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Eliminated CMS Consultation Codes Affect Neurology Bottom Line


of survey respondents estimated that the elimination of consultation codes had decreased their total revenues by more than 5 percent — 30 percent said their losses exceed 15 percent.

Six months after the Centers for Medicare & Medicaid Services (CMS) eliminated consultation codes, the Academy and other medical associations are pressing the government to reconsider.

In a June 18 letter to the CMS, the groups said the elimination of consult codes is hurting some physician practices more than expected.

The financial implication for a practice with at least 50 percent Medicare patients will depend on the patient mix — whether they are new or established patients, simple or complex, and inpatient or outpatient, experts said.

James C. Stevens, MD, a neurologist at Fort Wayne Neurological Center in Indiana, said the new CMS coding rules have resulted in a 15 to 20 percent decline in pay for treating Medicare patients, who comprise about 40 percent of his practice.” That makes it more of a challenge for us to see those patients and make ends meet,” he said.

Indeed, 34 percent of neurologists responding to a survey said they intend to avoid treating patients with complex conditions because of the coding change. The American Medical Association (AMA) developed the survey with input from its member societies, including the AAN.

“This confirms some of our worries about what the effects would be,” said Amanda Becker, the AAN associate director of medical reimbursement.

The AAN, the AMA, and other societies signing the letter are asking the CMS to address the problem in its physician fee schedule rule for 2011.


At issue is the CMS decision, which went into effect Jan. 1, to discontinue the use of consultation codes and replace them with codes for new or established office visits, initial hospital visits or initial nursing facility visits.

When the CMS proposed the move last year, many physician groups protested based on the belief that the change would cut their revenues. But the CMS stuck to its plan, citing years of confusion over consultation codes.

That confusion, attributed to disparities between CMS' rules and the AMA's Current Procedural Terminology manual, has resulted in overpayments totaling more than $1 billion a year, according to the CMS, and eliminating the consultation code will eliminate that unjustified payout.

Aside from addressing that overpayment, the CMS said the elimination of the consultation codes should be budget-neutral and no specialty would see Medicare revenues drop by more than 3 percent. After a few months of experience with the new coding strategy, physician groups worry that it is not the case.


“Revenue losses appear to be considerably higher than projected and physicians report that they have had to compensate by taking steps to reduce their services to Medicare patients,” the Academy and other physician groups said in a letter to CMS.

Although it is too soon to know how any specialty is affected overall, results of a survey by the Academy and 12 other medical groups suggest that some physicians are being hard hit.

Approximately 5,500 physicians of all medical specialties completed an online survey posted on medical society Web sites. Of these respondents, 72 percent estimated that the elimination of consultation codes had decreased their total revenues by more than 5 percent — 30 percent said their losses exceed 15 percent.

Because the survey was only available online and the response period was rather short, the findings are not statistically reliable, but the responses do document the challenges that many physicians are experiencing because of the elimination of consult codes.


Becker said nearly 900 neurologists participated in the online survey, making neurology one of the most heavily represented specialties in the survey responses.

“It was clear that our members were very interested in giving feedback about how they have been affected,” she said.

That may be because neurologists are being hit harder than some other specialties. More than 90 percent of neurologists responding to the survey said their revenues had fallen more than 5 percent because of the elimination of the consultation codes.

Moreover, 32 percent of neurologists said they have modified their practice or services in response to decreased revenues. Of those, 70 percent said they have reduced the number of new Medicare patients they are accepting and 42 percent say they have cut the amount of time spent with Medicare patients.

The survey shows that physicians are taking drastic actions to cut back on their costs,” Becker said.

At the University of Maryland Department of Neurology in Baltimore, senior administrator Bryan M. Soronson said the negative financial impact of the CMS' elimination of consultation codes has been partially mitigated by the fact that private insurers have not followed CMS' lead. Although Medicare Advantage plans have complied with the new CMS rule, private payers in his market have not gone along.

“Nationally, there's been a little talk about it, but I haven't seen it here,” he said. “That could increase the impact dramatically. Medicare is 20 to 30 percent of our patient base so we still have 70 to 80 percent from other payers” that use consultation codes, he said.

In some parts of the country, however, private payers are following CMS' lead in eliminating consult codes. Marc Nuwer, MD, PhD, a neurologist in the University of California-Los Angeles (UCLA) Health System, said Kaiser Permanente, one of the largest private payers in California, and other HMOs have already done so.

Although private payers still use consult codes in the Baltimore market, it frustrates Soronson to see the CMS new rule play out in practice, particularly for patients who have recently been referred to the practice but were also treated there within the past three years.

Just figuring out which patients have been seen by one of his UCLA colleagues in the past three years presents a problem for Dr. Nuwer. The practice has many neurologists working in multiple locations.

“We have a great deal of difficulty sorting out who has seen the patient previously so as to correctly code and not be subject to an accusation of fraud for sending in new patient codes when somebody was seen two years ago by one of my colleagues at another site,” he said.

The situation is further complicated because a patient who has had certain procedures — such as EMG — provided in the past three years is considered to be an established patient of the practice, while a patient who has other procedures — such as EEG — is not.

Dr. Nuwer estimates that his practice will experience a 15 percent decline in revenue for treating Medicare patients because of the coding change. The financial implication for private-pay patients is not yet clear, he said.

At the University of Maryland, the logistical problem of having two coding rules was addressed by the university's central billing system, which set up an automated crosswalk.

“We still enter the charges as consultations and the system changes them automatically” to the corresponding office-visit code, he said.

Frustrated by the challenges of using the new coding system, Dr. Nuwer and his colleagues are considering a new process — even though it will increase staffing costs.

“We are thinking that the doctors will simply code using the consult codes and have somebody else figure out whether the consult codes should actually be used and, if not, whether the patient is new or established, and then change the code,” he said. “We may chew up a lot of staff time trying to research what the code is for these patients.”

All the neurologists interviewed for this article said they continue to send written reports to the primary care physicians who made the referrals, even though CMS does not require that activity since the consultation codes went away.

Only 6 percent of the physicians (including neurologists and all other specialties) responding to the AMA-led survey said they have discontinued written reports to date, although another 16 percent said they plan to stop sending the reports in the future.


The AAN and other medical societies project that the elimination of consultation codes is hurting some physician practices more than expected.

THE RELATIVE VALUE UNITS (RVUS) — the numeric reimbursement value associated with physician services — for new and established office visits is always substantially lower than for the equivalent level of consultation code.

Neurology Plans to Cope With Coding-related Revenue Declines