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Impact of Coding Change Varies Widely Among Neurologists


Physicians across the board have expressed alarm about the Center for Medicare & Medicaid Services (CMS) decision to eliminate consultation codes as of Jan. 1, 2010.

Although CMS maintained that its intent was not to lower its reimbursement for evaluation and management (E&M) services, neurologists and other specialists worried that would be the effect of the coding change, which instructs physicians to use codes for new or established office visits, initial hospital visits, or initial nursing facility visits instead.

But interviews with neurologists in different settings suggest that the impact of the coding change depends on the nature of the practice. The size and scope of the practice as well as the payment policies of regional health insurers may affect reimbursement patterns. Those who see patients more than once may find that the increase in E&M codes for follow-up visits may offset the loss of the consultation code.


Elaine C. Jones, MD, a solo practitioner at Southern New England Neurology in Bristol, RI, said she assumed the coding change had not significantly affected her revenues until she recently did a thorough review at the Academy‘s request.

She found that because of the new coding rule, the Medicare program paid her at least 16 percent less in 2010 than 2009. Moreover, Blue Cross and Blue Shield of Rhode Island, the largest private insurer in her market, followed the CMS lead in eliminating consult codes as of December 2010 — and paid her at least 21 percent less in the first half of 2011 because of it.

“I didn‘t realize (the reduced reimbursement) was this big until I actually looked at it,” Dr. Jones said.

Dr. Jones, who chairs the Academy‘s Governmental Relations Committee, said the impact of the coding change on her practice was initially masked by another factor. At the beginning of 2010, she began filing insurance claims via an electronic health record system, and the speed and accuracy with which private insurers process and pay her claims has increased dramatically.

Because of that improved cash flow, she had not immediately noticed the impact of the coding change.

Dr. Jones said she has always limited her use of consult codes to new patients; under the new coding rule, she expected that the lower reimbursement for an initial office visit was being offset by higher pay for follow-up visits.

Initial office visits — many of which would have been billed as consults before the 2010 change — account for about one-third of her practice.

The financial hit to her practice appears to reflect the fact that Dr. Jones‘ top payer — the Rhode Island Blue Cross and Blue Shield plan — eliminated consult codes but did not increase the pay for office visit codes sufficiently to keep her revenues even.

“If we get more decreases in reimbursement, I‘ll be out of business,” she said. “I‘m really struggling to think ‘what can I do to expand revenue?‘”


Will other neurology practices be similarly affected? Broadly speaking, that fear appears to be unfounded, according to Amanda Becker, the AAN associate director of medical economics. The American Medical Association (AMA) determined that the CMS total payout to neurologists for E&M in 2010 was essentially the same as it was in 2009, she said.

Becker said that after a year‘s experience with the new codes, most Academy members she has spoken with have reported no major impact.

“I think one group of neurologists who are being hurt are those whose practice consisted mostly of one-time visits for a consultation and not any follow-up care. They will not get paid as much,” said Gregory L. Barkley, MD, a neurologist at Henry Ford Hospital in Detroit. “But the good news is that neurologists who are providing ongoing care to patients are getting paid more for those follow-up visits.”

“For a large neurology group with an extensive practice, the difference has been a wash,” said Dr. Barkley.

Dr. Barkley, a member of the AAN Coding Subcommittee, said he expected that most neurologists had the same experience. “It‘s important to run some numbers and actually look at what the numbers say, rather than just throwing up your hands and saying, ‘Woe is me,‘” he said.


When CMS eliminated consultation codes, it cited years of confusion that resulted in miscoding by physicians and overpayment by the government. The agency attributed the confusion to disparities between CMS rules and the AMA Current Procedural Terminology manual and estimated that it was making more than $1 billion a year in overpayments.

In conjunction with discontinuing the consult codes, CMS increased the pay rates associated with other E&M codes to offset the fact that it had historically paid more for consultations than new and established office visits.

Shortly after the new coding rules went into effect, the Academy joined the AMA and other societies to survey physicians about the effect of the change. Nearly 900 neurologists participated in that survey — and 90 percent of them said their revenues had fallen more than 5 percent because of the elimination of consult codes.

Additionally, more than 30 percent of neurologists participating in the survey said they had modified their practice or services because of declining revenues.

Based on that information, the Academy and other physician groups sent a letter to CMS in mid-2010, asking the agency to reconsider its coding change. That did not happen, so the Academy has continued to monitor the issue.


At the Academy‘s request, US Senator Jon Kyl (R-AZ) sent a letter to CMS this spring asking whether the elimination of consult codes had worked out the way the agency had expected. In May, CMS responded by saying it did not know.

“In FY 2009, Medicare spent $4 billion on office and inpatient consultation services. Given the year to year variation in the number of billings for E/M services, combined with the fact that there are vastly more E/M services than services formerly billed as consultations, precise estimates of a difference, if any, between our estimate and the actual impact is not possible,” CMS said in its response letter.