Automatic downcoding occurs when insurers unilaterally reduce the level of a billed Evaluation and Management (E/M) service or procedure code without reviewing the physician’s supporting documentation. Instead, claims are automatically flagged and adjusted by internal algorithms based on coding guidelines or statistical norms. The outcome is reduced reimbursement, even when the billed service level was appropriate and supported by the medical record.
This practice has serious implications. For physicians, it means lost revenue, time-consuming appeals, and increased administrative workload. For patients, it threatens the sustainability of physician practices, particularly in underserved areas where margins are already thin. Automatic downcoding also raises broader concerns about fairness and transparency in claims adjudication, as it bypasses medical judgment and disregards the physician’s expertise. As of October 1, Cigna and Aetna are automatically downcoding claims.
States attempting to tackle downcoding have sought out different avenues for the process. New York Senate Bill S4833 categorizes downcoding as an adverse decision — enabling policy prescriptions for adverse decisions, such as in prior authorization, to be applicable for downcoding.
In California, Cigna has agreed to temporarily pause a novel and controversial downcoding policy that would have automatically downcoded any higher-level evaluation and management services.
MSSNY is contacting physicians statewide to assess the impact of insurance companies’ automatic downcoding, a growing concern that undermines fair reimbursement and burdens physician practices.
By sharing your experiences, you will help MSSNY document the scope of this issue and determine whether further advocacy, regulatory engagement, or legal action is warranted. Submit your experiences here
