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 Coding Corner May 2010

Dan NagleConsultations are No Longer Covered by Medicare

By Dan Nagle, MD
Practice Division Director

The Center for Medicare and Medicaid Services (CMS) has eliminated the consultation codes for Medicare and Medicaid beneficiaries. This rule became effective January 1, 2010.

Dr. Raymond Janevicius, the CPT Advisor for the American Society of Plastic Surgeons and author of the ASPS “CPT Corner,”  has graciously given me permission to share his excellent review of this issue with you. I have taken the liberty of tweaking his review to include impact data for hand surgery. 

Consultations are No Longer Covered by Medicare
CPT Corner - March, 2010
Raymond Janevicius, MD
NOTE: This article pertains to Medicare patients only.

In another cost-cutting measure, as of January, 2010, Medicare will no longer reimburse for inpatient or outpatient consultation codes.  CMS (Centers for Medicare and Medicaid Services) set this policy despite significant protests from the AMA and other medical societies.

Rationale

CMS has indicated that distinguishing consultations from other E/M encounters (such as new patient visits) is too confusing.  Although the AMA CPT guidelines are clear,  CMS feels auditing these claims is too difficult.  Thus, they will no longer reimburse for outpatient or inpatient consultation codes.

Unfortunately, CMS did not think through the significant consequences of these changes.  Of course these changes will result in significant decreases in physician reimbursement, but the problems created extend beyond reimbursement issues.  Although CMS has made some recommendations and has suggested some "cross-walks" of codes (see below), certain patient encounters cannot be clearly reported, until further guidance and recommendations come from CMS.  Certain situations are impossible to code, and CMS provides no guidance for these circumstances.

Recommendations in this month's column are based upon our best estimates using the limited and sometimes conflicting information currently available.  These recommendations may change as experience is gained with the new rules.  You should also seek guidance and information from your MAC (Medicare Administrative Contractor) and Fiscal Intermediaries.
 
Although the new edicts may seem straightforward, practical ramifications are significant, and coding for consultations has been rendered more complicated for physicians.  As of January, 2010 (for Medicare patients only):

  • CMS will not reimburse for outpatient consultation codes (99241 - 99245).
  • CMS will not reimburse for inpatient consultation codes (99251 - 99255).
  • Office consultations are to be reported with the New Patient (99201 - 99205) or Established Patient (99212 - 99215) CPT codes.
  • Inpatient consultations are to be reported with Initial Hospital Care codes (99221 - 99223), even though the consultant is not the admitting physician.
  • The admitting physician ("Principal Physician of Record"), who also uses the Initial Hospital Care codes (99221 - 99223), must append modifier "AI" (that's "A followed by the capital letter i" --not the number 1) to the Initial Hospital Care codes.  Consultants DO NOT use the "AI" modifier.
  • Nursing Facility consultations are to be reported with Initial Nursing Facility Care Visit codes (99304 - 99306).
  • As with all E/M encounters, codes are selected based upon the level of History, Examination, and Medical Decision Making.

Financial Impact on Consultants

Clearly, reimbursement for all consultation services will decrease significantly, since the RVUs for consultations exceed the RVUs of comparable New Patient, Established Patient, and Initial Hospital Care visits.  CMS has increased the work RVUs for New Patient, Established Patient, and Initial Hospital Care visits by approximately 6%, but these increases do not make up the difference in reimbursement between these codes and the consultation codes.

Moreover, outpatient consultation encounters must now follow the New and Established Patient rules.  This will also result in significant decreases in reimbursement for consultative services.  If a patient has not been seen by a physician in three years, then  New Patient codes are used.  If a patient has been seen by the physician in the previous three years, then Established Patient codes are reported.  Even if the consultant is seeing a patient again, for an entirely different problem and evaluation, the Established Patient codes must be used.
 
Rough Calculations

Consider the reimbursement difference between a new patient code and an outpatient consultation code.  Hand surgeons mostly use level 2 and level 3 codes.  The 2010 reimbursement difference between level 2 or level 3 outpatient codes and their comparable new patient codes is approximately $30.   If you see ten new consultations a week, the losses are approximately $15,000 a year.

”Silver Lining?”

Because RVUs (and hence reimbursements) for new patient, established patient, and initial hospital care E/M encounters are increasing, and because the total RVUs for most surgical procedures include E/M encounters as part of the global surgery package, RVUs for most surgical procedures will increase.  This will help surgeons "recoup" some of the losses incurred with decreased reimbursement for consultations.

Our consultant and CMS estimate the "net effect" for hand surgeons (decreases in consultation reimbursements offset by increases in procedural reimbursements) will be a 3% increase in total reimbursements.  

How It Works

Consider an outpatient office consultation.  The physician performs a detailed history, a detailed examination, and the medical decision making is of low complexity.  This is a level 3 outpatient consultation, 99243, which is still the code to be reported for non-Medicare patients.

For Medicare patients, the code selected is based upon whether the patient has been seen by the physician in the past three  years.  If the patient has not been seen in the past three years, then this is considered a "New Patient," and the appropriate code based upon level of history, exam, and medical decision making is 99203.

