Independent medical practitioners are raising alarms about a recent initiative by insurance companies that could push them out of private practice. This strategy, aimed at reducing high-cost doctor visits, may compel physicians to seek employment with larger hospital networks, potentially increasing patient costs.
Last week, Cigna introduced a policy that flags medical bills deemed excessively high. According to the policy, the insurance company may lower reimbursements by one billing level if the claim does not meet the criteria for higher-level payment codes. Dr. David Eagle, vice president of the American Independent Medical Practice Association (AIMPA), warned that this approach could diminish the income of private doctors, with significant ramifications for their patients.
The process for appealing downgraded claims involves submitting detailed medical records, which is notably labor-intensive, as explained by Eagle, a blood and cancer specialist based in New York. He expressed concern that such “downcoding” decisions will likely be automated, relying on algorithms that assess claims with minimal detail. This could create a disadvantage for small practices that lack the resources to navigate these changes effectively.
Cigna stated that only about 1% of providers in its network would be impacted by the new policy, which it claims is designed to combat overbilling. A one-level downcode is expected to result in an average payment decrease of approximately $50 per visit. For practices operating on narrow profit margins, like that of Dr. Bradley Sumrall, a blood and cancer specialist in Macon, such reductions can accumulate rapidly. Sumrall noted, “I see 25 to 30 patients a day. If you take out fifty bucks a patient, that’s $1,500 a day. That’s several employees.”
The move is not isolated to Cigna; Aetna has had a similar downcoding policy in place for several years. A spokesperson for Aetna remarked that the company has a responsibility to monitor payment claims for clients and members, ensuring the prevention of fraud, waste, and abuse within Medicare and Medicaid systems.
Independent providers are voicing concerns that these cost-saving measures could further diminish their earnings, pushing them towards employment with larger health systems that have more robust billing departments. Dr. Eagle highlighted that independent doctors typically lack the negotiating power of larger hospitals, which could make it increasingly challenging for them to remain independent.
A recent study by the Physicians Advocacy Institute revealed that the percentage of physicians transitioning from independent practice to employment with hospitals and health systems doubled over the past twelve years, reaching 55% in 2024. Many independent doctors fear that downcoding policies could accelerate this trend, which would have long-term implications for healthcare costs.
Dr. Elizabeth Burns, a dermatologist in Atlanta, acknowledged the motivations behind insurance companies’ policies but emphasized that they conflict with the mission of healthcare providers. “They’re trying to save money. That’s their main objective. The majority of doctors, their main objective is for the patient to get the best care,” she stated. While she agrees that some physicians may overbill and warrant audits, she insists that the new policies should not penalize practitioners who accurately code their services.
Eagle shared his own experience from a previous role in a North Carolina oncology group that joined a hospital system due to increasing administrative pressures and declining reimbursements. He noted that his patients subsequently faced new facility fees and heightened co-pays. “Everything else was the same. I was the same doctor, it was the same patient, they came to the same building, they got the same service. And many of them, because of the facility fees, paid a lot more for their co-pays,” he explained. This shift prompted some patients to discontinue their visits, underscoring the potential impact of these cost-cutting measures on patient access to care.
As the medical community grapples with these changes, independent practitioners remain concerned about their future viability. The ongoing dialogue between insurance companies and healthcare providers will be crucial in determining how these policies evolve and ultimately affect patient care.