Remove a splinter? Treating a wart? If a doctor performs this, it can be billed as surgery

Remove a splinter? Treating a wart? If a doctor performs this, it can be billed as surgery

When George Lai of Portland, Oregon, took his young son to a pediatrician for an examination last summer, the doctor noticed a small splinter in the child's palm. “He must have caught it between the front door and the car,” Lai later recalled, and the child didn’t complain. The doctor grabbed a pair of tweezers - also called tweezers - and pulled out the splinter in "a second," Lai said. This short pull was converted into a surgical billing code: Current Procedural Terminology (CPT) code 10120, “Incision and removal of a foreign body, subcutaneous” – at a cost of $414.

“That was ridiculous,” Lai said. “There was no scalpel.” He was so angry that he went back to the office to speak to the manager, who told him the coding was correct because tweezers could make an incision to open the skin.

When Helene Schilders of Seattle went to her dermatologist for her annual skin exam this year, she mentioned that her clothing was irritating a skin tag she had. The doctor froze the label with liquid nitrogen. "It was Squirt, Squirt. That's it," Schilders told me. She was stunned by a statement of benefits that said the simple procedure had been billed at $469 for the surgery.

As she assumed the bill was incorrect, she called the doctor's office and was told that an operation had actually taken place - because the skin had been broken. Hence the surgical CPT code 17110, “Destruction of 1-14 benign lesions.”

Schilders complained to her insurer, who provided her with a document informing her that "a surgical procedure is classified as something that enters the body, such as a cotton swab entering the ear canal or a scalpel during surgery."

Huh? “I had surgery and this is not it,” Schilders said.

In popular parlance, “surgery” conjures up images of doctors and nurses hunched over an operating table in gowns and masks, tackling a problem deep within the body. Removing an appendix or tumor. Replacing a knee. Cutting off a leaky aneurysm in the brain. This will most likely require a scalpel or special instruments and surgical skills.

However, for profit reasons, more and more minor procedures are being renamed and billed as surgery. These tiny procedures don't generate large bills — they run into the hundreds rather than thousands of dollars — but cumulatively they likely add up to tens, if not hundreds, of millions of dollars per year for doctors and hospitals. The surprise bills often surprise patients. And they have to pay if they haven't met their deductible. Even if this is the case, “surgery” generally requires a coinsurance payment, whereas a doctor’s visit does not.

“The pressure to make money is greater, and the idea is that you can charge more if it's a surgical procedure,” said Sabrina Corlette, founder and co-director of Georgetown University's Center on Health Insurance Reforms. "The payer should check this and say this is a given. But there's not much incentive to do this."

Corlette suspected that the codes used in the above cases were intended for rare, complicated cases where removing a splinter or skin lesion - or 14 of them - required special skill or time. But the use of the codes has increased to cover the complicated and mundane. Use of code 17110 billed by medical practices increased 62% from 2013 (1,739,708) to 2022 (2,817,190).

The spate of surgeries in name only is a symptom of a system that has long valued procedures far more than intellectual work in its payments to medical providers. This deserves a rethink, and there are some indications that the future presidential administration may be interested in doing so.

The current payment calculation system has its origins in the late 1980s, when a team led by an economist at Harvard University's School of Public Health, William Hsiao, developed the so-called Resource Based Relative Value Scale (RBRVS) to streamline Medicare payments to physicians. Reimbursement was based on a formula that took into account physician work, practice costs and medical malpractice costs. It concluded “that work per unit time (a measure of intensity) for invasive services is approximately three times greater than for assessment/management.”

In other words, the idea was entrenched that “invasive services” – procedures or surgeries – were by far the most valuable.

A committee of the American Medical Association, made up of physicians from various specialties, regularly proposes updates to these codes (and federal regulators accept them more than 90% of the time in many years). Because surgeons are overrepresented on the committee, the valuation of anything defined as surgery has only increased, giving billers the incentive to classify even the most mundane procedures as surgery.

Experts of all political stripes have been criticizing the process for years - it's obvious that the fox (the doctors) shouldn't be guarding the chicken coop (the payments). Robert F. Kennedy Jr., President-elect Donald Trump's choice as Secretary of Health and Human Services, has signaled he may reconsider that approach, according to health industry publication Stat. Kennedy has not outlined a specific plan to replace the current process, but he is reportedly exploring whether the Centers for Medicare & Medicaid Services, a government agency, could do so instead.

Without reform we will continue.

Anthony Norton of Puyallup, Washington, took his 3-year-old daughter to the doctor this year because she had a bothersome plantar wart on her foot. Every two weeks in the office, the doctor applied a chemical ointment to the wart and covered it with a plaster. When the child came for a third visit, Norton was told he had an outstanding balance of $465 (in addition to the $25 office visit co-pay he had already paid) because the request was for "surgery." CPT code 17110 again.

“It didn’t make any sense,” Norton later recalled. The billing office assured him it was an operation “because the ointment penetrates the skin.”

Norton wondered, “If you extrapolate that, is it also Neosporin surgery or calamine surgery?”

We are now in a time where a neurologist who spends 40 minutes with a patient trying to figure out a diagnosis can be paid less for that time than a dermatologist who spends a few seconds squirting a drop of liquid nitrogen onto the skin.

Lai was so angry about being charged more than $400 to remove the splinter from his child's hand that he went on a crusade, returning to the dermatologist's office when his calls were ignored, accusing him of fraud and threatening to complain to his insurance company. Only then, he said, did the doctor's office waive the cost of the surgery - and kicked him and his family out of the practice.

Sources: