Anthem, CA Providers Dispute Rates After Surprise Medical Bill Law
A House committee approved a bill to eliminate surprise medical billing, placing higher cost burden on payers and providers, as Anthem faces provider contract disputes over reimbursements.
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- California’s surprise medical billing laws are motivating Anthem to cut reimbursements to physicians in the state, providers argue.
In June, California payer Anthem cut reimbursements for physicians. The payer claims the move is a result of routine fee adjustments.
But providers in the state are arguing that the payer is actually making these changes in response to a 2016 law to eliminate surprise billing.
In California, 18 percent of in-network inpatient admissions result in an out-of-network charge. California law sets a benchmark for payment rates for these services. Physicians can only collect certain amounts when they are out-of-network for their patient. The law enacted in 2016 also prohibits payers and providers from charging patients the difference between their rates.
As a result, physicians are saying, insurers force them to shoulder the responsibility through reimbursement cuts. And now they are arguing that Anthem recently cut reimbursement rates for primarily inpatient physicians such as pathologists, radiologists, and anesthesiologists—areas most likely to be affected by surprise bills.
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Eliminating surprise medical bills is a top priority for the Trump Administration and Congress.
Last week, the House Committee on Energy and Commerce approved an amendment (H.R. 3630 of the REACH Act) modeled somewhat on California’s surprise billing law. The amendment seeks to “prohibit balance billing and limit patient cost-sharing to the in-network amount for emergency services.”
For out-of-network payment disputes in the case of an emergency when the patient had no way to choose their provider, the “No Surprises Act,” as the amendment is called, declares that the insurer must pay at least the median in-network contract rate for the region where the patient received care.
However, the No Surprises Act gives states flexibility in defining out-of-network payment resolutions.
“I think what we’ve done with this bill, the most important thing, is that we’ve taken the patient out of it,” said Rep. Anna Eshoo (D-CA). “I think we’ve achieved a delicate balance so that hospitals, doctors, and insurance pull their fair weight by combining the arbitration and the benchmark payment approaches. Obviously, the debate is over money so—like what’s new around here? So, as I’ve said previously, if doctors are charging inflated rates, then they’re going to come down. If insurers aren’t negotiating with doctors fairly, now we have a hammer to bring them to the table. If insurers save money from our bill, we’re tracking those savings to make sure they’re passed on to patients in the form of lower premiums. I think the real winners in this are who we intended it to be and that’s the patients.”
READ MORE: Texas Enacts Bill to Protect Consumers from Surprise Billing
Anthem also has a second dispute at hand regarding denying reimbursement of same-day claims made under modifier 25.
Modifier 25 allows physicians to document multiple same-day visits from a patient in order to receive reimbursement. In order to qualify, the subsequent visits must be a “significant, separately identifiable evaluation and management (E/M) service by the same physician on the same day of the procedure or other service.”
Anthem determined that providers were billing duplicate evaluation and management (E/M) services for same-day visits. On February 1, Anthem said, “Beginning with claims processed on or after March 1, 2019, Anthem may deny the E/M service with a modifier 25 billed on the day of a related procedure when there is a recent service or procedure for the same or similar diagnosis on record.”
The California Medical Association (CMA), the American Medical Association (AMA), and other physician organizations have expressed their concerns regarding Anthem’s new policy.
“Elements of the policy are vague, and we believe the policy will result in inappropriate denials for physicians using the modifier correctly,” CMA wrote to Anthem following an in-person meeting.
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The associations’ letter to Anthem notes six main areas of concern: the policy’s vague language and lack of detail, a definition of the modifier that is inconsistent with Current Procedural Terminology (CPT) guidelines, the possibility of misguided denials and higher administrative burden, the lack of incentive for physicians to perform same-day procedures, that the modifier 25 policy has not been updated to reflect potential denials and lack of reimbursement scenarios, and the lack of dialogue with medical professionals prior to making this change.
CMA did not deny that modifier 25 was incorrectly used but primarily focused on the effects the new policy would have on legitimate claims.
“We believe a more collaborative approach to identify alternative methodologies for cost containment, including provider education on proper coding practices that do not bluntly penalize physicians using the modifier appropriately, will be more effective and less costly long term,” CMA concluded. “With the shift to value-based care, this is a time where plans and physicians should be identifying ways to work together.”
