No More Consults? Understanding the Changes to Consultations

On November 25, 2009, the Center for Medicare and Medicaid Services (CMS) announced, via the Federal Register (FR), that beginning January 1, 2010, payment for consultation services would cease, except for services provided via telehealth. This is one of the most startling changes in payment policy that CMS ever has instituted. It will affect every physician — but the specialty physicians will bear the burden of the policy change because specialists are historically the largest providers of consultation services.

Medicare had defined a consultation as “an evaluation and management (E/M) service furnished to evaluate and possibly treat a patient’s problem(s). It can involve an opinion, advice, recommendation, suggestion, direction, or counsel from a physician or qualified NPP at the request of another physician or appropriate source” (Internet-Only Medicare Claims Processing Manual, Pub. 100-04, chapter 12, §30.6.10 A). Consultations also always have required a request from an appropriate source, a rendering of an evaluation and management service, and a response back to the requesting source.

In 1999, CMS began attempting to clarify the physician community’s questions regarding the differences between a consultation and other patient E/M services by the development of a workgroup comprised of internal medical officers. In August of that same year, Medicare published in the Claims Processing Manual examples of both valid consultation services and vignettes of clinical services that did not meet the criteria for a valid consultation based upon Medicare’s definition and payment policy. This first attempt at clarification succeeded only in creating more questions from the provider community. In both January and September of 2001, Medicare made revisions to the manual to try to clarify further the consultation payment policy. Because the national policy could not address every possible clinical scenario, local Medicare carriers varied widely in their interpretations. Thus, payment or denial of consultation services was not consistent throughout the country creating even more provider confusion.

The Office of the Inspector General (OIG) placed physician services on its annual Work Plan from 2002 through 2004. The audit covered claims processed and paid in the year 2001. The OIG published the report of its findings in March of 2006. The report was entitled “Consultations in Medicare: Coding and Reimbursement” (OEI-09-02-00030). The report found that approximately 75 percent of all services that Medicare had paid as consultation services in 2001 did not meet the criteria that Medicare had outlined in its payment policy. This resulted in overpayment of approximately $1.1 billion that year alone. In this report, the OIG recommended that CMS concentrate on provider education regarding the criteria and proper billing for consultation services, with emphasis on the higher levels in the code set.

Prior to the publication of the OIG report, the American Medical Association (AMA) Current Procedural Terminology (CPT®) Editorial Panel chose to delete the Follow-up Inpatient Consultation and Confirmatory Consultation code sets. This change was effective January 1, 2006. Medicare published a Medlearn Matters article that became effective in January of 2006 that attempted to explain the CPT changes and further educate the provider community on the criteria of the consultation code set payment policy as recommended by the OIG.

Medicare states in the current Final Rule that these educational efforts all have been unsuccessful. The rule also states that the provider community has expressed to Medicare through physician groups that it disagrees with the Medicare interpretation and guidance for the documentation of both transfers of care and consultations. Medicare further states that AMA CPT® has not given any guidance regarding the difference between a consultation and a transfer of care, adding to the confusion.

Because of the aforementioned 10-year educational struggle, Medicare proposed and adopted the policy of ceasing to pay for consultation services entirely. The change was budget neutral: Medicare has increased the work RVUs for new and established office visits by 6 percent. Medicare also has increased the work RVUs for initial hospital and facility visits by 2 percent.

The proposal was published on July 13, 2009, and public comments were accepted until August 31, 2009. The comment responses were published in the Final Rule. Each of the comments submitted by the provider community were denied by Medicare ,except for the suggestion that Medicare also increase payment for 10-day and 90-day global surgical period procedures to cover the cost of pre- and post-operative visits. Medicare traditionally has increased these rates whenever they increase the rates for Evaluation and Management services. Medicare did not increase the rates for the surgical services themselves, only the rates for the evaluation and management portion of the global period. This translates to very small increases in payment for these global services; the evaluation and management portion of the global surgical period is quite small.

Beginning on January 1, 2010, all former office consults will need to be coded as either new (99201-99205) or established (99211-99215) office visits, as appropriate. When choosing the proper code for billing purposes, providers should remember to use the CPT® and Medicare guidelines for the current code set, and not for the outdated consultation code set (Note that consultation codes still appear in the 2010 CPT® manual, but the codes are not valid for Medicare). When billing for inpatient hospital or nursing facility consults, providers will need to utilize an initial inpatient hospital care (99221-99223) or initial nursing facility care (99304-99306) code. Medicare will establish by January 1, 2010, a modifier (predicted to be “AI”) to be used by the attending physician to indicate the initial service, and distinguish that physician service from other initial care codes reported by “consulting” physicians.