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Medicare Slashes Neurology Code Reimbursements — Neurology Takes a Hit

Avitzur, Orly, MD

doi: 10.1097/01.NT.0000424076.20932.d4
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The final Medicare Physician Fee Schedule rule entails cuts in reimbursement values for neurology services, in particular EMG and nerve conduction studies, which could deal a devastating financial blow to the specialty.

In what is perhaps the most devastating blow to the practice of neurology, the Centers for Medicare & Medicaid Services (CMS) has decided to reject the recommendations of the Relative Value Update Committee (RUC) and make drastic cuts in payments for neurologic services. The policy will result in an estimated 7 percent decrease, according to the final rule on the Medicare Physician Fee Schedule issued by CMS in November.

The largest cuts will affect electromyography and nerve conduction studies (EMG/NCS). Under the reassigned relative value units (RVUs), which provide the formulas for reimbursement values, practices will see between 55- to 66-percent cuts to their electrodiagnostic studies, effective Jan. 1, 2013.

Seven new nerve conduction codes (CPT® codes 95907—95913) were created last fall that bundle the work of multiple nerve conduction studies into each individual code. Under the new coding structure, the unit of service in codes 95907–95913 is the number of nerve conduction studies performed, whereas the unit of service in previous codes 95900–95904 was applied to each nerve. The new CPT codes were assigned new RVUs following surveys with members that inquired about how much time physicians spend providing the service, the intensity and complexity of the service, and the RVU they would assign the service.

“The threat to neurology is huge,” said AAN President Bruce Sigsbee, MD, who is working with the AAN Center for Health Policy to appeal this decision. “Certainly, small practices that depend on these services to make payroll will be devastated, however, large academic departments, most of which also depend on clinical neurophysiology, will be impacted as well,” he said.

The AAN is mounting an aggressive response strategy to the CMS decision, said Amanda Becker, AAN senior director of medical economics and quality. “We intend to request that a CMS Refinement Panel review the RVUs assigned to these services and coordinate our response with other societies including the American Association of Neuromuscular & Electrodiagnostic Medicine and American Academy of Physical Medicine and Rehabilitation,” she said.

The AAN is also scheduling a meeting with CMS to ask that these values be reconsidered and plans to include this issue in upcoming meetings with Congressional offices. Moreover, since patient access to neurologists is at threat, the AAN will begin working with patient groups to engender support.

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Marc Raphaelson, MD, the AAN senior representative at RUC, said: “Completing a usual RUC survey, electrophysiologists individually valued EMG and nerve conduction velocity [NCV] procedures compared with other medical services such as office visits or EEG. After careful comparison with a wide range of other medical procedures, RUC recommended that EMG and NCV should be valued at the survey's median, or 50th percentile,” he said, adding that CMS chose instead to lower the value for most EMG and NCV to the survey's 25th percentile.

“Although there is ample precedent for using either the 25th or 50th percentile to value medical services, this nonetheless is a hard blow to neurology,” Dr. Raphaelson said. He advises busy neurologists to limit access for patients from the most difficult insurers, as he has done in his solo sleep practice in Washington, DC. “My practice has very few openings for new Medicare patients, but I have not discharged current patients or opted out of Medicare entirely. If and when Medicare policies and payments better favor my participation, I will quickly adapt my scheduling.”

But not all neurologists are able to drop Medicare patients. “In certain communities, such as mine where I'm in practice, there are so many Medicare beneficiaries that it is inconceivable that physicians, acting individually, would risk opting out of Medicare unless they were very well-known and/or had a concierge type practice,” said Neil A. Busis, MD, current chair of the AAN Medical Economics and Management (MEM) Committee and a member of the Neurology Today editorial advisory board. Dr. Busis, who is chief of neurology at the University of Pittsburgh Medical Center-Shadyside, pointed out that CMS took the initiative to revise the RVUs for needle EMG codes, which were adopted last year with the RUC-recommended RVUs. This move seemed to have taken most MEM members by surprise, and raised the suspicion by many that neurology was being singled out and targeted as a specialty.

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Some suspect that the intention by CMS is to drive private practice doctors to large centers so that they can move more rapidly to bundled payments and alternative models of payment reform. “I think that pressures to consolidate medical care into large networks is irreversible so much so that unless you practice in a geographically isolated area, you will be unable to remain in a solo or small group single specialty practice in a few years, no matter what your specialty,” said Gregory L. Barkley, MD, clinical vice chair of the department of neurology and the chair of the board of governors of Henry Ford Hospital and the Henry Ford Medical Group in Detroit. At his institution, they just announced the intention to form a merger with their major competitor, Beaumont Health System. “Like it or not, this is the reality of health care in the United States,” he said.

