This post is a follow-up on the last two posts in this topic. I've been busy with real-life issues (let's just say, I have a ton of material for future blog entries). You can access the prior two posts, with the original here and the follow-up here. In short, the situation involved a real-life case of a patient I accepted as a transfer from other hospital for a question of seizures. After an brief hospitalization and tests, I determined that the seizures were likely psychological. Medicare, 3 months after the fact, retrospectively denied payment after determining that I could have treated the patient as an outpatient and did not need to admit the patient to the hospital. I solicited input from readers to see what other thought about this situation.

Hobotalk and Pck21, among others commented about the inherent absurdity that payment was denied in large part because of the end diagnosis. However, the end diagnosis could not have been made without the appropriate investigations and if the patient truly had seizures, it would have been malpractice to delay the work-up as an outpatient, putting herself at risk. It seems unfair to hold that against health care providers.

Others, like Avidwriter commented on the cost. The amount in question was $8,000. I should also add that the cost is considerably more than that since the hospital was reimbursed some amount (I do not know how much but considering similar cases, I would estimate around $2,000 or so). To him/her, this amount seems excessive for a inpatient hospital stay. The other question should be then, what would a "reasonable" total cost for a patient like this? The labor provided (nursing, physicians, technologists) is highly skilled. The are costs of equipment and also capacity to provide life-saving care at a moment's notice to consider. Administrative costs in running a hospital are also quite high as full-time people are required just to navigate the maze of red tape just to submit claims and get paid. Also each patient is a potential lawsuit, adding malpractice costs. Thus the overhead in medical care is enormous and discerning the true cost of care provided is extremely difficult. However, I agree we should be able to do better than over $2,000/day for a relatively simple case like this.

BluewingX was first to hit upon the issue that I find the most irksome, that this came over 3 months after the fact. This highlights the inefficient bureaucracy of the whole system (it takes weeks, if not months for hospitals to get paid for services rendered, even if there is no hang up over the costs). I don't think there is any other service industry where the customer can come in, demand service and get to pay for it 3 months later without any penalty, unless they unilaterally decide after the fact not to pay. It's like going into a restaurant, ordering an expensive meal and having up to 3 months to decide whether to pay or not. I also think this delay is deliberate since the more time that elapses, the less I will remember and the less I'll be inclined to go through the effort to appeal.

zshipp defended the insurance company, arguing that if the standard of care was not met, then they should be in their rights not to pay. I agree that a pure "fee-for-service" arrangement easily could lead to over-testing and waste. However, I take issue that these companies can play Monday morning quarterback and question my clinical judgment in this case (which by the way, their guidelines are NOT based on true medical guidelines, I was clearing following standard of care in this situation). I should not have to bear all the risk (medicolegal if I send her home "to save money" leading to a bad outcome and the financial risk that I can get stiffed after deciding to admit her to the hospital. If the insurers are going to have hand in the clinical decision making (which I do not want by the way), they they also need to bear some of this risk. Otherwise, stay the hell out of my way. I have to say, if you're a medical student, believe me, I think you will change your tune once to enter the clinical side of things and see more of this first hand.

Fortunately, in the end, everything worked out as described in the second post. For those that expressed doubt on whether I made the whole thing up, I assure you that the entire case and sequence of events are real. The conversation was not verbatim of course and I admit to some literary license but the overall content was completely real. However, if you don't believe it, nothing I can do about it and I don't care anyway.

Thanks for reading.

Next up: Prior authorization hell, where doctors don't decide what medicine to prescribe, the insurance company does.