CMS Change to Physician Consult Payments Did Not Lower Costs

In an article published in the Archives of Internal Medicine, investigators found that the elimination of payments for physician consultations in 2010 did not appear to be budget neutral the first year. The investigators compared spending per Medicare beneficiary per quarter on outpatient physician visits before and after the change. The 2010 rule required physicians to bill as office visits patient encounters that previously had been billed as consultations. The fees for office visits were increased but still remained below the previous fees for consultations.

According to the investigators, the change was based on an assumption that physicians would bill for the services at the same level of complexity as before. They hypothesized that physicians would make up the difference either with higher volume or increased intensity in coding for the same services.

The sample population comprised more than two million Medicare beneficiaries who had Medigap insurance through large employers. The investigators reviewed claims from 2007 through 2010. They found that after January 1, 2010, physicians stopped submitting claims for consultations, eliminating an average expense of $18.52 per beneficiary per quarter. However, spending per beneficiary per quarter rose by about $13.64 for new patient visits and $15.08 for established patient visits. The net change in spending for physician visits was an increase of $10.20 per beneficiary per quarter, about 6.5 percent. About 58 percent of the increase was attributable to visits to primary care physicians, 42 percent to specialists.

There was no significant change in the total volume of outpatient physician encounters, but the level of complexity increased. The investigators attributed about 1/3 of the increase in spending to changes in the level of complexity coded and the remainder to the increased payments.