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Is it Budget Neutral?

By Brian J. Knabe MD, CFP, CMP

http://www.CertifiedMedicalPlanner.org

The New Year 2010 has brought some changes in the Medicare Physicians Fee Schedule.  For many specialists, the most significant change is the elimination of consultation codes, 99241-99245 in the outpatient setting and 99251-99255 for inpatient care.  Physicians can still provide consultations and bill for these services – using codes for routine new or established patient visits (99201-99205 and 99211-99215).

Reported Revenue Neutrality

It has been reported that this change has been made in a revenue neutral manner.  Reimbursement for all E/M codes has been increased in order to make up for the removal of consultation codes.  The increase is approximately 6% in the outpatient setting and about 2% for inpatient codes.

Of Averages and Outliers 

The result of these changes might be revenue neutral overall, but the outlier effect on many specialties and individual physicians can be significant.  Specialists who obtain most of their income from procedures will see less of an effect on their income.  This includes dermatologists, surgeons, and gastroenterologists.  Less procedurally-oriented specialists, particularly those who rely upon Medicare as a primary payor, are seeing the most significant effect.  For example, neurologists and hematologists will likely see double-digit declines in revenue.

Private Payers 

While private payers have not yet adopted these changes, billing codes must be adjusted when filing a claim with a commercial insurer when Medicare is the secondary insurer.  If a consultation code is used in these instances, the primary payer will pay their portion of the bill, but Medicare will deny secondary coverage.  There is no indication yet that commercial insurers are dropping the consultation codes altogether, but if history is any indication, they will likely eventually follow the lead of Medicare.

Assessment 

Physicians can take certain measures to decrease the impact of these changes on their revenue stream.  It is increasingly important to understand how the complexity of a patient visit affects the appropriate level to be billed.  Prolonged service codes are also available (99356 and 99357) to enable physicians to bill appropriately for more complex and time-consuming evaluations.

Conclusion

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Filed under: Health Insurance, Health Law & Policy, Practice Management | Tagged: brian knabe, CPT codes, EM codes, medical billing codes, medicare, physician fee schedules | 5 Comments »