How to bill a referral: New patient or consultation?

ABSTRACT: Mixing and matching the Medicare codes for a new patient and a consultation may seem like no big deal, but Medicare has definite ideas about these two encounters. Avoid a billing headache by erring on the side of caution.

A common conundrum that community oncologists face in their practices is whether to bill a first encounter with a new patient referred by another physician as a consultation or as a new patient visit. Making the distinction may seem like splitting hairs, but the Centers for Medicare and Medicaid Services (CMS) has very specific billing criteria on this issue.

CMS requires the following criteria for reimbursing a consultation:

• “A physician’s opinion or advice regarding the evaluation and management (E&M) of a specific medical issue is requested by another physician;

• The request for the consultation must be documented by the consultant in the patient’s record; and

• A written report containing the findings is provided to the referring physician” (Practical Tips for the Oncology Practice, 4th edition, ASCO, 2007, p. 50).

A new patient encounter requires a transfer of care from the referring physician to the consulting physician, according to Medicare. CMS suggests that an encounter should be billed as a new patient visit unless the referring physician plans to treat the patient based on advice from the consultant.

As for consultations, according to CMS, billing an encounter as a consultation is proper when the specialist directly treats the patient but the referring physician retains responsibility for the patient’s general care.

Needless to say, complaints have been lodged that CMS guidance on what constitutes a transfer of care is confusing and ambiguous. In an effort to clear up the confusion, CMS has been asked to clarify its guidelines by a consortium of societies, including ASCO and the Society of Gynecologic Oncologists.

In an October 2006 letter to the CMS, the societies take issue with the CMS’ use of the term “complete care for the condition,” when a patient shifts from one physician to another. “It is unclear whether this means that physicians performing consultations are precluded from billing for an initial consultation if any transfer of care is involved,” the letter stated. As of July 2008, CMS had not responded to the requests in the letter.

To be on the safe side, a first meeting with a new referred patient should be coded as a new patient visit. If the oncologist assumes responsibility for care of the referred patient after the initial consultation, the subsequent codes used should be visit codes, not consultation codes. Finally, initial encounters with patients who self-refer for a second opinion can be billed as new patient visits.

CCP&P welcomes questions from our readers on practice management. Please forward question or comments to Ronald.Piana@cmpmedica.com.