How will that affect your income and your relationships with subspecialists? by Phyllis Maguire
Published in the January 2010 issue of Today's Hospitalist
Given the heated debate over health care reform, it’s no wonder that a major coding change slated to take effect this month has slipped under the radar of some physicians.
In October, the Centers for Medicare and Medicaid Services (CMS) announced that in 2010, it would no longer pay inpatient or outpatient consult codes (except for telemedicine consults). While those CPT codes remain on the books and will continue to be paid by private insurers, doctors who provide consults for Medicare patients will have to bill for those services using initial or subsequent
"Instead of the note ending, ‘We’ll continue to follow with you,’ it may say, ‘We’ll sign off for now. Please call with any questions.’ That’s my concern."
–David Frenz, MD HealthEast Care System
visit codes. (What used to be outpatient consults will have to be billed with either new or established patient codes.)
At press time, the AMA and specialty societies were lobbying the CMS and Congress hard to at least delay implementation of the rule until 2011. But many hospitalists say that even if the change goes through as planned, the hit to their revenue should be only modest.
That’s because only 10% to 20% of hospitalist charges are for consults. In addition, Medicare has stated that the value weight of initial hospital and nursing home care codes to be used in lieu of consult codes will be re-calibrated to provide additional revenue.
But the coding change could have a ripple effect on hospitalists’ role vis-a-vis subspecialists. Even as hospitalists take on a growing number of admitting services, some experts wonder if subspecialists might be tempted to reclaim a larger role as attendings so they can bill more complex admissions. Other hospitalists, however, say the coding change will only accelerate subspecialists’ exodus from inpatient care, leaving hospitalists to figure out how to fill in for them.
A hit for ED call panels?
In explaining its decision to stop paying consult codes, the CMS has cited several factors. For one, the confusion among physicians over when to bill a consult vs. a transfer of care has led to many inappropriate consult charges.
But there has also been growing conviction among policy-makers that high-priced care, complete with a string of consultants, doesn’t mean better quality care. At the same time, a growing consensus holds that evaluation and management services provided in primary care have been undervalued and that cost savings from consultative services should be shifted to primary care providers.
As for hospitalist revenue, Albert Caccavale, DO, director of the 14-physician Northern Arizona Hospitalists (NAZ) in Prescott, Ariz., doesn’t think his private group will take much of a hit. As many as 70% of the patients that NAZ hospitalists treat are covered by Medicare, Dr. Caccavale says, but "less than 10%" of their charges are for consults.
The coding change, however, may affect the already tepid willingness on the part of subspecialists to take ED call. According to the bylaws at Yavipai Regional Medical Center, where the hospitalists work, subspecialists are required to be available only to the ED for new patients, not all inpatients.
"There’s been some increasing resistance and people just flat-out not doing it," Dr. Caccavale reports. "This rule change is going to add to the already difficult job of getting consultants to see patients in some instances."
According to Dr. Caccavale, any increased unwillingness on the part of subspecialists to consult shouldn’t result in pushing the hospitalists’ scope of practice. "We would probably balk at taking an admission when the subspecialist refuses to come in," he explains. "We’d say to the hospital, ‘That’s your responsibility to get subspecialists to cover or to transfer a patient that we can’t manage.’ "
Dr. Caccavale does, however, expect the coding change to lead to specialists demanding more money to take ED call. And if his group finds itself taking a hit in revenue, Dr. Caccavale doesn’t see himself approaching the administration to up their subsidy and offset those losses. His hospital is already trying to find money to recruit primary care physicians—and to increase on-call coverage payments to keep subspecialists happy.
"Another subsidy problem"?
But in some cases, a higher hospital subsidy may be necessary, says David Frenz, MD, a hospitalist who is medical director for addiction medicine for the HealthEast Care System in St. Paul, Minn. Of the 70 behavioral health beds that his hospital medicine group covers, 38 are psychiatry beds for which, according to regulations, a psychiatrist has to be the attending physician.
"Psychiatrists frequently request consultations from us for various general medical conditions," Dr. Frenz says. "Historically, we have billed the initial patient encounters as consultations."
While nothing will change clinically in how he and his group treat these patients, Dr. Frenz expects to see a change in reimbursement for services on non-psychiatric medical issues like diabetes. What his group has traditionally billed as a moderate-level consult may now qualify for only a low-level initial or subsequent visit.
"Medical decision-making is the critical component for level of service," he notes. "Services previously billed as consultations do not automatically become high-level subsequent visits when you look at medical decision-making."
Dr. Frenz gives this example based on relative value unit weights in his state. Say a hospital medicine group has been performing 1,500 postoperative consultations a year and billing a level 3 consult. That would come to about 3,500 wRVUs and $171,000.
