Little-Known Medicare Pay Code Change Will Hurt Specialists

Cheryl Clark, for HealthLeaders Media , November 18, 2009

Physicians acknowledge that overutilization of consultants is largely to blame for the change. And that belief was documented last week by a report in the Archives of Internal Medicine study "Is It Time to Eliminate Consultation Codes?" by Joel I. Shalowitz, MD, of the Kellogg School of Management at Northwestern University in Evanston, IL.

Shalowitz reviewed 500 claims for consultation services over a 13-month period ending this July and discovered 32.4% were in error. The report concluded that changing ambulatory consultation codes to those for new patient visits would save Medicare $534.5 million per year.

"With the growing needs for cost savings as well as encouraging payment parity for cognitive services for primary care physicians, it is time these codes are reevaluated," Shalowitz wrote.

Mazer, however, says that's not the right answer to the problem. "Do we throw away an entire system of coding rather than address the educational needs for proper use of the codes?" he asks.

"There is legitimate value in consults, which often require a higher level of expertise for a more complex problem, which is why the consult was requested to begin with," Mazer says.

The American Medical Association has written CMS expressing its objections, especially about the speed at which the change seems to have been pushed into place. "While there may be advantages and disadvantages to this proposal, the AMA has strong concerns about moving forward with the consultation code proposal on Jan. 1, 2010," according to a letter from AMA Executive Vice President and CEO Michael Maves, MD.

"It would be impossible to educate all physicians who currently report consultation codes in such a short period of time, which means there would be a flood of claim denials and appeals," he wrote.

"Further, at a time when the President and Congress are seeking administrative simplification as part of healthcare reform, this new policy would undermine this goal by setting up different standards for Medicare versus other payers that will still be using consultation codes."

The California Medical Association is drafting a similar letter of objection.

Ned Bentley, MD, a Northern California gastroenterologist, also had harsh words for the policy change. Eliminating these codes, "threatens to undermine the CPT Editorial Panel process and a well-established system to describe and report physician work," he wrote in a briefing paper.

Elimination of the consult codes is said to already be final, although CMS is still accepting comments at

However, AMA officials say they expect the pay change is, regrettably, final, and fear that physicians will be overwhelmed with fighting denials when they unknowingly turn in old CPT codes for reimbursement.

"While policymakers are looking for ways to improve coordination of care, it seems counter-intuitive that CMS would move forward with this proposal without understanding the implications for the impact on care coordination," Maves wrote.

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