Practice Economics

Necessary Evil: Change


The amount and complexity of medical knowledge we need to keep up with is changing and growing at a remarkable rate. I was trained in an era in which it was taken as a given that congestive heart failure patients should not receive beta-blockers; now it is a big mistake if we don’t prescribe them in most cases. But even before starting medical school, most of us realize that things will change a lot, and many of us see that as a good thing. It keeps our work interesting. Just recently, our hospital had a guest speaker who talked about potential medical applications of nanotechnology. It was way over my head, but it sounded pretty cool.

The net financial impact of this change probably will be positive for most HM groups because you probably bill very few initial consult codes, and instead were stuck billing a follow-up visit code when seeing comanagement “consults.”

While I was prepared for ongoing changes in medical knowledge, I failed to anticipate how quickly the business of medicine would change during my career. I think the need to keep up with ever-increasing financial and regulatory issues siphons a lot of time and energy that could be used to keep up with the medical knowledge base. I wasn’t prepared for this when I started my career.

Because it is the start of a new year, I thought I would highlight one issue related to CPT coding: Medicare stopped recognizing consult codes as of Jan. 1 (see “Consultation Elimination,” p. 31).

New Rules for Medicare Billing

CMS has eliminated the use of all consultation CPT/HCPC codes. This includes inpatient codes (99251-99255) and office/outpatient codes (99241-99245) for various places of service. The only exception is for telehealth consultation G-codes. Instead of consultation codes, providers are instructed to bill initial hospital care (99221-99223), initial nursing facility care (99304-99306), or initial office visits (99201-99205), as applicable.

In order to distinguish the admitting physician from others who will be using the initial care codes, CMS will create a modifier that the admitting provider will append to the initial care code to identify them as the admitting provider of record. Others will simply bill the applicable initial care code without a modifier whenever a patient is seen for the first time.

CMS proposes to implement this rule in a budget-neutral way by increasing the wRVUs for initial hospital and nursing facility visits by about 0.3%, and increasing the wRVUs for both new and existing office visits by about 6%. In addition, CMS will adjust the practice expense and malpractice expense RVUs for the initial visit codes to recognize the increased use of these visits.

The documentation requirements for consultations will no longer be applicable; physicians will only need to meet the applicable evaluation and management (E/M) documentation requirements for the initial visit code selected.—Leslie Flores

What It Means for Hospitalists

The good news is that we can just use initial hospital visit codes, inpatient or observation, for all new visits. For example, it won’t matter anymore whether I’m admitting and serving as attending for a patient, or whether a surgeon admitted the patient and asked me to consult for preoperative medical evaluation (“clearance”). I should use the same CPT code in either situation, simply appending a modifier if I’m the admitting physician. And for billing purposes, we won’t have to worry about documenting which doctor requested that we see the patient, though it is a good idea to document it as part of the clinical record anyway.

But it gets a little more complicated. The codes aren’t going away or being removed from the CPT “bible” published by the American Medical Association (AMA). Instead, Medicare simply won’t recognize them anymore. Other payors probably will follow suit within a few months, but that isn’t certain. So it is possible that when asked by a surgeon to provide a preoperative evaluation, you will need to bill an initial hospital (or office or nursing facility) care visit if the patient is on Medicare but bill a consult code if the patient has other insurance. You should check with your billers to ensure you’re doing this correctly.

Medicare-paid consults are at a slightly higher rate than the equivalent service billed as initial hospital care (e.g., when the hospitalist is attending). So a higher reimbursing code has been replaced with one that pays a little less. For example, a 99253 consultation code requires a detailed history, detailed examination, and medical decision-making of low complexity; last year, 99253 was reimbursed by Medicare at an average rate of $114.69. The equivalent admission code for a detailed history, detailed examination, and low-complexity medical decision-making is a 99221 code, for which Medicare pays about $99.90. This represents a difference of about 14%.

However, the net financial impact of this change probably will be positive for most HM groups because you probably bill very few initial consult codes, and instead were stuck billing a follow-up visit code when seeing co-management “consults” (i.e., a patient admitted by a surgeon who asks you to follow and manage diabetes and other medical issues). Now, at least in the case of Medicare, it is appropriate for us to bill an initial hospital visit code, which provides significantly higher reimbursement than follow-up codes.

In addition, there is a modest (about 0.3%) proposed increase in work relative value units attached to the initial hospital visit codes, which will benefit us not only when we’re consulting, but also when we admit and serve as a patient’s attending.

Some specialists may be less interested in consulting on our patients because the initial visit codes will reimburse a little less than similar consultation codes. I don’t anticipate this will be a significant problem for most of us, particularly since many specialists bill the highest level of consultation code (99255), which pays about the same as the equivalent admission code (99223).

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Although I think elimination of the use of consultation codes seems like a reasonable step toward simplifying how hospitalists bill for our services, keeping up with these frequent coding changes requires a high level of diligence on our part, and on the part of our administrative and clerical staffs. And it consumes time and resources that I—and my team—could better spend keeping up with changes in clinical practice.

Perhaps when all the dust settles around the healthcare reform debate, we will begin to move toward new, more creative payment models that will allow us to focus on what we do best. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm ( He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

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