First Anthem, now UnitedHealth. Hospital claims are being scrutinized, especially the more severe Emergency Department visits, which also happen to be the most expensive to United’s commercial and Medicare Advantage endeavors. It’s the new age of coding, and hospitals will feel the burn.
They hope the result will be reducing emergency department claims costs. Hospitals that submit ED claims ranging between Level 4 or 5 management and evaluation codes are having the claims rejected or adjusted downwards. These codes are used for complex diagnosis and costly conditions that utilize a lot of resources. However, the company believes that not all these high-level codes are justified.
UnitedHealth wants to make it clear that they are not trying to cut costs but are looking to increase accuracy in the coding practices being utilized by said provider. Additionally, it is important to remember this will be done by computers that automatically downgrade or deny codes.
Anthem took a more extreme route to solving the issue by outright denying the claims, whereas UnitedHealth’s policies are more prone to down-coding. In either case, many hospitals are going to experience a real financial depression as they are hit by these policy changes.
Let’s look at hospital emergency department codes, more closely. Level 1 codes are for low acuity conditions. Approximately fifty million times annually, patients visit physicians for low-acuity conditions such as bronchitis and urinary tract infections. Many more would likely visit their primary care physician if there were shorter appointment delays at primary care offices.
Level 4 and 5 codes, however, are for severe injury, trauma and severe infections. When the higher codes are in use, a much larger amount of resources are used, including hands-on treatments from physicians and doctors. In late February or 2018, the American Hospital Association held a webinar to describe the policies that will go into effect.
Optum, a subsidiary of UnitedHealth, will using its emergency department claims analyzer to audit anything submitted with level 4 or 5. The tool analyses the patient’s medical issues, morbidities and the services that were performed, then determines what it believes to have been the appropriate code.
The tool makes some exceptions. Not every code will be analyzed and edited, such as patients who were admitted to the hospital after the emergency, critical care patients, those younger than 2, and patients who died during the emergency department visit. Other exceptions are those who have specific diagnoses and diseases that require greater than average resources.
From 2007 to 2016, the codes have increased by more than 50%, possibly totaling to 1.5 billion in healthcare costs for the U.S., sparking the change in policy. There is no set standard for hospitals when it comes to emergency department visits. The centers for Medicare and Medicaid Services allows hospitals to set their own guidelines. Hospitals are worried that this will become yet another excuse for insurers to deny claims, but there have been cases when the same patient visits a hospital and receives a code 2, and then repeats the visit for the same diagnoses a year later and has an emergency department code 5.
Although many professionals believe the percentages of level 4 and 5 codes have increased because more patients using codes 1-3 are using appropriate urgent care facilities instead of the E.R. The result of these policies, however, are yet to come to fruition.
Written by Armando Diaz