Do Doctors Get Paid More To Diagnose Patients With COVID?

Recently, a relative mentioned that she had heard that doctors were over-diagnosing COVID deaths because doctors get paid $3,000 for every COVID diagnosis listed on a death certificate. Fortunately, she did not believe what she was being told. I personally cared for hundreds of COVID patients in our COVID monoclonal antibody infusion center and in our ICU… and I can promise you that I did not get paid an extra $3,000 for a single one of them. But misinformation abounds when it comes to falsification of COVID diagnoses. The problem is that behind every misinformation lie, there is often a kernel of truth.


Summary Points:

  • There are three coding systems used in healthcare billing:
    • ICD-10 codes – these are unique codes for every disease. There are 72,748 different ICD-10 codes
    • DRG codes – these are groups of similar ICD-10 codes. Each DRG has a specific dollar amount that the hospitals get paid for caring for a patient with one of the ICD-10 codes in that DRG. There are 740 different DRG codes
    • CPT codes – these are level of service codes and are not tied to any specific diagnosis. Each CPT code has a specific dollar amount that the doctors get paid each day for caring for a patient.
  • Medicare pays hospitals 20% more per DRG when patients have COVID
  • Doctors get paid the same whether or not patients have COVID
  • The CDC’s COVID statistics underestimate the true number of Americans who have had COVID

Do hospitals get paid extra for COVID patients?

It costs a lot to take care of COVID inpatients. They have to be in a private hospital room rather than a less expensive semi-private room. They require nurses and staff to used expensive disposable personal protective equipment. They require expensive medications. And when they end up on a ventilator, they stay in the ICU for a long, long time. Because these costs are considerably higher than for inpatients with other types of respiratory infections, Congress passed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) that was signed into effect on March 27, 2020 by then-president Trump. The CARES Act created a new ICD-10 diagnosis code for COVID infection (U07.1). The Act also authorized CMS to pay 20% more per DRG for inpatients with COVID infection who are on Medicare.

As a result, hospitals do get paid more for for patients with COVID. However, Medicare specifically requires that patients must have a positive COVID test in order to diagnose COVID – hospitals cannot use diagnosis code U07.1 unless there is a documented positive COVID test within 14 days of admission to the hospital. Using code U07.1 in the absence of a positive COVID test would be considered in violation of Federal fraud laws. In other words, hospitals do not get paid more for COVID unless patients have confirmed COVID infection.

So where did the misinformation come from? In April 2020, Minnesota Republican Senator Scott Jensen stated on Fox News that hospitals get paid more if they list COVID as a diagnosis. Later that month, he wrote:

“Hospital administrators might well want to see COVID-19 attached to a discharge summary or a death certificate. Why? Because if it’s a straightforward, garden-variety pneumonia that a person is admitted to the hospital for – if they’re Medicare – typically, the diagnosis-related group lump sum payment would be $5,000. But if it’s COVID-19 pneumonia, then it’s $13,000, and if that COVID-19 pneumonia patient ends up on a ventilator, it goes up to $39,000.”

Senator Jensen’s and other people’s comments served as the kernel of truth that then morphed into the misinformation that doctors were putting COVID infection on people’s death certificates to get paid more. Additionally, the misinformation was that COVID death numbers were being blown out of proportion because doctors were putting COVID on the death certificates of people who did not really have COVID. So, what is the truth?

Every disease is coded by a unique ICD-10 diagnosis code. However, hospitals get paid by the DRG code (diagnosis related group) and not by the ICD-10 code. A DRG is the code for a number of similar diseases (each disease having its own different ICD-10 code) that are grouped together for hospital billing purposes. Medicare assigns each DRG a payment amount based on the U.S. average length of stay for those diseases and the U.S. average cost to treat those patients (including hospital personnel, supplies, equipment, medications, etc.). No matter how many days an individual patient is actually in the hospital or how much the hospital actually spends to treat that patient, Medicare pays the hospital the same amount – whatever that particular DRG is worth. As an example, DRG #177 (respiratory infection with major co-morbidity) has an average hospital length of stay of 6.9 days and the typical U.S. hospital gets paid $14,263. If a patient has a respiratory infection due to COVID, the hospital gets paid an additional 20%, or $17,116 (nearly $3,000 more). Similarly, DRG #207 (respiratory system diagnoses with ventilator support > 96 hours) has an average hospital length of stay of 14.1 days and the typical U.S. hospital gets paid $45,987. If that patient has COVID, then the hospital gets an additional 20%, or $55,184 (more than $9,000 more).

