Downcoding

Optometric Management, Apr 2000 by Weber, Gil

Across the nation, as more optometrists expand their involvement in managed care, they now face the prospect of new, more difficult struggles to collect money owed by HMOs and vision plans. In years past, when your participation was limited to providing refractive exams and eyewear, coding and claims submissions were relatively straightforward and claims payment was relatively issue-free. You submitted paperwork, and the payer mailed a check. Differences between the two types were relatively few.

Now, as O.D.s increasingly contract to provide services beyond the "routine" vision exam (using CPT codes to differentiate service intensity - therefore opening it to interpretation), they're exposed to problems traditionally faced by physicians.

One of the most troublesome of these problems is "downcoding." This is a process by which payers unilaterally change submitted claims to lower-valued codes so they can pay less. Another significant issue is the timeliness of final and accurate claims settlement.

In many cases, payers aren't processing claims promptly, or paying them as submitted, or sometimes paying them at all.

Problems around the country

Obviously, collecting the proper amount in a timely manner is essential to maintaining a healthy practice, so anything a payer does to affect that is worrisome. Payment problems have surfaced up and down the East Coast, particularly with New Jersey and Florida HMOs, and with independent practice associations (IPAs) in the Southwest.

These problems have become such an issue that legislators in 27 states have adopted prompt payment laws. The legislation varies widely. The toughest laws are in Georgia and Nebraska, which require payers to pay or deny a claim within 15 days and to request additional information within 15 days before downcoding. In Florida, which is considered to be the nation's managed care snake pit by many, a recent law allows 35 days for payment of "clean" claims and 120 days for disputed ones.

But payers are getting around the laws - even ignoring them and absorbing fines as the cost of doing business. Why? In part, because the fines, when imposed, haven't been sufficient to alter behavior. For example:

Modern Healthcare reported last June that New York regulators fined 16 healthcare plans a total of $188,000. That's an almost laughable sum when the fine is divided among 16 payers.

Last July, The Miami Herald reported that Physicians Healthcare Plans of Tampa was fined $13,500 and ordered to reprocess its Medicaid claims.

It's difficult not to be skeptical when you hear about such slaps on the wrist.

The latest tactics

The new reality is that many payers have learned to use downcoding as a simple, yet highly effective, cash flow tool. Beneath the entire process of downcoding and associated claims delay is the fact that payers can cause a claim to be unpayable or underpaid by declaring it not "clean"; that is, saying data are missing or information is insufficiently documented to justify the service level indicated.

Unfortunately, a clear definition of "clean" slipped through the cracks when prompt payment laws were adopted. Without a standard to which all plans in a state are held accountable, optometrists and office managers have to deal with numerous plan-specific requirements.

As you probably know, just getting your claims to the payer can be an arduous task. One doctor wrote: "At least two insurers have changed their post office box numbers without notifying the post office of the change. My claims get returned after 10 to 15 days, delaying the payment. One company changed its phone number as well, so I can't even call to find out where to send claims."

And when the claims arrive on the claim examiner's desk, they still may not get paid quickly. The same doctor I quoted above told me: "Even if I receive a paper referral by fax or by mail, the insurer won't pay if the claim . . . arrives before the primary care physician (PCP) can get his copy of the referral sheet to (the insurer) so (the insurer) can `authorize' it.

I've called the medical director of the culprit insured and he's agreed to pay some claims, but he's getting tired of my calls. It was easy to get him on the phone last month. It's not so easy now."

More horror stories

Once the claims examiner has the claim and any necessary referral, downcoding (or denial) rears its ugly head. One doctor wrote to me: "XYZ health plan will pre-authorize a visit based on a patient's initial complaint. Then, when an exam is completed and a medical diagnosis is provided, they won't reimburse at that level. But they may reimburse just for a refraction 00001 code, which really doesn't exist.

Also, when we see patients in the hospital, they'll reimburse not as an inpatient consultation, but just for a routine visit. We're living a nightmare."

Another doctor wrote: "XXX subcontracts with ABC for medical eye care. A patient reports diplopia. A sensorimotor exam is done (92060). ABC says they don't cover a 92060 and no payment is made for this. How can diplopia (and diagnoses like esotropia or convergence insufficiency) not be covered? They've denied it several times and actually list it in the manual as a noncovered service."