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An Analysis of Impact and Rationale

Joel I. Shalowitz, MD, MBA

Arch Intern Med. 2010;170(1):(doi:10.1001/archinternmed.2009.446).

Background  As issues of health care cost escalation and parity of payment between primary care and other physicians have become more important, one proposal has been to eliminate consultation codes. Little is known about the current payment accuracy or financial impact of such a change.

Methods  To assess the impact of consultation code elimination, 2 assessments were conducted. First, from June 1, 2008, to July 1, 2009, 500 consecutive referrals from primary care physicians to other specialists were reviewed and matched with claims for accuracy of coding and billing. Second, to evaluate the financial impact of this change, year 2007 data on outpatient consultations from the Centers for Medicare and Medicaid Services were reviewed.

Results  Of the 500 claims reviewed, 466 were appropriate for analysis. Overall, the coding error rate was 32.4%. When the requesting physician ordered a consultation, the error rate was 5.5%; however, with lower paid referral requests, the error rate was 78.0%. Changing ambulatory consultation codes to those for new patient visits would save Medicare $534.5 million per year.

Conclusions  Consultation codes are being billed erroneously at a high rate. Furthermore, the differential cost to Medicare of these codes over those for new patient evaluation and management codes is over half a billion dollars per year. With the growing needs for cost savings as well as encouraging payment parity for cognitive services for primary care physicians, it is time these codes are reevaluated.

Author Affiliation: Health Industry Management, Kellogg School of Management, Northwestern University, Evanston, Illinois.

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