Consultation confusion

CMS stopped paying for services billed as consultations as of Jan. 1, 2010. What does this mean for hospitalists?.


Consultations have long been a source of coding confusion, resulting in countless billing errors and millions—possibly billions—of dollars in overpaid Medicare claims. To stop these overpayments, the Centers for Medicare and Medicaid Services (CMS) has decided it will no longer pay for services billed as consultations as of Jan. 1, 2010. Instead, medical practices need to use the visit code that best describes the service provided, based upon the patient (new or established), the place of service and the amount of workup provided.

These rules are mandatory for Medicare fee-for-service (FFS) and apply even when Medicare FFS is the secondary payer. State Medicaid programs, Medicare Choice plans, Tricare and private carriers are not required to implement these rules, but can do so if they choose. Practices should contact their major payers to determine whether they will accept consultation codes in 2010. When in doubt, bill the consultation codes to plans that are not Medicare FFS, but watch payment reports carefully to see if the codes are accepted.

It is important to note that, if a patient was seen by someone in a group practice or specialty in the last three years, all physicians in that practice or specialty must bill as though they were a single physician. Thus, if Dr. A, an internist, provided a hospital service two years ago and her patient now presents to Dr. C, an internist in the same group, for an unrelated problem, the patient is considered an established patient. Beyond three years, the patient is considered a new patient.

Observation patients

Only the physician who actually admits a patient to observation should bill using a code for “observation services” (codes 99218 to 99220). All other physicians who provide care, including hospitalists and surgeons, should bill using the codes for “office and other outpatient visits” (codes 99201 through 99215). A physician may use the codes for a new patient if he or she hasn't provided any professional services to the patient in any setting in the last three years. If s/he has, or a colleague from the same practice has, the service should be billed as an “established patient encounter.”

Inpatient billing

In most cases, each physician who sees a patient will bill his or her first inpatient visit as an admit. CMS feels that the initial workup (history, exam and decision making) is the same for all first encounters, whether admission history and physicals or consultations. When billing for these visits, remember that admit codes may be billed on a date other than the hospital's admission date, and the admitting physician should add modifier AI to his or her inpatient or facility admit code to indicate that he or she is the true admitting physician of record.

In the emergency department

If called to the emergency department to provide care, a hospitalist should bill as an emergency department service (codes 99281 through 99285). If that same physician ultimately determines the patient should be admitted, he or she may bill using the inpatient admit code instead. If multiple physicians see a patient on one date, each physician should bill using either an emergency department code or an inpatient admit code based upon the patient's status at the time of the visit.

Contrary to popular belief, more than one physician may bill for an emergency department code on the same date. The caveat is that each physician must be of a different specialty to avoid Medicare's denying the service as concurrent care that isn't medically necessary. Medicare also expects each of these physicians to evaluate or treat a problem that is outside the other physicians' area of expertise. Thus, each physician's primary diagnosis should be different.

Low-level consults

One problem practices will face involves the first visit to manage a stable or low-risk problem. This may occur, for example, with a patient who is admitted for psychiatric problems, but for whom a hospitalist is asked to assess and manage diabetes. The hospitalist may find it unnecessary to perform a full history and physical since the patient is stable, and may choose to limit the patient's workup. When he or she does so, a lower code is appropriate.

There are five levels of consultations, but only three levels of admit codes. A level 1 admit code requires the same detailed workup as a level 3 consult, so if a workup fails to meet the definition of a detailed workup, physicians can't bill the admit codes. Instead, they must bill a visit that more appropriately reflects the level of workup provided. For inpatient services, physicians would bill subsequent hospital visits (rounds) at level 1 or level 2. For observation services, physicians would bill the codes for “office and other outpatient visits.”

Is there a crosswalk?

There is no official crosswalk at this time; however, we have developed one that seems reasonable based upon the instructions currently available (see Table). We compared Oklahoma Medicare's allowables for consultation in 2009 to the allowables for crosswalked codes in 2010, and the reductions are significant. While part of the reduction can be attributed to a 21.29% overall reduction in allowables, a greater portion is directly related to the change in consultation coding. For example, the amount allowed in 2009 for an observation consult (code 99244) was $145.96. In 2010, that same service is allowed $89.14 for new patients (code 99204) or $54.30 for established patients (code 99214)—a loss of $56.82 or $91.66 for one visit.