Coos Bay Dermatologist Strikes Out on Her Own, Abandons Billing Codes

Dr. Kathleen Brown says she’s received pushback from the two insurers for not using CPT billing codes

December 15, 2011 – In July, Dr. Kathleen Brown decided to leave the Coos Bay clinic where she’d been practicing since 1997 and open her own dermatology practice. It’s not uncommon for doctors to strike out on their own, but Brown’s decision had a twist: she decided to eschew the use of CPT codes, a set of medical billing codes required by the American Medical Association for reimbursement by insurers.

Processing patients according to the codes was eating up too much time, she said. Instead, she switched to a time-based model that bills patients in five-minute increments, using a tiered pricing structure that adjusts the costs based on what type of procedure is needed. Prices are listed on her website. Although patients pay out of pocket, the price is still lower than it might be if they billed insurers themselves.

Brown sees a mix of insured and uninsured patients, and she now sees herself as working for the patient -- not insurance companies and not the government. “I think something pretty much everyone agrees on is that the way we pay for healthcare is broken,” she said.

More controversial is Brown’s response to the problem – specifically her decision not to use the billing codes. Just determining the right codes ate into her evenings and weekends, she said, and placed unwelcome restrictions on her practice. “In a sense, insurance companies set the price,” Brown said. “They just set the price a little bit higher or a lot higher.”

When she left to start her practice, Brown told The Lund Report, her patients received phone calls from representatives at Regence BlueCross BlueShield and ODS telling them not to see her, and ODS counsel sent a letter to her office threatening to report her to the Oregon Medical Board, but the board stood by her decision to run her practice as she does. A spokesperson for the board couldn’t comment on whether such a complaint was made, since only actions taken by the board are public information.

Regence spokesperson Scott Burton declined to comment for this story. Earlier this year, using part of a $56 million payout to its holding company, Regence started a subsidiary company, Sprig Health, which functions as an online portal to connect patients with providers who will see them without insurance, lists prices and allows patients to pay with a credit card.

Jonathan Nicholas, ODS’ vice president of corporate branding and communication, said he was unaware of any ODS employees having contacted Brown’s patients, and added that ODS is unable to reimburse patients for services if their providers don’t submit billing codes.

CPT billing codes are mandatory, Nicholas said. “You can’t be half in and half out. If you want to bill insurance companies, you have to have a code.”

Thus far, Brown’s practice is doing well financially. “I haven’t done a formal profit and loss, but we are financially viable and able to take a check,” adding that she’s paid off her school debt, and that if that weren’t the case, her business would not be as viable.

Brown said many healthcare discussions center on the high costs incurred by uninsured patients, but she doesn’t think they’re the sole driver of spiraling costs.

She believes more physicians will find alternative ways of delivering healthcare without dealing with insurance companies. “I didn’t anticipate that insurance companies would still try to control the way I practice.”
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I love you guys, but did The Lund Report write this article or did OPB? The thing I like about you is that you make health care transparent. Shouldn't you reveal who reported this story first?

Good for you, Dr. Brown! The AMA's is oppressive to health care in the United States. We cannot "bend the cost curve" with their powerful lobbying influence and their role in setting compensation. The fee-for-service fiasco is about a procedure-dominated reimbursement system where the AMA financially benefits in their development of the CPT codes. We need to Replace the RUC! Kris Alman MD

I am sure the patients love it" They know what they are going to pay and that the doctor is not going to argue with them when they ask for a "vitamin injection" or for anything else whether justified or not. They say, "this is the charge" and the patient pays it. No fussy insurance company which has to justify payment for procedures and medications based scientifically on effectiveness or for the proper diagnosis. Makes it much easier to provide, "powdered bee's knees" and "butterfly wings" and get paid for it and no one has any questions. duane bietz md

This is a great story and should be part of a larger wake-up of our insurers. I'm curious if Dr. Brown anticipates or will experience the challenges experienced by similar physician decisions in New York: eventual harassment by the New York insurance board for in effect "competing" with insurers without an insurance license. Absurd. Good for you Dr. Brown and best of luck!

Wow, I appreciate the creativity but what type of value is this providing to her community? The fee's posted on her website aren't much different than what she would be paid using the traditional CPT methodology. If she truly wants to do help her patients it seems to me that she should reduce the fees since she won't have to spend all that extra time "processing patients according to the codes." Based on her fee schedule she is looking to be paid $300 per hour or over $600,000 per year. I sure hope she has better outcomes than her peers at the practice she just left....

