The elimination of consultation codes under Medicare has resulted in a loss of revenue for many physicians and forced some to cut back on appointments with Medicare beneficiaries, according to a survey commissioned by the American Medical Association and several other medical specialty societies.
That loss, especially when combined with cuts to the Medicare physician fee schedule potentially as high as 30%, means the future looks bleak for many endocrinologists, experts say.
The code elimination “comes at the worst possible time,” as the health care system is about to launch a new generation of health delivery systems that rely heavily on care coordination, said Dr. R. Mack Harrell, cochair of the American Association of Clinical Endocrinologists' Socioeconomics and Member Advocacy Committee. He was referring to comments by some physicians who have said they have stopped providing primary care physicians with written reports following consults with Medicare patients because of the elimination of the consultation codes.
In January, officials at the Centers for Medicare and Medicaid Services discontinued the use of inpatient and outpatient consultation codes when billing Medicare, except for telehealth codes. Physicians instead were asked to use new or established office visit codes, initial hospital care codes, or initial nursing facility care codes. At the time of the policy change, CMS officials said they could no longer justify paying physicians more for a consultation when they had reduced so much of the documentation required to bill for a consultation. Agency officials also said that eliminating consultation codes would reduce the confusion around the differing definitions of consultations, transfers, and referrals.
Many specialists view that approach as flawed and detrimental to both their bottom line and patient access to care.
In an online survey of about 5,500 physicians, about 72% said that not being able to bill for consultations had decreased their total revenues by more than 5%, with about 30% reporting that their revenues had fallen more than 15%.
The loss of revenue has in turn had an impact on physicians' practices. For example, 20% of respondents said they have already reduced the number of new Medicare patients seen in their practices. In addition, 39% said they will hold off on purchasing new equipment or health information technology.
The policy change may also undermine efforts to improve care coordination. About 6% of responding physicians said they have stopped providing primary care physicians with written reports following consults with Medicare patients, and another 19% said they are planning to do so.
“Patient health is best managed when physicians can work together across specialties to coordinate care,” Dr. J. James Rohack, immediate past president of the AMA, said in a statement. “Twenty percent of patients over age 65 live with five or more chronic illnesses, and managing their care frequently requires primary care physicians to consult with a physician who specializes in the medical or surgical care of their conditions. CMS's new policy eliminating Medicare consultation codes fails to adequately recognize the additional time and effort involved in these consultations and limits physicians' ability to work together as a comprehensive health care team for their patients.”
In a letter to CMS officials, more than 30 medical specialty societies including the American Association of Clinical Endocrinologists and the Endocrine Society urged the agency to revise the policy when they issue a final regulation on the 2011 Medicare Physician Fee Schedule this fall. They suggested that CMS consider paying consulting physicians for providing the referring physician with a comprehensive report. They also said CMS could ease some of the financial pressure on physicians by revising its guidelines for prolonged visits to allow for reimbursement for services provided outside of the face-to-face visit, such as reviewing charts and communicating with families and other health care providers.
Ideally, CMS would reverse its decision and readopt the consultation codes, Dr. Harrell, who practices at Minimally Invasive Endocrine Surgery Center at Imperial Point Medical Center in Ft. Lauderdale, Fla, said in an interview. But he called that “unlikely,” and noted that AACE and other groups are pushing the agency to create some type of reimbursement for physician communication. “For us to do our job correctly, we need to be paid to communicate,” he said.
Still No Permanent Fix for Fee Cuts
Physicians also find once again themselves facing significantly lower Medicare fees for next year, based on the Medicare Sustainable Growth Rate formula.
Under a stop-gap law passed in June, doctors currently are receiving a 2.2% increase in Medicare payments—but only through Nov. 30. In the absence of congressional action, that increase will be rolled back and the prior pay cut of about 21% will go into effect for the month of December.
For 2011, the proposed rule projects an additional 6.1% cut, starting Jan. 1.
