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Health Net Announces Significant Policy Changes to Medicare Advantage and Medi-Cal Managed Care Product Lines

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Health Net has recently published a Provider Update advising it will implement several new payment policies for its Medicare and Medi-Cal lines of business, effective May 16, 2018. The new policies propose to:

  • Reduce reimbursement of evaluation and management (E&M) services when billed with modifier 25 under the following circumstances:
    • When a minor surgical procedure code (0 or 10-day global period) is reported on the same day as an E/M code by the same physician, payment for the E/M code will be reduced by 50 percent.
    • When a preventative/wellness exam and a problem-oriented E/M are billed during the same encounter, payment for the problem-oriented E/M code will be reduced by 50 percent.
  • Reduce reimbursement for level 4 (CPT 99284) and level 5 (CPT 99285) emergency room services that are billed with what Health Net deems a non-emergent diagnosis to a level 3 (CPT99283) contracted rate.
  • No longer honor or reimburse for consultation codes (99241-99255). Instead, physicians will be required to bill for the E/M code that best describes the service provided.

Health Net's proposed policy change on modifier -25 follows Anthem Blue Cross' attempt to implement a similar policy, however, due to overwhelming opposition from organized medicine, Anthem announced it rescinded the policy before it was implemented.

The proposed policy to reduce reimbursement on some high-level emergency room services it deems were not emergent is on the heels of Anthem's controversial policy decision in other states not to cover ER visits if it deems the medical condition was not an emergency.

The Health Net Update states the policy changes "…follow the Centers for Medicare and Medicaid Services (CMS) National Correct Coding Initiative (NCCI) guidelines and will impact providers who are coding outside of fair and appropriate use."

The California Medical Association is very concerned with the adverse impacts these new policies will have on physician members and has raised concerns with Health Net and noting only one of the four changes actually align with CMS guidelines.

Physicians are urged to thoroughly review and assess the impact any proposed modifications to their contract would have on their individual practices. To assist physicians in analyzing the modifier -25 change, CMA has developed a simple worksheet that will help calculate the net financial impact to their practice resulting from this change. The Modifier -25 financial impact worksheet is available free to CMA members at www.cmanet.org/ces.