Payment Confusion

Abstract

To the Editor.—The recent article by Melzer et al1 is an eye-opener! It illustrates the confusing collage of payment and reimbursement schemes now in use in the United States. One could argue that their analysis is inadequate because it is limited to an academic institution. However, the “academic overhead” of 24% they cited is less than half that of most private practices, which makes the authors financial conclusions that much more frightening. Clearly, providing pediatric care in the present financial context is a “losing proposition.”What to do? The current alphabet soup system of resource-based relative value scales, total relative value limits, conversion factors, Current Procedural Terminology codes, and so forth should be scrapped. That the authors urge practitioners to spend time learning Current Procedural Terminology codes instead of caring for children illustrates this insanity.Instead, pediatricians and other care providers should bill and be paid on a strictly hourly basis. This would be similar to attorneys, who typically bill by the tenth of an hour, be it court, travel, telephone, or consultative time. We should do the same. I suggest charging $200 for each hour of our time. The Academy should investigate this possibility and urge Congress to change federal physician payment methods.In Reply.—We appreciate Dr Haruda’s thoughtful comments, and his letter clearly highlights certain critical problems in the current system of reimbursement for physician services. The extraordinary (and growing) number of Current Procedural Terminology (CPT) codes, along with the complexity of unique documentation requirements for each code, represents a significant barrier to physicians seeking to accurately report, and obtain fair reimbursement for, their work.The notion of reimbursement based on time spent with the patient as suggested represents a credible alternative to the current system of evaluation and management (E&M) codes. Proponents of a time-based system of reimbursement argue that this method best represents the value of physician work, and note that such a system would greatly simplify reporting, documentation, and auditing of medical services.The American Academy of Pediatrics (AAP) Committee on Coding and Reimbursement (COCR) continues to discuss this option. Time-based reimbursement is also being advanced by segments of the internal medicine and family practice communities, through the American College of Physicians—American Society of Internal Medicine and American Academy of Family Physicians, respectively. We suggest that practitioners who feel similarly contact COCR or their professional associations to provide support for this move away from burdensome documentation and paperwork requirements.We support additional investigation into the feasibility of time-based codes for inpatient care, especially given the minimal amount of “overhead” or practice expense that is involved in inpatient service delivery compared to office based E&M services. However, we also acknowledge the reality that any change in CPT in this direction will take a long time, and therefore one purpose of our article1 is to educate physicians trying to work within the current CPT system. We have emphasized the importance of accurate coding to ensure that physicians are fairly compensated for the time they spend in providing inpatient care. In contrast to many office-based services, the current coding system for inpatient services is relatively straightforward, both in terms of number of possible codes and documentation requirements, and as such lends itself well to the use of coding templates. In our experience, the use of coding templates improves the accuracy of physician coding and reimbursement. These templates also provide the added benefit of improved patient care, both through better documentation and by freeing up time to allow the physician to concentrate on the most important task at hand—the care of a sick hospitalized child.