Doctors are NOT Financially Benefitting From COVID Deaths

By Chuck Dinerstein, MD, MBA — Nov 02, 2020
An especially malignant fallacy is now circulating in the news, that the spike in COVID deaths can be explained by financial gain to physicians. That is totally untrue, and it's an unprecedented slap in the face to doctors and other healthcare workers. In a lesser-noticed moment, HHS moves towards more transparent healthcare costs.
Image courtesy of Hilary Clark on Pixabay

An Allegation Without Merit

The idea that physicians are profiting from the COVID-19 pandemic by "upcoding" for services shows a fundamental lack of understanding of how physicians receive payments. But these days, when anything – no matter how far-fetched is turned into a political football – it cannot be surprising that physicians are being blamed for the increase in cases. This is pure drivel.

Physicians are paid based on procedural care. We receive a set fee for doing something – a history and physical, an operation, your daily care in the hospital. Those fees are set annually. When a physician is paid to care for a patient with pneumonia or sepsis, two of the common COVID-19 pathways, there is no difference in payment based upon the organism causing the illness. No physician receives a penny more or less for treating a COVID-19 patient or one with pneumococcal pneumonia. 

As with all good misdirection, a nugget of truth deep in the center of the lie does provide some credibility. Hospitals receive a "bundled" payment for a hospitalization based upon the severity of illness and what is being treated. Because of the unique nature of COVID-19, the federal government paid an additional component to hospitals for patients with a primary diagnosis of COVID-19 – the virus had to be the reason for admission. For several months, early in the pandemic before testing was widely available, hospitals were allowed to claim the patient had COVID-19 without a verified test. That rule was changed several months ago, as testing became more accessible, and to qualify for that extra money, hospitals need to demonstrate a laboratory proven infection with COVID-19. Perhaps some hospitals, in a time of medical chaos, as we tried to find some form of effective treatment, took advantage and claimed a COVID-19 case that wasn't, but there is no proof of that. Further, it is illegal, and being caught in that way results in significant fines and penalties.

Trying for Transparency

Health and Human Services finalized a health insurance transparency rule this week, which may well have escaped your notice. It requires health insurance companies to post the negotiated prices and cost-sharing for their care publicly. In 2023, consumers will see what 500 of the "most shoppable" healthcare services will cost. Shoppable is another word for elective care, meaning visits to physicians, diagnostic testing, especially imaging, and hospitalization for elective surgery and procedures. It may well include less elective care, like the need to be hospitalized for a heart attack or stroke, where there is a theoretical ability to choose which hospital provides your care.

The real impact is not directly patient-centered because many studies have shown that patients choose care based upon physician, family, and friends, not price or even quality information. The real impact comes a year earlier, in 2022, when insurance companies must post those prices in data files that the other players can search for in negotiating health care costs – hospitals, physicians, and other insurance companies. Insurance companies negotiate different payments to different hospitals based upon their beneficiaries "at-risk" and the hospitals' size and reach. Those contracts are confidential, allowing some hospitals to receive more than others and some insurance companies to pay more or less than others. Lifting the veil on prices levels the field so that what is being paid for in-network or out-of-network care is known to everyone. 

To make this deal, the insurance companies got a new loophole. With price transparency will come a bigger push for patients to utilize "lower cost, higher value" providers. Lower cost is easy to determine, but value is based on quality, which has many meanings. For example, if two providers produce identical results, but the one with the lower cost is located 80 miles away, is that a value to the patient and family driving 3 hours? It is for the insurance company. The savings that come from such a choice would be split with the patient; let's say that of the $150 total savings, the patient gets $50. Would that make the 3-hour drive more of a value? I suppose the insurance companies will find the number that works best, although one will still need to ask works best for whom?

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Chuck Dinerstein, MD, MBA

Director of Medicine

Dr. Charles Dinerstein, M.D., MBA, FACS is Director of Medicine at the American Council on Science and Health. He has over 25 years of experience as a vascular surgeon.

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