Some Health Plans Automatically Downcode Office Visit Claims

 Several insurers are automatically downcoding -- and, therefore, paying less for -- claims for non-procedural office visits, a practice that provider groups said is unfair and may be anticompetitive.

The claims involved are mostly "evaluation and management" (E/M) visits for established patients. In an announcement, Cigna noted that, under one automatic downcoding program implemented on Oct. 1, the insurer may adjust the E/M Current Procedural Terminology (CPT) codes 99204-99205, 99214-99215, and 99244-99245 "to a single level lower when the encounter criteria on the claim does not support the higher-level E/M CPT code reported." For example, a claim may be adjusted from 99215 to 99214, or from 99214 to 99213.

"Both the Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) have documented that E/M services are among those most likely to be incorrectly coded," Cigna added. "Physicians have increased reporting of higher-level E/M codes representing more complex visits ... The documentation within the medical record must accurately document and support the visit level reported."

'Another Mind Game' to Delay Payment

"Here's another mind game that the insurance companies are using to delay payment," said Gregory Fuller, MD, a family medicine physician in Keller, Texas, last month during the interim meeting of the American Medical Association's (AMA) House of Delegates. "It's ridiculous ... Now we're going to spend staff time to submit our records to them." Keller was expressing the support of the AMA's Texas delegation for a resolution submitted by the delegates' Private Practice Physician Section opposing the practice.

Ana Marie Tobiasz, MD, of Mandan, North Dakota, speaking for the American College of Obstetricians and Gynecologists (ACOG), also praised the resolution. "Through our technical assistance portal, we have now heard multiple instances where payers are downcoding claims without notification, without claims adjustment reason codes ... or without a mechanism to appeal," she said. "This is wrong and should be illegal."

The delegates eventually passed an amended resolution urging the AMA to "work with state medical associations, specialty societies, and regulatory authorities to challenge payer-initiated downcoding policies through regulatory, legislative, and when appropriate, legal channels."

The resolution also called for the AMA to report back to the delegates at the 2026 interim meeting about "payer downcoding practices, their effects on physicians and patients, and strategies for collective advocacy" and to develop educational materials on how to document, appeal, and report inappropriate payer conduct to regulators.

The Texas Medical Association (TMA) has sent letters to both Cigna and Aetna "to basically tell them to quit doing this," Fuller said in a phone interview. "That didn't work 100%, but at least they know they're on our radar and we're keeping an eye on them ... It's like anything they do -- any way they can slow money coming out of their bank [account] is their ultimate goal."

Appeals Can Be Successful

Fuller, who is on TMA's board of trustees, has seen downcoding take effect in his own office, in particular with claims to Aetna. "Our most common codes are 99213 and 99214; they're downcoding the -14s to -13s and paying on the -13 contracted rates," he said. "We've gone back and looked at records they've downcoded and submitted [our] medical records. Over the last 6 months, we had 169 claims downcoded, and for 111 of them, we submitted records and they've [changed them] back to 99214, so we had a 66% success rate in getting them converted back."

"The biggest issue from a primary care standpoint is that our primary source of revenue is the E/M codes, and any kind of payment delay is going to be harmful to primary care, especially independent practices that don't necessarily have a bigger network to help them and aren't part of a big hospital system," Fuller added. "That's [the TMA's] biggest concern -- for small, independent practices, is that going to be harmful to them?"

The Medical Group Management Association (MGMA), a trade group for physician practices, also panned the downcoding. "Automatic downcoding devalues the important work physicians are doing in caring for patients with complex medical needs," Anders Gilberg, MGMA's senior vice president for government affairs, said in a statement. (Disclosure: Gilberg is a member of the MedPage Today editorial board.) "If anything, physicians frequently undercode these claims. Insurers are simply looking to profit off of overworked medical practices that don't have the time and resources to appeal."

The American Academy of Family Physicians (AAFP) also expressed concerns. AAFP executive vice president and CEO Shawn Martin said the health plans' lack of transparency about the downcoding is what bothered him. "Why not more transparency?" he said in a phone interview at which a public relations person was present. "There's direct downcoding taking place behind the scenes, and the only way providers find out is if they reconcile claims submissions with claims payments. I think that's wrong and I'm not entirely sure how legal that is."

While he said he appreciated that some health plans have announced their downcoding programs, "I still think there needs to be a different level of transparency in the operationalizing of these programs," Martin said. "People need to understand what is the criteria, is there an appeals process, and how would they be notified this is happening to them. I don't think we want it to happen at all, but if they're going to do it, we need to know why it's being done and how [providers] are being selected."

AAFP members are dealing with this problem in different ways, he added. "There is this risk mitigation strategy that physicians will engage in, which is over-documentation and over-explanation ... And every minute they're doing that is a minute that they're not seeing a patient." On the other hand, "the other thing that we're seeing is physicians just downcode -- [these insurers] are incentivizing a behavior of undercoding for physician services, and that also is not good."

Government Action Requested

Last month, the AAFP wrote to the Department of Justice (DOJ), the Federal Trade Commission (FTC), and CMS asking them all to take action on automatic downcoding. "To date, AAFP and its members have not been able to secure any guidelines, standards, or rules from payers with which physicians could educate themselves to improve their billing and documentation in order to avoid having their claims downcoded," wrote AAFP Board Chair Jen Brull, MD. "Rather, these programs appear to be using algorithms that lack transparency and are applied without full clinical context."

The AAFP asked the FTC and DOJ to investigate the use and impact of health plans' downcoding algorithms; require disclosure of downcoding criteria; and mandate streamlined, transparent appeals processes. The letter also requested that primary care physicians be excluded from downcoding, noting that "the administrative burden and financial uncertainty introduced by these programs threaten the sustainability of primary care, ultimately jeopardizing patient access and outcomes."

Cigna and Aetna did not respond by press time to emails asking about the issue, but AHIP (formerly America's Health Insurance Plans), a trade group for health insurers, defended the practice.

"Health plans are committed to ensuring providers are reimbursed fairly and accurately and to protecting patients from unjustified costs," an AHIP spokesperson said in a statement. "Concerns with physician practices billing more intensive office visit codes without sufficiently meeting the clinical criteria have been documented by CMS, the Office of Inspector General, and others. As part of their efforts to advance quality and affordability, health plans work to identify a small subset of outlier physicians that are out of step with their peers to educate them on appropriate documentation and billing practices to improve payment accuracy."

https://www.medpagetoday.com/practicemanagement/reimbursement/118999