If the patient has been seen in the past three years, then this is an "Established Patient" and the correct code to report is 99214.  Refer to the accompanying table for cross-walking of codes.
 
Inpatient Dilemma

The cross-walking of codes is straightforward with outpatient consultations.  Inpatient consultations on Medicare patients are now reported as "Initial Hospital Care" codes, 99221 - 99223.  Note that although there are five inpatient consultation codes, there are only three Initial Hospital Care codes, and the lowest level code (99221) requires a detailed history, a detailed examination, and straightforward medical decision making.

Most inpatient consultation encounters will have documentation to support level 3 services, so 99221 is appropriate to report for these services.  So how does one report a level 1 or level 2 inpatient consultation?  What if the patient is seen for a minor problem, and the history is problem focused, the exam is problem focused, and the medical decision making is straightforward?  No "Initial Hospital Care" code matches this level of E/M encounter. 

CMS gives absolutely no guidance here, other than suggesting using an unlisted procedure code, which is, of course, preposterous, as 99499 requires additional documentation and manual reviews.  This is impractical for the high-volume use of inpatient consultation codes.   It is peculiar that CMS makes this recommendation, because even the Medicare manual clearly indicates that the unlisted procedure codes are to be used  only “in the rare circumstance when a physician provides a service that does not reflect a CPT code.”  Level 1 and 2 inpatient consultations are far from “rare circumstances,” so unlisted procedure codes are not an option.

The current CMS edicts provide no method to report these level 1 or level 2 inpatient consultation encounters.  Modifiers may be useful here:  Modifier 52 may be used to indicate that "reduced services" are rendered: 99221-52.   This is appropriate use of modifiers by CPT rules.  Note that one of the rules in the CPT book for using modifiers states: "Modifiers also enable health care professionals to effectively respond to payment policy requirements established by other entities."  Some fiscal intermediaries, however, may not accept modifiers.
 
Since the correct method of reporting inpatient encounters, by CPT rules, is no longer recognized by Medicare, several choices are available to report level 1 and 2 inpatient encounters:

1. Use the reduced services modifier:  99221-52.

2. Use the unlisted procedure code 99499.

3. Make sure all inpatient consultations have documentation to support a detailed history, a detailed examination, and straightforward or low complexity medical decision making, then use 99221.

4. Just don't bill for level 1 and 2 inpatient consultations.

None of these options is ideal.  99221-52 most closely approximates CPT rules, but may not be accepted by some Medicare fiscal intermediaries.  99499 will need additional documentation to receive payment.  Contact your MAC (Medicare Administrative Contractor) and Fiscal Intermediaries for local recommendations.
 
Secondary Payer Issues

When a patient is covered by an insurance policy that recognizes consultation codes, and Medicare is secondary payer, you can imagine the difficulty and confusion in trying to bill Medicare.  CMS offers two poor suggestions:

  1. Even if the E/M encounter is a consultation by CPT rules, bill the primary payer the new or established patient or initial hospital care code, and bill the same code to Medicare.
  2. Bill the primary payer the correct consultation code, and bill Medicare the new or established patient or initial hospital care code.

CMS indicates that option 1 “may be easier.”  It will, however, result in significantly less reimbursement than billing correctly with a consultation code.  Option 2 requires the use of two different codes for the same encounter, and may be a billing impossibility. 

Clearly, there is no good solution for this secondary payer issue.  Experience in the coming months may provide some practical guidelines.

Remember, all these new rules refer to Medicare claims only.   Note also, that the new rules apply to consultations in the emergency room and consultations in nursing facilities.   For more information and more details on the new Medicare rules, visit the CMS website “Medicare Learning Network:”

http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM6740.pdf

Medicare will no longer reimburse for codes 99241 - 99245 and 99251 - 99255.

TABLE
Medicare Claims Only

"OLD" 

CONSULT

CODE

HISTORY

EXAM

MEDICAL
DECISION

MAKING

CURRENT CODE

(PATIENT NOT
SEEN IN PAST
THREE YEARS)

CURRENT CODE

(PATIENT SEEN IN
PAST THREE YEARS)

 

 

 

 

OP

99241

PF

PF

SF

99201

99212

99242

EPF

EPF

SF

99202

99213

 

99243

DET

DET

LC

99203

99214

 

99244

COMPR

COMPR

MC

99204

99215

 

99245

COMPR

COMPR

HC

99205

99215

 

 

 

IP

99251

PF

PF

SF

***

***

99252

EPF

EPF

SF

***

***

 

99253

DET

DET

LC

99221

99221

 

99254

COMPR

COMPR

MC

99222

99222

99255

COMPR

COMPR

HC

99223

99223

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

***  See text

OP  Outpatient
IP  Inpatient
PF  Problem focused
EPF  Expanded problem focused
DET  Detailed
COMPR Comprehensive
SF  Straightforward
LC  Low complexity
MC   Moderate complexity
HC  High complexity

Dr. Raymond Janevicius's article was reprinted from the March 2010 issue of Plastic Surgery News. Please note that CPT codes and descriptors are Copyright AMA. Ultimately, coding decisions are the responsibility of the physician.
 

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