Practice Revenue Is Down Sharply After CMS Killed Consultation Codes

August 2, 2010
Terri Cullen

More than eight out of 10 doctors said their practice revenue has declined as a result of Medicare's elimination of the use of inpatient and outpatient consultation codes, a recent survey shows.

More than eight out of 10 doctors said their practice revenue has declined as a result of Medicare’s elimination of the use of consultation codes and require physicians to bill using other evaluation and management codes, according to a survey by the American Medical Association. More than a third plan to eliminate staff and make other cutbacks as a result.

Consultation codes were discontinued by the Centers for Medicare & Medicaid Services (CMS) on Jan. 1. All inpatient and outpatient consultation codes were eliminated, with the exception of telemedicine consultations. Instead, physicians are now required to bill for visits using evaluation and management codes.

Since the consultation codes were eliminated, thousands of physicians say they’ve seen their income decline by as much as 20 percent or more, according to the AMA. The AMA conducted the survey in conjunction with 17 specialty physician groups. Of the 5,500 doctors who completed the survey, 83 percent said their total revenue stream has decreased since the codes were discontinued. Thirty-nine percent said they will be deferring purchases of new equipment and/or information technology in order to make up for the lost, while 34 percent said they intend to eliminate staff.

Most of the doctors surveyed said their revenue was down between 5 percent and 20 percent, with 12 percent of doctors reporting a more than 20 percent drop. Only 4 percent said they saw no impact from the coding change, while 12 percent couldn’t quantify its effect on their revenue.

When CMS first announced the policy change, it predicted no specialty would see its revenue decline by more than 3 percent. The AMA has asked CMS to reconsider the policy as the agency works on the Medicare physician fee schedule for 2011.