Epic Systems makes the dominant electronic health record (EHR) system in America; if you're a doctor, chances are you are required to use it, and for every hour a doctor spends with a patient, they have to spend two hours doing clinically useless bureaucratic data-entry on an Epic EHR.
How could a product so manifestly unfit for purpose be the absolute market leader? Simple: as Robert Kuttner describes in an excellent feature in The American Prospect, Epic may be a clinical disaster, but it's a profit-generating miracle:
At the core of Epic's value proposition is "upcoding," a form of billing fraud that is beloved of hospital administrators, including the "nonprofit" hospitals that generate vast fortunes that are somehow not characterized as profits. Here's a particularly egregious form of upcoding: back in 2020, the Poudre Valley Hospital in Ft Collins, CO locked all its doors except the ER entrance. Every patient entering the hospital, including those receiving absolutely routine care, was therefore processed as an "emergency."
In April 2020, Caitlin Wells Salerno – a pregnant biologist – drove to Poudre Valley with normal labor pains. She walked herself up to obstetrics, declining the offer of a wheelchair, stopping only to snap a cheeky selfie. Nevertheless, the hospital recorded her normal, uncomplicated birth as a Level 5 emergency – comparable to a major heart-attack – and whacked her with a $2755 bill for emergency care:
Upcoding has its origins in the Reagan revolution, when the market-worshipping cultists he'd put in charge of health care created the "Prospective Payment System," which paid a lump sum for care. The idea was to incentivize hospitals to provide efficient care, since they could keep the difference between whatever they spent getting you better and the set PPS amount that Medicare would reimburse them. Hospitals responded by inventing upcoding: a patient with controlled, long-term coronary disease who showed up with a broken leg would get coded for the coronary condition and the cast, and the hospital would pocket both lump sums:
The reason hospital administrators love Epic, and pay gigantic sums for systemwide software licenses, is directly connected to the two hours that doctors spent filling in Epic forms for every hour they spend treating patients. Epic collects all that extra information in order to identify potential sources of plausible upcodes, which allows hospitals to bill patients, insurers, and Medicare through the nose for routine care. Epic can automatically recode "diabetes with no complications" from a Hierarchical Condition Category code 19 (worth $894.40) as "diabetes with kidney failure," code 18 and 136, which gooses the reimbursement to $1273.60.
Epic snitches on doctors to their bosses, giving them a dashboard to track doctors' compliance with upcoding suggestions. One of Kuttner's doctor sources says her supervisor contacts her with questions like, "That appointment was a 2. Don’t you think it might be a 3?"
Robert Kuttner is the perfect journalist to unravel the Epic scam. As a journalist who wrote for The New England Journal of Medicine, he's got an insider's knowledge of the health industry, and plenty of sources among health professionals. As he tells it, Epic is a cultlike, insular company that employs 12.500 people in its hometown of Verona, WI.
The EHR industry's origins start with a GW Bush-era law called the HITECH Act, which was later folded into Obama's Recovery Act in 2009. Obama provided $27b to hospitals that installed EHR systems. These systems had to more than track patient outcomes – they also provided the data for pay-for-performance incentives. EHRs were already trying to do something very complicated – track health outcomes – but now they were also meant to underpin a cockamamie "incentives" program that was supposed to provide a carrot to the health industry so it would stop killing people and ripping off Medicare. EHRs devolved into obscenely complex spaghetti systems that doctors and nurses loathed on sight.
But there was one group that loved EHRs: hospital administrators and the private companies offering Medicare Advantage plans (which also benefited from upcoding patients in order to soak Uncle Sucker):
The spread of EHRs neatly tracks with a spike in upcharging: "from 2014 through 2019, the number of hospital stays billed at the highest severity level increased almost 20 percent…the number of stays billed at each of the other severity levels decreased":
The purpose of a system is what it does. Epic's industry-dominating EHR is great at price-gouging, but it sucks as a clinical tool – it takes 18 keystrokes just to enter a prescription:
Doctors need to see patients, but their bosses demand that they satisfy Epic's endless red tape. Doctors now routinely stay late after work and show up hours early, just to do paperwork. It's not enough. According to another one of Kuttner's sources, doctors routinely copy-and-paste earlier entries into the current one, a practice that generates rampant errors. Some just make up random numbers to fulfill Epic's nonsensical requirements: the same source told Kuttner that when prompted to enter a pain score for his TB patients, he just enters "zero."
