ARTICLE IN BRIEF
The article discusses the impact that the latest rounds in cuts for EMG codes will have on individual, group, and academic neurology practices.
This year's devastating payment cuts to critical neurological services — imposed upon the field by the Centers for Medicare & Medicaid Services (CMS) at a time when many neurology practices and academic departments are already financially vulnerable — is likely the most serious threat that has ever faced our profession. It may also help propel a neurology work force crisis, already poised on the brink of disaster.
The most critical losses are to nerve conduction velocity (NCV) CPT codes, which are expected to see reductions of 55 percent to 66 percent of 2012 values. The extent of the damage on the financial bottom line will depend on the percentage of electrodiagnostic testing to total revenues performed by each practice or department.
Medicare reductions can be calculated based on Relative Value Units (RVUs), but those of private payers were not yet revealed at the time this column was being written. Unlike the CMS elimination of the consultation codes in 2010, the CPT codes used in 2012 will no longer be available to payers through the 2013 CPT manual and they all will need to assign new values to their 2013 counterparts.
FINANCIAL PROJECTIONS: OLD CODES TO NEW
Business administrators throughout the country have begun to make financial projections based on estimations that convert old codes to new ones. [See the table, “Changes in Billing Values.”] Joanne S. Johansen, chief operating officer of Savannah Neurology Specialists in Georgia, is certified as a professional coder and a medical practice executive; she ran projections with her staff as soon as they were notified about the cuts. “It looks like a 45 percent reduction in revenues from this department, which comes to $352,000,” she said. Her adult and pediatric neurology group — a newly-merged practice which includes 11 physicians and four physician extenders — will need to make substantial modifications in order to address the losses.
“In the past, we accommodated our physicians by allowing them to designate specific electromyography (EMG) machines for their use; but in order to streamline operations, we will now be booking them a room, and they have agreed to use whatever machine is in it,” she said. “The practice also intends to expand EMG testing to branch offices in order to increase their numbers, as well as to pursue new revenue streams. For example, after offering stroke telemedicine services for several years, we are now extending the network to do other neurology consults to leverage the use of the available equipment.”
Johansen contends that the expansion will increase their new patient visits and provide opportunities for referrals to their office when testing is medically necessary. The practice is also considering reducing expenses by laying off a part-time technician, if revenues fail to continue to justify the current level of staffing, and adjusting physician salaries if it becomes necessary.
The Dec. 6 Neurology Today article, “DEATH BY A THOUSAND CUTS: Medicare Slashes Neurology Code Reimbursements — Neurology Takes a Hit,” reported that overall CMS cuts will result in an estimated 7 percent decrease, according to the final rule on the Medicare Physician Fee Schedule issued by CMS in November 2012. But that figure translates to a 14-20 percent cut in take-home pay, unless expenses are dramatically slashed. Furthermore, it is a global estimate and does not reflect the damage to practices that perform significant numbers of EMGs.
William S. Henderson, a Fellow of the American College of Medical Practice Executives and administrator of The Neurology Group LLP in Albany, NY — which was united by a merger in 2011 and has seven neurologists and three nurse non-physician providers — also spent time creating new financial forecasts for 2013. His projections were based on the 7 percent overall neurology reimbursement reduction and the 2 percent sequester reduction (postponed two months at the time of print), a 9 percent total. “The 9 percent reimbursement reduction may actually be greater for neurologists who perform a higher number of EMGs/NCVs than for the average neurologist,” he explained.
“Since most of the changes affect NCV and EMG by eliminating old codes and creating new codes at different RVU values, it is likely most insurers will follow these changes,” he predicted. “Even if a group has a ‘carve-out’ — procedures reimbursed at a different amount than the fee schedule otherwise would have allowed as a percentage of the CMS fee schedule — it is likely that they will follow these changes for previously designated procedure codes; these are for new procedure codes and so can fall out of such agreements,” he pointed out. “This may necessitate renegotiating with insurers, if — and it's a big if — they are willing to do so.”
