Down-coding of claims and upsurge in medical records requests
- In April 2023, physicians began reporting down-coding of evaluation and management (E/M) and emergency room claims by various payors including Wellcare, Cigna, Aetna, and UHC. These payors either automatically paid the claim at a lesser allowed amount associated with a lower E/M code level or requested medical records prior to down-coding the claims. Physicians complained that they were administratively unable to comply with the high volume of medical record requests, thus resulting in automatic claims denials or down-coding. Additionally, the remittances/EOBs on down-coded claims did not indicate they were paid at a reduced rate making it difficult to identify the underpayment and submit an appeal. In June, HCMS asked to collaborate advocacy efforts with the AMA, the MGMA, and other state and specialty medical societies to coordinate efforts to address this practice.
Fortuitously, in July a lawsuit against Cigna was filed in California, and sought class action status, alleging Cigna systematically rejected claims in a matter of seconds based on an algorithmic system put in place to help automate the process. A ProPublica article exposed the denial process and reported Cigna denied more than 300,000 claims, spending an average of 1.2 seconds on each claim, over a two month period in 2022. While Cigna physicians signed off on the denials, the system didn’t require them to open patient medical records for the review. The ProPublica article also triggered investigations on the Hill into whether Cigna and its peers are indeed deploying algorithms to deny claims for members en masse. The House Energy and Commerce Committee opened a probe into Cigna's actions in May, and the Senate Permanente Subcommittee on Investigations is looking into how insurers are using AI to deny claims in Medicare Advantage.
Also in July, a United Healthcare unit, UMR, was sued by the U.S. Department of Labor over systematic claims denials from 2015 through 2018 alleging that UMR incorrectly denied emergency room and urinary drug screenings based solely on diagnosis codes and not applying a prudent layperson standard. This practice is in violation of the Employee Retirement Income Security Act of 1974, which oversees self-funded plans. The department added that UMR's explanation to members for the denied emergency claims violated the ACA and the government's internal claims procedures regulations. The lawsuit is seeking to require UMR to reform its emergency and urinary drug testing claims procedures to comply with ERISA and readjudicate all denied or partially denied claims from Jan. 1, 2015, to present.
Cigna modifier 25 policy
- In March 2023, Cigna sent notice
to physicians advising them of a new reimbursement policy that will increase administrative burdens and adversely affect cash flow for physicians who bill modifier 25. This modifier is used when an evaluation and management (E/M) code is billed on the same day as a minor procedure. Cigna's new policy would require medical records to be submitted to verify that the required elements of modifier 25 had been met when appended to E/M codes 99212 through 99215. As a result of efforts by the HCMS, TMA, AMA, and other state medical societies and specialty organizations to halt this policy, Cigna delayed implementation. Cigna attempted to implement this same policy in June 2022 and our efforts, along with our colleagues', were successful in delaying the policy at that time as well.
UHC gastroenterology preauthorization policy
- In early 2023, UHC announced preauthorization requirements for gastroenterology endoscopy services. As a result of efforts by the HCMS, TMA, AMA, and other state medical societies and specialty organizations to halt this policy, drawing the attention of mainstream media outlets USA Today and Forbes, UHC rescinded the requirement. Instead, advance notification is required, but administrative denials will not be issued for failure to submit advance notification.
Federal gold card preauthorization legislation (H.R. 7995)
- As a result of the successful efforts of HCMS, the TMA, and other stakeholders in passing significant preauthorization gold carding regulations in the 2021 Texas legislative session, many states have since contacted the TMA for assistance drafting like legislation in their states. At the federal level, Congressman Vicente Gonzalez (D-TX) and Congressman Michael C. Burgess, M.D. (R-TX) introduced H.R. 7995, the Gold Card Act of 2022. This legislation will exempt qualifying providers from preauthorization requirements under Medicare Advantage plans. HCMS met with Congressman Burgess on May 23, 2022 to discuss our experience with the health plans’ opposition to the Texas law and advise him on what difficulties he may experience at the federal level. Passage of this important federal legislation will be a significant step in alleviating the extreme burdens places on physicians in performing preauthorizations and the resulting adverse impact on patient care.