“This means that under current law—that is, in the absence of additional legislative action—if a service is performed on Nov. 1 and Jan. 1, the payment for Jan. 1 will be about 30% lower” than the Nov. 1 payment, explained Ellen Griffith-Cohen, a spokesperson for the Centers for Medicare and Medicaid Services.
Associations and policy makers say that they expect Congress to once again address the pay cut before it goes into effect on Nov. 30. But there is a consensus that the temporary fixes are no longer the answer.
“There clearly needs to be a new formula for how physicians are reimbursed in the [Medicare] system,” said Dr. Harrell, who explained that physician pay is the only Medicare expense that is indexed to the overall health of the economy—gross domestic product (GDP). Pharmaceutical, durable medical equipment, and hospital reimbursements have no such linkage.
It is unfair that physicians “should be forced to take substantial pay-cuts to compensate for systemwide mismanagement. If the SGR cuts are allowed to occur, then American seniors will face a serious shortage of available health care providers at the very time they need them the most. That's why AACE is in favor of complete abolition of the flawed SGR formula. If we are going to control costs in the Medicare system, we need to make sure that all parties are equally [affected] by budgetary shortfalls. In addition, if parties work together to improve care and reduce waste in the system, then they should be rewarded.”
Meanwhile, both Democrats and Republicans in Congress are vying to be the party to fix the SGR formula. But there's doubt about any change in the Medicare payment system this year.
“I think that whatever was going to happen in this Congress, happened a couple of weeks ago when [Congress] postponed the cuts until Nov. 30,” said Rep. Michael Burgess (R-Tex.) at a recent Congressional Health Care Caucus forum. “I don't see anybody working on it hard enough right now to [make me] think that there's actually going to be a solution that's on the floor of the House right before or after the [November] election. That's just not going to happen.
“We'll probably do some other temporary patch to get into the next Congress,” said Rep. Burgess, who is also an ob.gyn. He added that he hoped that the new majority in Congress will be Republican. “If we're going to show that we're different as a governing body in a new majority after the first of the year, we've got to fix this.”
Back in June, when the House passed the 6-month SGR delay, Rep. Frank Pallone (D-N.J.) addressed the Republicans when they spoke of a permanent fix.
“When you talk about how we have a problem, well, I don't see you helping us out,” he said. “Don't kid those doctors and make them think you're going to vote for a permanent fix. You're never going to do it. You're not helping at all.”
By law, CMS officials are required to adjust physician payments according to the SGR formula, which calculates physician payments based in part on GDP. Congress has repeatedly stepped in to eliminate scheduled pay cuts under the formula, but because the SGR formula has not been altered, physicians continue to face ever-greater pay cuts unless Congress acts to change or replace the SGR.
CMS officials have repeatedly stressed their commitment to work with Congress to change the payment update formula for physicians' services, Ms. Griffith-Cohen said.
On June 30, Marilyn Tavenner, acting administrator of CMS, wrote providers: “This short-term relief is critical, but so too is a long-term solution. We will continue to work with Congress to fix this untenable solution, so that doctors no longer have to worry about the stability and adequacy of their payment from Medicare.”
And without Congressional action, Ms. Griffith-Cohen explained, Medicare is required to follow the SGR formula.
Dr. Ardis Hoven, chairman of the AMA board of trustees, said in a statement that the “current index is woefully outdated and understates the growing gap between Medicare payments and the cost of caring for seniors.”
But according to the AMA, the 1,250-page proposed rule has some bright spots.
Dr. Hoven said in a statement that she was pleased to see in the rule “that there is a consensus on the need to update the government index of medical practice costs to reflect the current cost.” According to the proposed rule, CMS intends to convene a technical panel to review all aspects of the Medicare Economic Index.
The proposed rule for the Medicare Physician Fee Schedule for 2011 is open for comment until Aug. 24. To comment, visit www.regulations.gov.
Naseem S. Miller contributed to this report.
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