How Charges Are
Calculated
CPT Codes
New versus Established Patient
Consultation versus
Non-referred
Procedure/ Operations
Unit
Values and Conversion Factors
Comparing Surgical
Fees
Additional Charges
Most physician charges are based on “Current
Procedural Terminology” codes (CPT codes). Codes are numbers which are
assigned to specific medical services. There are Evaluation and Management
(E & M) codes as well as procedure or surgical codes.
For example, code #99241 (an E & M code) is defined
as an office visit for a person referred by another physician for evaluation
(a Consultation.) It includes a low complexity problem with a limited
history and physical examination. The visit would be about 20 minutes
in total length.
Code #99245 on the other hand is an office visit for
a person referred by another physician for evaluation. It includes a
highly complex problem evaluation with an extended focus, complete
history and physical examination. The visit would be about 110
minutes in total length.
Code #49505 is a surgical code for a hernia repair
operation.
There are literally thousands of different
codes for physician services and not all physicians use codes or even the
same set of codes. Just to complicate things further, each physician may
charge a different price for each code.
A physician can not always tell you what his charges
will be until he has actually evaluated you. Something that might have
appeared simple on first glance could easily end up being very complex and
involved.
Price comparisons in advance are very difficult due
to the variability of codes used, fees charged, and the variety of illnesses
treated.
Despite these complexities most doctors tend to
charge roughly the same way for evaluating most of their patients. This
means that the doctor’s office staff can usually give you an estimate and a
range for their doctor’s usual charges to see a new patient or to see a
patient for a follow up visit.
Most doctors realize that cash patients want
to control the cost of their care. If your doctor knows in advance that you
are a cash patient, he or she will usually work with you to help keep the
charges down. Therefore it is wise to let the doctor know in advance that
you are a cash patient so that you both can work together.
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When you go to see the doctor for the first time,
expect to pay 2-4 times more than you will for subsequent visits to the same
doctor. On the first visit the doctor will likely gather a history of your
general medical situation. Although much of the information collected may
not seem pertinent to your particular problem, this general information
helps the doctor properly diagnose your complaint and safely prescribe
appropriate treatments. As each patient has a different problem and medical
history, it is difficult to predict precisely the charges in advance.
Ask the doctor’s staff for an estimate of his
charges in advance. The staff ought to be able to give you a range of
charges and the average charge to see a new patient.
Below is a table showing what Medicare allows in San
Diego in 2005 for similar new non-referred patient visits versus established
patient visits.
|
Type of Visit |
CPT Code |
Medicare Allowable |
|
New, non-referred |
99202 |
$66.20 |
|
Established |
99212 |
$39.35 |
If you have not been seen in a doctors office for
quite some time, the doctor may charge you for a New Patient Visit in
order to update all the necessary information. The period of time after
which your visit is considered a New Patient Visit varies from doctor
to doctor, but as a rule most physicians use three years which is the
standard for Medicare.
Do not hesitate to ask the doctor or his staff about this.
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When you see a doctor for the
first time, you have
either selected that doctor yourself (non-referred) or have been referred to
that doctor by another physician (a consultation).
It will generally cost more to see a new doctor
in consultation than it would if you went to see the doctor on your own
(non-referred).
The difference in charges is based on two things.
First, a patient referred by another physician will likely have a more
complex problem. Second, the consulting physician must prepare a report to
the referring physicians on his findings and recommendations. This costs the
doctor both time and money, and therefore increases his fees.
The table below compares the Medicare allowables in
San Diego in 2005 at a similar level of service for a new non-referred
patient versus a new consultation.
|
Type of Visit |
CPT Code |
Medicare Allowable |
|
New, non-referred |
99202 |
$66.20 |
|
New Consultation |
99242 |
$93.12 |
Seeing the right doctor on your own from the start may cut your cost by more than half!
1.
You avoid paying the first doctor who saw you and referred you
to the second doctor.
2.
And, when you see a doctor
on a non-referred basis instead of a consultation, the doctor is
likely to charge you less for the visit!
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Unit Values and Conversion Factors
Virtually every service and surgical procedure has
been assigned a procedure code (CPT Code). These CPT Codes have been
assigned Unit Values. Unit Values attempt to standardize charges by
estimating the degree of difficulty or complexity for specific surgical
procedures, the cost of supplies and instruments and the relative liability
from a malpractice standpoint. For instance a heart bypass operation is assigned many more
units than a hernia repair.
Many surgeons use a conversion factor for surgical
Unit values to assign their charges for surgical procedures. Thus, if the
surgeon’s conversion factor is $200.00/ Unit and a procedure is assigned 5
Units, then that surgeon’s charge would be $1000.00 for that particular
procedure.
Unfortunately many surgeons do not use conversion
factors. They simply assign a charge to a particular procedure.
Also, there is more than one system for assigning
unit values. Thus, depending on what unit value system is used, the same
procedure may have completely different unit values assigned. A Physician’s
conversion factor will be specific for a particular unit value system, and
his competitors may use a different unit value system.
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Comparing Surgical Fees
Comparing surgical fees
in advance is very difficult, if not impossible. The best way to comparatively shop for a
surgical procedure is to find the CPT codes for the surgery you need (ask
your doctor or his staff for the code[s]), then
find what Medicare pays
for those CPT
codes. You might also try calling other specialists in the area to find out
what they charge.
If there is a significant difference, you might
consider seeing another surgeon or you could try to bargain a better
rate with your current surgeon based on what Medicare pays, or what his or
her competitors are charging. That usually is not
successful, but it might be worthwhile before changing physicians?
Remember,
if you go to see another surgeon, you will likely have to pay that doctor to
be evaluated again. Few doctors will operate on you based on another doctor’s recommendations alone.
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Charges for laboratory tests (blood, urine etc.) and
supplies (bandages, medications, etc.) are likely additional charges in a
doctor's office.
Laboratory tests are often sent out to other labs or
physicians. The doctor you are seeing usually can not discount these kinds
of services since they are not under his or her control.
Supplies and other items such as medications and durable medical
equipment often are not discounted either, as the doctor must pay a fixed
amount in advance and can not offer a discount below his or her cost.
Ask if a cash discount applies to supplies,
medications and
laboratory tests before
they are provided to you. You may be able to purchase these items for far
less elsewhere.
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