develop strategies to combat these relatively benign mistakes. They must move forward and work together with providers, because playing the blame game harms every facet of the delicate healthcare ecosystem. But this doesn’t completely rule out the possibility of fraud. In some cases, providers have generated inflated revenue by intentionally using the wrong billing code (a practice commonly called “upcoding”) or incorrectly using modifiers to bypass the review process (e.g., the use of Modifier 59 to report distinct procedural services not normally reported together).