This alert was submitted by TMA's legal department. For questions, please contact legal@tnmed.org.

TMA warns member medical practices to closely review EOBs to identify automatic downcoding of their claims, especially E/M codes, by many health insurance companies. Cigna announced recently that, effective Oct. 1, it will start automatically downcoding E/M codes that it determines are “not in alignment with American Medical Association (AMA) E/M service guidelines.” By doing so, Cigna joins Humana, Aetna, and BlueCross BlueShield in implementing this type of policy.

Generally, these companies utilize proprietary algorithms to mine claims without reviewing the medical records of the patient visit. Claims are downcoded and the onus is placed on the physician to request a reconsideration from the health insurer even though the high-level E/M code may be proper at the time the claim is filed. At least one health insurer, BlueCross BlueShield of Tennessee, have algorithmic denials reviewed by nurse coders before the downcode is processed. The claims are not treated as clean claims but the health plans are not giving sufficient instruction as to what documentation is required to make the claims clean, in contravention of the state’s prompt pay law requirement.

Anecdotal reports from practices reveal that reconsiderations may take several weeks or even months to process and are more common than originally thought. Interest is not being paid to physicians for these delays. Specialties such as psychiatry, where most patient office visits generate high-level E/M claims, are hit the hardest by these policies. 

TMA member physicians should make their billing staff aware of these business practices and advise them to timely seek reconsideration of claims when the physician disagrees with an auto downcode.