The Dangers of Downcoding

danger of downcoding

While emergency physicians perform procedures and tests based on their patient’s condition, insurance companies downcode, often based upon the final diagnoses and, in some cases, for no bonafide reason. Insurance carrier motivation is frequently just a means of reducing reimbursements. 

Payers get away with the act of downcoding, which results in underpaying physicians and hospitals. 

With these practices in place, prolific revenue loss can damage the accessibility and quality of life-saving care. 

Health insurance companies have been taking advantage of their size, using downcoding to exploit healthcare providers. Allia Group specializes in recovering underpayments, fighting back so emergency physicians and physician groups can regain the revenue they deserve.


Payers continue to cut providers’ reimbursements by downcoding. One method involves the use of claim-editing software algorithms which downcode without review of clinical records or requests for additional information. The AMA has instructed physicians on how to fight back against these downcoding schemes.

To further address this issue, the AMA has also released a resource called the Payer Evaluation and Management (E/M) Downcoding Program. This document provides physicians with the tools they need to recognize payer downcoding and information about the appeals process.

The AMA advocates for various principles related to downcoding. These include notification for algorithm-based claims that often go without request for information or review of records. Second, the AMA recommends physicians’ ability to provide medical records before payments are reduced by downcoding.

Recognizing and taking action against downcoding is integral to leveling the playing field for providers and payers and stopping harmful physician practice revenue cuts.

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