Cracking The Code: How Health Care Bills Come Down To Numbers Unrelated To Service

April 16, 2019

Sarah Hirsch was teaching a second-period art class at Manvel High School in November when she felt as if the room was spinning. It was unnerving enough that she went to the school nurse’s office to lie down and soon felt better. But when she stood, the dizziness came back.

The cause of Hirsch’s symptom was never determined, but the doctor who saw her the next day quickly discovered fluid in her ears, a common cause of dizziness that usually requires no immediate treatment. Yet, by the time she left the Montrose Emergency Center, a free-standing emergency room, Hirsch had accumulated more than $15,000 in charges that included two CAT scans, an electrocardiogram, two urine tests, blood work, and an IV of saline solution to prevent dehydration — even though she was told she was not dehydrated.

She now owes $13,794.49 because insurance covered less than 10 percent of the charges since it was out-of-network.

Hirsch’s staggering bill raises many familiar and troubling questions about medical care and costs, including the proliferation of excess tests and procedures, the uncertainty of insurance coverage and the responsibilities of providers to clearly disclose network affiliations and potential charges faced by patients. It also highlights a twist in the impenetrable maze of medical billing in the United States, one that patients rarely know about, much less how to fight back.

About one-fourth, or $3,500 of Hirsch’s nearly $14,000 bill was the facility fee, an overhead charge imposed by emergency rooms and hospitals for just walking in the door. Attached to the fee was a five-digit code, used in billing to describe the severity of the condition and scope of treatment. Those codes can spell the difference between paying a few hundred dollars or many thousands on top of bills for doctors and treatment.

Montrose Emergency Center, part of the SignatureCare chain of free-standing emergency rooms, rated Hirsch’s visit at the highest level of severity, typical of life-threatening conditions. She was never given a diagnosis or explanation for the extensive testing. She got a potassium tablet and some motion-sickness medicine and told to go home and rest.

“This is a total scam,” said Hirsch, who has challenged the charges and is awaiting a decision from her insurer. “If I felt like my life was threatened I would have gone to a hospital. I thought I was going to urgent care. I guess they figured we’ve got all of these toys, let’s use them.”

Ending in ‘5’

Dr. R. Joe Ybarra, the legislative liaison for SignatureCare, said he did not find the tests ordered or coding unusual. In emergencies, he said, “we have to think of all possibilities.”

In the coding used to determine facility fees, it’s the last number that matters. The higher the number, the higher the charges.

In Texas, the average facility price allowed by insurers for a low to moderately severe condition — a 99282 code — was $436 in 2016, according to Health Care Cost Institute, a research group that examined 1.4 million insured trips to Texas emergency rooms. It more than triples to an average of $1,411 if the visit was coded a 99285, the highest level. Texas has the highest average cost of level 5 facility fees in the nation.

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These days, higher severity codes are appearing more frequently, according to internal insurance claims data and a review of dozens of patient bills by the Houston Chronicle. That, in turn, can lead to significantly higher prices billed to insurers, which ultimately, can get passed to unsuspecting patients.

An analysis of claims by UnitedHealthCare, the nation’s largest health insurer, found the use of the two highest facility fee codes rose 50 percent in the past decade, translating into a $1.5 billion increase in the country’s overall health care costs, said Tracey Lempner, a spokeswoman for the insurer.

Similarly, the Health Care Cost Institute, which gathers its data from insurers, found the amount spent for emergency room visits nearly doubled between 2009 and 2016. Prices rose across severity codes, but climbed fastest in the highest designations, said John Hargraves, a researcher at Health Care Cost Institute.

In Texas, the increase of high severity codes mostly came from free-standing emergency rooms, analysts said. The phenomenon of fully-equipped emergency rooms often tucked into retail centers got its start in Houston about a decade ago.

Between 2015 and 2017, Blue Cross and Blue Shield of Texas, the state’s largest insurer, had a 49.9 percent jump in the use of the two highest severity codes at free-standing emergency rooms, said Dr. Robert Morrow, president of the insurer’s Houston and Southeast Texas office.

The emergency medicine industry, however, says the statistics are misleading. They argue that any increase in higher severity codes is a result of people arriving sicker and in need high-level treatment, sometimes after delaying care because of high-deductible insurance plans.

Those with less serious ailments or injuries go elsewhere, such as urgent care clinics or their doctor’s offices, say free-standing industry officials.

“You can only code what is in the chart,” said Rhonda Sandel, CEO of Texas Emergency Care Centers, a network of four free-standing emergency rooms in the state and a board member of the industry’s trade association.

She rejected any suggestion of over-treatment or manipulation of the codes for higher reimbursement, a practice known as up-coding. Sometimes life-threatening conditions masquerade as something common. In one case, she said, a sore throat turned out to be a peritonsilar abscess that required emergency surgery.

The number of emergency room visits, however, is essentially unchanged. If patients were now seeking emergency care only for serious conditions, the number of visits would drop, analysts said.

“Since the population of insured people is not changing,” said Hargraves, the researcher for HCCI, “the only logical explanation is a change in how things are being coded.”

The free-standing emergency industry responds that more aging, sicker patients who need higher level care have offset the decline in lower-coded visits.

