TOPICS > Health

Medicare Patients Aren’t Getting Sicker or Older, But Doctors Are Charging More

September 17, 2012 at 12:00 AM EDT
The Center for Public Integrity investigated how Medicare billing changed over the past decade and found doctors were billing at much higher rates. Hari Sreenivasan talks to Center for Public Integrity's Fred Schulte to understand why doctors are 'upcoding' more and why electronic medical records could be driving higher prices.


GWEN IFILL: Next: A new investigation finds doctors are increasingly billing Medicare at higher rates, leading to questions about the possibility of fraud, error, and sicker patients.

For that, we turn again to Hari.

HARI SREENIVASAN: The new report looks at hundreds of thousands of bills from doctors, hospitals and medical professionals over a decade.

Doctors bill the government for a Medicare patient’s visit by using one of five codes, each one at a different rate. The investigation found doctors are increasingly charging Medicare at the higher rates for routine visits, a practice known as upcoding.

The Center for Public Integrity found those charges and others may have added at least $11 billion to the government’s tab over 10 years, even though many of the higher billings seemed questionable. And the report comes amid greater political attention on lowering Medicare costs.

Fred Schulte is a senior reporter with the Center for Public Integrity, an investigative reporting association. He joins me now.

Thanks for being with us.

So you had to sue to get access to this data in the first place. What made you want to go there?

FRED SCHULTE, Center for Public Integrity: Well, to sue them? Because they wouldn’t give it to us.

But we were, you know, interested in looking at how Medicare billing has changed over the years. And this is the database that had millions and millions of individual billings by doctors. And it was sort of the Holy Grail at looking at Medicare billing.

HARI SREENIVASAN: So, when you look at all those numbers — I tried to explain upcoding a little bit. But when we get a bill from our doctor, we don’t really know that there are these five different categories on how our visit was billed.

FRED SCHULTE: Right. That has kind of been a mystery to patients for years. And nobody looks at those numbers. And they don’t mean anything to anybody.

But, in fact, they’re representative of the amount of time that the doctor took with caring for you and the degree of effort that was put into the treatment. And they’re paid correspondingly.

So, what we saw is, over time, that the coding was just going up like this. It’s sort of like an airplane taking off. And it appeared that there was no real explanation for it.

HARI SREENIVASAN: So, more and more of the visits were categorized in the highest…

FRED SCHULTE: Higher levels.

HARI SREENIVASAN: …highest level.

So, how do you determine that kind of fine line between fraud, maybe just billing error, and legitimate efficiency?

FRED SCHULTE: Well, the government says that when you do these five codes, you’re supposed to have something of a bell curve.

So, obviously, some patients are sicker than others, so they take more time and effort.

When you have doctors who every patient that they see is at the highest possible level, that’s really suggestive of some abuse of the system.

HARI SREENIVASAN: So, the American Medical Association in your own story said that, hey, listen, the folks who are focused on Medicare are seeing patients who might be sicker, who might take longer to treat.

FRED SCHULTE: Well, a lot of doctors did say that.

But the data really don’t show that. I mean, what we saw in the billing data was that the reasons that people were coming to see the doctor didn’t change much over the decade.

We also saw that the ages, the average age of the patients weren’t changing. And there’s not much academic research that we could find to suggest that, in fact, patients are sicker and older.

HARI SREENIVASAN: Well, there’s also this fascinating bit in your story about electronic record-keeping, electronic medical records.

The government has asked doctors to put this into their practices. But you’re saying that this actually could be driving to higher billing rates. How is that?


Well, when you write down everything by hand — I mean, this is what many doctors told you — that you may forget a few things. But when you have a computer, it never forgets. And it collects everything.

So, used correctly, you could see an increase in the coding, an increase in the billing, because the computer’s capturing more things.

But what you can also do is, with the push of a button, you create a complete medical file that moves information from previous visits into the current visit, and then, as a result of that, jacks up the coding level, even though there was no additional service provided.

HARI SREENIVASAN: So, it’s sort of like copy and paste from one document to another.

FRED SCHULTE: It is copy — it’s exactly copy and paste. Yes.

HARI SREENIVASAN: And it makes that visit more expensive.


HARI SREENIVASAN: OK. So, I asked a couple of doctors. After they read that report, they said, listen, some of the software that I buy actually advertises that it will give me better revenue, that it will help me code better.

Is that pretty commonplace?

FRED SCHULTE: Absolutely. If you look on the Internet, I mean, you can look up, there’s about 1,000 different companies that are selling electronic billing software.

And most of them in fact do make a pitch to doctors: If you buy this equipment, it will increase your revenues. And the way it increases your revenues is through higher coding.

HARI SREENIVASAN: And so how hard is it to clamp down? In one section in your story, it said that it actually might cost more to investigate these cases than they would recoup. So perhaps they’re not investigating as aggressively as even you are.

FRED SCHULTE: Well, that’s what the government is saying. And they’re saying that it might cost them $50 to actually go back into a patient’s file and read through it, pay someone to do that, and decide whether the coding was right, and that the average upcoding that they might see would only be $45. Therefore, they’re losing money.

But, I mean, if that’s the position you want to take then — I mean, I don’t know.

HARI SREENIVASAN: Well, doctors are also saying, listen, I’m underpaid. Whether this is a silent protest or not, whether they’re actively, willingly doing this or not, they are saying, if the top end of how I bill a patient’s visit $140, you have got to recognize that my time is worth more than this and I’m not going to bill it at $20.

FRED SCHULTE: Well, I think a lot of people would probably agree that the doctor has got a point there.Who do you get to come to your house to do anything or to go and see for $140 nowadays? So, I mean, I think that they make an argument that they have been underpaid.

They also make an argument that they have been undercoding over the years because they’re fearful that the government is going to swoop in and accuse them of wrongdoing and that now if they have got a electronic health record, it’s assisting them in getting what they’re due, that in the past, they have been leaving money on the table, and now they’re only getting their just due.

But we will have to see if that’s the case.

HARI SREENIVASAN: And there’s also this somewhat of a veiled threat, saying, listen, you keep up these audits and you’re going to have more doctors that will dump Medicare patients, because this isn’t going to work.

FRED SCHULTE: Well, that’s not too subtle a threat. I mean, we have seen that in letters, you know, in California.

When the government announced it was going to start stepping up audits because it was seeing a lot of coding at the higher levels, they got a letter back from the California Medical Association that said — that did say that, that if you come — they said that, of course we don’t want any doctors cheating the system, but when you step up these audits, you start requiring doctors to send all this documentation in, it puts a burden upon them.

And if you put too much of a burden on doctors, they’re going to simply say, we’re not going to take any more Medicare patients.

HARI SREENIVASAN: All right, Fred Schulte from the Center for Public Integrity, thanks so much for your time.

FRED SCHULTE: Thank you.