Behind the payer practice 'significantly' cutting physician practice revenue

Payers have increasingly been incorrectly cutting evaluation-and-management service payments to physicians, according to a Nov. 23 report from the American Medical Association. 

This process, called downcoding, happens when a payer changes a claim to a lower-cost service than was submitted by the physician, often automatically through algorithm-based programs. 

Last year, changes to the evaluation-and-management services CPT codes cut physicians documentation burden. However, these changes have resulted in payers increasingly implementing downcoding programs. This downcoding can "significantly cut physician practice revenue," the report said, particularly when it becomes routine. 

Here are six principles AMA advocates for regarding downcoding:

1. Any downcoding program should only target outliers. 

2. If a physician is identified with an outlier coding issue, payers should provide correct coding instruction. 

3. Physicians should have an opportunity to provide supporting documentation before payment is reduced. 

4. It is burdensome to require documentation for all claims the payer deems subject to downcoding. 

5. Physicians should be notified in advance if they are to be subject to automatic or algorithm-based downcoding programs. 

6. Any payer that downcodes a claim should send the physician written notification of the adjustment.  

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