No More Consults? CMSs Proposal for 2010

July, 2010

By now you've seen the headline!  CMS proposes to eliminate payment for consults in 2010!  Why?  How will they pay for the services?

First, the AMA develops and owns CPT® codes, and only they can add, delete, or change the definition of CPT® codes.  However, Medicare and private payers develop reimbursement policies, and each payer can and does set their own payment rules.  Medicare, in particular, tends to take the lead and other payers adopt their policies, for better or worse.

CMS (the Center for Medicare and Medicaid Services) develops and proposes policies for physician payment each year in their Proposed Physician Fee Schedule Rule, released in the summer of each year, and in their Final Physician Fee Schedule Rule, released in the fall of each year.  There is an article about the Physician Fee Schedule in the Codapedia encyclopedia.

In July of 2010, CMS's Proposed Rule contained a real bombshell.  They proposed to stop paying for the consults, and increase the RVUs for new and established patient visits, and initial and subsequent hospital visits.  Why?  CMS believes that physicians have never understood properly the issue of transfer of care.  The Proposed Rule starts with a historical look at the consult codes, including CMS and AMA changes and revisions, as well as discussion of the OIG's 2006 report, which indicated that Medicare allowed approximately $1.1 billion more in 2001 than it should have, for services billed as consults.  The OIG report determined that approximately 75% of services paid as consults didn't meet all of program instructions. (level of care, didn't meet the definition of a consult, lack of documentation.)

In addition, CMS doesn't feel that the AMA has helped them in defining a transfer of care.  Here are a few quotes, "However, there remained discrepancies with unclear and ambigous terms and instructions in the AMA CPT® consultation coding definition..." and "There is an absence of any guidance in the AMA CPT® consultation coding definition that distinguishes a transfer of care service..."

The CMS proposal is to stop paying for these codes.  On an outpatient basis, primary care and specialty physicians would bill new or established patient visit codes, and the RVUs for these would increase 4-6%.  This would clearly benefit physicians who now bill more office visits than consults, and would be a revenue decrease for those physicians who currently bill more consults than new or established patient visits. 

For inpatient services, CMS would increase the RVUs for initial and subsequent hospital visits by about 2%.  All physicians would use the initial hospital visit codes (which do not have the word admission in their CPT® description) for their first visit with the patient during an inpatient stay.  The admitting physician would use a modifier to indicate that their visit was the admission.  (This would work be a benefit for hospitalists, who currently cannot bill consults for their first visit when managing the medical problems of post op patients.)

This rule is in the comment period right now.  That is, anyone can comment to CMS until the end of August about this proposal.  CMS will finalize the rule for 2010 in the Fall.

One complication:  the AMA does not have time to remove or change any codes for the 2010 book as of now, if they agreed with the policy, which seems unlikely.

CMS often proposes changes in the Proposed Rule, which do not become effective that year.  They tend to reappear in the proposed rule the next year, and are then implemented.

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