Payers have mistakenly reduced payments to physicians for assessment and administration (E/M) services – often automatically through the use of claim processing algorithms. A new AMA resource helps physicians defend against downcoding by health insurance companies.
Downcoding occurs when a payer modifies a claim for a less expensive service than that submitted by the physician, resulting in the practice being paid for a lower level of care than was provided. Claim-editing software algorithms are downcoded without reviewing clinical records or requesting additional information.
The new AMA resource, Payer Evaluation and Management (E/M) Downcoding Programs. What You Need to Know” (PDF) provides tools to help physicians identify and take action against downcoding schemes, including:
- Advice on identifying downcoding and examples of downcoding scenarios.
- Sample Plan Notices.
- Instructions for verifying the transfer.
- Documentation tips to support successful appeals.
- Example of a downcoding objection (DOC).
With the AMA, learn how clarity on the 2021 E/M overhaul will help reduce the burden of documentation.
Content changes to the current procedural terminology of the E/M services (CPT®) code set and reporting guidelines went into effect last year which reduced the documentation burden for physicians and simplified coding.
“While these changes allow physicians to spend less time on documentation and more time with patients, some healthcare plans dispute E/M levels for submitted claims,” the source said. “Much to the frustration of physicians, payers are increasingly implementing E/M downcoding programs that unreasonably reduce payment for billed claims.”
This inappropriate downcoding of claims can significantly reduce physician office revenue—especially if it becomes routine or if a physician is subject to a global prepayment scrutiny.
Physicians who believe their practice has been affected by payer downcoding will be invited to complete an AMA informational survey. The results will be used to help medical practices respond to payer downcoding initiatives.
Discover more AMA tools for proper payment.
The AMA endorses these principles regarding downcoding:
- Blanket downcoding is not appropriate. Any downcoding program should only target outliers whose coding patterns differ significantly from their peers in the same subject.
- When a physician is found to have outlier coding patterns, payers should first take an educational approach and provide correct coding information and instructions.
- It is never appropriate to downcode claims without reviewing medical records. If a claim is downcoded, the doctor should be able to provide supporting evidence before the payment is reduced – not after.
- It is disproportionately onerous to routinely require documentation for all claims that the payer believes may be subject to down-coding.
- Any physician subject to an automated or algorithm-based downcoding program should be notified prior to downcoding so that they know to be vigilant for downcoding claims.
- Any payer who downcodes a claim should send the physician a written notification of the adjustment, including the primary reason the claim was downgraded, a specific clinical rationale for the decision, and a statement describing the appeal process.
Payers are unilaterally downcoding claims with increasing frequency and without notice – and doing so in a way that makes them extremely difficult to identify during coding checks.
“Physician offices need to keep a close eye on payment details to identify downcoded claims,” the source said.
Find out what doctors need to know about the E/M code changes coming January 1st.
Building on its efforts to reduce administrative tasks that can lead to physician burnout, the AMA has also released an AMA STEPS Forward® Simplified Ambulatory Documentation and Coding Toolkit (PDF).
A dedicated CPT education section was created for the AMA Ed Hub™, an online learning platform featuring CME and education, including a module series that provides an overview of CPT coding fundamentals and other topics. The CPT Network is also available to AMA members and subscribers for authoritative CPT coding guides.
The AMA has additional resources on how to implement the E/M revisions, including step-by-step videos. Summaries of the revisions and explanations of how they will reduce administrative burden are also available.