In essence,…this law requires that all health plans must “accept and initiate the processing of all health care claims submitted by a physician pursuant to and consistent with the current version of the American Medical Association’s Current Procedural Terminology (CPT) codes, reporting guidelines and conventions and the Centers for Medicare and Medicaid services healthcare common procedure coding system (HCPCS).”

They must recognize the code and “all the associated material contained in the CPT Book” per the reporting guidelines and conventions definition promulgated by the American Medical Association (AMA)….

[This statute] then gives health plans the wide latitude to deny the service per their own in-house policy, but they cannot ignore the code/service by combining or bundling it with other services.

They must “accept and initiate” thereby processing the service as separate and distinct and, after denial if dictated by [this statute]; normal contractual provisions would then apply.

For example, a health plan bundles or combines a diagnostic test with an Evaluation and Management (E&M) exam service, claiming it is part of and incidental to the exam. However, plans ignore the fact that both the test and the exam have separate codes. Additionally, they are not being consistent with the current version of the American Medical Association’s CPT codes, reporting guidelines and conventions (all associated material contained in the AMA CPT book), which states that the “actual performance and interpretation of diagnostic tests or studies during a patient encounter are not included in the levels of E&M service.

Physician performance of diagnostic tests or studies for which specific CPT codes are available may be reported separately, in addition to the appropriate diagnostic code.” (Source: Evaluation & Management Services Guidelines – Page 3 – 2007 AMA CPT.)

Health plans must, therefore, accept (recognize) the code as separate and distinct and process as separate line items. They are then free to apply their own policies and may deny the service according to the dictates of [this statute].

Processing of health care claims: This subsection is intended to provide uniformity and consistency in the reporting of medical services and procedures as they relate to the processing of health care claims and is not intended to dictate reimbursement policy.

(2) Subject to the provisions of paragraph three of this subsection, a health plan shall accept and initiate the processing of all health care claims submitted by a physician¹ pursuant to and consistent with the current version of the American medical association's current procedural terminology (CPT) codes, reporting guidelines and conventions and the centers for medicare and medicaid services healthcare common procedure coding system (HCPCS) (emphasis added).

(3) Nothing in this section shall preclude a health plan from determining that any such claim is not eligible for payment, in full or in part, based on a determination that: (i) the claim is not complete . . .(ii) the service provided is not a covered benefit under the contract or agreement, including but not limited to, a determination that such service is not medically necessary or is experimental or investigational; (iii) the insured did not obtain a referral, pre-certification or satisfy any other condition precedent to receive covered benefits from the physician; (iv) the covered benefit exceeds the benefit limits of the contract or agreement; (v) the person is not eligible for coverage or is otherwise not compliant with the terms and conditions of his or her contract; (vi) another insurer, corporation or organization is liable for all or part of the claim; or (vii) the plan has a reasonable suspicion of fraud or abuse. In addition, nothing in this section shall be deemed to require a health plan to pay or reimburse a claim, in full or in part, or dictate the amount of a claim to be paid by a health plan to a physician.

CPT is a systematic listing and coding of procedures and services performed by physicians. Each procedure or service is identified with a five-digit code. The use of CPT codes simplifies the reporting of services. With this coding and recording system, the procedure or service rendered by the physician is accurately identified.

Inclusion in CPT does not represent endorsement by the American Medical Association of any particular diagnostic or therapeutic procedure. Inclusion or exclusion of a procedure does not imply any health insurance coverage or reimbursement policy.

The E/M section is divided into broad categories such as office visits, hospital visits, and consultations. Most of the categories are further divided into two or more subcategories of office visits (new patient and established patient) and there are two subcategories of hospital visits (initial and subsequent).

Furthermore, nothing in this section requires a health plan to pay or reimburse a claim or dictate the amount of a claim to be paid by a health plan to a physician.

Unfortunately, not all insurers use the CPT code in the same way. In fact, while many insurers use the CPT code as a base, they will add additional standards for determining how payment will be made for care provided to the patient. . . . This legislation will reduce hassles faced by physicians, their staffs and their patients when submitting claims for services rendered by creating uniformity and consistency among all insurers.