Professional News
N.Y. Insurers Begin to Comply With Rule Barring Coding Bias
Psychiatric News
Volume 46 Number 3 page 8-27

Insurance companies in New York state have begun to comply with a directive from the New York Department of Insurance to reimburse psychiatrists for use of evaluation and management (E/M) codes—a victory that can be attributed to several years of legwork on the issue by the New York State Psychiatric Association (NYSPA).

In October 2010, the Superintendent of the New York Department of Insurance, James Wrynn, told insurers in New York in a "circular letter" that they must accept and process all health care claims with E/M codes submitted by psychiatrists and "may not limit the types of CPT codes that [they accept] from psychiatrists to the codes specifically designated as ‘psychiatric’ in the AMA's CPT codes reporting guidelines and conventions" (Psychiatric News, December 3, 2010).

It was a turnabout that marks an important change by recognizing that psychiatrists today offer services more varied and complex than those reflected in the CPT codes for psychotherapy and the other 908xx psychiatric codes in CPT—the only codes that many insurers will cover for psychiatrists' services.

Seth Stein, J.D., executive director of the NYSPA, told Psychiatric News that within days of the letter being sent by the state insurance superintendent, NYSPA member psychiatrists were receiving denials of reimbursement for E/M codes from at least one insurer in the state—Value Options—saying psychiatrists were relegated to the use of the psychiatric codes.

But in a December 10, 2010, letter to Value Options, Stein told the company that its position was in conflict with the law.

"E/M codes are available for use by all physicians without regard to specialty and irrespective of the availability of other procedure codes," Stein wrote. "Psychiatrists regularly provide E/M services in all settings—inpatient and outpatient—and there is no clinical reason why psychiatrists cannot practice exclusively using E/M codes if deemed clinically appropriate for the treatment of a patient.

"The State Insurance Department has recently issued [a ruling] that specifically prohibits insurers from limiting the types of CPT codes that it accepts from psychiatrists to codes specifically designated as ‘psychiatric’ in CPT," he added. "Insurers must accept and initiate processing of E/M codes from any physician, including a psychiatrist, for the treatment of mental, nervous, or emotional disorders or ailments."

Stein said that since then he has received assurance from Value Options that it will be complying with the law, and he believes other insurance companies will be following suit.

"It is hard for us to independently verify whether insurance companies are complying," Stein told Psychiatric News. "So we want to publicize the insurance department's directive as widely as possible and ask psychiatrists to contact us if they experience difficulty. My sense is that health plans and behavioral health carveout companies are not intentionally disregarding the law but may need time to adjust their own computer-processing systems."

The decision by the New York Department of Insurance was preceded by a similar one by Blue Cross/Blue Shield (BCBS) of Massachusetts last August. Staff in APA's Office of Healthcare Systems and Financing (OHSF) have alerted other states that they should follow suit in requiring insurers to reimburse psychiatrists for use of E/M codes.

Psychiatrists and OHSF staff said the move is significant because psychiatric practice has evolved in such a way that the services clinicians provide today to medically complicated patients no longer fit neatly into either psychotherapy or medical management, the service categories traditionally used by psychiatrists. The use of the generic E/M codes allows for a more fluid approach to coding that better reflects the diverse services psychiatrists provide; for example, a psychiatrist may be seeing a patient with bipolar disorder and advising the patient about all manner of issues related to general medical health without necessarily only managing psychiatric medications.

It's an issue the NYSPA has been vigorously addressing for at least four years. Stein told Psychiatric News that beginning in 2006, NYSPA was negotiating with the state health insurance department about interpretation of existing state insurance law.

"We argued that if a health plan reimburses for E/M services provided by physicians in their office or in the hospital, then health plans must accept, process, and reimburse claims submitted by psychiatrists for E/M services in the same manner and to the same extent," he said. "While a health plan is not required to provide coverage for every E/M code listed in CPT, to the extent that it covers specific E/M codes, health plans must accept and process claims for those E/M codes submitted by psychiatrists.

"For example, if a health plan covers E/M codes for office visits—CPT codes 99201-99205 for new patients and 99210-99215 for established patients—then health plans must accept and process claims submitted by psychiatrists for these codes. Health plans cannot restrict psychiatrists to submitting claims only for psychiatry procedure codes and must permit psychiatrists to use all E/M codes covered under the health plan."

In fact, it was NYPSA's pursuit of the issue that ultimately led to the October "circular letter" by the state insurance department.

"We held numerous meetings in New York City and Albany with SID staff and later on with representatives from the health insurance trade association," Stein told Psychiatric News. "We initially encountered significant difficulty in getting our point across, but when we posed this problem as a patient coverage issue, we secured greater traction. We argued that when a health plan refused to pay for an E/M code because it was provided by a psychiatrist or for the treatment of mental illness, it was the patient who was ultimately being harmed since the patient would then be compelled to pay for service out of pocket and thereby was deprived of the benefits of the patient's health plan."

Stein said he believes the ability to use the E/M codes used by general physicians is a reflection of the fact that psychiatric practice today is about the management of chronic conditions. "Disease management has become the byword of health system reform, and psychiatry is the paradigm for disease management, because we deal with chronic illness," he said. blacksquare

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