TMA vs HHS federal No Surprises Act lawsuit
- In 2021, the TMA scored a victory
over federal regulators in its first suit
regarding the qualifying payment amount (QPA) in the Act's independent dispute resolution (IDR) process. They argued part of the rulemaking issued for the No Surprises Act directly conflicted with the language of the law and created an illegal piece of the independent dispute resolution IDR process to resolve out-of-network billing disputes. The TMA said the process in the rules would make an arbiter disproportionately rely on one insurer-calculated factor, the qualifying payment amount, to determine fair payment – not several factors, as lawmakers had intended. District Judge Jeremy D. Kernodle agreed
in his 35-page decision, which granted TMA’s motion and invalidated that part of the rule.
TMA filed its second lawsuit
(TMA II) in Sept. 2022 challenging the NSA’s August 2022 final rules published by the federal agencies, alleging the final rules unfairly advantage health insurers by requiring arbitrators to give outsized weight or consideration to the QPA. In both this and the Oct. 28, 2021, lawsuit, TMA alleges that the agencies, when implementing the federal surprise billing independent dispute resolution processes, adopted rules that conflict with the law and skew results in favor of insurers to the detriment of both physicians and the patients they serve. On Feb. 6, 2023, the district court sided with the TMA. At issue was whether the August 2022 final rule, which eliminated the rebuttable presumption in favor of the QPA and made other changes, cured the defects in the interim rule. The court concluded it did not and that the NSA requires the arbitrators to consider all the factors listed in the NSA without granting the QPA special status or imposing burdens on considering other factors.
TMA filed its third lawsuit
(TMA III) in Nov. 2022 challenging certain portions of the July 2021 interim final rules
implementing the federal NSA. TMA challenged certain parts of the rules that artificially deflate the QPA. The QPA is an insurer-calculated amount that arbitrators are required to consider, among other factors, when deciding between the physician’s and the health insurer’s offer as the appropriate out-of-network rate in federal arbitrations. Under the law, the QPA is generally supposed to be the median in-network rate for the service provided by a physician in the same or similar specialty in the relevant geographic area. The challenged parts of the rule set forth a methodology for calculating QPAs that conflicts with how the NSA requires insurers to calculate QPAs. The lawsuit also challenges the lack of transparency around QPA calculations. On August 24, 2023, the U.S. District Court for the Eastern District of Texas issued an opinion
and order and agreed with the provider plaintiffs that certain regulations governing the calculation of the QPA conflict with the IIDR process in the NSA legislation, and therefore must be revisited. HHS/Labor and the Treasury departments appealed the decision on Oct. 6 and will exercise enforcement discretion regarding the courts ruling which is no in effect but they will not actively enforce compliance for at least six months.
A fourth lawsuit
(TMA IV) filed by the TMA challenges a Sept. 2022 rule that all parties involved in arbitration pay an administrative fee of $350, and that claims could not be batched unless they were related. The Biden administration set the initial arbitration fee at $50 for 2022 and 2023. However, the administration announced in Dec. 2022 that the fee would be $350 for 2023. The TMA challenged the Sept. rule and the decision to increase the administrative fee on two main grounds. First, the TMA argued that the rules were unlawfully issued without notice and comment rulemaking and therefore must be set aside under the Administrative Procedure Act (APA). Second, the TMA contended that the rules are arbitrary and capricious because the administration failed to consider the adverse effects their decisions would have on providers’ ability to access the IDR process. The TMA complained that both the fee hike and the limits on batching made the IDR process cost-prohibitive for small-value claims. On Aug. 3, 2023, the district court again ruled
in the TMAs’ favor and vacated both the fee increase and the batching rules on the basis that they were issued without necessary notice and comment. As a result of the TMA IV decision, the agencies temporarily closed
the IDR process to new cases on Aug. 9, 2023.