Don't worry, Epic has a solution: AI. They've rolled out an "ambient listening" tool that attempts to transcribe everything the doctor and patient say during an exam and then bash it into a visit report. Not only is this prone to the customary mistakes that make AI unsuited to high-stakes, error-sensitive applications, it also represents a profound misunderstanding of the purpose of clinical notes.
The very exercise of organizing your thoughts and reflections about an event – such as a medical exam – into a coherent report makes you apply rigor and perspective to events that otherwise arrive as a series of fleeting impressions and reactions. That's why blogging is such an effective practice:
The answer to doctors not having time to reflect and organize good notes is to give them more time – not more AI. As another doctor told Kuttner: "Ambient listening is a solution to a self-created problem of requiring too much data entry by clinicians."
EHRs are one of those especially hellish public-private partnerships. Health care doctrine from Reagan to Obama insisted that the system just needed to be exposed to market forces and incentives. EHRs are designed to allow hospitals to win as many of these incentives as possible. Epic's clinical care modules do this by bombarding doctors with low-quality diagnostic suggestions with "little to do with a patient’s actual condition and risks," leading to "alert fatigue," so doctors miss the important alerts in the storm of nonsense elbow-jostling:
Clinicians who actually want to improve the quality of care in their facilities end up recording data manually and keying it into spreadsheets, because they can't get Epic to give them the data they need. Meanwhile, an army of high-priced consultants stand ready to give clinicians advise on getting Epic to do what they need, but can't seem to deliver.
Ironically, one of the benefits that Epic touts is its interoperability: hospitals that buy Epic systems can interconnect those with other Epic systems, and there's a large ecosystem of aftermarket add-ons that work with Epic. But Epic is a product, not a protocol, so its much-touted interop exists entirely on its terms, and at its sufferance. If Epic chooses, a doctor using its products can send files to a doctor using a rival product. But Epic can also veto that activity – and its veto extends to deciding whether a hospital can export their patient records to a competing service and get off Epic altogether.
One major selling point for Epic is its capacity to export "anonymized" data for medical research. Very large patient data-sets like Epic's are reasonably believed to contain many potential medical insights, so medical researchers are very excited at the prospect of interrogating that data.
But Epic's approach – anonymizing files containing the most sensitive information imaginable, about millions of people, and then releasing them to third parties – is a nightmare. "De-identified" data-sets are notoriously vulnerable to "re-identification" and the threat of re-identification only increases every time there's another release or breach, which can used to reveal the identities of people in anonymized records. For example, if you have a database of all the prescribing at a given hospital – a numeric identifier representing the patient, and the time and date when they saw a doctor and got a scrip. At any time in the future, a big location-data breach – say, from Uber or a transit system – can show you which people went back and forth to the hospital at the times that line up with those doctor's appointments, unmasking the person who got abortion meds, cancer meds, psychiatric meds or other sensitive prescriptions.
The fact that anonymized data can – will! – be re-identified doesn't mean we have to give up on the prospect of gleaning insight from medical records. In the UK, the eminent doctor Ben Goldacre and colleagues built an incredible effective, privacy-preserving "trusted research environment" (TRE) to operate on millions of NHS records across a decentralized system of hospitals and trusts without ever moving the data off their own servers:
The TRE is an open source, transparent server that accepts complex research questions in the form of database queries. These queries are posted to a public server for peer-review and revision, and when they're ready, the TRE sends them to each of the databases where the records are held. Those databases transmit responses to the TRE, which then publishes them. This has been unimaginably successful: the prototype of the TRE launched during the lockdown generated sixty papers in Nature in a matter of months.
Monopolies are inefficient, and Epic's outmoded and dangerous approach to research, along with the roadblocks it puts in the way of clinical excellence, epitomizes the problems with monopoly. America's health care industry is a dumpster fire from top to bottom – from Medicare Advantage to hospital cartels – and allowing Epic to dominate the EHR market has somehow, incredibly, made that system even worse.