But Bruce H. Cohen, MD, outgoing president of the Professors of Child Neurology worries that many neurologists cannot join large hospital systems, nor are all made of the iron required to prosper in that type of rigid practice model. As part of his work with the United Mitochondrial Disease Foundation he has visited about 60 medical practices in the past few years for educational talks: both large medical centers and one-person practices. He noted that many AAN members have little infrastructure in their tiny practices, with spouses handling the offices and the books, and businesses already struggling to make ends meet. “These members have happily chosen this practice model for a reason, and may not easily survive this change,” he said. Although many in small private practices work long hours and see large numbers of patients, other practices schedule patients at a more relaxed pace, out of choice; these physician's lifestyles are at huge risks, he said.

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Small practice neurologists all over the country are weighing their options. “As a solo, private practitioner I continue to see the writing on the wall for my practice,” said Elaine C. Jones, MD, chair of the AAN Government Relations Committee. “I am not afraid of change and feel we need to transform how we do things, but I am not sure what to do with my practice and my career,” she said. ”As new models come out I need resources to assess their pros and cons; we are doing this currently.”

Like many others, Dr. Jones is also reviewing alternative revenue streams. She was recently approached by an EEG company that wants to collaborate on outpatient EEG. “Should I invest in this now, if this is going to be cut in the coming year?” she asked. “I struggle with these business decisions regularly,” she said.

“I realize that many neurologists cannot survive without Medicare,” said Dr. Barkley, an alternate neurology representative to the RUC. The reality of health care spending, regardless of who won the election, he cautioned, is that payments are being cut to providers, hospitals, device makers and the like. “In order to stay in business, members need to pare expenses and improve efficiency every way they can — not only this year, but annually,” he advised. Selective contracting is but one small part of the response but should best be thought of as a temporizing measure because all payers are moving in the same direction, he warned, adding that all insurers are moving to high deductible plans so that the rates we charge will be increasingly scrutinized by our patients. “Health care is becoming like the retail world and people will seek out less expensive care most of the time because they cannot afford to do otherwise.”

Some hope that with time, the market may respond to retail medicine. Former MEM Chair Marc R. Nuwer, MD, PhD, professor of neurology at University of California, Los Angeles David Geffen School of Medicine, wonders if Medicare reductions may ultimately drive more physicians out of the Medicare system and back into private contracting and fee-for-service, particularly in those regions where there are patients who are able to select such plans.

“Some local physicians here have opted out of the Medicare program,” Dr. Nuwer observed, explaining that they charge patients privately in office practices. “Under those circumstances, patients cannot seek reimbursement from Medicare because the physician charged more than the Medicare-approved amount,” he said. “Those same physicians often don't accept contracts from commercial carriers either; they remain busy because access, service, and reputations are good.”

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Even so, the future ramifications of this decision will undoubtedly be to further discourage medical students from entering neurology in favor of selecting more lucrative fields. “I'm concerned about those in training with hundreds of thousands of dollars in loans,” Dr. Barkley reflected. “I am especially worried about medical students and residents who have acquired large debts and are now faced with a new paradigm that will exclude the lucrative practice options that they presumed would be there when they entered medical school, and be unable to pay off their obligations.”

Dr. Cohen, director of neurology at Children's Hospital in Akron, is also concerned about the impact on young neurologists. “Training models will need to change — placing increasing value on becoming a jack- of-all-trades neurologist,” Dr. Cohen said. “Economic changes will likely drive decisions on post-residency training — the impact of deferring an income for two more years of subspecialty training, like EEG, is like entering the priesthood if there are no jobs in that field,” he said. “Depending on the field, my trainees tell me that they are currently being offered between $30 and $50K more in some subspecialty fields than the neurologists without that training, but will that keep up?”

Experts who spoke with Neurology Today unanimously expressed trepidation about the future of electrodiagnostic medicine and neurology in general. “The cuts that have affected intraoperative monitoring, sleep, and now, NCV/EMG are certain to affect EEG soon,” Dr. Cohen continued, explaining that the damage could lead to corporate outsourcing of EEG interpretation in smaller medical centers, especially if the accountable care organization model is adopted, with a resultant shift in how these studies are interpreted and reimbursed. “Most of us accept that EMGs are of huge value to caring for patients — it is the right method to care for patients, but these money-generating EMGs that balance the budget for many departments today may be viewed as cost units in the future,” he said.

Neurology Today Associate Editor Orly Avitzur, MD, has been reporting from the field on the impact of health policy changes on neurologists in private practice. This is the third in a series of articles, “Death by a Thousand Cuts,” outlining the impact of changes in coding and reimbursement on neurology. Also, read “The Demise of Private Practice Neurology: Death by a Thousand Cuts”:, and “More Death By A Thousand Cuts: Neurology in the Crosshairs as CMS Seeks to Slash Reimbursement for ‘Bread and Butter’ Codes”:

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• The final Medicare Physician Fee Schedule (MPFS):
    • AAN will host a webinar on the 2013 final MPFS in January:
      • AAN analysis of the final MPFS:
        ©2012 American Academy of Neurology