So, it is true that hospitals do get paid more if a patient is diagnosed with COVID. However, since that payment requires that the patient have a documented positive COVID test within 14 days of hospital admission, it is not possible for hospitals to falsely label non-COVID patients as having COVID for the purposes of getting paid more. Given how much sicker patients with a COVID infection are compared to other viral infections, hospitals needed that extra 20% Medicare payment just to cover their costs.

Do doctors get paid extra for COVID patients?

Unlike hospitals, physicians do not get paid based on a patient’s diagnosis. Instead, doctors are paid by the CPT code. There are 3 CPT codes for the first hospital day, 3 codes for subsequent hospital days, and 2 codes for the discharge day. Each of these CPT codes are based on the patient’s complexity and the amount of time the doctor spent taking care of the patient on that day. A level 1 CPT code is used for patients with the simplest medical problems that require the least amount of a physician’s time. A level 3 CPT code is used for patients with the most complex medical problems that require the greatest amount of a physician’s time. Most inpatients are coded as a level 2 or level 3 CPT code. In addition, there is a separate code for care of critically ill patients (those in intensive care units). It does not matter what the patient’s diagnosis is – doctors get paid exactly the same for a level 3 hospital visit whether the patient has COVID, has a bleeding ulcer, or has a drug overdose.

So, physicians have no incentive to falsely list COVID as a patient’s diagnosis in a hospital chart, on a Medicare bill, or on a death certificate.

That being said, it is true that many critical care physicians did make a lot of money during the COVID pandemic. If you have more patients on ventilators in your intensive care unit, you generate more patient bills. If you generate more patient bills, you get paid more. At the peak of the pandemic, many hospitals had to double or triple the size of their intensive care units due to the massive surge in COVID patients with respiratory failure. All of a sudden, critical care physicians had more business than they could handle and many made a lot of money (but at a cost of becoming overworked and burned out). I personally made a lot of extra income by working at our medical center’s COVID vaccination clinics on the weekends.

So, are the COVID numbers accurate?

Actually, the answer is a resounding no, the COVID numbers are not accurate. They are an underestimate of the true number of COVID infections and COVID deaths. Many patients with COVID infection had mild (or no) symptoms and so they did not get tested; without a test, there was no diagnosis reported to the CDC. Once home testing became available, many patients opted to test themselves; the results of those home tests are not reported to the CDC. Many patients with COVID infection died suddenly at home and if they had not been previously tested, then they were often labeled as having “death from natural causes” and the doctors could not list COVID on their death certificates since there was no way to know (or even suspect) that they had COVID.

One way of determining how many people die from a pandemic is the number of excess deaths. We can fairly reliably predict how many Americans will die each year based on how many died in previous years. When there are more deaths than expected, these are called “excess deaths”. The CDC reported that between March 7, 2020 and March 5, 2022, there were 1,105,736 excess deaths in the United States compared to the normal predicted number of deaths. However, there were only 958,864 documented COVID deaths. This means that the excess deaths for that time period were 15% higher than the number of deaths that could be attributed to COVID. It is likely that many (if not most) of these 15% excess deaths were due to undiagnosed COVID infection.

Worldwide, many counties lack the testing and access to healthcare that we have in the U.S. A report from the World Health Organization determined that in 2020 and 2021, there were 14.9 million excess deaths but there were only 5.42 million deaths documented to be due to COVID. The implication is that as many as 9.5 million people worldwide died from undiagnosed COVID.

I experienced the COVID pandemic first hand and saw it through the eyes of a critical care physician and of a hospital medical director. The conspiracy theorists who say that the infection isn’t real or that the case & death numbers have been overstated are just plain wrong. For as long as humans have studied science, there have always been science doubters and science deniers. And history has repeatedly shown that those doubters and deniers were either misinformed or were fools. The COVID era has been no different. It’s like showing a person an ocean but not being able to convince him that it is wet.

September 19, 2022

By James Allen, MD

I am a Professor Emeritus of Internal Medicine at the Ohio State University and former Medical Director of Ohio State University East Hospital