Naturally, Kuttner finishes out his article with some antitrust analysis, sketching out how the Sherman Act could be brought to bear on Epic. Something has to be done. Epic's software is one of the many reasons that MDs are leaving the medical profession in droves.
Epic epitomizes the long-standing class war between doctors who want to take care of their patients and hospital executives who want to make a buck off of those patients.
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If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
On June 21, I'm doing an ONLINE READING for the LOCUS AWARDS at 16hPT. On June 22, I'll be in OAKLAND, CA for a panel and a keynote at the LOCUS AWARDS.
The US has the rich world's most expensive health care system, and that system delivers the worst health outcomes of any country in the rich world. Also, the US is unique in relying on market forces as the primary regulator of its health care system. All of these facts are related!
Capitalism's most dogmatic zealots have a mystical belief in the power of markets to "efficiently allocate" goods and services. For them, the process by which goods and services are offered and purchased performs a kind of vast, distributed computation that "discovers the price" of everything. Our decisions to accept or refuse prices are the data that feeds this distributed computer, and the signals these decisions send about our desires triggers investment decisions by sellers, which guides the whole system to "equilibrium" in which we are all better off.
There's some truth to this: when demand for something exceeds the supply, prices tend to go up. These higher prices tempt new sellers into the market, until demand is met and prices fall and production is stabilized at the level that meets demand.
But this elegant, self-regulating system rarely survives contact with reality. It's the kind of simplified model that works when we're hypothesizing about perfectly spherical cows of uniform density on a frictionless surface, but ceases to be useful when it encounters a messy world of imperfect rationality, imperfect information, monopolization, regulatory capture, and other unavoidable properties of reality.
For members of the "efficient market" cult, reality's stubborn refusal to behave the way it does in their thought experiments is a personal affront. Panged by cognitive dissonance, the cult members insist that any market failures in the real world are illusions caused by not doing capitalism hard enough. When deregulation and markets fail, the answer is always more deregulation and more markets.
That's the story of the American health industry in a nutshell. Rather than accepting that people won't shop for the best emergency room while unconscious in an ambulance, or that the "clearing price" of "not dying of cancer" is "infinity," the cult insists that America's worst-in-class, most expensive health system just needs more capitalism to turn it into a world leader.
In the 1980s, Reagan's court sorcerers decreed that they could fix health care with something called "Prospective Payment Systems," which would pay hospitals a lump sum for treating conditions, rather than reimbursing them for each procedure, using competition and profit motives to drive "efficiency." The hospital system responded by "upcoding' patients: if you showed up with a broken leg and a history of coronary disease, they would code you as a heart patient and someone who needed a cast. They'd collect both lump sums, slap a cast on you, and wheel you out the door:
As Robert Kuttner writes for The American Prospect, this kind of abuse was predictable from the outset, especially since Health and Human Services is starved of budget for auditors and can only hand out "slaps on the wrist" when they catch a hospital ripping off the system:
Upcoding isn't limited to Medicare fraud, either. Hospitals and insurers are locked in a death-battle over payments, and hospitals' favorite scam is sending everyone to the ER, even when they don't have emergencies (some hospitals literally lock all the doors except for the ER entrance). That way, a normal, uncomplicated childbirth can be transformed into a "Level 5" emergency treatment (the highest severity of emergency) and generate a surprise bill of over $2,700:
The US health industry is bad enough to generate a constant degree of political will for change, but the industry (and its captured politicians and regulators) is also canny enough to dream up an endless procession of useless gimmicks designed to temporarily bleed off the pressure for change. In 2018, HHS passed a rule requiring hospitals to publish their prices.
Hospitals responded to this with a shrewd gambit: they simply ignored the rule. So in 2021, HHS made another rule, creating penalties for ignoring the first rule:
The theory here was that publishing prices would create "market discipline." Again, this isn't wholly nonsensical. To the extent that patients have nonurgent conditions and the free time to shop around, being able to access prices will help them. Indeed, if the prices are in a standards-defined, machine-readable form, patients and their advocates could automatically import them, create price-comparison sites, leaderboards, etc. None of this addresses the core problem that health-care is a) a human right and b) not a discretionary expense, but it could help at the margins.
