A barrage of physicians' lawsuits challenging health plans' use of automated coding software appears to be having an effect on the plans. In the three years since the suits were first filed, plans have been softening their payment practices and are more willing to reveal previously secret payment policies, according to the plans, billing consultants and physicians who submit claims.
Michael Wasylik, M.D., a Tampa, Fla., orthopedic surgeon, says he used to see his bills downcoded, "but I don't see that now."
Health plan officials say they still bundle Current Procedural Terminology, or CPT, codes and in some cases remove CPT modifiers. But they are lifting a veil of secrecy about their methodologies and making more efforts to reveal and explain what the plans do.
Louis Dickey, M.D., senior medical director for national accounts at Hartford, Conn.-based Aetna, says that in the past year or two, the company sent letters to physicians providing its rationale for payment decisions whenever the decisions were questioned.
"We are really working with the provider community to get it right," says Aetna spokesperson David Carter.
Lawsuits play a part
Carter and others say plans have come to realize that battling providers is bad business. But the lawsuits, which have won some key pretrial victories, also seem to be playing a role.
San Francisco-based McKesson, the largest purveyor of claims processing software for plans, in the spring will begin offering software programs through payers that tell physicians which codes are bundled by the company's proprietary software, says Caroline Staudenmeier, general manager for clinical auditing compliance at McKesson in Malvern, Pa. She says its ClaimCheck software, which two-thirds of the plans use, has 1 million "edits," or ways to change the CPT coding.
This year, two sets of lawsuits that target the automated systems-one group being heard in federal court in Miami, the other in state court in Illinois-have won class action status. However, class action for the Miami lawsuits is being appealed.
The mammoth Miami suits pit five medical societies, including those in Texas and California, against 10 plans, including Aetna, United Healthcare and Cigna.
When he gave class action status to the Miami suits on Sept. 26, U.S. District Judge Federico Moreno questioned the extent that plans rely on automated software to determine payment. He noted the CPT codes the software reads "are simply code numbers that do not contain anything that would allow a benefit analyst or claims processor to make a distinction between different codes."
But Richard Doren, the attorney representing Aetna in the Miami suits, notes that automated systems have helped plans comply with prompt-payment laws. Aetna last year processed 210 million claims, impossible to do by hand, he says.
Archie Lamb, attorney for the medical societies in the Miami suits, says physicians don't object to automated processing, such as the basic McKesson product. But he says plans significantly alter ClaimCheck for their own purposes and, in many cases, still won't reveal their methodologies to physicians.
In contrast, physicians generally tolerate Medicare's own claims processing rules, the Correct Coding Initiative, because the government seeks input from physicians and the methodology is publicly reported, says Teresa Devine, director of healthcare financing at the Texas Medical Association.
David Rogers, M.D., a member of TMA's council for socioeconomics, says the CCI bundles, but adds that it generally makes clinical sense. When several procedures are done together, the payer can eliminate all but the most important code. But Rogers says commercial payers often choose the least important code because it is the cheapest.
States want transparency
In addition to the lawsuits, states have begun to demand the same kind of openness that the Medicare process has. Texas and Georgia have begun to require that plans reveal their claims processing methodologies. And on Aug. 1, Tennessee enacted a law requiring insurers to disclose rates for every unbundled CPT code.
Lamb says any changes that plans have introduced since the lawsuits were filed will not affect the cases.
"There are 12 years of bad conduct that already have taken place," he says, referring to the period covered in the suits.
Rogers says the medical societies have a strong case that health plans have committed fraud against doctors, and he believes the suits will prevail when they go to trial, scheduled for May.
To fix the problem, Rogers says all payers should adopt one set of bundling rules created with physician input, like the Correct Coding Initiative.
"Whoever controls the edits controls how much goes to the providers," he says.