With the red tape of health insurance already causing frustration for millions of Americans, doctors are helping to shed light on a common industry practice: downcoding. Insurance companies change claims to save money, and according to experts, it’s yet another way that health insurance plays into a rigged system.
What is downcoding?
When downcoding, insurance companies “automatically downgrade the claims a doctor sends them to a lower tier of reimbursement, without actually reviewing details about the visit itself,” said NBC News. For Dr. Terry Wagner, a family medicine doctor in Hudson, Ohio, this “means a ‘level four’ office visit that might yield $170 is being paid as if it’s a ‘level three’ for about $125.” This $45 difference may not seem like a lot, but “when it’s happening on dozens of claims, and to a physician-owned practice like Wagner’s, the damage mounts.”
“It’s blatantly disrespectful,” Wagner said to NBC. A “computer program is deciding what my level of care is. If they question my level of care, then ask for my notes. Look at the tests I ordered. Look at my charts.” Doctors who want to challenge a downcoding decision typically have to “appeal each claim with documentation.” And these doctors may have nowhere to turn, as most big health insurance players practice downcoding. Aetna and Cigna have both admitted to downcoding, and “other insurers including Anthem Blue Cross Blue Shield, Humana and Molina Healthcare have all acknowledged downcoding higher-level claims for certain office visits,” said NBC.
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Why is it a problem in the health care industry?
Insurance companies have defended the practice. Cigna says the “goal is to fight upcoding and billing abuse, arguing that some physicians bill for more complex visits than were actually provided, such as charging for a 40-minute encounter when the visit lasted only 10 minutes,” said health care website Stat News. Companies have also argued that these patterns “drive unnecessary costs for patients and employers.”
But the codes that insurers use are “not based on time alone,” said Stat News. Under the current rules, physicians can bill “according to either total time or the complexity of medical decision making.” This means that a doctor who “legitimately spends half an hour or more untangling multiple conditions, reviewing medications and coordinating care could still be flagged as an outlier, triggering payment reductions.”
Doctors in smaller clinics are worried this could lead to higher operating costs. The “understanding of everyone who has been rallying the cry about this” is that the new policy “just says they are going to downcode everybody and it’s up to us to go back and fight and prove we are not doing it inappropriately,” Dr. Peter Hahn, a cardiologist in Uncasville, Connecticut, told The Connecticut Mirror of Cigna’s downcoding plan.
This could result in doctors having to “make choices that are inherently bad for patients, like cramming more patient visits into a single day to make up for lost revenue, dropping patients on certain insurance plans, or selling their practices altogether,” said NBC. There’s a “break point and it’s like you either see more” patients and “give them less time, or you just give up,” Wagner said. “It’s exhausting.”
