Tuesday, February 9, 2010

Physician Business Ideas: Coding Conundrum

A conundrum, according to my dictionary, is 1. A riddle whose answer contains a pun (Ex:”What’s the difference between a jeweler and a jailer?” “One sells watches and other watches cells.” 2. Any puzzling question or problem- SYN. See MYSTERY.

What is the difference between a physician and a payer? The doctor offers and sells treatments and the payer offers treatments for what the doctor sells. In other words, the payer decides the price for services the doctor provides.

How this is done is a mysterious process requiring either an inside practice coder or an outside coding consultant, who get their information from elaborate, ever changing coding books and manuals. Consequently, coding has become not only a process, but an industry unto itself.

These codes are arrived by an arcane process developed by Medicare and something called RUC (Reimbursement Update Committee), developed and backed by the American Medical Association . The process is arbitrary, secretive, and byzantine . The codes often have nothing to do with the cost of doing business.

The process has become controversial because 1. RUC is said to be dominated by specialists and therefore rewards specialists and underpays primary care physicians; 2. third parties pay the AMA for use of these codes, which has become the main source of the $300 million required to run the AMA: AMA critics feel AMA revenues should flow from member physicians, not from third parties who decide what and how to pay doctors; 3) Coding is so complicated and mercurial nobody can figure it out.

Controversies aside, proper coding is the key to profitability, for that is how doctors are paid. There are various approaches to coding.

• John McDaniels, founder of Peak Performance Physicians, a practice management firm in New Orleans gives this advice: conduct an annual audit to compare coding against national established bookmarks, competitiveness of fee schedules, and evaluation and adjustments of fee schedules of managed care companies. McDaniels says 80% of doctors undercode, partly out of fear of a Medicare audit.

• James Weintrub, MD, a plastic surgeon developed a website www.dpnx.com, consolidating contents of coding books and manuals, and allowing doctors to set their own codes. But he quickly found doctors weren’t all that interested in the whys, whats, and hows of coding, and wanted someone else to figure out the precise code.

• Allen Wenner, MD, a family physician developed the Instant Medical History, an onlie set of clinical algorithms, wherein patients could record their history online and produce a complete electronic narrative history, and whereby payers would pay for a higher code because of the comprehensiveness of the submitted claim.

• Daniel Palestrant, MD, a general surgeon who founded and serves as CEO of Sermo. com, has pushed for simplification of coding as a central reform measure to reduce overhead and to allow physicians to see more patients through more transparent billing.

As for doctors themselves, they often escape the complexities and burdens of coding by retiring or going to work as a salaried employee and letting the employer do the coding.

As for me, if I had the eloquence of Winston Churchill, I might say: I cannot forecast the future of coding. It is a conundrum wrapped in a riddle inside a mystery concealed as an enigma

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