The $ behind the doctor's visit

My parents recently visited a new primary care physician. My father was shocked to see the bill (to the insurance company) was $283.00 for a simple office visit. I explained to him a little about how billing works and where the charges come from. Maybe it would be helpful to others to demystify the office visit charge.

Most office visit charges are based on 3 main factors - 1) the type of visit (office visit, physical exam, or consult visit); 2) whether you are a new patient or an "established" patient to that clinic; and 3) the "level of service" or how much the doctor does during the visit.

The first two are pretty self-explanatory but the third confuses even the most seasoned physician. Level of service is determined by how much history a doctor gathers (asking about why you are coming in, other symptoms you are having, your past medical history, medications you are taking, whether you smoke or drink, etc), how extensive of an exam the doctor performs (listens to heart and lungs only or does a head-to-toe exam); and finally how complex the medical issues are (simple cold versus a complex patient with multiple serious medical problems). Visits can be charged at anywhere from a level 1 to a level 5 (except for physicals which are a "flat" fee).

Level 1 - this is rarely billed by a physician, but may be billed by a nurse who checks a TB test result on a patient's arm, for example.
Level 2 - very straightforward type of visit, for example, checking a rash in an otherwise uncomplicated patient with no other concerns.
Level 3 - most common type of visit - fairly straightforward visit for a cold, sinus infection, sprained ankle, or a visit with a complex patient for a single issue that is stable and needs no change in medications.
Level 4 - most patients with uncontrolled diabetes, multiple medical problems, or presenting with a serious concern (like chest pain) will warrant a level 4 visit.
Level 5 - I rarely use this code because it involves a high level of care and a serious medical problem. One example of a level 5 visit would be a child with uncontrolled type 1 diabetes who presented having a hypoglycemic (low blood sugar) reaction requiring me to coordinate specialty level care on an urgent basis.

This is a very general overview. Visits can also be billed based on time. If a doctor spends more than half of the visit counseling a patient or coordinating care, the doctor can bill for the corresponding level visit (level 3 is 15 minutes, level 4 is 25 minutes, level 5 is 45 minutes). I typically use this type of billing when I am diagnosing someone with diabetes. I spend almost the whole visit counseling about diet, exercise, medications, tests, complications, etc. and very little time examining the patient or asking about other symptoms.

So, you can get a sense of why health care billing is so complicated and difficult to figure out. My next post will be on "RVUs", the basis for assigning a "value" to each and every service provided to patients.