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CMS Approves Increase in Practice Expense for Neurologists, Eliminates Consultation Codes


doi: 10.1097/

A Centers for Medicare & Medicaid Services (CMS) plan to redistribute physician payment among the specialties will bring a 2 percent Medicare pay cut to neurologists in 2010.

The redistribution reflects two moves: the CMS decision to use controversial new practice-expense data to adjust physician fees and its elimination of consultation codes.

The AAN Professional Association (AANPA) had urged CMS not to eliminate consultation codes. But it had supported the CMS proposal to update physician practice-expense data because, in the agency's original proposal, that would have meant a 6 percent increase in neurology pay rates in 2010.

However, some physician groups, including the American College of Cardiology (ACC) and the American Society of Clinical Oncology (ASCO), strongly protested the use of the new practice-expense data because it would mean severe pay reductions for their members.



In its 2010 Medicare Physician Fee Schedule final rule published on Oct. 30, CMS stuck with the updated practice expense data but said the new rates will be phased in over four years to give hard-hit specialties time to adjust. And, according to the final rule, neurology's total increase associated with the new practice expense data will be 4 percent instead of 6 percent.

“The results didn't end up being as good as expected,” said AANPA Associate Director of Medical Economics Amanda Becker.

In fact, neurology's 1 percent increase in practice expense pay in 2010 will be offset by a 3 percent decrease in work relative value unit changes. That translates into an overall 2 percent cut in Medicare pay rates.

Of course, that does not count a theoretical 21.5 percent cut in 2010 physician payments, which is the current estimate of the Sustainable Growth Rate conversion factor for 2010. In recent years, Congress has prevented the SGR conversion factor from being implemented, and another reprieve is expected this year. The controversy over the CMS plan to update practice expense data stems from the Physician Practice Information Survey (PPIS), commissioned by the American Medical Association (AMA) with financial support and input from the AANPA and about 70 other specialty societies and groups that represent audiologists, clinical social workers, and other health care providers.

The AMA initiated the survey to address concerns expressed by the Medicare Payment Advisory Commission and others about the CMS use of data sources about practice expenses. The primary source has been AMA surveys conducted in the late 1990s; however, a few medical societies, including ASCO and ACC, have sponsored more recent surveys of practice expenses for their own specialties, and CMS has used their data.

The PPIS was conducted in 2007 and 2008. Of the 7,403 physicians and other health care professionals who responded to the survey, only 3,659 provided complete practice cost information that could be included in the practice cost computations provided to CMS. That translated into some small samples for various specialties.

“From radiology, only 18 surveys represent radiologists who work in the office environment and can provide that kind of data,” said Pam Kassing, senior director of economics and health policy for the American College of Radiology (ACR).

She and others who disagreed with the survey findings said the low response rate may be attributed to the length of the survey, the fact that other surveys were being fielded simultaneously, and the reality that physicians are sometimes not always fully informed about practice expense details.

Those arguments did not fly with Becker, who believes the new survey data create a level playing field for all health care providers paid by CMS.

“The exact same questions were asked of everybody and everybody had the same opportunity to participate,” Becker said.

The arguments also did not fly with CMS. In its final rule, the agency identified several specialties — cardiology, radiation oncology, medical oncology, interventional radiology, hematology, nuclear medicine, urology, rheumatology, and dieticians — which strongly opposed the use of the new practice expense data. While the agency rejected their complaints, CMS agreed to phase the new payment schedule in over four years.

An exception to the use of new practice expense data was made for medical oncology practices, which were scheduled to see a 20 percent reduction in Medicare payments for chemotherapy administration services, courtesy of the AMA survey. ASCO argued that the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which changed the way in which Medicare reimburses oncologists for drugs, required the use of ASCO's 2003 supplemental practice expense survey — and CMS concurred. In addition to the practice-expense changes, CMS will replace consultation codes with new or established office visits, initial hospital visits, or initial nursing facility visits.

The Academy and many other physician groups had asked CMS to abandon its proposal to eliminate consultation codes, saying the net impact for most neurologists would be negative.

CMS attributed its decision to years of confusion over consultation codes, stemming in part from disparities between CMS rules and the AMA's Current Procedural Terminology manual. The Office of the Inspector General has estimated that about 75 percent of services paid as consultations in 2001 did not meet all of the CMS requirements, prompting the government to overpay physicians by an estimated $1.1 billion.

CMS says its proposal to eliminate consultation codes is budget-neutral, meaning that it does not expect it to either increase or decrease its payout to physicians. But the elimination of consultation codes, along with two other proposals in the 2010 fee schedule, would redistribute CMS payments from some types of physicians to others.

Under the new fee schedule, neurologists and other specialists who frequently use consultation codes are expected to lose out to those who do not.

©2009 American Academy of Neurology