Downcoding

The alteration by an insurer or other third-party payer of service codes for physicians or other health care providers, to those of lesser complexity, resulting in decreased reimbursement
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The reviewers found that SNFs had included "upcoding" -- use of inaccurate, more expensive billing codes -- in 20 percent of the claims and downcoding in just 2.5 percent of the claims.
They may also be provider driven, either resulting from cream skimming (i.e., if low-scoring providers are more likely to seek out low-risk patients) or downcoding (i.e., if low-scoring providers change their documentation to make their patients [and their quality] appear better).
In 2002, the NCMS sued in state court alleging that United's practices - improper coding, bundling, downcoding, edits, improper use of guidelines, and poor claims resolution - breached contracts with physicians (North Carolina Medical Society v.
Plaintiffs claim that the problem is not upcoding and unbundling by providers, hut rather is arbitrary and unjustified downcoding and bundling by bill-review companies.
Product: PrivaNotes EMR Captures encounter data, so documentation supports billing and reduces unnecessary downcoding. Integrates with existing practice workflows.
For example, one allegation in the suits has been that the insurers are routinely "downcoding" provider claims--reducing the level or intensity of the service performed to a lower level, and therefore a lower payment.
They also claimed that making payments on a basis other than the medical necessity definition contained in their agreements with the insurers constituted a pattern of racketeering activity and that failing to pay their claims, or the downcoding of their claims according to a new standard other than medical necessity, was a breach of contract.
John McMahan, an Illinois ear, nose, and throat physician, sued Employers Health Insurance Co., a subsidiary of Humana Inc., after the managed care organization began downcoding claims on outpatient office visits.
Marks said he's seeing more class action and individual suits by physicians seeking compensation that was denied due to downcoding, bundling, or other reasons.
Ample evidence of facility confusion has surfaced over the years, most particularly in the recent OIG study disclosing a mishmash of PPS upcoding and downcoding without apparent reason.
Suits that include claims for downcoding, bundling, and other forms of underpayment, nonpayment, and late payment have been asserting violations of the Racketeer Influenced, and Corrupt Organizations Act, fraud, misrepresentation, and--as used in the CIGNA case--breach of contract.
The CPT guidelines for coding and documentation are a morass of rules that seem to encourage "downcoding" by making the rules vague and the penalties harsh.