If those visits are now billed as a level 3 subsequent visit (99233), however, the combined wRVUs would fall to 3,100, cutting revenue to $145,000. And if medical decision- making for 50% of those visits supports only a level 2 subsequent visit (99232), the wRVUs would come to only 2,600, and the revenue would drop to $123,000.
As a member of an employed group, Dr. Frenz says that he thinks hospitals will have to make up the difference between what’s being billed for hospitalist services and their salaries.
"So, it’s another subsidy problem," he explains. "It’s the cost of doing business as a hospital."
The effect on multispecialty and private groups
Multispecialty groups in which hospitalists and primary care physicians partner with subspecialists are likewise expecting a hit. Eric Rice, MD, MMM, is a hospitalist with Methodist Physicians Clinic in Omaha, Neb., a multispecialty group with 13 hospitalists serving Omaha’s Methodist Hospital.
According to the group’s calculations in early December, the coding consult change could cost the group $1 million in revenue per year. That, says Dr. Rice, will affect the group’s profit margin and its distribution of payouts to its physician partners.
As a hospitalist, Dr. Rice says that most of the consults he bills are a level 4, which in his state is worth 2.64 wRVUs. If those services qualify instead as a level 3 initial visit code, he’d be trading up to 2.99 wRVUs. If they qualify as a level 2 initial code, however, that drops to 2.14.
As for the subspecialists in his group and others, Dr. Rice says they plan to wait and see how the coding change shakes out in terms of what level visit they’ll be able to bill. "But some of them," he adds, "are wondering if they’d be better off just admitting patients themselves because high-level admissions would reimburse better."
In West Chester, Pa., Edward Ma, MD, one of six managing partners with a local private group, Medical Inpatient Care Associates (MICA), plans to watch how his group’s revenue is affected, particularly because the group is considering moving to a compensation plan based 50% on productivity.
And Dr. Ma also wonders if subspecialists may be tempted to take a larger admitting role in the wake of the change. Currently, hospitalists at his facility admit nearly all GI and pulmonary patients and a substantial number of cardiology patients.
But if the consult codes go away and reimbursement changes lead to a significant decrease in subspecialist revenue, Dr. Ma says, "MICA may potentially lose many admissions to subspecialists." While the hospitalists may at the same time be handed a larger comanagement role with these patients, the hospitalist group may still lose a fair amount of revenue, he adds.
"The hospitalists may not be consulted for many of the uncomplicated cases, which will now be managed solely by the subspecialists," Dr. Ma explains. "This may be especially true for subspecialty practices that utilize physician extenders."
The specialties that may be most adversely affected by this change, he adds, will be endocrine and infectious diseases, "as well as others that rarely take patients on as a primary and have fewer revenue-generating procedures to fall back on." Despite his concerns, he still believes that GIs, cardiologists and others will continue to depend on hospitalists to admit and manage most of their patients.
"They would much rather be focusing on their area of expertise or performing procedures," says Dr. Ma, "than having to coordinate a patient’s care or deal with multiple medical issues outside their specialty."
Subspecialists: a bigger or smaller role?
According to Robert Bessler, MD, president and CEO of Sound Physicians, a national hospitalist practice based in Tacoma, Wash., the move away from hospital medicine on the part of subspecialists has already happened.
"Consults, at least for most GIs and cardiologists, are not what generates revenue," says Dr. Bessler. Instead, consults for proceduralists represent "a small component" of their practice, so he doesn’t believe the coding change will substantially affect their behavior.
Felix Aguirre, MD, vice president of medical affairs for IPC The Hospitalist Company, the country’s largest hospitalist provider, echoes that assessment. "Specialists probably wouldn’t change their patterns of referrals to any significant degree," he points out. Whatever decrease they may be facing in reimbursement "may not be enough to force specialists to reverse roles and begin to provide all of the patient care management, discharge summaries and background work that hospitalists provide."
Having said that, however, Dr. Aguirre adds, "I don’t think all of them will be as educated, and we will find a mixed bag of what happens out there in the real world."
Not leaving money on the table
Some in hospital medicine predict that the rule change may highlight the need for hospitalists to become much more savvy about coding and billing. That’s certainly on the mind of Dr. Bessler, who notes that some Sound practices that do a lot of consults could see a "few percentage points" drop in revenue. To contain that loss, he points out, the company is stepping up its already rigorous program of training for physicians in how to document and bill for services and to give physicians feedback on how accurately they bill.
But others see even bigger fallout from the rule change. HealthEast Care System’s Dr. Frenz, for example, points out that hospitalists who already have a hard time finding consultants may find even scanter coverage.
"The question becomes: Will the consultant stick around after the initial visit?" he asks. "Instead of the note ending, ‘We’ll continue to follow with you,’ it may say, ‘We’ll sign off for now. Please call with any questions.’ That’s my concern."
Phyllis Maguire is Executive Editor of Today’s Hospitalist.