You open the dashboard. Denials are under control. The billing team says claims are getting paid. Nothing looks urgent.

But you still have a nagging question: Are we actually being reimbursed at the level we submitted—or are some E/M claims being paid at a lower level without showing up as denials?

That is the management problem behind E/M downcoding.

For a physician owner or practice manager, the point is not to learn how to code an office visit. It is to know whether your current reporting could miss a recurring reimbursement pattern—and what to ask your billing or RCM team to show you.

Think of denial rate like one vital sign. A normal reading is useful, but it does not rule out every other problem. In the same way, a healthy denial report tells you something important about your revenue cycle, but it does not necessarily tell you whether every paid E/M claim was adjudicated at the level originally submitted.

This article will help you answer four practical questions:

  1. Could this be happening in my practice?
  2. What should I ask my billing or RCM team to show me?
  3. How do I know whether I am looking at a real pattern or just normal payment variation?
  4. If I find a pattern, what should happen next?

First: what E/M downcoding actually means

E/M downcoding generally occurs when a payer changes a submitted evaluation and management service to a lower-cost level, resulting in payment at that lower level.

The American Medical Association's E/M downcoding resource describes the issue in those terms and discusses payer programs that reduce E/M levels, including programs that use automated claim-editing logic.

For practice leadership, the useful distinction is:

Denied claim: the claim or line is denied and usually enters a denial-management process.

Paid claim at a lower E/M level: the claim is paid, but the payer reimburses a lower level than the one submitted.

That second claim can be easier to miss because the word your team sees first may be paid, not denied.

Why this deserves attention now

Blue Cross and Blue Shield of Illinois and Blue Cross and Blue Shield of Texas both announced changes affecting certain professional E/M claims for commercial members, effective for dates of service beginning July 1, 2026.

The BCBS Illinois notice and the BCBS Texas notice state that when reviewed services do not support the E/M level billed, reimbursement will be made at a lower validated level. Both notices also say providers who disagree with the reimbursed level may submit medical records to support the claim.

These are payer-specific policies. They are not a new federal E/M rule, and they should not be generalized to Medicare, Medicaid, every commercial plan, or every Blue Cross entity.

BCBS Illinois was still offering provider education on these E/M claim-editing changes in September 2026, which makes this a current operational issue rather than a historical policy announcement.

MGMA also devoted a 2026 educational session to downcoding and the visibility problem created when a claim is paid at a lower level and does not move through a traditional denial workflow.

The question to ask your team is not "Are our claims getting paid?"

That question is too broad.

A better management question is:

"Can we see whether paid E/M claims are being reimbursed at the same level we submitted?"

You do not need to personally inspect every claim. You need your reporting or RCM team to be able to answer that question with evidence.

Ask for a representative review of paid E/M claims that shows, where the payer and your systems make the data available:

The purpose is not to create another giant spreadsheet. It is to answer one management question:

Is there a repeatable pattern that deserves attention?

What a meaningful pattern looks like

One unusual payment is not enough.

A pattern becomes more meaningful when you repeatedly see the same signals, for example:

This is similar to clinical decision-making in one important way: one isolated finding rarely tells the whole story. Repetition, context, and consistency make a signal more useful.

For management purposes, you are not trying to diagnose the claim yourself. You are trying to determine whether the pattern is strong enough to justify a closer professional review.

Do not assume every lower payment is downcoding

This is where practices can waste a lot of time if they jump too quickly from "payment is lower than expected" to "the payer downcoded us."

Payment differences can also come from:

So the management sequence should be:

Detect the pattern → identify the cause → decide whether action is justified.

Not:

See a lower payment → assume the payer is wrong → appeal everything.

That distinction matters because the right solution depends on the cause.

Five questions a physician owner or practice manager should ask

You do not need to tell your coder how to code. You do need to know whether your team can answer these questions:

1. Are we looking at paid E/M claims as well as denied claims?

If your reporting concentrates almost entirely on denials, ask how your team identifies paid claims where the adjudicated level differs from the level submitted.

2. Can we show the pattern by payer, plan, provider, and code family?

You are trying to see whether this is random noise or a repeatable issue.

3. Can we explain why the payment changed?

Ask whether the difference appears related to documentation, coding, contract terms, a payer policy, or another adjudication rule.

4. If the payer offers a review path, who owns it?

Someone should know when medical records, reconsideration, or an appeal is appropriate and who is responsible for that follow-up.

5. Is the pattern large enough to deserve management attention?

Not every variance deserves a project. Your team should be able to help you determine whether the pattern is isolated, recurring, or financially material enough to investigate further.

If those questions cannot be answered from your current reporting, the first problem may be visibility, not necessarily reimbursement.

If you find a pattern, separate it into one of three buckets

Before deciding what to do, determine which of these situations you are actually dealing with.

1. The adjustment appears appropriate

The payment difference is explained by documentation, coding, contract terms, or an applicable payer rule.

Management response: document what you learned and do not spend staff time fighting a payment that appears correct.

2. The pattern points to an internal issue

The review identifies a recurring documentation, coding, or workflow problem inside the practice.

Management response: assign the issue to the appropriate clinical, coding, or operational owner and correct the process prospectively.

3. The pattern appears to deserve payer follow-up

The documentation and coding support the level submitted, the payer policy applies, and the payer provides a route for additional review.

Management response: make sure the correct person owns the records, reconsideration, or appeal process, and track whether the same issue continues.

This is the practical value of the review: the practice stops treating every payment difference as the same problem.

Why this can affect revenue without turning every claim into a fight

The financial opportunity is not "appeal everything."

It is preventing a repeatable reimbursement variance from becoming invisible simply because the claims are marked paid.

If the issue is internal, correcting it may reduce future avoidable payment variance.

If the issue is payer-specific and the claim is supportable, the practice can focus follow-up on the claims that actually warrant it.

If the payments are correct, the practice avoids wasting staff time on a false problem.

All three outcomes are useful because leadership can make a better decision with the same basic information.

State rules are also changing—but do not assume they apply everywhere

Illinois enacted the Transparency in Downcoding Act, Public Act 104-0568 in 2026. The law takes effect January 1, 2028 and addresses matters including automated downcoding, notice, human review, and dispute processes.

That law is not a nationwide rule and is not yet an effective Illinois requirement in 2026.

State law, plan type, payer policy, contract language, and federal requirements can all affect what applies to a particular claim. Practices operating in more than one state should not assume that one state's protections or restrictions follow them everywhere.

The one thing to ask for after reading this

At your next billing or RCM review, ask:

"Show me whether any paid E/M claims were reimbursed at a lower level than we submitted, and tell me whether you see a repeatable pattern."

That question keeps you in the role you should be in: leading the practice.

You are not doing the coder's job. You are asking for the visibility you need to decide whether there is:

That is a much more useful answer than simply hearing, "The claim was paid."

Where Healthcode RCM fits

Healthcode RCM supports medical practices with defined-scope medical billing, coding, denials, and focused support for in-house RCM teams.

If your practice already has billing staff but you want a clearer view of a recurring reimbursement issue, In-House RCM Support may be an appropriate starting point.

If the review points to an ongoing coding need, Medical Coding is available within a defined scope based on the documentation provided by the practice.

The first step is not automatically outsourcing. It is understanding what problem you actually have.

This article is educational and does not replace payer policy review, contract review, coding guidance, or legal advice.

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