Article

Ethical billing in trauma care

Contact information

* This field is mandatory

Contact details

*
*
*
*

Company details

*
*
*

The importance of properly defining charges for specialized trauma care

 

Trauma centers are required to provide extensive services in a continuous and uninterrupted fashion to ensure patients receive the highest quality care. Team members are trained to work together efficiently, providing rapid yet comprehensive care to address any challenge presented. With this comes the burden of providing a variety of twenty-four-hour medical, surgical, and ancillary services. To assure these critical services are available to the community around the clock, hospitals often charge a ‘trauma activation fee’ or ‘trauma response fee’ to partially offset global costs associated with this higher level of care. Today, these activation fees face increased scrutiny by both patients and state and federal authorities. It is critical that hospitals strive to properly define such fees, demonstrating a commitment to equitable and ethical billing practices for the benefit of all parties involved.

 

A costly proposition

The nature of a trauma center requires an immense financial commitment – including contracting with trauma surgeons, neurosurgeons, and orthopedic surgeons, and providing immediate access to operating rooms, radiology services (X-ray, CT, MRI, IR), and laboratory and blood bank services. Additionally, the trauma program administrative and support staff play a critical role in maintaining trauma center designation. These costs can run in excess of $10 million annually, depending on the trauma center designation level1. Historically, costs to activate these trauma center resources were not covered by service fees and hospital billing codes. That changed in 2002. The Trauma Center Association of America (TCAA) successfully lobbied the National Uniform Billing Committee (NUBC) to approve trauma response fees and critical care codes.

 

Determining these costs should be relative to the “state of readiness” required by the specific trauma center. For example, Level I readiness is more resource intensive than Level III readiness. While an annual net revenue from trauma center activation fees might typically fall between $3 million and $4 million, an unregulated environment has resulted in broadly disparate fees across the country with some hospitals seeing a profit of nearly $24 million – based on exceptionally high activation fees. In fact, charges can range from $1,112 at a hospital in Missouri to $50,659 at a hospital in California. 2

 

Closer scrutiny

A number of high-profile cases have brought a new focus to the high costs and inequities of trauma center activation fees. In one such case, a motorcyclist involved in a minor accident was treated for 30 minutes at a Level III trauma center and was solely given ibuprofen, two staples and a saline infusion and was charged an activation fee of $22,550.2  Another case involved an eight-month-old who fell off a hotel bed and was transported to a nearby trauma center where he was given infant formula and time for a short nap. The activation fee was $15,666. 2&3

 

Regulatory bodies in several states have begun to take notice – a trend that is just beginning, but one that is certain to continue as trauma center costs become the target of review. In fact, Connecticut legislators have already taken steps to force the issue. In the face of 11 of the state’s 12 trauma centers refusing to publicly reveal how much they charge patients for a trauma activation fee, new legislation will require Connecticut hospitals to disclose to the State Office of Health Strategy the amounts they assess for trauma activation fees.3 Hospitals have every right to expect compensation. However, applying charges to offset fixed operational costs can often create a challenge to hospitals and payers in understanding the rationale for such charges.

 

Benefits of a tiered approach

There is often a failure to re-evaluate over-triaged patients who receive more resources than needed. This can be an important factor in problematic billing. Hospitals need to continuously evaluate the issue by looking at patients who are over-triaged or under-triaged and change their team activation criteria to better align the level of care to the patient’s needs. When an inequitable situation arises, a quick move to adjust the level of care can set things straight.

 

Many Level I and II trauma centers have adopted a three-tiered approach to appropriately assign trauma care services. This allows for a targeted response – one that may better suit patient needs. 

 

  • Tier 1 – This highest level is for the most severely injured patients, and full team activation is required 
  • Tier 2 – A second, less urgent activation may include a partial team response with additional services on standby
  • Tier 3 – The lowest activation level consists of a trauma evaluation which may or may not require a surgeon to attend3

 

When a large, integrated Northeast health system assessed their trauma-specific coding and billing assessment to identify areas for improvement, they found that their protocol of making a full-team activation the default led to high resource utilization and a triage rate 55% higher than the industry standard. More importantly, patients were disproportionately billed at a higher rate and received a higher level of care than warranted for their condition. After consulting with Philips’ trauma consultants, the facility implemented a multi-tier team activation protocol, reduced their over- and under-triage rates to industry norms, and patients received the right care at the right time by the right providers, decreasing valuable resource utilization and costs.

 

Initial trauma activation decisions made from the field can be adjusted upon patient arrival and re-evaluation. Hospitals absolutely have the ability to downgrade or upgrade the patient based on the clinical findings, and subsequent fees will therefore be more properly allocated. Level III, IV and V trauma centers may choose to adopt abbreviated versions of this three-tiered approach as well.

 

Proper billing is key

Along with ethical charging for trauma care comes the issue of proper coding and billing. It is critical to:

  1. Determine the cost of the additional fees associated with trauma team readiness
  2. Be certain charges will offset the cost of services
  3. Undertake a constant evaluation of care to ensure that the right care is provided to the right patient at the right time (no over-/under-triage) 

 

Hospital clinical staff frequently voice concerns that it is unethical to bill such high fees for trauma team activations. According to research conducted by Philips, billing for trauma team activations is ethical, provided the charges are built to offset the burdensome cost of readiness. Highly specialized services require premium charges and hospitals must train key personnel to know the economic importance of proper billing for these services.

 

Trauma has no socioeconomic barriers and is critical to a patient’s survival. Oftentimes, the trauma center is just the beginning of a patient’s recovery – dedicated intensive care units are required following emergency resuscitation, followed up with physical therapy and out-patient rehabilitation to ensure the patient can live a full, meaningful and productive life. Considering this closer scrutiny, trauma centers must balance their high operational costs with a fair and justifiable framework to charge for trauma care. By ensuring ethical billing from the start and that each patient receives the right level of care, organizations will reap the benefits of improved resource utilization, as well as increased staff and patient satisfaction. 

 

Footnotes:

1 Sullivan, M. (2018).  The hidden cost of excellence. MDedge/Emergency Medicine.  Retrieve from https//www.mdedge.com/emergencymedicine/article/176110/trauma/hidden-cost-excellence

 

2 Gold, Jenny (Kaiser Health News), Kliff, Sarah (Vox), The Washington Post, 7/2/2018, https://www.washingtonpost.com/national/health-science/a-baby-was-treated-with-a-nap-and-a-bottle-of-formula-the-bill-was-18000/2018/07/02/6ee28214-7dd8-11e8-a63f-7b5d2aba7ac5_story.html, (accessed 12/16/2019)

 

3 Bailey, M. (2017) The Washington Post, 11/20/17. https://www.washingtonpost.com/national/health-science/ambulance-trips-can-leave-you-with-surprising--and-very-expensive--bills/2017/11/17/6be9280e-c313-11e7-84bc-5e285c7f4512_story.html 

About the author

Theresa Radeker

Theresa Radeker, MHA, BSN, RN, TCRN

Consultant

Theresa is a high-energy and results-driven hospital operations executive, with a proven track record of achievement in trauma program management, project management, service line leadership, hospital administration, physician recruiting, and quality and compliance.