Texas gold card preauthorization legislation
In the 2021 Texas legislative session, with significant efforts by HCMS and the TMA
scored a big win with HB 3459
, curbing onerous prior authorization practices
. HB 3459 states physicians who
participate in state-regulated commercial health plans will be eligible for
“gold carding” on a rolling six-month basis if 90% or more of their prior
authorizations have been approved in the previous six months. This is on a
procedure-by-procedure, health plan-by-health plan basis. In another
significant win for medicine, utilization reviews must now be conducted by a
Texas-licensed physician in the same or similar specialty.
United Healthcare accumulator adjustment program - UHC announced in January 2021 a policy that required providers to submit payment information received from drug manufacturer copay
coupon programs which are applied to a member’s cost share when billing for specialty medications as a
medical benefit drug claim. The amount of the coupon would not be applied to the patient's deductible or out-of-pocket limit. As such, the cost savings of the coupon would be effectively eliminated. Further, the burden to report the use of the coupon would fall to physicians thereby creating an undue burden and interfering in the patient/physician relationship. HCMS and other stakeholders voiced objections to this program citing unpaid administrative burdens on the physicians, and the effect the program would have in negating any coupon's benefit to the patient. As such, many patients would be unable to afford the drug/treatment limiting their access to effective, affordable medications that would likely result in exacerbating their conditions and limiting the physician's treatment options. As a result, in January 2022, UHC announced that given our concerns, the program would not be implemented. In the 2023 Texas legislative section, we were instrumental in obtaining legislation that would bar this practice.
TMB and the National Practitioner Data Bank (NPDB) - A Texas Supreme Court decision provided that physicians who are investigated by the TMB for allegations of wrongdoing and cleared of the allegations, must have their names fully cleared in the NPDB, the federal clearinghouse that records certain adverse or disciplinary actions taken against health care workers by a licensing board. In a friend-of-the-court brief, the TMA argued that the TMB’s handling of a case brought against a physician who was exonerated of wrongdoing “severely taint[ed] this exonerating … result.” The Supreme Court concurred and found that the TMB should have filed a “void report" expunging the physician's record rather than a “revision-to-action” report that kept the TMB action against Dr. Van Boven over the unproven allegations on his NPDB record. The TMA wrote in its February 2021 friend-of-the-court brief, “Without voiding the temporary action, the physician’s reputation and license to practice medicine is marked forever. The result of the time, effort, and expense of a successful defense before a SOAH judge should not be circumvented by the agents of a prosecuting agency.,”
United Healthcare designated diagnostic provider - UHC announced in early 2021 a new policy that would require lab and radiology facilities to apply for a Designated Diagnostic Provider (DDP) status in an effort to control costs. Physicians would be required to refer patients to DDP providers for the patient to receive coverage for services. For services rendered by providers not designated as DDP but in-network, UHC would pay nothing on the claim making the patient responsible for 100% of the payment amount. HCMS, the TMA, and other stakeholders voiced several concerns about this policy citing undue administrative burdens, narrowing of in-network referral options, improper shift of cost saving responsibilities to physicians, etc. As a result, while this program has been implemented in other states, it has been suspended in Texas.
BCBSTX incident-to billing
In a 1/19/2021 policy statement, BCBSTX indicated they would no longer pay for incident-to services (identified by the SA modifier), and instead would require board-certified physician assistants (PAs) and nurse practitioners (NPs) to contract with the health plan to bill directly for their services under their own NPI numbers. TMA and HCMS communicated to BCBSTX our concerns with this policy as it would eliminate the practice of incident-to billing utilized by many practices adversely affecting patient care, established practice work processes, and cash flow (payments for claims billed using an Advanced Practice Provider’s NPI number are typically paid at 85% of the physician’s contracted rate). As a result, on 5/12/21 BCBSTX published a reversal of this policy stating the policy will not be implemented and there are no plans to implement such a policy in the future.
