ACP: Governmental Affairs and Public Policy - ACP Joins Other National Medical Specialty Societies to Address and Comment Regarding the Policy of Blending payments for Evaluation and Management Services

Advocacy

ACP Joins Other National Medical Specialty Societies to Address and Comment Regarding the Policy of Blending payments for Evaluation and Management Services

February 24, 2006

Daniel J.Nicoll M.D., FACP
CIGNA HealthCare Northeast
499 Washiongton Blvd., 3rd floor
Jersey City, NJ 07310-1608

Dear Dr. Nicoll:

The national medical specialty society signatories on this letter would like to address and comment on CIGNA HealthCare of the Northeast (CT, NJ, NY) blended rate payment policy for Levels 3, 4, and 5 office visits. The purpose of this correspondence is to request that CIGNA HealthCare reconsider and cease from this payment policy the reasons outlined below.

First, CIGNA HealthCare is calculating its blended payment rate using 2005 Medicare (Ohio) payment rates. However, paying a blended rate for Levels 3, 4 , and 5 office visits contradicts the concept of a Resource-Based Relative Value Scale (RBRVS) upon which the Medicare rates are based. We believe that payment for services should be established according to a RBRVS which takes into account unique, physician resource-based practice expenses, professional liability relative value units, and real differences in physician work for each visit. Medicare, the largest payer in the United States, recognizes and pays more for the higher levels of office visits on this basis, and we believe CIGNA HealthCare should, too.

Second, where differences in physician work performed exist, appropriate coding should be developed that aids in the determination of equitable reimbursement. Current Procedural Terminology (CPT) recognizes that the higher the level of office visit represents more physician work in terms of the history, exam, medical decision making, and typical physician time involved. The blended rate does not encourage appropriate coding in this regard, and it subverts coding and documentation education previously provided to physicians. Importantly, in terms of stability of the E/M service codes and/or documentation guidelines, they have been and are likely to remain relatively stable in the foreseeable future.

Medical specialty societies and associations as well as health plans spend a great deal of resources on educating physicians about proper coding and documentation. We strive to provide clear, correct coding and documentation information to members via our online resources, practice management journals, specialty society news outlets, coding and practice management courses, and member inquiries. CIGNA HealthCare’s blended rate payment policy works in opposition to all of these efforts.

Third, office visits have been historically under-coded. In a research study published in the October 2004 Annals of Family Medicine, “How Many Problems Do Family Physicians Manage at Each Encounter?,” the family physicians reported managing an average of 3.05 problems per encounter and recorded 2.82 in the chart and 1.97 on the bill. With the aid of electronic health records and patients presenting with more complex care needs, a greater number of physicians will begin to code correctly, which will in turn, will increase the percentage of higher-level office visits.

Finally, but of no less importance or concern, is our belief that this proposed blended rate payment policy is contrary not only to the spirit of the Multi-District Lawsuit Settlement Agreement dated April 12, 2004, but certain agreements contained therein as well. More specifically, we believe that the payment policy may violate the restrictions on downcoding as set forth in Section 7.19 of the Settlement Agreement, which in part reads:

§7.19: No Automatic Downcoding of Evaluation and Management Claims.
CIGNA HealthCare shall not automatically reduce the code level of CPT® Evaluation and Management Codes billed for Covered Services.

If CIGNA HealthCare is concerned about potential abuse by outliers, who bill a statistically sufficient greater number of higher level E/M services (992x3, 992X4, and 992x5) than their peers, it should investigate whether the outliers’ documentation supports the services billed, send notifications as such to outlier physicians, and begin an educational process for improved and proper coding. It should not compromise the correct coding of all physicians for the perceived problems of a minority of physicians.

We want to stress the importance of proper CPT coding and documentation and equitable reimbursement for these services. A blended payment rate does not in any way meet this objective. We ask that you rescind this unfair payment policy and invite the opportunity to discuss this with you, which would include sharing the methodology used to arrive at a blended rate for the E/M services and on a percentage basis how it compares to Medicare’s reimbursement for the levels 3, 4, and 5 office visits.

Should you have questions or wish to discuss items addressed in this correspondence, please call the office of Trevor Stone, Manager, Private Sector Advocacy at the American Academy of Family Physicians at (913) 906-6000, ext. 4178.

Sincerely,

American Academy of Family Physicians
American Academy of Neurology
American Academy of Pediatrics
American Association of Oral and Maxillofacial Surgeons
American College of Foot and Ankle Surgeons
American College of Physicians