Mystery Markups: CT Scan Charges Vary Across Hospitals
A computerized tomography scan, also called a CT scan, uses a combination of X-rays and a computer to create detailed images of the body. It shows more detail than a regular X-ray and can be taken on any part of the body.
CT scans may be performed without a contrast agent (dye), or it may be performed with contrast. There are numerous CPT codes to consider when reporting and billing CT scan services, depending on the area of the body being imaged, whether performed without contrast, with contrast or without contrast followed by contrast and further sections/sequences. Additionally, CT scans may be considered a “global” service code (encompassing both, the technical component and professional component reported with no modifier), a professional component-only service (reported with modifier 26) or a technical component-only service (reported with modifier TC).
In this Audit Spotlight, we focus on egregious hospital charges identified on claims specific to CT scan services.
Disparities Identified in Charges for CT Scans
Factors that alter the charge for CT scans can vary significantly depending on:
- The type of CT scan ordered by the physician/practitioner
- The facility type where the CT scan is performed
- If uninsured or insured
- Whether the provider is in network or out of network
- The location (city/state) where the imaging is performed
Examples of Egregious Hospital Charge for CT Scan Services
Case One
A patient encountered a one-day stay in a Florida hospital having a total of 10 CT scans due to his involvement in a car accident.
Total charges for the CT scans – $93,029.
Actual reported hospital cost for all CT scans – $587.30.
The healthcare claim totaled $316,070.27 in charges for all hospital services. The actual reported hospital cost for all hospital services – $14,818.52.
ClaimDOC pricing for all services based on Medicare DRG with markup – $19,921.41.
Case Two
A patient encountered a hospital outpatient emergency room visit at a California hospital and had a single CT scan of the abdomen and pelvis with contrast for the diagnosis of pneumonia.
Total charges for one CT scan – $26,887.
The actual reported hospital cost for the CT scan – $159.95.
The healthcare claim totaled $70,111.70 in charges for all emergency room services. The actual reported hospital cost for all hospital services – $1,685.24.
ClaimDOC pricing for all services based on cost-to-charge ratios with markup – $2,310.31.
The Takeaway
Charges billed by hospitals for CT scans vary greatly between hospitals. While some inherent costs will always make CT scans a more expensive diagnostic test than an X-ray, many of the extraneous costs of hospital CT scans are avoidable. In the above examples, the hospital’s billed charges and the hospital’s reported cost for the CT scans signals the hospital’s markup is egregious.
Hospitals utilize their chargemaster, a list of procedure codes with corresponding set prices for thousands of items and services to bill services provided to generate hospital bills. Hospital rates are typically established by individual hospitals and, with few exceptions, are not subject to any limitation of charges in most states. The relationship between the chargemaster markups and hospital revenue and the variation in markups across hospitals and departments continue to demonstrate hospitals use markups to enhance revenues. Hospital markups should be held to a point that is fair to all concerned – patients, hospitals and insurers alike.
ClaimDOC’s Comprehensive Claims Review and Goals
The improper reporting of services, coding and billing errors, and egregious charges can complicate matters for members to understand their healthcare bills and payments, impact the collection of patient balances, build a reputation of providers charging high fees, create burdens for patients having no insurance, and a host of others.
When an individual receives a bill for healthcare services appearing questionable/inappropriate, an inquiry to the provider and/or health plan should be made to obtain an explanation of the services, corresponding charges and reimbursement.
Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Our high-quality and expert review of claims identifies and prevents improper medical claim payments and maximizes long-term cost savings opportunities. Employers turn to us seeking 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.
Background
ClaimDOC’s comprehensive line-by-line review 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, unbundling of services and many others. Our claims review is not intended to impact care decisions or medical practice.