A Happy New Year's greeting from CMS

As if you are not busy enough at this time of year with higher flu season demand to meet, CPT code changes to accommodate, and the holiday aftermath, the Centers for Medicare & Medicaid Services (CMS) is delivering a special Medicare present this year in the form of new modifier AI and new rules related to the deletion of the consultation codes from the Medicare Physician Fee Schedule. The first instructions regarding these changes were described in Change Request 6740. More recent guidance was published in the form of an MLN Matters article on the CMS web site. Here are some highlights:

Add modifier AI to your list of commonly used modifiers if you admit patients to hospital or nursing facilities.

The modifier must now be reported by the admitting physician of record in addition to the code for initial care services in the hospital (99221-99223) or nursing facility (99304-99306) according to the level of care provided. Modifier "-AI," defined by CMS as "Principal Physician of Record," shall be used by the admitting or attending physician who oversees the patient’s care, as distinct from other physicians who may be furnishing specialty care. All other physicians who perform an initial evaluation on this patient shall bill only the code for initial hospital or nursing facility care that represents the level of service provided as indicated in the E/M documentation guidelines.

Physicians other than the physician who ordered observation care services must report office and other outpatient care evaluation and management codes (99201-99215) for their services.

Initial charges for patients admitted to observation status (99218-99200 or 99234-99236) will continue to be reported only by the physician who ordered the observation stay with no requirement to add the AI modifier. All other physicians who furnish consultations or additional evaluations or services while the patient is receiving hospital outpatient observation services must bill the appropriate outpatient service codes.

For example, if a cardiologist orders observation services and asks a family physician to additionally evaluate the patient, only the cardiologist may bill the initial observation care code. The family physician who evaluates the patient must bill the new or established office or other outpatient visit codes (99201-99215) as appropriate. The same guidance for determining whether a patient is new or established applies to these services as to any other office or outpatient encounter. The patient is established if any physician of the same specialty in the same group practice has provided a face-to-face service within the last three years.

Services in the outpatient setting that were previously reported with consultation codes must now be reported with office or other outpatient evaluation and management codes (99201-99215). 

These rules apply to all Medicare claims whether Medicare is the primary or secondary payer.

We will be watching for more guidance on filing secondary claims where the codes on the claim may not match the codes on the explanation of benefits from the primary payer (e.g., private payer paid consultation code leaving co-insurance due from Medicare).

It will also be necessary to recognize Medicare Advantage plans that will no longer maintain the consultation codes in their fee schedules in 2010 and may require the AI modifier on initial care charges from the admitting physician for services in a hospital or nursing facility.

There you have it. Stay tuned. We'll share what we learn as we receive and read more; and hopefully buy you a little New Year's respite.