Weapons of Mass Corruption: Unbundling
“Until the great mass of the people shall be filled with the sense of responsibility for each other’s welfare, social justice can never be attained.”
“Throughout history, it has been the inaction of those who could have acted; the indifference of those who should have known better; the silence of the voice of justice when it mattered most; that has made it possible for evil to triumph.” –Haile Selassie
“The hardest thing to explain is the glaringly evident which everybody had decided not to see.” –Ayn Rand
Bundling? Fragmentation? These are words that most of us don’t use every day. Yet the healthcare industry uses them all the time—very strategically—to maximize profits at our expense.
Bundles are easy to understand. When you order a number six at McDonalds, you pay a bundled price. If you order a cheeseburger, a drink, and fries separately, you expect the teller to say to you, “Would you prefer the meal, ma’am? It’s a better price.” Or better yet, you just expect them to do it for you. And the last thing you expect them to do, when you order a number six, is to “unbundle” it and charge you separately for the burger, soda, and fries in order to charge you a little more.
Yet this is what healthcare providers—hospitals in particular—do to unsuspecting patients. The result, however, is not a little more. In healthcare, it can be a lot more.
Good businesses empower their employees to help customers get the best price on their goods and services. But then again, good businesses don’t generally give people titles like, “Revenue Enhancement Specialist.” (seriously—that’s the title on a letter I received from a hospital).
In healthcare, unbundling, sometimes called “fragmentation,” is used as a revenue optimization strategy. For example, you might be charged for five different blood tests, each having their own CPT code, when there was another CPT code that could have been used for a “liver panel” at a lower cost. CPT stands for Common Procedural Terminology. CPT is the system of medical coding used by healthcare providers.
While intentionally unbundling codes can be used to maximize revenue from self-paying patients and private insurance patients, it goes by another name when billing Medicare: fraud.
This is one of the many examples of our government’s conflict of interest in healthcare. It writes rules to protect itself, while not extending those same protections to the rest of us. And in the process, it creates systems that confuse us, which provides the industry with ever-better weapons to use against us.
Efforts are underway to change this by making it a condition of payment or participation in federal programs to extend the same protections to us that are enjoyed by government payers. But don’t kid yourself. The special interests are hard at work, sowing confusion, to minimize anything that might impact the bottom line. And, the system is so complex that these schemes still cost government payers a lot, too, even though many providers are being taken to task for fraud every year.
What about insurers? Well, insurance carriers only protect patients or employers when it’s in their best interest. With insurance carriers, if we are not going to hit our increasingly high deductibles this year, it’s not worth much to them to invest in correcting our fragmented bills. It doesn’t save them anything and, when still within your deductible limits, it doesn’t save your employer anything, either. So why fight the higher cost calculations just for us, the patients?
While I think they have a duty to protect us, acting in the best interest of the patients and employers they represent is not a duty that insurance carriers accept is theirs. They will tell you that they legally have no such duty. That’s something that needs to be changed, and it needs to be tested in the courts.
And when they are bumping against medical loss ratio limits, allowing unbundling helps drive payouts up, thereby maximizing profits.
Most patients and employers are oblivious to the practice of unbundling. At best, they might be able to go online and find an estimated price for a specific CPT code. There is nothing that will tell a patient that the CPT codes on their bill should have been bundled into a single, different code. They’d need to be a medical coding expert for that. By creating a system that requires such expertise, we have enabled unbundling abuse.
The complex nature of medical coding itself is an enabler to all kinds of corruption. Each year, hundreds—sometimes thousands—of codes are added to the system, along with “modifiers,” just to make things a little more complex.
To protect itself against malicious unbundling, CMS (Centers for Medicare and Medicaid Services) launched a program known as the “Correct Coding Initiative.” Unfortunately, the benefits of this program, again, are strictly for CMS. The Correct Coding Initiative does not extend to the private sector.
“In the absence of justice, what is sovereignty but organized robbery?”
The result of unbundling is, often times, that when billing patients at chargemaster prices, not only are the charges inflated by 10x, 20x or more than Medicare or an in-network insurance carrier would be charged, the unbundling results in even more obscene overcharging.
The bottom line: there is tremendous waste, fraud, and abuse in healthcare that is facilitated by complexity and price obfuscation. Anyone that doubts that serious price transparency will bring healthcare costs down hasn’t woken up to how they, and/or their employer, are being scammed every day.
Ask yourself, is that a healthcare system we can trust? I don’t think so. And the only thing that’s going to cure this very sickly beast is to shine a bright light on it.