Thinking Citizen Blog — Medical Coding — Job Growth, Revenue Maximization, Fraud, History

Thinking Citizen Blog — Thursday is Health, Health Care and Global Health Policy Day

Today’s Topic: Medical Coding — job growth, revenue maximization, fraud, history

Coding matters. Whether you are a hospital or a physician, how you code drives how much you make. Not surprisingly the job of medical coder has been one of the fastest growing occupations over the last 50 years. “Upcoding” is the illegal practice of charging a patient for a more expensive service or procedure than they actually received or needed. But, of course, there is a gray area between legal and illegal. A “good” coder like a “good” lawyer helps maximize revenues without crossing the line. Coding takes three principal forms: Medicare, Medicaid, and private insurance. Today, a few notes on the background of Medicare coding and on the pluses and minuses of medical coding as a career. Experts — please chime in. Correct, elaborate, elucidate. DRGs — “Diagnostic Related Groups” — designed to alter physician and hospital behavior

1. “DRGs were designed to be homogeneous units of hospital activity to which binding prices could be attached. A central theme in the advocacy of DRGs was that this reimbursement system would, by constraining the hospitals, oblige their administrators to alter the behavior of the physicians and surgeons comprising their medical staffs. Hospitals were forced to leave the “nearly risk-free world of cost reimbursement” and face the uncertain financial consequences associated with the provision of health care. DRGs were designed to provide practice pattern information that administrators could use to influence individual physician behavior.”

2. “The prospective payment system implemented as DRGs had been designed to limit the share of hospital revenues derived from the Medicare program budget.”

3. “DRGs were intended to describe all types of patients in an acute hospital setting. DRGs encompassed elderly patients as well as newborn, pediatric and adult populations.”


1. “Inexorably rising medical inflation and deep economic deterioration forced policymakers in the late 1970s to pursue radical reform of Medicare to keep the program from insolvency. Congress and the Reagan administration eventually turned to the one alternative reimbursement system that analysts and academics had studied more than any other and had even tested with apparent success in New Jersey: prospective payment with diagnosis-related groups (DRGs).”

2. “Rather than simply reimbursing hospitals whatever costs they charged to treat Medicare patients, the new model paid hospitals a predetermined, set rate based on the patient’s diagnosis.”

3. “The most significant change in health policy since Medicare and Medicaid’s passage in 1965 went virtually unnoticed by the general public.”

NB “Nevertheless, the change was nothing short of revolutionary. For the first time, the federal government gained the upper hand in its financial relationship with the hospital industry. Medicare’s new prospective payment system with DRGs triggered a shift in the balance of political and economic power between the providers of medical care (hospitals and physicians) and those who paid for it — power that providers had successfully accumulated for more than half a century.” Is this really true? or is it a textbook case of “regulatory capture”? “Regulatory capture” is the phenomenon whereby a regulatory agency designed to protect the public from a special interest group in fact protects the special interest group from the public. The SEC, for example, has been accused of protecting Wall Street from the public rather than the reverse. After all, the first chairman of the SEC was Joseph P. Kennedy, the notoriously corrupt patriarch of the Kennedy clan. Did FDR “put the fox in charge of the hen house”? In theory, health care regulation protects the public. What is the reality?


1. Pros: High demand, minimal education requirements, jobs available in non-hospital settings, potential for part-time work.

2. Cons: most time spent in front of a computer, “need to keep up with advances in technology,” certification requirements, “may need to work night and/or weekend hours.”

FOOTNOTE — Two more kinds of fraud

1. Unbundling — billing under separate codes for a single procedure.

2. Double billing — billing more than once for a procedure performed only once.

Robert B. Fetter | Obituaries | Yale Alumni Magazine

Diagnosis-related group

Regulatory capture

Medicare, Medicaid and Medical Billing

Medicare Coder Careers: Salary Information & Job Description

Salary and Job Growth for Billing and Coding

Medical Coding Could Be the Best Work from Home Job Available Today

Healthcare Common Procedure Coding System

For the last three years of posts organized by theme:

PDF with headlines — Google Drive


Please share the most interesting thing you learned in the last week related to health, health care or health care policy — the ethics, economics, politics, history…. Or the coolest, most important thing you learned in your life related to health are or health care policy that the rest of us may have missed. Or just some random health-related fact that blew you away.

This is your chance to make some one’s day. Or to cement in your mind something really important you might otherwise forget. Or to think more deeply than you otherwise would about something that matters.

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