Codes are not as simple as they may seem. The issue is complexity. Both insurance and medical use and abuse complexity to confuse people and hide the real costs. It may seem that doctors are as much victims as patients, both struggling with byzantine insurance rules, but actually doctors are to blame for much of it by charging outrageous fantasy prices. Time Magazine's "Bitter Pill" story fingered the "chargemaster" as the main culprit behind the crazy pricing.
For example, last year, I had a kidney stone, and went to emergency 3 times. The first visit, I was given a CT scan. The hospital would not trouble me with any confusing and boring details until I demanded that they send me a bill that included all the items, with codes. Instead, they at first presented me with an enormous bill with no details, and when I didn't pay up immediately, started getting nasty, threatening to turn me over to debt collectors, ruin my credit, etc. They were testing me, seeing if I'd let them walk all over me. They and the insurance (Blue Cross Blue Shield in this case) could have done their jobs, but they find it easier to bully patients. I should sign a blank check? I think not!
With a more detailed bill in hand, I learned that the "CT scan - body" was code 74176, and the hospital charges $9107.20 for it. That's an absolutely ridiculous price of course. Insurance cut them down to $193.85. But that's not the whole story. I also got a bill from a lab on that same code 74176, for $660, reduced by insurance to $56.15. What's the deal? Was I being double billed? The explanation I was given, and which I don't know whether to believe, is that it was legit, and that labs which analyze CT scans use the same code as facilities which actually operate the CT machinery. If true, this practice of doubling up codes like that can only lead to confusion. To further confuse matters, the hospital has their own internal code for the CT scan: 162889. When I check the Medicare price for a particular code, how am I to know which of several possible items or procedures they're talking about? They should have different codes, maybe 74176a and 74176b.
I spotted a lot of discrepancies in the bill. Yeah, I can believe 90% of medical bills contain errors. The example that sticks out the most for my own case is the 1 liter of saline solution, code J7030. A bag of salt water, which ought to cost about the same as a 2 liter bottle of a soft drink. I received 3 of these, and the hospital charged $306.78 for each one. Why? Then, the real puzzler: insurance reduced these 3 identical items to 3 different prices, $151.74, $63.62, and $26.84 respectively. Why? I was given several excuses, like that these are sterile solutions, and that's costly. No, it's not. Boil it, and done. Or, irradiate it. Another excuse was that it wasn't a simple bag of salt water, it contained drugs. Well, no, that, if you'll pardon the pun, doesn't hold water, and the insurance company support person backtracked pretty quickly on that idea. There were no drugs added to the saline solutions Yet another excuse is that the price is not for the item alone, it includes having a medical tech jab the needle into my arm and hitting a vein, which requires some skill. Finally, they admitted I had a point and started investigating. They reduced my cost to the lowest of the 3 for all 3 saline solutions. $26.84 is still outrageous for an item that ought to cost $2, but it's a lot better than $306.
At this point the hospital tried to cut a deal. If I paid right away, they'd generously knock 20% off my original bill. I told them to hold that thought. Looked like I could do better by continuing to question the details of my bill. And yes, I could. The insurance has adjusted a lot of costs downward, more than the 20% I would have saved by agreeing to the hospital's deal.
But, I think insurance still doesn't have it correct. The cost to me for that CT scan was changed from $193.85 plus $56.15 to $56.15 x 2. They had 2 entries for code 74176, and simply forced both to the lower of the 2 prices, although they might actually be different items. That's the kind of confusion caused by reusing codes. I really do not know what is right. For the CT scan, should I pay $193.85 + 56.15 = $250 , or $56.15 x 2 = $112.30, or even just $56.15? The whole thing seems to be in limbo right now. I have still not heard from Blue Cross Blue Shield what my final bill should be.