Claims Downcoding
Special E-Mail Bulletin
Hello. Here's a very interesting story that appeared in the Orlando Business Journal. It's about automatic downcoding, a practice that I'm hearing more and more doctors and administrators say is happening to them. This problem seems to occur in all parts of the country, but it's more prevalent in some very aggressive managed care states such as mine -- Florida.
If you're having downcoding problems please drop me a line. I'd like to hear what's happening in your part of the country.
Gil Weber
State warns HMOs about low payments
Monday, September 20, 1999
Susan Lundine, Staff Writer, Orlando Business Journal
TALLAHASSEE -- Florida's Department of Insurance is warning Florida HMOs that automatically "downcoding" medical claims without investigating them is illegal.
The bulletin was issued because the department has received complaints regarding a variety of claim payment practices by HMOs. "Additionally, the department has evidence that some HMOs automatically `pend' or deny particular types of claims or employ the practice of `downcoding' ... which automatically changes the billing code and thereby reduces the amount due on claims," according to the department's written statement.
And doing that, states the bulletin, violates the state's Unfair Claim Settlement Practices law.
A controversial insurance practice under fire across the nation, downcoding involves paying doctors based on an insurance code representing a brief or uncomplicated office visit -- even when the actual visit involved a great deal of time and care.
Thus, a doctor who spent an hour with a patient suffering from a serious or chronic illness, such as HIV infection, might be paid an amount normally charged when he briefly sees a patient for a bad cold.
Under state law, an HMO many not deny a claim without conducting a reasonable investigation, and an HMO also has to give a doctor or hospital at least 35 days to respond to any requests for more information.
Even so, critics say managed care insurers, which are losing record amounts of money, are turning to such aggressive tactics to wring out savings wherever they can. In Jacksonville, for instance, Don Weidner, executive director and general counsel for the Florida Physicians Union, says many of his group's 400 members have gotten letters from Humana asking for documentation within 14 days -- only to receive a letter three days later saying the claims already had been downcoded.
That, in turn, has prompted doctors, hospitals and other health care providers in Florida to file complaints about automatic downcoding against United HealthCare of Florida, Prudential HealthCare and Humana Inc. Those Department of Insurance investigations are ongoing.
The Florida Medical Association is pleased with the bulletin, "but we don't feel it went quite far enough," says Francesca Plendl, associate general counsel for the 17,000-member physician organization. "We do feel that it's a victory," she says. "But there has to be enforcement."
Enforcement actions may be coming: Nina Bottcher, spokeswoman for the state Department of Insurance, says it should begin issuing reports about its HMO investigations sometime this month.
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