Blending: The new downcoding

May 5, 2006

This Ohio Blue Cross/Blue Shield plan makes the same payment for level 3 and level 4 visits. Is it the start of a trend?

Both Medicare and commercial insurers have long paid physicians different amounts for each of the five levels of office visits. Now Anthem Blue Cross and Blue Shield Ohio, a subsidiary of WellPoint, the nation's largest insurer, has thrown that system into question by blending payments for level 3 and 4 visit codes into a single rate. This new policy, which became effective in Cincinnati, Dayton, and the rest of southern Ohio last November, greatly concerns physicians and medical leaders on both the local and national level.

"Common sense would tell us that if you're using codes that have been carefully developed over the years to reflect a level of service, you should be reimbursed more for more service," says ob/gyn Molly A. Katz, president of the Ohio State Medical Association (OSMA).

Some physicians and software vendors say that Anthem's move could also have a chilling effect on the adoption of electronic health records. Because EHRs enable doctors to document a higher level of work more easily, their implementation often leads to an increased average level of coding. Physicians view the resultant revenue growth as not only justified, but also as one way of achieving a return on their technology investment. It's feared that if other plans follow Anthem's lead, doctors will see less reason to move to an EHR.

It's just that fear that's fueled the national attention on Anthem's Ohio move. Observers view it as a trial balloon. But the insurer says it has no current plans to expand it to more regions. Even in Ohio, the plan may not make code blending permanent, according to pediatrician Barry C. Malinowski, Anthem's medical director for southern Ohio. In an e-mail to Medical Economics, Malinowski said that "the blending was instituted as a temporary measure until the issue of coding differences is resolved." Physician leaders said this came as news to them.

Is Anthem blowing smoke? Will other plans follow Anthem's example? There's some history that suggests the answer to both questions is No. Anthem is not the first insurer to try code blending. CIGNA adopted blended rates for levels 3, 4, and 5 office visits in New York, New Jersey and Connecticut several years ago. It has not expanded the program to other regions and says it has no intention of doing so.

Several other major insurers have signaled that they don't plan to go down the code-blending road, says Trevor Stone, manager of private sector advocacy for the American Academy of Family Physicians. "However, if there's no big uprising and no voice against it, that could change in a year or so," he observes. "That's why we think it's vital that we make our voice heard in opposition to this kind of payment policy. It goes against CPT, and that's what we base our billing on. If the plans make this change, we're going to have a lot of problems."