Could my insurance company be giving my healthcare providers kickbacks?
This may seems like a far-fetched conspiracy theory, but this has happened to me twice now… Scenario goes like this: My insurance policy covers X but not Y (or X has a lower deductible than Y). I get healthcare services provided to me for X. Eventually the bill comes in and it is considered a Y service due to the CPT codes assigned and therefore not covered or covered under a higher deductible. This has happened to me in three obvious cases:
- Flu/food poisoning was coded by hospital as extreme and chronic morning sickness. I just happened to not have maternity coverage on that policy…
- Hospital codes for a very routine child delivery (3 days to term, vaginal delivery with epidural) are somehow coded as “complications of pregnancy”. In this I was actually counting on using “maternity” coverage since our standard deductible is very high.
- Same as above but even our Ob/Gyn’s office coded the services under “complications of pregnancy”.
The first case and the other cases are actually with two different insurance companies. In the first case it was actually billed and paid as covered, then 6 months later we got a revised EOB stating it was not covered. I concluded that the service code must have been changed but I was unable to prove this since I never saw the original bill and the hospital wouldn’t produce it for me.
The second/third case I just found out about today. We have a maternity specific deductible that is high, but still half of what our general deductible is. By Splitting up all of the services among the maternity/general deductible we are not meeting either one and are therefore paying 100% of the bill.
My theory and question: Is it possible that the insurance adjusters are contacting the providers to get the services coded in such a way that benefits the insurance company the most by allowing them to mark a bill as not covered or by splitting up between our deductibles? I believe this would be fraud, but would also be very difficult to prove considering I’ve not seen a single itemized bill from the providers, just a total with no explanations.
The word for this called “upcoding“. And yes, hospitals have departments and computer AI to optimize their CPT returns. As for kickbacks? Maybe….
CPT codes and how they are selected is subject to a lot of potential mishandling. Legally providers aren’t allowed to use computers to automatically assign the codes, which means that someone has to pick from the huge list of available options and enter that.
Often the person entering the code is just reading from your chart and was not one of the ones that actually provided care. This means they are left to decipher what was entered on the chart and try and match it based on their previous experience. The charts the provider used to tick off the services performed might very well be out of date or just not match up with the latest round of updates for CPT codes (article link). CPT codes change annually. and vary by state, and not everyone stays as up to date as they should. This is one of the reasons for mandated usage of EMR software.
There is a fairly large industry around medical billing. Companies exist just to handle coding and communication with the insurance vendor. Those companies don’t necessarily employee doctors or even nurses (info about how to start your own billing company) and rely on a lot of data entry level people. It’s complicated enough that there are billing companies that specialize in particular types of coding. I believe the code list just for blood draws runs 39+ pages.
Just on a normal live birth example, consider the following:
99460 – Initial hospital or birthing center care, per day, for evaluation and management of normal newborn infant
99463 – Initial hospital or birthing center care, per day, for evaluation and management of normal newborn infant admitted and discharged on the same date
It would be trivial for a coder to mix those two items up if they weren’t paying attention to the entry and discharge dates; or, it could simply be that someone at the providers facility entered the wrong discharge date. BTW those pay different rates to the facility.
(source: link. use TX and Birth as the search terms.)
Next, it is simply NOT in the providers best interest to code things such that the insurance company doesn’t pay. Just the opposite in fact, it’s in their interest to code things so that the insurance company does pay. The reality is that when an insurance company pays, it’s usually within 2 to 6 months. When an individual is billed, it might take years to get payout, assuming the individual pays at all.
My point is, I would lean towards simple human error rather than believing malicious intent to defraud. As billing gets further away from the actual point of the provided service the likelihood of variability increases and, as you’ve seen, insurance companies have little to no interest in reducing the complexity here.
Given my experience with medical billing, I’d say that the insurance company previously approved the benefits, medical billing submitted the info, insurance company denied for whatever reason (their reasons often make no sense), medical billing modified the codes, resubmitted, insurance company approved but doesn’t pay due to how they decided to apply your deductibles. At this point the ONLY recourse is for the provider to have you argue with your insurance company.
You’ll need to look at the EOB that should have been sent out from your insurance company and argue with them. The provider’s hands are likely tied at this point.
Now, lets add another wrinkle. If you were pregnant and went to the hospital, the hospital likely admitted you to the maternity area. The codes that they use are specialized for maternity health care and whoever entered the code went to that section of the CPT handbook and found the closest thing they could: extreme morning sickness. Was this coded wrong? yes. Was it purposeful? Probably not as the coder probably only deals with maternity codes and that was the best one they could find in the 30 seconds they have to enter the code before moving on to the next thing.
Next, was the code changed? It is HIGHLY unlikely to have been done by the provider. Insurance companies do NOT look kindly upon those that send in a bill and much later change the bill, especially after everyone has been paid. Further, it’s hard enough to jump through the hoops that insurance companies put up that provider’s usually don’t argue with the payout unless they feel like they’ve really been shafted.
What is more likely is that it was initially approved by the insurance company, then later reviewed by someone else at the insurance company that decided it should have been denied. Unfortunately, this is very common. The provider in this case has a choice. Either to resubmit the info to the insurance company or to just send you a bill for the balance. Typically they will do the latter as you are the only one that has any pull at all with your insurance company. Note that if the company had previously paid the provider they will simply deduct that amount from the next check to the provider.
Items 2/3 are a little bit different. “Complications during pregnancy” leaves a LOT of wiggle room. A simple example is that you go to the hospital and they put a baby monitor on you as things are progressing. Those monitors are extremely sensitive so if you move around (like turning on your side) then the recorded heart tones might jump around. If the tones dropped for any period of time then you’ve entered the “complicated pregnancy” arena.
The provider has to put that the tones changed – for liability reasons. When the coder sees this they’ll mark it as a complication; which, by the insurance company’s definition, it is even if everything else went perfectly fine.
While it may be difficult to ascertain the actual motive; and while yes I agree with you that it would be fraud if the communications were occurring in the way you state, there is a simpler explanation.
Specifically that given the overwhelming complexity of medical billing procedures, people tend to revert to a few simple codes that “work” and cover all bases, instead of searching out the most-correct code.
Your first example, of the code that changed is interesting. If you have the time to pursue it certainly writing letters, actual physical paper letters, and while always being polite, being insistent, to both the hospital administration and insurance company. Demand, politely of course, to understand the rationale for the change.
As a last resort, a useful tactic for the likely amount of money involved might be small claims court. A judge might well force the documentation out in the open, if your previous efforts had not worked.
Good Luck