Thank you, Christen, for interviewing me. 1) Per ODS, "you can't be half in and half out". I am out, but patients have a contract with their insurer to get reimbursed for care from out-of-network doctors. Unless there is language in the insurance contract that lets the insurance company out of their obligation to reimburse when the doctor refuses to use CPT coding, they are in breach of contract. Neither Regence Blue Cross nor ODS has shown my patients that language, to my knowledge. It is inconvenient for them, but they need to honor their contract. I cannot set reasonable, transparent prices AND use CPT. CPT is too complicated, confusing, rigid, etc. to lend itself to transparent reasonable pricing. 2) The first anonymous commentator talked about fees. I can tell you that our fees are extremely reasonable, and although they may be perhaps comparable to Medicare rates some of the time, they are definitely lower than what commercial insurance pays. I know this for a fact. The hourly rate, if I were seeing and billing someone every single minute, would be $240.00, for regular visits, but I don't (and can't) see and bill someone for every minute. Higher level visits use more expensive materials and more staffing. There are also services we provide that we don't generally bill for, but which take my time (phone calls, research, prescription refills, review of lab results, stitch removal). Our gross daily income, since you asked, ranges from around $1000.00 to $1600.00 currently, and we'll probably be open about 240 days in a year, so the earnings estimate made by the commentator is quite extreme(!), and assumes no expenses. I have two excellent full-time staff, and of course they are paid and have benefits, and then there are the multitude of expenses of running a small business, including rent, a lot of very expensive equipment, insurance (several types), phone, banking/credit card fees, electricity, accountant, attorney, medical licenses and memberships, continuing medical education (involves travel), laundry, lots and lots of supplies (very expensive!), janitorial, answering service, security, and that is not all. And, my day does not end when I leave the office. This is a customized, personalized, quality service in a very well-equipped comfortable office; not a mass-produced good. We are very proud of achieving the good prices and posting them. We do not aim to be cheap; we aim to be excellent, and for a reasonable price. I feel happy to be practicing medicine, free of most of the endless obstacles from "third parties". I appreciate the interest in this article, and in our practice! Kathleen M. Brown, MD

And this is why the McCarran-Ferguson act needs to be repealed. It is legal for a large insurance company to attempt to restrain the trade of an individual physician. It would not be in the reverse situation.

Duane Bietz, seriously? You are an MD and rely on an insurance company to help determine how appropriate and effective is the care? Well, there is the tail wagging the dog. It is the doctor's responsibility to keep up to date, to tell patients the truth, to avoid "snake oil" medicine, and to practice high quality medicine, informed by good science. Kathleen M Brown MD

A worthy discussion. However, what if every medical provider designed their own billing system? How would insurers and self- insured entities know what they are paying for? How would medical researchers and state agencies study medical trends and costs?

Dr Brown's practice should be emulated around the country. She and her patients have many advantages: 1: Much lower overhead secondary not needing a ramped up business office 2: Not having daily hassles with insurers that interact with the provider asking to have the patient switched from one medicine or rx to another (in which the insurance company benefits. She doesn't have to read and respond to the never ending escalating increased paperwork, produced by in insurance companies. 3: She has much more productive time when in her office and can choose to utilize the non productive time as she wishes. 4: She feels more in control and less wasted time is spent when she doesn't have to ask "mother may I" in treatment, referrals, and accepting referrals. I agree the one of the responders that stated her overhead would be 30% lower and add that her wasted time will also be lower by 20-30%.

CPT billing codes are mandatory, Nicholas said. “You can’t be half in and half out. If you want to bill insurance companies, you have to have a code.” So if the insurers demand that their customers - Dr. Brown's patients - be able to generate the necessary codes, they need to start a really big, expensive, mandatory training program for their customers. Dr. Brown, however, is not a customer, not a contractor and, in fact, not in any way obligated to follow the rules the insurance companies set. Instead, she is obligated to care for her patients, without the interference of the insurance company. Good for her.

Dr. Brown Thankyou for standing up and doing something about our broken system. Emergency Nurse

I am very greatful as a patient not to have to deal with the buearuacy of insurance companies dictating to me what medical treatment I can have. I also appreciated the fact that I could actually afford my medical visit to Dr. Brown's office and not have to worry about, if or when, either one of my insurance companies would pay. I think more doctors need to do the same as Dr. Brown. Just maybe, our over zealous government, will see that the insurance companies and the power they have been given, is why our current medical system broken and will remain so, until they go back to doing what the individual insured are paying them to their medical expenses!