Major payers are quietly cutting reimbursement by automatically adjusting the complexity codes on claims before payment clears.
In the past year, Cigna, Aetna, Anthem and BCBS of Massachusetts have all launched or expanded automatic downcoding programs, algorithmically adjusting higher-complexity E/M claims. The policies vary by state, and so does the pushback.
Here’s where things stand:
Cigna
Cigna launched its downcoding policy Oct. 1, allowing the insurer to adjust higher-level E/M codes for certain visits if they don’t meet complexity standards — affecting codes 99204-99205, 99214-99215 and 99244-99245. Implementation was temporarily paused for California HMO plans pending review by the California Department of Managed Health Care.
Texas Medical Association President Jay Shah, MD, said in a July 30 letter to the payer that automatic downcoding programs “place onerous administrative burdens on practices forcing them to fight for appropriate payment rates in an increasingly challenging environment for small and independent physician practices.”
“These measures also are counterproductive to the intent of recent revisions to E/M documentation and coding guidelines, which were meant to better align coding with patient-care delivery and to ease administrative burdens for physicians,” Dr. Shah said.
Maryland’s Insurance Administration issued Cigna an $80,000 fine in March and required the insurer to stop automatic downcoding, determining the policy is not permitted under state law. Maryland ruled that rather than automatically adjusting claims, Cigna must formally dispute claims it believes to be improper and request further documentation.
Aetna
Aetna expanded its claim and code review program, which results in downcoding of certain level 4 and 5 E/M claims, from an initial 12 pilot states to all Aetna commercial states except Louisiana. Further expansion to Medicare Advantage plans is planned.
Jefferson Health filed suit on April 6 in Pennsylvania’s Eastern District Court, alleging Aetna is automatically downcoding inpatient hospital stays of one to four midnights to observation-level rates even when physicians have documented the necessity for inpatient care. The suit argues the policy violates the CMS Two-Midnight Rule and breaches negotiated provider contracts.
Several local physicians told D CEO Healthcare that Aetna has been automatically downcoding patient interactions without notice or explanation, potentially costing practices thousands of dollars in revenue per day.
Anthem Blue Cross of California
Anthem Blue Cross of California held off on its E/M downcoding policy until June 1, pending California DMHC review. A Nov. 13 provider notice had said it would begin a prepayment review process that could result in claims being resubmitted, suspended or having reimbursement modified.
Blue Cross Blue Shield of Massachusetts
Blue Cross Blue Shield of Massachusetts expanded its claims review process to address what it describes as potential overcoding among physicians who routinely bill for high-complexity visits. The policy took effect for dates of service on or after Nov. 3 and applies to a subset of clinicians whose billing patterns stand out from peers, BCBSMA told Becker’s.
Under the program, BCBSMA will review E/M claims from providers who consistently bill visits at the highest complexity levels — 4 and 5 — to ensure that services billed match the severity of conditions reported. Reimbursement may be reduced if the insurer determines overcoding has occurred.
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