State legislatures address health plan downcoding of physician claims
As health plans continue to rely on downcoding programs to reduce physician payments, state policymakers are taking action to reform this harmful practice.
Several state legislatures are considering bills to address health plan downcoding of physician claims. Earlier this month, Indiana’s Governor signed important legislation backed by the Indiana State Medical Association that requires plans to notify physicians when a claim is being downcoded, bars a plan from downcoding a claim based on a diagnosis alone and requires a clear appeals process that permits the batching of downcoded claims. The new law also prohibits a plan from using an automated process, program, or tool, including AI, as the sole basis for downcoding a claim and prevents downcoding from being used to target physicians caring for patients with complex medical conditions.
Meanwhile, the Maryland Insurance Administration (MIA) recently determined (PDF) that Cigna improperly “downcoded” evaluation and management (E/M) claims submitted by physicians, reducing reimbursement levels in violation of Maryland’s insurance statutes governing claim payment and processing. The MIA imposed an administrative penalty on Cigna and ordered the health plan to stop the practice. MedChi, the Maryland State Medical Society, has long been advocating for changes and applauded (PDF) the MIA’s actions.
The AMA has model state downcoding legislation and a number of other resources to help physician advocates advance reforms.
