Downcoding is the process in which a payer assigns a lower-level code to medical services, specifically evaluation and management visits, than those reported by the practitioner. Payers are utilizing claims data, like diagnosis codes, to determine whether the reported E/M code is reflective of an appropriate level of service. Payers may also be using algorithms to target “outlier” reporting by physicians based on peer comparison.
Payers are notifying providers of affected codes by pending claims for medical records review, denying with a level of service denial code, or reimbursing the level of service reported with the lower-level rate. Awareness of these applications may assist practices in identifying affected claims.
Some payers may have bypass procedures, however most claims will need to be appealed if the clinic believes the E/M service was correctly reported. The American Medical Association has published a white paper detailing information about E/M downcoding programs and also offers an appeal template for those needing to appeal affected claims.
Be sure to bookmark the Coding and Reimbursement page to view more updates as they are added.