My wife, a previous obstetrical nurse, once received a group email that two circumcisions on one day did not have appropriate charge sheets filled out. Had this oversight not been found, the hospital would not have charged out for two circumcisions. How much was one circumcision worth? He hospital reportedly charged $1,600 for one circumcision. I should resign, take a class on how to hold the scissors, put a sign in my front yard and charge $800 a snip. Talk about cutting edge competition. Now that's a market economy at work for you.
Maybe a hospital really does charge $1,600 for a circumcision. I suspect they aren't going to collect that much due to the insurance games that are played out every day. To see a breakdown of all of our son Zachary's childbirth hospital charges, go here. I think it provides a fascinating look into the screwed up world of hospital-insurance economics. How much will a hospital charge to provide the supplies, nursing and rent necessary to perform a circumcision? I have no idea. These charges usually get lumped into the master bill as miscellaneous charges. Every insurance company is probably different in their contract with the hospital and how they provide payment to the hospital for their supplies. The relationship is complex.
In addition to hospital charges for a circumcision, often called facility fees, many self employed physicians bill separately and independently of the hospital. The total allowable charges from our 2011 pediatric circumcision fee on Zachary totaled $263.10. This was from Blue Cross Blue Shield of Nebraska. The pediatrician's professional fee before the allowable insurance charges were considered was $653. That means insurance paid 40% of the doctor's billed charges. How much would Medicare pay for the same procedure on my son if my son had Medicare? See the discussion below. It will also help you to understand how the pediatrician arrived at their fee and what the insurance company allowed as payment. I'm confident the pediatrician submitted a CPT® code for their procedure. CPT stands for Current Procedure Terminology. What are the possible CPT® codes for providing circumcision of a newborn?
- CPT® 54150 for circumcision, using clamp or other device with regional dorsal penile or ring block.
- CPT® 54150 with modifier 52 for the above procedure without dorsal penile or ring block.
- CPT® 54160 for circumcision, surgical excision other than clamp, device, or dorsal split, neonate
- CPT® 54161 as in 54160 but for a child greater than 28 days old.
How much would Medicare pay for CPT® 54150? Look here to understand what relative value unit (RVU) means to help understand what these numbers represent. In the state of Nebraska, in 2013, Medicare says CPT® 54150 will pay the physician $89.31 if the procedure is done in the hospital and $141.59 if the circumcision is done in the office setting (non-facility fee). The higher office payment is used to offset costs incurred by the physician in the office that are covered by the hospital when done in the hospital setting. These dollar amounts are based on the complex RVU calculation converted to dollars that can be reviewed in the link just above. In 2013, the work RVU for a circumcision under CPT® code 54150 is 1.9 RVUs. The practice expense RVU is 0.904 and the malpractice RVU adds on an additional 0.322 additional RVUs.
What is the ICD code used by the physician to link their CPT® code for payment? ICD stands for International Classification of Disease. In the case of routine circumcision of the newborn, physicians can use ICD code V50.2, which is the ICD-9 code for routine or ritual circumcision.
As you can see, many private insurances pay much better than Medicare and often Medicaid too. Our hospital pediatrician billed $653 and was paid $263 by BCBS of Nebraska for performing a circumcision in the hospital that Medicare values at under $90. The $653 is a pie in the sky value. I'm sure there is no rational basis for the number except to ensure that it's high enough to capture any potential insurance company willing to pay it. How much would they charge a person without insurance? Many offices would charge their cash price with a discount of 20-30-40 percent or more for the uninsured so they don't lose out on dollars insurance companies are willing to pay. If you took your newborn child to a pediatrician's office and asked them how much they charge for a circumcision, they may tell you their cash price ($653) or whatever number they feel like telling you. I doubt they will tell you their Blue Cross price or their Medicare price. In other words, it's impossible to know how much a circumcision costs because it's different for every insurance company and every office cash price is different.
In my state, it's no wonder why many physicians are no longer accepting Medicare and why ObamaCare promises to insure millions of Americans without physician access. Let's look at this another way. Do you care to guess how much Medicare pays an internist for up to 74 minutes of highly complex critical care in the intensive care unit? About $200. That's right. Medicare pays a hospitalist less for over an hour of critical care than BCBS pays a pediatrician to do a brief procedure.