Physician Charges

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How Charges Are Calculated

CPT Codes

New versus Established Patient

Consultation versus Non-referred

Procedure/ Operations

       Unit Values and Conversion Factors

       Comparing Surgical Fees

Additional Charges

CPT Codes

Most physician charges are based on “Current Procedural Terminology” codes (CPT codes).  Codes are numbers which are assigned to specific medical services. There are Evaluation and Management (E & M) codes as well as procedure or surgical codes.

For example, code #99241 (an E & M code) is defined as an office visit for a person referred by another physician for evaluation (a Consultation.) It includes a low complexity problem with a limited history and physical examination. The visit would be about 20 minutes in total length.

Code #99245 on the other hand is an office visit for a person referred by another physician for evaluation. It includes a highly complex problem evaluation with an extended focus, complete history and physical examination. The visit would be about 110 minutes in total length.

Code #49505 is a surgical code for a hernia repair operation.

There are literally thousands of different codes for physician services and not all physicians use codes or even the same set of codes. Just to complicate things further, each physician may charge a different price for each code.

A physician can not always tell you what his charges will be until he has actually evaluated you. Something that might have appeared simple on first glance could easily end up being very complex and involved.

Price comparisons in advance are very difficult due to the variability of codes used, fees charged, and the variety of illnesses treated.

Despite these complexities most doctors tend to charge roughly the same way for evaluating most of their patients.  This means that the doctor’s office staff can usually give you an estimate and a range for their doctor’s usual charges to see a new patient or to see a patient for a follow up visit.

Most doctors realize that cash patients want to control the cost of their care. If your doctor knows in advance that you are a cash patient, he or she will usually work with you to help keep the charges down. Therefore it is wise to let the doctor know in advance that you are a cash patient so that you both can work together.

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New versus Established Patient

When you go to see the doctor for the first time, expect to pay 2-4 times more than you will for subsequent visits to the same doctor. On the first visit the doctor will likely gather a history of your general medical situation. Although much of the information collected may not seem pertinent to your particular problem, this general information helps the doctor properly diagnose your complaint and safely prescribe appropriate treatments. As each patient has a different problem and medical history, it is difficult to predict precisely the charges in advance.

Ask the doctor’s staff for an estimate of his charges in advance. The staff ought to be able to give you a range of charges and the average charge to see a new patient.

Below is a table showing what Medicare allows in San Diego in 2005 for similar new non-referred patient visits versus established patient visits.

Type of Visit CPT Code Medicare Allowable
New, non-referred 99202 $66.20
Established 99212 $39.35

If you have not been seen in a doctors office for quite some time, the doctor may charge you for a New Patient Visit in order to update all the necessary information. The period of time after which your visit is considered a New Patient Visit varies from doctor to doctor, but as a rule most physicians use three years which is the standard for Medicare.

Do not hesitate to ask the doctor or his staff about this.

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Consultation versus Non-referred

When you see a doctor for the first time, you have either selected that doctor yourself (non-referred) or have been referred to that doctor by another physician (a consultation).

It will generally cost more to see a new doctor in consultation than it would if you went to see the doctor on your own (non-referred).

The difference in charges is based on two things. First, a patient referred by another physician will likely have a more complex problem. Second, the consulting physician must prepare a report to the referring physicians on his findings and recommendations. This costs the doctor both time and money, and therefore increases his fees.

The table below compares the Medicare allowables in San Diego in 2005 at a similar level of service for a new non-referred patient versus a new consultation.

Type of Visit CPT Code Medicare Allowable
New, non-referred 99202 $66.20
New Consultation 99242 $93.12

Seeing the right doctor on your own from the start may cut your cost by more than half!

1.       You avoid paying the first doctor who saw you and referred you to the second doctor.

2.      And, when you see a doctor on a non-referred basis instead of a consultation, the doctor is likely to charge you less for the visit!

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Procedures/ Operations

Unit Values and Conversion Factors

Virtually every service and surgical procedure has been assigned a procedure code (CPT Code). These CPT Codes have been assigned Unit Values. Unit Values attempt to standardize charges by estimating the degree of difficulty or complexity for specific surgical procedures, the cost of supplies and instruments and the relative liability from a malpractice standpoint.  For instance a heart bypass operation is assigned many more units than a hernia repair.

Many surgeons use a conversion factor for surgical Unit values to assign their charges for surgical procedures. Thus, if the surgeon’s conversion factor is $200.00/ Unit and a procedure is assigned 5 Units, then that surgeon’s charge would be $1000.00 for that particular procedure.

Unfortunately many surgeons do not use conversion factors. They simply assign a charge to a particular procedure.

Also, there is more than one system for assigning unit values. Thus, depending on what unit value system is used, the same procedure may have completely different unit values assigned. A Physician’s conversion factor will be specific for a particular unit value system, and his competitors may use a different unit value system.

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Comparing Surgical Fees

Comparing surgical fees in advance is very difficult, if not impossible. The best way to comparatively shop for a surgical procedure is to find the CPT codes for the surgery you need (ask your doctor or his staff for the code[s]), then find what Medicare pays for those CPT codes. You might also try calling other specialists in the area to find out what they charge.

If there is a significant difference, you might consider seeing another surgeon or you could try to bargain a better rate with your current surgeon based on what Medicare pays, or what his or her competitors are charging. That usually is not successful, but it might be worthwhile before changing physicians?

Remember, if you go to see another surgeon, you will likely have to pay that doctor to be evaluated again. Few doctors will operate on you based on another doctor’s recommendations alone.

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Additional Charges

Charges for laboratory tests (blood, urine etc.) and supplies (bandages, medications, etc.) are likely additional charges in a doctor's office.

Laboratory tests are often sent out to other labs or physicians. The doctor you are seeing usually can not discount these kinds of services since they are not under his or her control.

Supplies and other items such as medications and durable medical equipment often are not discounted either, as the doctor must pay a fixed amount in advance  and can not offer a discount below his or her cost.

Ask if a cash discount applies to supplies, medications and  laboratory tests before they are provided to you. You may be able to purchase these items for far less elsewhere.

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