News Alert: UHC Plans Automatic Downgrade of ED Facility Codes

Proprietary algorithm to determine “correct” code and change claim.

It’s clearly a new age in the coding of emergency department (ED) visits – after all, one insurance giant is reportedly looking to take the human element out of the equation completely.

ED facility coding and auditing seems to be a popular topic of late. UnitedHealthcare (UHC) announced in its December 2017 Provider Bulletin that starting March 1, 2018, it will be reviewing all facility claims for ED visits billed with a Level 4 (99284, G0383) or Level 5 (99285, G0384) code to determine if the correct code was billed.

Before we go any further, let me lay out what UHC is planning to do. UHC staff will not be reviewing these claims; UHC’s computers will run their proprietary Optum Emergency Department Claim Analyzer™ and automatically either downgrade or deny any code that the algorithm determines is wrong. No human intervention, no review of physician documentation, just a computer looking at the data on the claim.

How will their proprietary analyzer do that? Well, again, it is proprietary, so UHC won’t tell us exactly how – but it appears that the tool will look at the patient’s demographic information and presenting complaint, factor in any testing or treatments performed, and then adjust for any additional diagnoses on the claim. Once it comes out with a final code, it automatically changes the claim. From the description on the site, the Analyzer™ uses another Optum tool called Lynx™ to calculate a total weight, which then selects the code appropriate for the given weight range.

UHC claims that “these enhancements support UnitedHealthcare’s commitment to the Triple Aim of improving health care services, health outcomes, and overall cost of care.” But seeing how they will not be looking at the quality of the care provided, nor the outcomes of that care, clearly the only objective of this initiative is to affect “the overall cost of care” in UHC’s favor.

Occurring at about the same time as this announcement from UHC, WPS Medicare, one of the Medicare Administrative Contractors (MACs), has been given permission from the Centers for Medicare & Medicaid Services (CMS) to audit facility billing of ED visits, despite the lack of standardized code selection guidelines.

And as I mentioned on a recent edition of Monitor Mondays, there are no coding standards for choosing ED facility codes. CMS addressed this in the Federal Register in 2007, 72 CFR 66789, with the summary that:

“Until national guidelines are established, hospitals should continue using their own internal guidelines to determine the appropriate reporting of different levels of clinic and emergency department visits. We would not expect individual hospitals to necessarily experience a normal distribution of visit levels across their claims, although we would expect a normal distribution across all hospitals as currently observed and as we would also expect if national guidelines were implemented. We understand that, based on different patterns of care, we could expect that a small community hospital might provide a greater percentage of low-level services than high-level services, while an academic medical center or trauma center might provide a greater percentage of high level services than low-level services.”

That means the government advocates the development of internal guidelines at each facility.

That also means that these UHC tools are not adhering to nationally recognized guidelines from any governmental agency, hospital group, or professional society, but rather they are governed by internally developed rules without any clear evidence of external validation.

Now, UHC does state that providers will be given the opportunity to appeal the changes, but since this is all happening behind the scenes, it is unclear how the facility will know that its claim was automatically adjusted downward – nor what element, the presenting problem, the treatments administered, or the final diagnoses, not to mention why the case was not complex enough to justify the billed code. UHC has also noted that it will be applying these tools to all ED facilities, including those that are out-of-network and have not agreed to accept UHC’s contractual terms.

So, what should hospitals and freestanding EDs do with this information? I would alert your finance people to be sure your billing and payment posting system will compare the billed codes and expected payments to the codes posted on the remittance advice and the payment actually received from UHC, and flag these automatic downgrades and denials.

From that point, you have to decide internally to determine if an appeal is warranted. If you are a contracted facility, you may consider asking for a look under the hood at their tools. If they are going to subject you to these tools, you certainly have the right to know how they run. It should also be noted that if UHC was truly concerned about the Triple Aim, it would also review visits that were coded with the lower-level codes to determine if any of those should be automatically upgraded to properly reimburse providers for the care they provided.

Although provider coding of their visits is not yet a target of UHC’s algorithm, you should warn your physicians that it may happen. One way they can start helping is to ensure that they are including documentation of all comorbid conditions that they considered when evaluating the patient, determining the necessary ED treatment and testing, and deciding on their disposition.

The “points” assigned to the patient’s poorly controlled diabetes or chronic lung disease may be enough to justify the code submitted by the facility.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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