United Healthcare (UHC) Optum Pay
- In January 2021 physicians began experiencing significant problems with Optum Pay and were unable to obtain readable remittances or perform other revenue cycle functions available to them prior to the implementation of a new Optum Pay premium paid subscription service. UHC had assured that the main functions needed to conduct business with UHC would remain in the free version and the paid version would simply provide enhanced functionality. However, upon rollout, the functionality of the free version was greatly reduced, and physicians reported to HCMS that they were experiencing several issues. They were unable to obtain readable remittances or perform other revenue cycle functions available to them before the implementation of the Optum Pay Premium paid subscription service. This caused significant business interruptions, the need for additional and complicated work-arounds, payment and banking reconciliation disruptions, and other revenue cycle management difficulties. HCMS reached out to UHC on several occasions to report these issues and provided examples of problems experienced by physicians in Harris County and across the nation. As a result of our efforts and those of other organizations, UHC restored access to the essential functions in the free version of Optum Pay allowing physicians to continue to manage their UHC business without having to pay for the premium service.
United Healthcare (UHC) malpractice liability limits increase
- In December 2020, HCMS learned UHC would require an increase in liability limits from $100,000/$300,000 to $1 million/3 million, which was set to take effect March 1, 2021. HCMS reached out to UHC and advised them that Texas enacted tort reform in 2003 (see below item) to limit frivolous lawsuits and placed a cap on noneconomic damages at $250,000. As such, liability limits at $1 million/3 million were unnecessary in Texas and caused an economic burden to our physicians. As a result of these efforts, UHC indefinitely postponed the requirement. However, HCMS continues to monitor any changes in liability limits by payors to ensure they are appropriate for our physicians.
United Healthcare incident-to billing
- In December of 2020, UHC announced that for their commercial plans, APRNs who had their own NPI would be required to be credentialed and directly bill for their services even when performed incident-to, with reimbursement for such services at 85% of the contracted rate. This policy went into effect May 1, 2021. Incident-to services allow APPs to treat patients under the direct supervision of a physician without being required to be contracted with the health plan and receive reimbursement at 100% of the contracted rate. For several months HCMS and the TMA urged UHC to reconsider this policy as it would be disruptive to physician practices and patient care. As a result of these efforts, UHC reversed this restriction on incident-to billing in two policy notices (Advanced Practice Health Care Provider Policy, Professional
#2021R5009B and the Services Incident-to a Supervising Health Care Provider Policy, Professional
#2021R5025A). UHC will honor incident-to billing when the incident-to requirements are met. Such claims will be reimbursed at 100% of the applicable fee schedule. These new policies became effective 8/1/2021.
Newborn screens underpayments
- In 2020, HCMS became aware of systematic underpayments for the state-mandated newborn screens by several commercial and Medicaid Managed Care payors. Each of these payors were contacted by HCMS and made aware of the underpayments in violation of state law
. However, most of these payors were unaware such a law existed and based their reimbursement methodology on a percentage of billed charges. HCMS provided the applicable state regulations and other documentation that mandates that the reimbursement rate for newborn screens be equal to that provided by the Department of State Health Services
. As a result, these payors reprocessed claims for several physicians and updated their claims systems to reflect the correct reimbursement amount.
Wellcare Texan Plus CMS complaint
– In January 2019 HCMS received a high number of complaints regarding Texan Plus and Wellcare. The migration of Texan Plus physicians to the Wellcare system failed, and as a result, the affected physicians could not access the portal, verify eligibility and benefits, obtain authorizations or referrals online or by phone, or conduct any business online. Payments to physicians were also delayed, incorrect, or denied, and seeing Texan Plus patients became difficult. Many physicians and patients had to cancel appointments and procedures until they received instructions from Wellcare. Unfortunately, the instructions they received were inconsistent and often incorrect. HCMS met with Wellcare leaders to discuss the issues and find a work-around until these physicians could be manually loaded into Wellcare’s system. Corrective action was slow despite several meetings with the Houston market and corporate Wellcare leadership, and physicians and patients suffered. As a result, HCMS filed a complaint with the Atlanta CMS Regional Office to find a resolution to the surfeit of problems that continue to affect physicians and their patients. We have had several discussions with the CMS Atlanta office. HCMS will continue to assist physicians who have contacted us for help and will meet with Wellcare leadership frequently until these issues are resolved. If you have any issues with Wellcare Texan Plus, please call HCMS at 713-524-4267 and ask for the Payment Assistance department.
