Anthem Refuses to Budge on Blended Rate Policy

The Academy recently joined a team of medical specialty societies and organizations to go to bat for physicians against a blended rate policy implemented by Anthem Blue Cross Blue Shield of Ohio last fall, but the team has made little progress to date in resolving the dispute.

"Anthem regional executives refused to discontinue the policy until the company can devise a solution that allows them to maintain their profit margins," said a May 4 joint statement issued by the Ohio State Medical Society.

The statement was released after representatives from 11 medical organizations, including the AAFP, American Academy of Pediatrics, American Osteopathic Association, AMA and several state medical societies, met with Anthem officials on May 1 at OSMA headquarters in Hilliard, Ohio.

The organizations scheduled the meeting in hopes of persuading Anthem to discontinue blending payments for Level 3 and Level 4 office visits into a single rate. Anthem initiated the payment practice in southern Ohio after detecting what it called a significant increase in the number of Level 4, or 99214, claims being submitted by some physicians.

Trevor Stone, an AAFP private sector advocacy specialist, represented the Academy at the meeting. He said the AAFP will continue to advocate on this issue by insisting that Anthem -- and all health plans -- follow CPT guidelines that stipulate separate physician payment levels for Level 3 and Level 4 visits.

"We're disappointed with the meeting with Anthem," said Stone. "This appears to be a poorly thought-out policy based solely on profits to Anthem. Paying a Level 4 visit at a Level 3 rate devalues the level of the physician's work in the higher-level office visit."

OSMA President Molly Katz, M.D., also expressed disappointment with the meeting's outcome. "This was a missed opportunity for Anthem to work with physicians to promptly resolve an acknowledged problem," she said in the joint statement. "We had expected Anthem's decision makers to come to the meeting with a proposal for resolving the blended rate policy issue. Anthem had no proposal, had no answers to direct, straightforward questions asked in advance by the OSMA, and did not bring staff with coding expertise to facilitate a reasoned response."

Anthem did leave the door open for further discussion on the issue by agreeing to "seek review of a sample complement of outlier coding patterns by external, impartial coding consultants," said the statement. The results of that review will be shared with OSMA.

Paul Beckman, vice president of Anthem's southern Ohio health service area, attended the meeting and responded to questions about it via e-mail: "About all I can say right now is that Anthem Blue Cross and Blue Shield values its relationships with physicians and physician organizations, and we want to be responsive to their needs," said Beckman "We have met with a number of local and national physician organizations and societies, including the Ohio State Medical Association, so that we can address any concerns. Once we've completed our discussions with these organizations, I would be happy to provide more detail."

Stone provided further background on Anthem's argument for maintaining its blended code policy, citing figures that Anthem presented to the same players during a similar March meeting. According to those materials, Anthem estimates that 75 percent of physicians will see either no change in payment rates or small overall increases in revenue with a blended rate. Anthem also estimates that it will pay out an additional $500,000 to physicians in 2006 compared with 2005 if the volume of Level 3 visits this year is consistent with the number of Level 3 visits paid out in 2004.