Anthem's cost-cutting drive riles providers
The payer said the E/M payment cut is one way to reduce costs for its members and employer clients, but critics say the change may require patients to return for another doctor visit.
Anthem's cost-cutting drive is angering providers, and they're looking to push back as yet more policies go into effect.
In the past year, the giant Blue Cross plan has sought to limit the use of anesthesiologists during cataract surgery and refused to pay for MRIs and CT scans performed at a hospital on an outpatient basis.
Anthem was forced to somewhat soften its move to not pay for Emergency Department (ED) care it deems unnecessary after complaints that patients would have to self-diagnose or would avoid seeking needed care.
Providers will next week see another of Anthem's attempts to whack at healthcare costs. The payer is cutting provider payments by 25% for separate evaluation and management (E/M) services billed using CPT modifier 25 when physicians provide services on the same day for a different procedure or another service.
The insurer of 40 million members across 14 states initially planned on a 50% payment cut on E/M services on Jan. 1, but delayed and lessened the cut until March 1 after opposition from the American Medical Association.
The AMA House of Delegates voted against the payment cut, and AMA President David Barbe called Anthem’s actions unfair and “detrimental to physicians who are trying to practice medicine according to the needs of their patients.”
The AMA said the “appropriate use of CPT modifier 25 facilitates provision of unscheduled, medically necessary care and, consequently, prompt diagnosis and streamlined treatment. Physicians’ efforts to provide patient-centric care will be disrupted by implementation of Anthem’s policy.”
“Health insurers that reduce or deny payment for evaluation and management services associated with procedures performed on the same day are needlessly forcing patients into multiple visits and delaying the provision of necessary care,” he said.
The 25% reduction goes into effect on March 1 in California, Colorado, Connecticut, Indiana, Kentucky, Maine, Missouri, New Hampshire, Nevada, New York, Ohio and Wisconsin. Anthem will expand the policy to Georgia and Virginia after network contract renewal.
Anthem said it doesn't expect physicians “to modify their approach” to providing healthcare.
Critics, though, say the reduction may make providers delay additional patient care to another appointment to get full reimbursement. That could cause patients to avoid additional care because of the hassle of another appointment.
The new policy “sends the message that Anthem does not value or prioritize patient convenience” and may cause a greater burden on the healthcare system, Patrick Padgett, executive vice president at the Kentucky Medical Association (KMA), told Healthcare Dive.
Padgett said the coding system was “designed to promote the most efficient care possible, including payment for multiple services that might be provided in one visit.”
The KMA offers this example of how the modifier 25 is used properly:
“A patient has a nosebleed. The physician performs packing of the nose in the office, which stops the bleeding. At the same visit, the physician then evaluates the patient for moderate hypertension that was not well controlled and adjusts the antihypertensive medications.
“The 25 modifier may be reported with the appropriate level of E/M code in addition to the minor procedure. The hypertension E/M was medically necessary, significant and a separately identifiable service performed on the same day as control of the nosebleed. The hypertension was exacerbating the nosebleed and was actually related to the nosebleed, but management of the hypertension was a separate service from actually packing the nose.”
Anthem pulls back but stays the course
Anthem told Healthcare Dive in a statement that it remains “committed to providing our members access to high quality, affordable health care.”
“An important part of fulfilling that commitment is our work to reduce the cost of healthcare while simultaneously improving the quality and efficiency of the healthcare system for consumers. Anthem’s recently announced reimbursement policy aims to reduce duplicative payments for overhead costs in the same visit to save money on behalf of our members and employer clients without impacting the quality of care.”
Anthem declined to comment on how much the payment cut, as well as its other cost-saving measures, are expected to save the payer.
Padgett said KMA believes the cut will cause care disruptions and violate long-standing coding policies designed to “facilitate patient care in a complicated healthcare system.”
Padgett said Anthem’s ED policy is already impacting patients, who may face hefty bills if they go to the ED but Anthem rules it wasn’t an emergency. Anthem has rolled back the policy a bit, exempting certain situations, like a weekend visit or a child who may have a medical emergency.
This is especially problematic for a state like Kentucky that doesn't have strong malpractice laws, Padgett said.
“Physicians have to constantly run tests and perform services in an effort to avoid a malpractice claim. The liability system and the insurance system are at odds on this issue, and patients suffer because of it," he said.
Padgett said these kinds of policies can hurt quality and patient convenience. Patients may have to pay extra copays, deal with denials and take the time to appeal the payer’s rulings. Padgett also argued the policies will ultimately increase costs for everyone, including Anthem, which will spend more time processing and reviewing appeals.
Rivals weigh similar policies
Despite provider opposition, other payers have implemented policies that push imaging services outside of hospitals and to less costly ambulatory facilities. Payers are increasingly paying providers the same rates for imaging whether the tests are done at a hospital or ambulatory facility.
It’s not only insurance companies that want to reduce costs.
Employers are pushing payers to cut healthcare costs and managed Medicaid programs are getting less funding from states so they must find ways to cut back. This is causing health insurers to pull any lever they can to reduce costs, Rachel Sokol, practice manager of research at Advisory Board, told Healthcare Dive.
“Plans are certainly feeling pricing and margin pressure like the rest of the industry,” Sokol said.
Healthcare costs already make up nearly 18% of the GDP and that’s expected to reach nearly 20% by 2026, according to the Office of the Actuary at CMS.
The provider reimbursement lever is just one way payers are looking to cut costs. They’ve found that pushing more healthcare costs onto individuals hasn't worked. A decade ago with the launch of high-deductible health plans (HDHPs), payers and employers hoped that giving patients more “skin in the game” would turn them into better healthcare consumers. Deductibles have increased over the years, but HDHPs haven’t solved the problem of patients getting too much care or too expensive care.
Instead, payers are creating policies, such as Anthem’s, trying to make it clearer for patients when and where they should use care.
Also, Sokol said payers are looking for ways to move more care to lower cost primary care physicians and steer members away from more expensive specialists when possible. Plus, Sokol said payers are partnering with retail providers to offer preventive care that’s less costly than primary care and moving more into value-based payments to encourage providers to think about utilization.
In the long run, these cost-saving policies could lead to revenue decreases for hospitals and providers, particularly for healthy patients. Ultimately, Sokol said the cost-cutting policies and push to more affordable care locations may result in providers taking on more population health.
“They are going to look for more say and influence on how their patients are experiencing the delivery system,” said Sokol concerning providers moving more into population health.
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