The Down-Coding Dilemma: Dr. Terry Wagner Raises Awareness about Insurers Down-Coding Physician Claims without Notification or Reason

In his almost 30 years of practice, Terry Wagner, DO, FAAFP, never had to question the accuracy of an insurance claim payment—until now.

Earlier this year, Dr. Wagner’s office manager at Hudson Family Practice was auditing claims when she noticed that Aetna paid him for a Level 3 claim rather than the Level 4 claim originally filed. Upon further investigation, she found several claims that were down-coded prior that had never been addressed by Aetna; there had been no request for documentation or evidence, and the claims were quietly overridden and down-coded.

“We did some more digging and made some calls, but couldn’t get anywhere with Aetna,” explained Dr. Wagner. “That’s when we decided to reach out to the Ohio State Medical Association (OSMA).”

As it turns out, the OSMA confirmed that there were other practices across the state experiencing the same down-coding issues with insurers and that they are supporting Ohio Senate Bill 165 that would ban insurers from automatically down-coding claims in Ohio. With such wide-spread frequency and concern over down-coding, the OSMA contacted NBC News to run a story. To his surprise, Dr. Wagner led the charge and shared his experience in a recent NBC News feature.

The article highlights the burden insurers place on physicians to appeal their claims payment and prove their claim was valid at the higher level, rather than the insurers contacting physicians proactively and discussing justification. Overtime, these reduced reimbursements add up and if they go unchecked, can hurt small practices and negatively affect patients’ access to care.

“We make appeals on the down-coded claims, and some claims get paid, others denied,” said Dr. Wagner. “But the appeals process is funny, if you didn’t appeal ‘in-time’ you can’t even submit one. And if you do successfully, it could still take months.”

From the insurer side, the argument is about controlling costs and preventing billing that is not justified by the services provided. On the physician side, the concern is that judgment, clinical complexity, and time are not always fully captured by the billing code reductions.

“The level of care family physicians provide has become so much more that what it used to be,” said Dr. Wagner. “You go into a room with a patient you’ve known for decades and treat everything, while also inquiring about their family, and addressing a multitude of concerns in a short amount of time just to have insurance companies automatically reduce that work to a Level 3. It makes you feel disrespected and unappreciated.”

Since the NBC News article released, Dr. Wagner has found he is not alone in his frustration. Many physicians who own private practices throughout the country have reached out to share their experiences with the down-coding dilemma, as well.

Dr. Wagner received the Ohio Academy of Family Physicians (OAFP) Family Physician of the Year in 2016. He has served on the OAFP Board of Director, as well as numerous committees and workgroups. Dr. Wagner graduated from the Ohio University Heritage College of Osteopathic Medicine and completed his residency training at the Akron General Medical Center Family Medicine Residency Program.