Egregious Charges for Behavioral Health Service Raises a Red Flag


ClaimDOC’s comprehensive line-by-line auditing of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and its plan members.  Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual and customary charges, duplication of claims, incorrect coding/billing, unbundling of services and many others.  Our claims review is not intended to impact care decisions or medical practice.

In this Claims Audit Spotlight, we focus on a claim example where a licensed clinical social worker (LCSW) billed a questionable fee/charge for a service that made our red flag go up.  

We pondered three (3) questions:

1)    Is the practitioner really charging this much for the service?

2)    Is this an error in practitioner billing?

3)    Is the charge egregious for the type of service provided and billed?

Case Scenario

A 53-year-old female was seen in a Colorado nursing facility by a LCSW for the treatment of anxiety disorder.

The CMS-1500 claim form/electronic equivalent 837P was reported/ billed as follows:

CPT code 90837 – Psychotherapy, 60 minutes – practitioner charge – $8,186.00

According to FAIRHealth® data, practitioner charges for this service (CPT code 90837) for the Colorado locality/zip code reported ranges from the 50th percentile at $160.00 to the 95th percentile at $294.00.

ClaimDOC’s reference-based pricing – $185.86 based on the 2023 Medicare Physician Fee Schedule with markup.

Plan Savings: $8,000.14

Percentage of Savings: 98%

The Takeaway

The concern of an egregious charge was observed on the above provider’s health insurance claim.  While practitioners can charge any amount they elect for provided services, egregious fees and billing/coding errors complicate matters for members to understand their bills and payments, impact the collection of patient balances, build a reputation of practitioners charging high fees, create burdens for patients having no insurance and a host of others.

Obtaining pricing estimates prior to needing or having related care to understand how much one is obligated to pay for their services can be beneficial to avoid surprise medical bills.  Whenever an individual receives a bill and the cost for care seems inappropriate/questionable, an inquiry to the provider and/or health plan should be made to obtain an explanation of the service(s) and corresponding charge(s).

Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments.  Employers turn to us to establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees.  A win-win for everyone.