But there's another wrinkle here. The same people who claim that prices can solve all of our problems also insist that monopolies are impossible. They've presided over a decades-long assault on antitrust law that has seen hospitals, pharma companies, insurers, and a menagerie of obscure middlemen merge into gigantic companies that are too big to fail and too big to jail. When a single hospital system is responsible for the majority of care in a city or even a county, how much punishment can regulators realistically subject it to?
Not much, as it turns out. Kuttner describes how Mass Gen Brigham cornered the market on health-care in Boston, allowing it to flout the rules on pricing. In addition to standard tricks – like charging self-pay patients vastly more than insured payments (because individuals don't have the bargaining power of insurers), Mass Gen Brigham's price data is a sick joke.
See for yourself! The portal will send you giant, unstructured, ZIPped text files filled with cryptic garbage like:
ADJUSTABLE C TAPER NECK PLUS|1|UNITED HEALTHCARE [1016]|HB CH UNITED HMO / PPO / INDEMNITY [34]|UNITED HEALTHCARE HMO [101604]|75|Inv Loc: 1004203; from OR location 1004203|52.02|Inpatient PAF; 69.36% Billed|75|Inv Loc: 1004203; from OR location 1004203|56.87|Outpatient PAF; 75.83% Billed
These files have tens of thousands of rows. As a patient, you are meant to parse through these in order to decide whether you're getting ripped off on that HIP STEM 16X203MM SIZE 4 FEMORAL PRESS FIT NEUTRAL REVISION TITANIUM you're in the market for (as it happens, I have two of these in my body).
Kuttner describes the surreal lengths he had to go through to prevent his mother from getting ripped off by Mass Gen through an upcoding hustle. By coding her as "admitted for observation," Mass Gen was able to turn her into an outpatient, with a 20% co-pay (this is down to a GW Bush policy that punishes hospitals that charge Medicare for inpatient care when they could be treated as outpatients – hospitals reflexively game the system to make every patient an outpatient, even if they have overnight hospital stays).
Kuttner's an expert on this: he was national policy correspondent for the New England Journal of Medicine and covers the health beat for the Prospect. Even so, it took him ten hours of phone calls to two doctors' offices and Blue Cross to resolve the discrepancy. The average person is not qualified to do this – indeed, the average person won't even know they've been upcoded.
Needless to say that people in other countries – countries where health care is cheaper and the outcomes are better – are baffled by this. Canadians, Britons, Australians, Germans, Finns, etc do not have to price-shop for their care. They don't have to hawkishly monitor their admission paperwork for sneaky upcodes. They don't have to spend ten hours on the phone arguing about esoteric billing practices.
In a rational world, we'd compare the American system to the rest of the world and say, "Well, they've figured it out, we should do what they're doing." But in good old U-S-A! U-S-A! U-S-A!, the answer to this is more prices, more commercialization, more market forces. Just rub some capitalism on it!
That's where companies like Multiplan come in: this is a middleman that serves other middlemen. Multiplan negotiates prices on behalf of insurers, and splits the difference between the list price and the negotiated price with them:
But – as the Arm and a Leg podcast points out – this provides the perverse incentive for Multiplan to drive list prices up. If the list price quintuples, and then Multiplan drives it back down to, say, double the old price, they collect more money. Meanwhile, your insurer sticks you with the bill, over and above your deductible and co-pay:
https://armandalegshow.com/episode/multiplan/
The Multiplan layer doesn't just allow insurers to rip you off (though boy does it allow insurers to rip you off), it also makes it literally impossible to know what the price is going to be before you get your procedure. As with any proposition bet, the added complexity is there to make it impossible for you to calculate the odds and figure out if you're getting robbed:
Multiplan is the purest expression of market dynamics brainworms I've yet encountered: solving the inefficiencies created by the complexity of a system with too many middlemen by adding another middle-man who is even more complex.
No matter what the problem is with America's health industry, the answer is always the same: more markets! Are older voters getting pissed off at politicians for slashing Medicare? No problem: just create Medicare Advantage, where old people can surrender their right to government care and place themselves in the loving hands of a giant corporation that makes more money by denying them care.
