Effective for dates of service beginning July 1, Blue Cross and Blue Shield of Texas (BCBSTX) expanded its claims editing and review process for office, inpatient, and outpatient E/M services provided to members of commercial plans. Under the policy, BCBSTX may reimburse a claim at a lower E/M level if its review determines that the services billed do not support the submitted level of service.
BCBSTX states that its reviews will follow American Medical Association guidelines for determining E/M levels and medical decision-making. Physicians who disagree with a payment adjustment may submit medical records supporting the E/M level originally billed. The insurer’s current Evaluation and Management reimbursement policy recognizes both medical decision-making and total time on the date of the encounter as bases for selecting office and outpatient E/M levels.
The change is particularly relevant to psychiatric practices because psychiatrists frequently bill E/M services for medication management, including encounters in which psychotherapy is also provided. BCBSTX’s psychiatry and psychotherapy coding policy recognizes psychotherapy add-on codes 90833, 90836, and 90838 when psychotherapy is performed with a separately identifiable E/M service. In those encounters, the E/M service is reported as the primary code and may therefore be subject to BCBSTX’s E/M claims-review process. BCBSTX has not indicated that the psychotherapy add-on codes themselves are being downcoded.
Psychiatrists who provide medication management with psychotherapy should therefore review remittance information carefully for claims with dates of service on or after July 1. Documentation should separately support the E/M service and the psychotherapy service under applicable coding rules.
The Texas Medical Association (TMA) opposes unilateral downcoding and would monitor the BCBSTX policy’s effect on Texas physicians and practices. TMA had previously challenged a similar policy announced by Cigna.
The Texas change is not a nationwide Blue Cross Blue Shield policy. It is, however, part of a multistate initiative among Blue plans operated by Health Care Service Corporation. Plans in Illinois, New Mexico, Oklahoma, and Montana issued substantially similar notices for July 1. New Mexico’s notice also applies to Turquoise Care Medicaid members and many commercial plans.
The American Medical Association opposes payer programs that rely exclusively on software, algorithms, or other methods—without review of the patient’s medical record—to deny or downcode E/M services. Its practice resource on payer E/M downcoding programs advises practices to watch remittance advice and compare actual payments with expected amounts because the billed code itself may not always change.
Maryland regulators stated in an April 7 bulletin that state prompt-payment law prohibits a payer from modifying a submitted service code based on its own assessment before obtaining the information needed from the provider to justify the change.
Illinois enacted the Transparency in Downcoding Act on July 10. Effective January 1, 2028, the law requires downcoding determinations to be made or reviewed by a natural person, bars downcoding based solely on diagnosis codes, requires notice and an explanation, and establishes dispute protections.
Virginia’s 2026 legislation requires notice when claims are downcoded, disclosure of relevant adjustment and remark codes, a dispute process, batch disputes for claims involving an individual patient, and natural-person review of dispute decisions.
In California, Anthem Blue Cross extended its pause on a separate automatic E/M downcoding policy through at least September 1, 2026, while regulators continue their review.
Review payments closely. Monitor remittance information for E/M claims with dates of service on or after July 1, particularly higher-level services and encounters combining E/M and psychotherapy.
Document the selected level. When coding by medical decision-making, clearly document the problems addressed, data considered when applicable, and management risk. When coding by time, document total time and the work counted under applicable CPT guidance.
Challenge unsupported reductions.If BCBSTX reimburses a lower E/M level and the original code is supported by the documentation, submit the relevant medical records and follow BCBSTX’s applicable claim reconsideration or dispute process.
Track patterns. Record the codes affected, frequency, financial impact, reason codes, and results of reconsiderations or appeals. Aggregated practice data may help medical societies and policymakers evaluate the policy’s impact.
TSPP will continue to monitor the BCBSTX policy and broader state and national efforts addressing payer-initiated downcoding.
Claim Editing Changes for Evaluation and Management Services, Effective July 1, 2026 — Blue Cross and Blue Shield of Texas
Primary BCBSTX notice describing the July 1 change and medical-record submission option.
BCBSTX to Implement Downcoding Policy July 1 — Texas Medical Association
Texas physician-advocacy summary and TMA response.
Payer E/M Downcoding Programs: What You Need to Know — American Medical Association
Practice guidance for identifying and responding to payer downcoding.
Bulletin 26-9: Prompt Payment of Claims—Downcoding Practices Prohibited — Maryland Insurance Administration
State regulator interpretation issued April 7, 2026.
Public Act 104-0568: Transparency in Downcoding Act — Illinois General Assembly
Illinois statutory protections effective January 1, 2028.
Editorial note: This article summarizes publicly available payer, medical-association, and government materials as of August 12, 2026. It is not legal advice or a substitute for payer contracts, current CPT guidance, or individualized coding advice.