Medicare Reimbursement for Nephrology Services Increases Slightly

Butcher, Lola

doi: 10.1097/01.NEP.0000367971.29308.2f

Nephrologists are expected to see an overall 1% rise in Medicare fees in 2010, courtesy of the physician fee schedule that went into effect Jan. 1.

That modest change obscures some rather dramatic changes in the new schedule, not to mention the substantial wrangling that occurred after the Centers for Medicare and Medicaid Services (CMS) released its proposed schedule last July and before the final rule was issued in late October.

Although the changes amount to a 1% increase for nephrology rather than the 2% in CMS's original fee proposal, few are complaining. Nephrologists fared much better than some specialties. Cardiologists and radiologists, for example, are facing cuts of more than 10% over the next few years.

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So Long, Consultation Codes

The 2010 changes include one that has many medical specialties up in arms: the elimination of consultation codes.

“This is probably the biggest change that we've seen in years,” said David Doane, Director of Reimbursement for Dallas Nephrology Associates, one of the nation's largest nephrology practices.

Citing years of confusion over their proper use, CMS has eliminated the use of inpatient and outpatient consultation codes. Physicians will instead use new and established office visit, hospital visit, and nursing home visit codes.

CMS is attempting to make the change budget-neutral, meaning that the agency does not intend to save money on the move. To that end, the agency increased the pay rate for new and established office visits by about 6% and initial hospital and nursing facility visits by about 0.3%.

While some medical specialties worry that their fees will fall because of the move to office and inpatient visit codes, that is not particularly a concern for nephrologists.

“Financially, we don't think it will have a significant impact, predominately because of the complexity of the cases we see, which allows us to bill using the higher codes,” said Edward R. Jones, MD, President of the Renal Physicians Association.

According to an RPA analysis that assumes a complex kidney patient would be billed as a Level 3 initial inpatient visit, the pay rate will be 11% higher than for the previous Level 4 inpatient consult code. Similarly, the rate for a Level 5 new outpatient visit code is 2.7% higher than the previous Level 4 outpatient consult code.

Mr. Doane agreed that the change will not have a big financial impact on his practice, but he worries about the administrative challenges that will accompany it.

For one thing, CMS must issue a modifier that distinguishes the admitting physician from the nephrologist, who will also be using inpatient visit codes—and nephrologists will have difficulty getting paid if the admitting physician does not use the modifier correctly.

For another, CMS has not allowed sufficient time to educate practice administrators and physicians about the documentation needed to support the new coding system, Mr. Doane said.

“It's going to require us to reeducate physicians, and we don't have a good grasp yet on how we're going to do that,” he said.

Additionally, the fact that many private payers intend to continue using consultation codes will complicate coding. Representatives of WellPoint, Cigna, Aetna, UnitedHealthcare, and some large regional health plans all said their firms are studying CMS's decision and had not decided whether to follow its lead.

Dr. Jones, a physician with Delaware Valley Nephrology and Hypertension Associates in the Philadelphia area, expects private payers will eventually follow CMS, eliminating the need to bill different payers in different ways after the transition is complete. His disappointment with the loss of consultation codes is more philosophic than economic.

“A consultant, particularly in nephrology, spends a great deal of time pulling together a lot of information, calling other physicians, spending 80 minutes or so on a consult, developing a body of knowledge, and detailing that in a note,” he said.

“It's a matter of intellectual property. We think the effort that is being put into consults is being devalued, and that's a pretty important thing. Our concern is whether some specialists, or even nephrologists, may say, ‘Why am I doing all this stuff if I'm not going to get reimbursed for it?’”

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Kidney Disease Education

CMS will start paying for kidney disease education services, but only for patients with Stage 4 CKD. In its rule, CMS pointed to a legislative mandate that limits payment in this way, but the restriction does not sit well with nephrology practices.

“That doesn't make a lot of sense because many patients aren't referred to us until Stage 5, and they're going to be excluded,” Mr. Doane said. “I think the opportunity that this could have had has really been diminished by that.”

The education sessions must be face-to-face, one-hour long, and provided either individually or in a group setting with up to 20 patients at a time. Eligible providers are physicians, nurse practitioners, physician assistants, and clinical nurse specialists, as well as particular facilities, but renal dialysis facilities are excluded.

Originally, CMS had proposed paying for education services at rates similar to those for medical nutritional therapy, but RPA and others protested. The final rule set the pay at about $108 an hour for an individual session, instead of the $23 an hour that CMS had proposed.

“I think nephrologists are now going to start bringing CKD education back in house because now they'll get paid for it,” Dr. Jones said. “It will be an increased benefit to the patient.”

Whether the new pay rate is sufficient to make CKD education a new revenue stream for practices remains to be seen.

Mr. Doane said his practice will continue to provide education services, as it has done without payment heretofore, because education improves patient management.

But he is not sure that establishing group sessions staffed by nurse practitioners or other highly valuable personnel as educators will be worth the payment CMS will provide.

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Practice Expense Recalculation

CMS's decision to use new practice expense data, gathered through a multispecialty Physician Practice Information Survey (PPIS), to determine relative pay rates for various physician specialties will mean slight increases for nephrologists.

The use of data from the survey, which was conducted in 2007 and 2008 under the leadership of the American Medical Association, has been controversial because it will significantly redistribute CMS pay among specialists. Although the majority of specialties will see their CMS pay rates increase because of the change, a few— including cardiology and radiology—face steep cuts because of it.

For nephrology, use of the new practice expense data means CMS pay rates increase for almost all dialysis services, although the increases will be phased in over four years.

For example, CPT code 90960 (end-stage renal disease-related services monthly for patients 20 years and older; four or more face-to-face physician visits per month) will increase by 2.4% in 2010 and by a total of 3.9% by 2013, according to the RPA analysis.

While interventional services will experience lower pay rates, the news is not as bad as it looked when CMS made its original proposal. Overall, pay for services provided by interventional nephrologists will experience cuts in the 6% range, rather than the overall decrease of more than 20% that was proposed before nephrology advocates met with CMS.

“When we talked to CMS, we were able to point out that the really highquality care that interventional nephrologists deliver is keeping patients out of the hospital, keeping them in the dialysis chairs, and saving the Medicare program a fairly significant chunk of money,” Dr. Jones said.

“Our concern had been that, if those draconian rates had gone into effect, there would be some interventional suites that would have had to close down.”

At Dallas Nephrology, Mr. Doane said he expects the new rates for interventional services will translate into an 18% cut, based on the mix of procedures performed there. To circumvent that reduction in the long run, the practice intends to re-license its vascular centers, which were built to meet ambulatory surgery center (ASC) standards, as ASCs.

“Then we pretty much stay whole,” he said.

However, the practice will be hurt by the reduced rates for radiology services, particularly bone-density testing.

“We're going to take almost a 40 percent hit on bone-density reimbursement in 2010, and that's really making us rethink this program,” Mr. Doane said. “We'd like to invest in new equipment, but we're going to have to wait and see where this goes because I don't think we're going to be able to afford to.”

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E-Prescribing and Quality Reporting

Nephrologists can boost their Medicare pay by up to 4% by participating in two CMS incentive programs, both of which are continuing from last year.

The Physician Quality Reporting Initiative (PQRI) is a pay-for-reporting program that offers a 2% bonus payment for nephrologists who successfully report certain quality measures. CMS expanded the list of quality measures in the program for 2010, but the new measures do not pertain to nephrology.

Additionally, CMS continues to offer a 2% bonus to physicians who use e-prescribing.

© 2010 Lippincott Williams & Wilkins, Inc.