CMS proposes elimination of initial consult codes

John Nelson writes…

I want to highlight an issue addressed in SHM’s July “Washington Update.” (Scroll down to the section titled “CMS releases proposed payment rule for FY10.”)  What follows is a portion of what is in the update.

“CMS is making several proposals that it estimates will increase payment rates for family physicians, internists, and geriatricians by between 6 and 8 percent. For example, the agency proposes to eliminate the use of all consultation codes (inpatient and office/outpatient codes for various places of service except for the telehealth consultation G-codes). CMS believes the rationale for differential payment for a consultation service is no longer supported because documentation requirements are now similar across all E/M services.

“Under the proposal, practitioners will use existing E/M service codes when providing these services instead–providers will bill initial visit codes in lieu of the consultation codes.  Resulting savings would be redistributed to increase payments for the existing E/M services.  The work RVUs for new and established office visits would be increased by approximately 6 percent to reflect the elimination of the office consultation codes and the work RVUs for initial hospital and facility visits by approximately 2 percent to reflect the elimination of the facility consultation codes.”

If this proposal is adopted, the financial impact for most hospitalist groups might be positive.

Most hospitalists are not billing many initial consult codes these days, since Medicare has instructed physicians to use subsequent visit codes for “transfers of care” (co-management) rather than initial consultation codes.  Under Medicare’s proposed rule, physicians who would previously have billed an initial consult code will instead use an initial hospital visit code (99221-3), and the initial visit codes would see increased wRVUs (about 2% for inpatient work) to offset the elimination of consult codes.

Although it’s not specifically spelled out in the proposed rule, it appears that hospitalists would be able to bill an initial hospital visit code the first time they see a patient in a “transfer of care” situation as well.  So we will be getting paid a little more for codes we are already using in exchange for the elimination of codes many hospitalists don’t use often anyway.

If the rule change adversely affects the ability for other doctors to bill when they serve as consultant, it could mean they will be less available to provide consultative services to patients admitted by hospitalists.  That impact might end up being much more significant than any direct financial consequences for hospitalists.

I encourage hospitalists to review the rule and think about what it could mean for your own practice.

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