TxEver death certificate registration system
The Texas Department of State Health Services created a new death certificate registration system, TxEVER, which went live Jan. 1, 2019. After going live, the system was plagued with technical issues which caused many physicians to exceed the 5-day window to file a death certificate. HCMS took action and met with Texas Department of State Health Services representatives to discuss the issues. As a result, HCMS created a list of FAQs
specifically designed to address your concerns about the new system and DSHS worked to address the system errors.
Molina TDI complaint
– In 2018, HCMS received an unusually high number of complaints from members regarding Molina Marketplace payment issues amounting to millions of dollars. Many large and small practices had been attempting to resolve their issues as far back as 2015, to no avail. Many filed complaints with the Texas Department of Insurance (TDI), but after the lack of responsiveness from both Molina and TDI, physicians turned to HCMS for help. HCMS reached out to its Molina contacts to try and resolve the issues, but like the membership, we too experienced a lack of response. Consequently, HCMS filed a TDI complaint against Molina in September 2018 on behalf of the affected practices. As a result, Molina’s CEO contacted HCMS to set up a meeting to discuss the issues. During the meeting, they committed to be the point of contact to resolve all issues with the assistance of their COO. Individual meetings were arranged at the HCMS offices in November 2018 with the Molina COO and all of the affected practices who had contacted HCMS for assistance. Our efforts resulted in collections of more than $2,000,000 for the affected physicians. In February 2019, as a result of the HCMS complaint to TDI, TDI issued a Consent Order fining Molina $500,000 and requiring them to address their deficiencies. If you are having any issues with Molina, please call HCMS at 713-524-4267 and ask for the Payment Advocacy Depart.
Aetna TDI complaint
– In late 2018, several physicians contacted HCMS regarding letters from Aetna informing them they were being deselected from 3 Aetna plans. As there was a fully-insured plan included, the deselection process from that plan violated the Texas Insurance Code, particularly sections 1301.0057 and 1301.0057, regarding physician termination. As such, HCMS filed a complaint with the Texas Department of Insurance (TDI) resulting in the removal of the fully-insured plans from the deselection notice. HCMS then met with Aetna representatives to better understand the criteria used to identify physicians for the systematic deselection. HCMS provided information that revealed that several of the physicians who contacted us did not meet those criteria. As such, Aetna reconsidered and pended or rescinded the deselections for several physicians.
– 2003 Tort Reform – Passed HB 4 and Prop 12. This legislation resulted from years of effort by the medical communities, TMA, HCMS, TEXPAC, and others to create a fair and balanced judicial process in malpractice cases, and to de-incentivize claimants from filing frivolous lawsuits. This practice became so prevalent in the Texas Valley that physicians left the area en masse leaving a severe shortage of healthcare professionals to serve the community. In addition, physicians began leaving statewide as the cost of medical liability for Texas physicians skyrocketed, making it too costly to practice medicine in Texas. These resulting shortages prompted the need for the legislation which placed a cap on noneconomic damages at $250,000 for all physician defendants and an additional cap of $250,000 for each of up to two medical care institutions. Other previous plaintiff-friendly procedural devices, such as forum shopping, were eliminated. It also required that there be a written medical report by a physician in the same or similar field as the one being sued, a report that clearly identifies the appropriate standard of care and how it was violated, and a delineation of specific damages resulting from the violation of the standard. The passage of HB 4 removed the hostile litigation environment in Texas and stopped the exodus of physicians in search of a more judicially fair and friendly one. The number of physicians coming to practice in Texas has increased dramatically since the passage of the bill resulting in access to care in areas rural and border communities of Texas that was previously unavailable. Also, the number of liability carriers increased creating competition and better premium rates. Texas remains the premiere healthcare mecca in the country, and this legislation is partly responsible for this distinction. Note: Every Texas legislative session, Tort Reform is attacked by lobbies who are against this law. Defending Tort Reform is a priority for HCMS and TMA.
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TMA 2023 Legislative Wrap Up
FTC Noncompete Proposed Rule
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