Blue Cross Blue Shield of Massachusetts is expanding its claims review process to address what it is describing as potential overcoding among physicians who routinely bill for high-complexity visits.
The new policy takes effect for dates of service on or after Nov. 3 and applies to a small subset of clinicians whose billing patterns stand out from peers, BCBSMA told Becker’s.
Under the program, BCBSMA will review evaluation and management claims from providers who consistently bill visits at the highest complexity levels (4 and 5) to ensure that the services billed match the severity of the conditions reported. Reimbursement may be reduced if the insurer decides that overcoding has occurred.
BCBSMA estimates that 1% to 2% of primary care physicians and 3% to 4% of specialists in its network will be subject to the expanded process. Clinicians can submit additional documentation and appeal to have claims reinstated as originally billed.
The company said the goal is to focus on “a very small group of outliers” while minimizing the administrative burden for most providers.
“Overcoding is a problem. Both CMS and the Office of Inspector General have identified E/M services as a high-risk area for overcoding and improper payments,” a spokesperson for BCBSMA said. “Level 4 and 5 E/M coding in both office and emergency room settings has risen significantly in recent years.”
The insurer noted that the average cost per office visit has increased by 30% since 2021, which it says is driven in part by the rise in higher-level codes. BCBSMA attributed part of the trend to the growing use of coding optimization tools and programs designed to boost physician revenue, including AI-powered scribe technology that markets itself as a way to “improve coding.”
Many insurers have been flagging an increase in high-acuity claims and overall utilization as a growing financial headwind in recent quarterly earnings calls, arguing that providers are deploying new AI-powered coding programs and enhanced auditing teams to manage margins. Health systems have pushed back on that narrative, arguing that the real issue lies not in overcoding, but in increasingly adversarial payer-provider relationships and administrative red tape.
“We sought a solution that would target only outlier providers and limit the need to do administratively burdensome manual documentation audits,” BCBSMA said. “We have an obligation to our members and employer customers to be good stewards of their premium dollars, and that includes ensuring our clinical partners are coding and billing appropriately.”
BCBSMA has recently been under severe financial strain. The company offered a voluntary separation program to about 18% of its employees in October and it reported a net loss of $223.6 million in 2024.