Jack Hoadley, research professor emeritus at Georgetown University’s Health Policy Institute, said it can be tricky to prove up-coding because of the discretion built into the system. The final determination of a facility fee code is based, in part, on the treating physician’s documentation in the medical chart.

No one wants to second-guess doctors or risk under-treating patients, he said, but a fine line runs between being thorough and “trying to squeeze the highest level of severity out of a situation.”

Wonders of Super Glue

In January 2018, Richard Kelley tried to step over his sprawled Labrador retriever just as the dog stood up. The Tomball construction manager went tumbling into the corner of a granite countertop, opening a cut to his temple.

Kelley, 63, was in pain and bleeding, but not hurt badly. He applied some do-it-yourself doctoring to the wound and closed it with Super Glue. He wasn’t disoriented and did not feel nauseous.

Still, his wife, Maxine, was worried about infection. Two days later, Kelley agreed to have the cut checked. He couldn’t get an appointment with his doctor, so he tried the Memorial Hermann Convenient Care Center nearby. He didn’t know anything about it, but the receptionist promised no waiting.

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A few minutes later, the doctor felt along Kelley’s eye socket and cheekbone and declared nothing broken. He asked Kelley about concussion warning signs.

“Richard, I don’t think stitches are going to help you any,” Kelley said the doctor told him. The nurse applied a few Steri-strips across the cut and Kelley was done. The whole deal, from walking in to walking out, took about 20 minutes, he said.

In March, the couple got a bill from Memorial Hermann. They owed $1,188.75 for the facility fee described as emergency care. The charge was later reduced by $361, leaving a balance of $827.37 because the deductible had not been met.

He repeatedly requested an itemized bill, but did not receive one. When he later asked, he was told the facility fee was coded a “3” for moderate severity.

Coding guidelines suggest such a designation includes treatment for “head injury without neurological symptom.” Kelley calls that a stretch.

“It makes you wonder what they would call a “1” or “2,” he said. “I feel like I’m subsidizing their overhead.”

Memorial Hermann declined to comment of Kelley’s case, citing privacy, but said in a statement, “Memorial Hermann makes every effort to correctly code visit levels and strives to ensure its billing practices are fair, equitable and accurate.”

Cracking down

Ken Janda, CEO of Houston insurer Community Health Choice, said facility claims coded moderate to severe jumped nearly 25 percent between 2015 and 2017. The easiest thing for insurance companies would be to just pay those claims, Janda said, but that would mean “premiums go up for all of us.”

Many health plans are heightening scrutiny on emergency room claims, Janda said, raising the temperature in the long-running fight between insurers and providers over reimbursement.

The emergency medicine industry has pushed back hard, accusing insurers of denying claims capriciously and trying to undercut doctors.

“Insurance companies are systematically denying emergency room visits where any reasonable person would agree (the treatment decisions) are medically necessary,” said Dr. Derek Guillory, medical director of The Emergency Clinic La Vernia, about 25 miles from San Antonio. ““They win when they sit on the money.”

Others in the industry say insurers are increasingly and unfairly denying facility reimbursements. Last month, the Texas Association of Freestanding Emergency Centers bought a double-page ad in the Houston Chronicle that accused insurers of “steering” patients away from the emergency care they need.

Patients, meanwhile, don’t know at whom to be mad. They only know they are getting socked.

Too late

What Philip McCraw needed was a tetanus shot after poking himself in the arm with a rusty nail while doing yard work last summer. What he got was a bill for nearly $1,900.

The San Antonio teacher didn’t have a regular doctor. He thought about going to the Mission Trail Baptist Hospital emergency room, but figured the wait would be too long and expensive for something so minor. He called a walk-in place called Baptist Emergency Hospital and was told to come in.

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He said the first words out of his mouth were: “Can you check my insurance to see what my coverage is?” He had Aetna. The woman at the front desk said it was against policy to provide such information before treatment, he said. He asked someone else who also would not confirm coverage.

Only after he went into a treatment room was he told he owed a $200 co-pay for emergency room services. McCraw, incredulous, said he wanted to refuse service and leave.

“OK,” he said he was told, “but we’re going to charge you anyway because you came back.”

“Right then I knew I was in a pickle,” he said.

A physician’s assistant glanced briefly at the wound. He got his shot, a prescription for an antibiotic, and left. The bill for the vaccine was $63.70 and another $97.99 to have it administered. The facility fee was $1,706.19 and coded a level 3.

“The thing that gets me is I told them why I was there,” said McCraw. “Why didn’t they explain from the beginning that this wasn’t the best place for me to go?”

The facility is part of the Baptist Health System, which has a partnership with of Emerus Holdings, a private developer of “micro-hospitals” with locations in Texas and other states.

“The owner of the facility, Emerus, is transparent about the fact that the facilities we manage are hospital-based emergency departments, and services are billed accordingly,” Baptist said in a statement. It added a puncture wound requiring a vaccination and antibiotic therapy “will generally be coded a level 3 charge, at a minimum.”

As for McCraw, he only found out later that a tetanus shot at Walgreens with insurance would have cost him nothing.jenny.deam@chron.comtwitter.com/jenny_dea