Please refer to Part I of this blog and podcast for important context.  

Recently, several states have been in the spotlight for their attempts to undermine clinician reimbursement, specifically regarding issues around the Prudent Lay Person (PLP) Standard. These states are downcoding medical claims based off the final diagnosis code, which is harmful for both the patient and the clinician.  

In April 2020, Virginia developed a list of approximately 800 diagnosis codes specifically for Medicaid patients that allowed them to downcode emergency department visits, as they were deemed “non-emergencies”. More recently, Indiana has developed an autopay list, and Georgia has a list of restricted diagnosis codes, much like Virginia, where the final diagnosis codes are being downcoded to "non-emergencies" by insurance.

The problem with downcoding is that clinicians are being reimbursed at a rate significantly below what is appropriate based on the clinical encounter, and it infringes upon patients’ rights to receive emergency medical care under the PLP Standard.

The issue in Virginia persisted and ended up in litigation, where in April 2023 a federal district court ruled that the VA Medicaid policies were in violation of federal PLP Standards and neither the state nor CMS appealed the decision.

Every citizen has the right to receive emergency medical care, and these incidents of downcoding impact patients’ rights and clinician reimbursement. 

Listen to Part II of the Zotec Answers podcast episode now to learn more.