The US health industry is a perfect parable about the dangers of trusting shareholder accountable markets to do the work of democratically accountable governments. Shareholders love monopolies, so they drove monopolization throughout the health supply chain. As David Dayen writes in his 2020 book Monopolized the pharma industry monopolized first, and put the screws to hospitals:
Hospitals formed regional monopolies to counter the seller power of consolidated Big Pharma. That's Mass Gen's story: tapping the capital markets to buy other hospitals in the region until it became too big to fail and too big to jail (and too big to care). Consolidated hospitals, in turn, put the screws to insurers, so they also consolidated, fighting Big Hospital's pricing power.
Monopoly at any point in a supply chain leads to monopoly throughout the supply chain. But patients can't consolidate (that's what governments are for – representing the diffuse interests of people). Neither can health workers (that's what unions are for). So the system screwed everyone: patients paid more for worse care. Health workers put in longer hours under worse conditions and got paid less.
Kuttner describes how his eye doctor races from patient to patient "as if he was on roller skates." When Kuttner wrote him a letter questioning the quality of care, the eye doctor answered that he understood that he was giving his patients short shrift, but explained that he had to, because his pay was half what he needed, relegating him to a small apartment and an old car. The hospital – which skims the payments he gets for care – sets his caseload, and he can't turn down patients.
The answers to this are obvious: get markets out of health care. Unionize health workers. Give regulators the budgets and power to hold health corporations to account.
But for market cultists, all of that can't work. Instead, we have to create more esoteric middlemen like "pharmacy benefit managers" and Multiplan. We need more prices to shovel into the market computer's data-hopper. If we just capitalism hard enough, surely the system will finally work…someday.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
PRAKTIK “upcoding” adalah tindakan manipulatif dalam sistem penagihan asuransi kesehatan.
Penyedia layanan kesehatan (misalnya rumah sakit, klinik, atau perusahaan asuransi) menggunakan kode diagnosis atau prosedur medis yang lebih mahal dari yang sebenarnya dilakukan atau dibutuhkan pasien.
Tujuannya untuk mendapatkan pembayaran lebih besar dari penyedia asuransi, seperti pemerintah melalui program Medicare atau Medicaid di AS.
Contoh sederhana:
Jika seorang pasien hanya mendapat perawatan ringan untuk batuk biasa, tapi dokter atau sistem penagihan memasukkan kode diagnosis pneumonia berat, maka asuransi (misalnya Medicare) akan membayar lebih besar dari yang seharusnya.
Preventing upcoding in medical billing necessitates a proactive strategy consisting of adequate training, frequent audits, and the application of advanced medical billing services and tools. Here are some measures healthcare providers may put in place so as to avoid upcoding dangers.
Common Medical Billing Fraud And How To Prevent It? What Are Upcoding And Unbundling? Healthcare fraud occurs when a healthcare provider kno
Healthcare fraud occurs when a healthcare provider knowingly provides false or misleading information to determine the number of healthcare benefits to pay. However, upcoding and unbundling are typical types of healthcare fraud 2022.
Beyond the Byline: Upcoding could explain why hospitals are increasingly billing for the most complex treatment
Modern Healthcare rules and regulations reporter Mike Brady and hospital operations reporter Alex Kacik discuss the latest data suggesting that patients aren’t sicker, contrary to hospitals’ billing practices.
Read Full Article:
(via Upcoding: Why hospitals may bill for the most complex treatment)
Carolinas HealthCare Pays $6.5M in Whistleblower Suit
Carolinas HealthCare System agreed Friday to pay $6.5 million to settle a federal lawsuit that the company violated the False Claims Act by “up-coding” claims for urine drug tests in order to receive higher payment than allowed for the tests. Also participating in the legal action were Josh Stein, North Carolina’s attorney general, and the…
Carolinas HealthCare Pays $6.5M in Whistleblower Suit was originally published on Allison Legal Law Firm
Whistleblower Suit Against Hospitalist Group Settles
Hospitalist Group Pays $4.2 Million to Settle Civil Fraud Case Fredericksburg Hospitalist Group, P.C. (FHG), and 14 of its member shareholders have agreed to pay approximately $4.2 million to settle a federal False Claims Act (FCA) case brought under the qui tam whistleblower provisions of the FCA. “Rooting out fraudulent billing by healthcare providers is…
Whistleblower Suit Against Hospitalist Group Settles was originally published on Allison Legal Law Firm
