Billing and reimbursement for pediatric surgical services: a unique assessment of a complex process

Abstract

Background/purpose Billing and reimbursement for pediatric surgical services is a complicated process that has not been rigorously evaluated. This study evaluates pediatric surgery billing and reimbursement and compares the process between third party payors. Methods The authors tracked all noncapitated bills from submission to final payment for all cases performed during 1 month. Data included operation, insurance type, amount billed, and amount collected. If payments were denied, the reasons were ascertained and the appropriateness verified. Chi-square and Student’s t tests were used for comparisons. Results The billing process for all noncapitated pediatric surgical cases during May 2000, was reviewed (n = 136). The majority of bills (79%) were paid outright. Of the rejected bills, 76% were denied inappropriately. Inappropriate denial of payment was most frequent among patients insured by Medicaid. Mean time to complete payment was longest among patients insured by managed care groups. Percent of total charges reimbursed for surgical services was significantly lower for patients insured by Medicaid and Health Maintenance Organizations (HMO). Conclusions A significant number of bills for pediatric surgical services are rejected inappropriately. Careful analysis of one’s rejected bills can recoup up to 20% of revenue. HMO’s and Medicaid are more likely to deny payment inappropriately, take longer to make payments, and reimburse less for pediatric surgical services.