Laboratory Economics: Downcoding of Testing by MA Plans Resulting in Under-Reimbursement
The following timely article is reprinted with permission from Laboratory Economics, Jondavid Klipp, editor. We thank him for granting us the right to share valuable insights on this vital topic. Learn more about Laboratory Economics at www.laboratoryeconomics.com
For example, some MA plans, in determining reimbursement to clinical laboratories, will downcode testing for chlamydia (87491), gonorrhea (87591) and trichomonas (87661) to multiple organism infectious disease panels (87801). This widespread downcoding is believed to be primarily driven by MA payers seeking cost savings, says White.
“Medicare Advantage programs are basically doing half of the Medicare population’s claims adjudications,” she explains. “It appears that many of these plans are downcoding to reduce reimbursement to labs.”
While traditional Medicare has been fairly consistent in following AMA and NCCI coding guidelines, MA plans are taking a different approach to how they view coding and reimbursement, says White. This raises compliance issues that need to be addressed.
“CMS requires MA plans to follow national coding guidelines (CPT, HCPCS, NCCI) and ensure payments reflect medically necessary services as billed,” says White. “For contracted providers, the negotiated contract governs payment. If the MA plan downcodes contrary to agreed rates for accurate CPT codes, I believe this is a breach of contract that the provider could dispute through the plan’s internal appeal process.”
If the MA plan downcodes contrary to agreed rates for accurate CPT codes, I believe this is a breach of contract that the provider could dispute through the plan’s internal appeal process.
Lâle White
Executive Chairman and CEO
Complicating this issue is the fact that NCCI coding guidance is not always consistent with CPT coding guidance established by the American Medical Association. White and many others in the lab industry believe that since AMA establishes CPT codes, its requirements should override those of the NCCI, which is developed by the Centers for Medicare and Medicaid Services (CMS). This inconsistency was raised in a December 2025 Laboratory Economics article about PCR testing for UTIs.
“This is something that needs to be addressed,” says White. “The AMA guidelines and NCCI can’t be out of sync like this.”
In instances where laboratories believe they have been underpaid, they can appeal. However, White notes that appeals can be expensive and time-consuming.
“Labs need to be judicious in how many appeals they do and pick the ones that are most likely to be overturned,” she says. “These are appeals that I think the labs should make because they need to make a point and ensure that coding interpretations are accurate.”