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Decoding upcoding: Reporter finds manipulation of patient condition severity in ER bills Date: 07/12/19

By Jenny Deam 

Reporting on medical billing can be daunting. That was particularly true with this story, because what I was looking for was so deeply hidden. This is where trusting my hunch paid off.

The Health Care Cost Institute issued an intriguing paper last year that showed what was paid by insurers for ER charges was going up significantly even though the overall number of insured patient visits was remaining steady. Tucked into the findings was a notation that the codes to reflect the severity of the patient condition, used in billing facility fees, was also going up – i.e. that the codes showed increasing severity. But since the patient census was staying roughly the same, the only explanation for the higher prices to insurers (and ultimately patients) was that there had been a change in the way fees were being coded.

My suspicion was that the severity of the patient conditions was being manipulated, or “upcoded,” and perhaps that excessive tests were being ordered to justify the higher code – which meant more revenue to the hospital.

But could I prove it?

Most people never see an itemized bill, nor do they even know that they are charged a facility fee, the so-called walking-in-the-door charge that emergencies departments bill to defray the overhead cost of equipment and staffing. And patients certainly don’t know there is a specific severity code attached. The only way to get at the story was to work backwards by casting a wide net over months through social media and a note on the Chronicle’s website asking readers to contact me if they received an unusually high bill for what seemed a minor treatment. You could do the same with social media, a tip line, patient groups, or whatever outreach tool works best in your newsroom.

Once patients responded to me, I asked them to contact the ER for an itemized bill and share it with me. That let me look for the billing codes. There is one specific code that controls pricing, ranging from 1 to 5. The higher the number, the higher the price.

What I found was shocking.

For instance, one man cut his forehead and treated it himself. A few days later, he decided he better have it checked. The ER doctor said it was healing nicely – and did nothing. The patient got a couple of Steri-strips and a facility fee bill for nearly $1,200. It was coded a 3 – or medium severity emergency. He had to call to find out his code designation because, despite repeated requests, he was never sent an itemized bill.

Another man went to what he thought was a walk-in clinic for a tetanus shot. When he learned it was instead a stand-alone ER (we have those in Texas!), he was told it was in-network – but he’d have a $200 co-pay. He declined treatment but was told he would be charged a facility fee anyway because he had checked in. So he stayed and got the tetanus shot. It was nearly $1,900 and too was coded a 3.

The most outrageous example, though, was the woman who had fluid in her ears, the precursor to the sinus infection that was about to hit. The ER doctor found her vitals normal but instead of treating – or not treating – the fluid in her ears, he ordered a long list of expensive, complex tests. She was given some motion sickness medicine and a nearly $14,000 facility fee bill coded a 5, the most serious code, typically for life-threatening conditions.

Doctors and ER administrators defend the use of higher codes because they say people are arriving at ERs sicker than they used to. Based on these patient examples, that is not the case.

Coding matters, as do these kinds of stories. A UnitedHealthcare analysis of claims showed 50 percent uptick in the use of highest severity codes over the past decade. That alone translated into $1.5 billion in added health care costs. And anything insurance does not pay gets passed onto patients through balance billing. (Which is different than surprise bills – that’s when there was an out-of-network provider in an in-network ER. That’s not what happened here.)

The trick is patience and the itemized bills – and knowing what to look for. Once the patient stories were laid out, readers were able to connect the dots immediately. This story was part of a continuing series on medical billing in Texas.