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Seven Things To Know When You Receive A Notice Of Investigation From The Department Of Health

New Study Reveals Complex Coding Requirements Are Increasing Medical Billing Costs in the U.S.

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On August 3, 2022, a study published by the Health Affairs Journal revealed that complex coding structures in the United States are driving up medical billing costs.  This is a primary factor helping to make it one of the most expensive countries in the world in which to obtain payment for medical care. According to the study, researchers studied this issue using a micro-level accounting of billing and insurance-related expenses in different national settings at six provider locations in five nations: Australia, Canada, Germany, the Netherlands, and Singapore. This recent study supplements a prior study measuring the costs in the U.S.  Not surprisingly, the findings, published in Health Affairs Journal, revealed “BIR [billing and insurance-related] costs in the U.S. are generally much higher than the costs in other countries.”

The Findings.

The study confirmed that billing and insurance-related (BIR) average cost of claims processing costs in the U.S. are much higher than in other countries. For example, prices range from a $6 in Canada to $215 in the U.S. for an inpatient surgical bill. In the U.S., this figure represents about 3.1 percent of the total professional revenue for the procedure. Providers also spent an average of approximately 100 minutes per claim in just processing the claim.

To compare, only Australia had similar billing and insurance-related costs to the U.S. Australia has a mix of publicly and privately funded payers and universal coverage. Billing and insurance-related costs were significantly less in Canada than in the other nations. The study said that Germany, Singapore, and the Netherlands had equal billing and insurance-related costs.

A Common Trend: Increasingly Complex Coding.

The U.S. has a coding process in which each payer has its own separate forms and documentation requirements, creating a significant burden on providers to translate clinical documentation into billable codes for reimbursement.  Although there is some effort to make these consistent, for example by requiring the use of CMS Forms 1500 for billing and use of the AMA’s CPT codes, there is still a number of inconsistencies making the process more complex.

Because of standardization in other countries, providers spend less time coding or do not need coders to translate documentation into billable codes. Additionally, “little physician time is spent entering billing-related information into the EHR system, as charge codes are either generated automatically or entered manually by a lower-wage or non-clinical teammate,” the study stated. “As a consequence, these countries’ billing systems either require fewer labor resources or much less costly labor and physician time than the one in the U.S.”

Researchers also found that financial counseling could reduce overall BIR costs in the U.S.
You can read the study in full to learn more by visiting Health Affairs, a leading peer-reviewed journal of health policy thought and research.

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LaPointe, Jacqueline. “Coding Drives Up Medical Billing Costs in the US.” Rev Cycle Intelligence. (August 3, 2022) Web.

Norris, Amanda. “REV CYCLE PROCESSES PUSH U.S. TO TOP OF LIST FOR HIGHEST MEDICAL BILLING COSTS.” Health Leaders Media. (August 10, 2022). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law; he is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in Orlando, Florida, area. The Health Law Firm, 1101 Douglas Ave. Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620.

Attorney Positions with The Health Law Firm.  The Health Law Firm is always looking for qualified attorneys interested in the practice of health law. Its main office is in the Orlando, Florida, area. If you are a member of The Florida Bar and are interested, forward a cover letter and your resume to: [email protected] or fax to: (407) 331-3030.

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