Downcoding Update:

One of the Illinois Psychiatric Society’s highest priorities continues to be addressing Blue Cross and Blue Shield of Illinois’ automatic downcoding of Evaluation and Management (E/M) services. Since BCBSIL implemented its new claims-editing process on July 1, 2026, IPS has heard directly from members about the financial and administrative impact on psychiatric practices. We are actively working with our state and national partners to address these concerns.

Breaking News: IPS Members Featured in Chicago Sun-Times

The issue is now receiving significant public attention. The Chicago Sun-Times published an article highlighting the impact of BCBSIL’s downcoding policy on physicians, mental health providers, and patients. Several IPS members participated in the reporting and shared their firsthand experiences. The article reports that one Chicago practice experienced approximately 2,400 claims being reduced in July alone, highlighting the significant financial and administrative burden created by the policy.

IPS has since submitted a Letter to the Editor in response to this article.

IPS Is Taking Action:

IPS has established a dedicated task force focused on supporting members and addressing BCBSIL’s downcoding practices.

We continue to work closely with the Illinois State Medical Society (ISMS) and the American Psychiatric Association (APA), while our partners are also engaging with the American Medical Association (AMA) and the Illinois Department of Insurance (DOI).

Our efforts along with our partners include documenting the impact on psychiatrists, communicating with BCBSIL, advocating for fair and transparent claims processing, and pursuing state and national solutions.

We have sent a letter directly to BCBSIL and have worked with APA directly to prepare an additional letter to BCBSIL along with support from American Academy of Child and Adolescent Psychiatry and the Illinois Council of Child and Adolescent Psychiatry. We have also worked closely with APA and 4 other district branches (DB), who have also been affected by these downcoding policies, to prepare a letter to Health Care Service Corporation that oversees BCBS for those 5 states. See the letters attached in the side panel of this page.

What Downcoding Can Mean:

Automatic downcoding can result in:

• Payment for a lower level of care than was provided.

• Significant uncompensated time spent identifying and appealing claims.

• Increased administrative and financial strain on practices.

• Potential reductions in physician participation with insurance plans.

• Threats to access to psychiatric care.

Important Legislative Update

Illinois enacted the Transparency in Downcoding Act (Public Act 104-0568) in July 2026. The law provides new protections and transparency requirements related to downcoding but does not take effect until January 1, 2028. That makes it particularly important that we continue documenting and addressing the impact physicians are experiencing now.

If You Have Experienced Downcoding:

‍If you believe a BCBSIL claim was inappropriately downcoded:

1. ‍Dispute the claim through Availity.‍ ‍BCBSIL makes electronic claim reconsideration available through Availity Essentials for applicable commercial claims. Under Claim Status & Payments → Claim Status, locate the affected claim and, when available, select “Dispute Claim.” Submit supporting documentation, including the clinical note when appropriate.

2. File Complaints with DOI. As we continue to work on this, we still encourage members to file a complaint with DOI in addition to filing appeals directly with BCBS on individual claims:  File complaints with the Department of Insurance here: Understanding the Provider Complaint Process. You will receive a case number to track your complaint. The more providers who report these issues, the stronger the case for regulatory action.

3. Keep Documentation.‍‍ Save the original E/M code, paid code, ERA/EOB, adjustment or remark codes, correspondence, documentation submitted, and appeal outcome

4. Share your Experience.

   • Member examples are critical to helping us identify patterns and demonstrate the scope of the problem. Member Survey. Your feedback will help strengthen our advocacy efforts and document the impact on psychiatric practices. APA has also sent out a similar survey. Please feel free to reply to both, if you have time.

   • Reach out to APA via their practice management helpline email – practicemanagement@psych.org. APA is working alongside the American Medical Association on this issue, and member reports help strengthen national advocacy efforts.

‍Do not wait to dispute affected claims. Starting the process promptly allows you to begin the applicable review and appeal process.

‍If You Have a Billing Team: Ask your billing team or billing vendor to:

• ‍Run a report of BCBSIL claims billed since July 1, 2026, particularly 99214 and 99215, and compare billed versus paid codes.

• Look specifically for 99214 paid at the 99213 rate or 99215 paid at a lower level.

• Review remark and adjustment codes for downcoding indicators.

• Determine whether BCBSIL requested clinical documentation before changing the reimbursement level.

• Run this report monthly, rather than as a one-time review.

• Ask your billing vendor whether they are seeing similar patterns across other clients.

‍Please ask your billing team or vendor to run this report this week.

IPS Is Working for You

IPS understands the frustration this issue is creating for members. Psychiatrists should be spending their time caring for patients—not fighting automated claims decisions.

We are working hard on your behalf and remain actively engaged with ISMS and APA, with our partners also working with the AMA and Illinois Department of Insurance, to ensure the experiences of Illinois psychiatrists are heard. The participation of IPS members in the Chicago Sun-Times coverage demonstrates the importance of bringing these experiences into the public conversation.

Please continue to share your experiences, track affected claims, complete the IPS survey, and report problematic claims. The more information we have from our members, the stronger our advocacy will be.

IPS will continue to push for fair reimbursement, transparency in claims processing, and—most importantly—continued access to high-quality psychiatric care for Illinois patients.