Cigna and about 450 other health insurers are using software programs that automatically restrict doctors’ fees, according to an article in The Wall Street Journal (July 31, 2002). The insurers say they are trying to keep health care costs down and prevent doctors from “padding” their claims. A survey, published in the Journal of the American Medical Association in 2000, reported that 39% of doctors admitted to exaggerating a patient’s condition, changing a patient’s billing diagnosis, or reporting non-existent symptoms ’sometimes or more often’ when billing insurers. In that same year, “the federal government won more than $1.2 billion in judgments, settlements or fines in healthcare fraud cases for just Medicare and the low-income insurance plan Medicaid alone.”

Doctors say that the automatic payment reduction has cost US physicians hundreds of millions in fees. The article gave examples in which insurers denied payment for an office visit if a procedure was also performed; for example, instead of paying $250 for an office exam and biopsy, Cigna paid $175 for the biopsy and refused to pay $75 for the office visit. The insurer says that the exam was part of the biopsy. Such policies have led 11 state medical societies and several physicians to file lawsuits against insurers for breach of contract.