Healthcare cost for outpatient services have increased -- significantly & the trend continues

Healthcare cost for outpatient services including urgent care centers and emergency department have increased --- significantly increased.

Charges for health cost are increasing for services provided at outpatient centers (physician offices), urgent care centers and emergency departments – services provided and billed with E&M CPT codes (Evaluation and Management codes in Common Procedural Terminology).

"There is concern that providers may be inappropriately billing for more complex—and thus more expensive—services, a practice known as “upcoding.” A deeper dive into the data brings meaningful and insightful answers.

>>> Claims billed across all three sites of care trended towards higher level service codes (meaning an E&M level 4 or level 5 service code) even among specific, common diagnoses like urinary tract infections and headaches -- - over the life of the data included in the study (2004- 2021). The implication –> the diagnosis (acute or chronic) or ageism is not the driving factor.

>>> Overall, services billed with a level 4 E&M service code increased the most -- - from 19% to 37%.

>>> Services billed with a level 3 E&M service code decreased from 60% with the majority of claims billed for service in 2004 to less than half of services (45%) billed in 2021.

Emergency Departments services:

>>> Level 4 and level 5 E&M service codes now make up the majority of claims submitted for services provided in Emergency Departments; an increase from 25% to 35% for level 4 services and from 8% to 25% for level 5 services for services provided 2004 - 2021. During the same period level 3 E&M service codes decreased from 44% to 31%.

“Emergency evaluation and management claims are 4.5 times as expensive as office claims, on average.”

Outpatient / physician office services:

>>> Level 4 E&M service codes now make up the majority of claims submitted for services provided in Outpatient / physician offices – an increase of 18% (20% to 38%) for services billed 2004 – 2021. Level 3 E&M codes had a decreased of 13% (61% to 48%) during the same period.

An increase in higher levels of care results in higher cost for outpatient services.

Urgent Care services:

>>> Urgent care centers have also shown higher levels of service -- becoming more common with notable changes occurring prior to the pandemic years, 2020 and 2021. While the trend for urgent care center services was on-track with other outpatient and ED service centers, the trend reversed during the pandemic years 2020 and 2021.

>>> Level 4 service codes increased from 21% to 49% prior to COVID (2004 - 2019) however, decreased to 29% during 2021.

>>> Level 3 services decreased along with similar services (2004 - 2019) from 55% to 44% however increased to 56% in 2021.

–> One conclusion (possibly) -- - people with COVID (with various degrees of severity) went to the ED for treatment, bypassing other treatment centers and specialties.

>>> Overall, the number of urgent care center visits decreased during the pandemic years (2020 – 2021). Can we assume people went to the ED instead – an indication that people were sicker and could not be treated in urgent care centers? Or, were urgent care centers not open and available to provide treatment?

Some key take-aways (personal viewpoints):

//one .... The cost of higher-level claims, that is – claims billed with a level 4 or level 5 E&M service code, are growing faster than the cost of lower-level claims, a level 3 E&M service or, a level 1 service code (the lowest level of service provided for healthcare treatment in the three referenced areas). The Data shows this trend has been occurring for last two decades.

One might ask -- - would an increase in billed coded services, along with increased cost and payments, not be reasonable and expected due to an aging population? However, the trends are reflected in diseases with similar comorbidities.

An aging and more medically complex population >>> it is reasonable to note that an individual "generally" requires more services and more complex services with age. An increase in coding services did not hold true when compared to individuals in younger age groups.

//two .... The cost of higher-level claims is growing faster than the cost of lower-level claims.

Sourced Article:rticle:ticle:icle:cle:le:e::.... Over time, outpatient visits are being coded at higher levels, resulting in higher costs for healthcare services.

“Overall, our findings demonstrate that regardless of the driving factors,

increasing billing at higher levels for outpatient care has led to

substantial increases in outpatient visit spending at the health system level.”

“Claims submitted with higher level service codes, for routine office visits, led to a $6.6 billion increase in Medicare payments from 2001-2010, and service codes billed for the emergency department increased costs by $1 billion from 2001-2008”, according to The Center for Public Integrity … more on the financials in the next article.

This information according to a study by Peterson and KFF for dates of services from 2004- 2021 in the U.S. Healthcare system.

Data from the Merative MarketScan Commercial Database, Peterson and KFF, Health System Tracker

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Sourced Article:

Outpatient visits billed at increasingly higher levels: implications for health costs. Published February 27, 2023 at HealthSystemTracker.org.

By Hope Schwartz, Gary Claxton, Matthew Rae, and Cynthia Cox.

Retrieved March 13, 2023

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