“Most practices are already pretty lean in terms of the way they run; that percentage reduction of revenue is too great to overcome by simply trimming paper products, for example,” Henderson observed. Henderson, also co-chair of the board of directors of the Medical Group Management Association, pointed out that the two biggest expenses for practices typically have been staff wages/benefits and rent. “Most of us can't change our rental agreements on the spot, so the place to obtain savings relates to staff cuts of some type — it could be positions, but it could also involve benefits, hours worked, etc.,” he said. “At the moment, we are discussing a range of options to help ease our loss of revenue — I expect we will make a final decision of what we will do within six weeks. Whatever we choose, I expect our neurologists will make less than last year.”
THE IMPACT ON ACADEMIC PRACTICES
The EMG losses will also adversely impact neurology departments at academic institutions, which are already straddled with a variety of economic challenges. David C Preston, MD, vice chairman of neurology at University Hospitals-Case Medical Center and co-director of the EMG lab, where they perform approximately 2500 cases per year, has performed projections for the 2013 fiscal year by converting 2012 NCV codes to 2013; he estimates that his hospital income may decrease by $1 million in receivables, revenues used in the past to cross-subsidize other areas, such as neurology work in cognitive care. He has also predicted that for those members of his department who perform EMGs two to two-and-a-half days per week, income net revenues will fall about 20-21 percent, and for those for whom 80 percent of the practice is EMGs, revenues are expected to decrease 31 percent. But he, like many others, is stumped when it comes to brainstorming strategies to mitigate the damage.
“The obvious response is to discuss these new codes with the private insurers, but they are not ready,” he said, admitting frustration. “Moreover, the finance people at my hospital won't understand what this means until we have a few months of data,” he added.
Armed with his financial forecasts, Dr. Preston ran an analysis of whether it is currently more lucrative to see patients in clinic to perform studies and receive reimbursement for their professional component. He concluded that a neurologist would have to do four to five studies per half-day to receive compensation equivalent to that of spending a half-day seeing patients in clinic.
Steven L. Galetta, MD, chair of the department of neurology at New York University Langone Medical Center, worries that these types of cuts put pressure on graduate medical education (GME) resources, particularly at a time when most neurology training programs are expanding to accommodate the demand for stroke and intensive care unit services. “Money to support these new resident and fellowship positions has to come from somewhere — either from the hospital system or the department,” he said. “If financing of these new training positions is pushed back to the department, it will greatly hamper the development of these growing areas of neurology, and of academic departments of neurology, in general.”
Henry J. Kaminski, MD, chair of neurology at George Washington University, stated that in his role as president of the Association of University Professors of Neurology, he has had the opportunity to speak with colleagues across the United States, and has learned that the anticipated revenue cuts range from $250,000 for smaller departments to one million dollars or greater for the larger ones. This will substantially impact their operations. “One person with whom I spoke said that his department was considering letting EMG technologists go because of these cuts, and worries that this will lead to access issues for all their patients,” Dr. Kaminski said. He also expects to see increasingly longer waiting times for these services as fewer neurologists continue to perform the studies.
“In my department, I'm already squeezed financially to try to break even, and this will only further exacerbate the problem of departmental funding,” he explained.
Dr. Kaminski, like others, is also concerned about the long-term educational ramifications of the cuts. “We don't get reimbursed adequately for medical student or resident education; it will be even tougher for academic departments to provide a full range of services. Moreover, there is already trepidation that the number of GME slots will be reduced due to federal budgetary cuts. If we don't have the money to train residents, we will have to reduce the number of residencies across the county. Small programs will shut down and larger programs will try to make do with training fewer residents.”
A member of the AAN Workforce Task Force, Dr. Kaminski is equally concerned about an already predicted shortfall of neurologists in the upcoming years, which, in view of the aging baby boomer population, is likely to further compromise the ability of the field to care for the growing numbers of elderly patients with more serious neurological problems. “This will only get worse with the EMG cuts,” he expects. “Even before the cuts, neurology was not the first choice of most American medical students, and there will likely be fewer and fewer applicants over the upcoming years,” he predicted. “Medical students have significant debt upon graduation, so they need to make economic decisions. With dropping reimbursement, I would expect students to be less likely to enter the field.”