By Steven Bush, M.D.

A pathologist at Lee Hospital in Johnstow

Published May 1997

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An actual medical case presentation with corresponding "financial" case presentation will illustrate the absurdity our patients have been quietly tolerating for decades.

Medical Case Presentation

An 85-year-old retired coal miner in no distress was transferred on September 26, 1996 by ambulance from a distant hospital because atrial fibrillation developed during anesthesia induction for elective laproscopic cholecystectomy. The admitting attending physician promptly and expertly evaluated and treated the patient and cleared him for surgery. The surgeon performed a laproscopic cholecystectomy made unusually difficult because the gallbladder was a large solid sac of gallstones. The patient was discharged within a week without complication and thanked all caregivers in writing for the success of his first-ever hospital stay. The patient lived alone and was able to care for himself unassisted upon discharge.

Financial Case Presentation

Within one week after discharge, a cascade of 22 bills and statements related to the hospital stay began arriving. These include one each from the ambulance service, pathologist, EKG reader, pulmonary consultant and attending physician; two each from the hospital and vascular laboratory interpretation; three from the radiologist; four from the surgeon and six from the anesthesiologist. These statements originated from the Medicare carrier, the Medigap insurer and the private physician billing. The bills and statements continue to arrive seven months after discharge. In no case did the patient question or resist complying with payment requests.

• Hospital (Post-operative Day 5). A one-page itemized statement ended in large bold letters: "Please Pay $25,000" and included a return envelope. After several sleepless nights considering a home mortgage loan or home sale, the patient noted the "CR" after the total amount: Credit!

A long statement in small letters included "This is not a bill." After several calls to the hospital he learned that the computer over-estimated the insurance payment expected resulting in the large credit amount. The return envelope remained unexplained.

One month later a "Medicare Benefit Notice" revealed how much Medicare did not pay of the hospital charges, but did not show how much was paid. Although over 80 percent of Medicare funds are hospital payments, no details are provided about those payments, thus avoiding accountability. The physician payment statements, however, are presented in exact detail.

• Ambulance (Post-operative Day 12). The first Medicare Explanation of Benefits arrived showing ambulance charges and payments. Although the statement had a bold heading, "This Is Not A Bill," it ended with an amount designated, "Your Total Responsibility." That certainly seems like a bill to most people.

• Pathologist (Post-operative Day 19).The first physician Medicare Explanation of Benefits was for examination of the surgical specimen. The promptness of submitting the claim and the speed at which Medicare processes the claim determine which claim is processed first. A statement of payment by the Medigap insurer and a subsequent bill for the residual payment by the patient should have followed later, but the amounts were deemed too small to be worth processing.

• Anesthesiologist (Post-operative Day 21). One month after the Medicare Explanation of Benefits for the anesthesiologist arrived, a bill from the anesthesiologist acknowledging the Medicare payment indicated that the Medigap insurer refused to pay its part of the bill with no reason given. This required more phone calls to convince the anesthesiologist office personnel to submit a claim to the Medigap insurer with all appropriate data. A month later, the Medigap insurer sent a statement indicating payment of their part of the anesthesiologist charges. Several weeks later the final charge for the patient obligation arrived from the anesthesiologist. This latter bill included a mysterious notation, "Can not (sic) identify patient." Figuring this out didn’t seem to be worth the effort.

• Cardiology (Post-operative Day 32). Electrocardiograms were read by a physician other than the patient’s attending physician and the Medicare Explanation of Benefits disclosed the payment.

• Vascular Surgeon (Post-operative Day 37). A Medicare Explanation of Benefits disclosed payment for extremity studies to rule out early deep vein thrombosis postoperatively. A private billing from the vascular surgeon’s office showed that the Medigap insurer was not billed. More phone calls eventually corrected the patient’s charge.

• Surgeon (Post-operative Day 40). The Medicare Explanation of Benefits arrived showing the payment made and noting that the claim submitted by the surgeon’s office failed to include accurate information about the Medigap insurer. This required telephone calls to correct the situation. Eventually the Medigap insurer’s statement came and indicated its payment to the surgeon. The final bill with the patient’s correct payment obligation arrived several weeks later.

• Radiology (Post-operative Day 62). A Medicare Explanation of Benefits arrived. Several months later the Medigap insurer sent a statement of payment, and two weeks later the radiologist private billing notice came with the patient’s final bill.

• Consultation (Post-operative Day 80). A post-operative chest evaluation on the day of discharge by a pulmonary consultant resulted in a Medicare Explanation of Benefits which indicated that the claim submitted by the doctor’s office failed to include accurate information for billing the portion that should be paid by the Medigap insurer.

Fee-for-service payment is ideal when one or few physicians are treating a patient. The physician establishes a fair charge for his services and the patient accepts the obligation to pay. This is the traditional fee-for-service payment controlled by the physician-patient relationship. What’s wrong with this picture? A number of things.

Most insurance companies cause physician fee schedules to become inflated. Most insurance companies pay only a percent of published fees, so physicians must raise rates to obtain a net payment that is fair.

Administrative costs for generating these numerous statements and keeping track of partial payments is considerable, wasteful and inefficient. This system is error-prone, since at each step human error occurs with predictable regularity.

When a team of physicians delivers care, the payment system is a nightmare for the patient. Physicians had to learn the art and science of billing; insurers have a long experience of controlling payments; hospitals have limitless billing staffs and reimbursement consultants. Patients have none of these advantages and, when assaulted by all these billing experts, they are in no position to understand the system. Patients usually end up accepting on faith what they are told, rightly or wrongly, is their obligation to pay. Patients often turn to the physician with questions or complaints because insurance service department staffs are typically over-worked and under-informed.

The fee-for-service process has attracted non-physician health care professionals to get into the act, including nurse practitioners, physical therapists, respiratory therapists and others. Their professional associations have lobbied the government and insurance industry to obtain fee-for-service payments, sometimes competing with physicians for the same available funds.

The fee-for-service practice fosters fragmentation of care by forcing physicians into isolated groups, each fighting for its economic survival. Organized medicine claims to be the patient advocate, but ignores the patient’s struggle with this aspect of fee-for-service care. We cannot expect patient support for a system that abuses their patience, intelligence and dignity. No one has come up with a better system, but managed care proponents understand the problem better than anyone and have used it to their marketing advantage.

Physicians, hospitals and all caregivers deserve just compensation for the excellent care they provide. The patient, however, is caught in a web of confusing demands and deserves a more friendly payment mechanism. Physicians complain bitterly and usually justifiably about the abuses of managed care, but no one can deny that the patient-friendly payment system is far better than what is described above. Any fee-for-service plan should include a mechanism for a seamless coordination of insurance payments, involving the patient only when necessary. At the very least, physician and hospital billing practices should be streamlined and use accurate patient data to avoid the necessity of repeatedly submitting claims for the same service.

Just as pilots do not run the airlines, physicians do not run health care, but perhaps we have something to learn from each other. Is there a union in our future, or will pilots bill their passengers?