You may be glad to know that Medicare has clarified its policy on when it will pay for a consultation instead of an office visit. Since consultations tend to be reimbursed at a higher rate than comparable office visits, understanding the policy can be financially rewarding. Here are the particulars.

Criteria for consultation

Medicare will only pay for a consultation when all of the following criteria are met:

1. The service is provided by a physician whose opinion or advice regarding evaluation and/or management of a specific problem is requested by another physician or other appropriate source (unless it's a patient-generated confirmatory consultation, e.g., a second opinion).

2. The request and need for the consultation are documented in the patient's medical record.

3. After the consultation, the consultant prepares a written report of his or her findings and provides it to the referring physician.

Documenting the request

If the referring physician and consultant share the medical record, the request for a consult must be documented in one of three ways:

• As part of a plan in the referring physician's progress note,

• As an order in the record,

• As a specific written request for the consultation.

Likewise, the consultant's report may consist of an appropriate entry in the common medical record.

In situations where the medical record is not shared, the request for a consultation may be documented in one of two ways. The consultant's record may include a written request from the referring physician, or it may specifically refer to the request. In either case, the consultation report should be a separate document supplied to the referring physician.

When you're the consultant

If another physician in your group asks you for a consultation or a surgeon asks you to perform a preoperative consultation, Medicare will reimburse you for a consultation as long as the previously mentioned criteria for use of the consultation codes are met. You could also bill a consultation code for performing a postoperative evaluation at a surgeon's request, but only if you didn't already perform the preoperative consultation.

If you assume responsibility for management of a portion or all of a patient's condition during the postoperative period (e.g., for a local patient who receives surgery out of town), you may not bill a consultation code, regardless of whether you performed the preoperative consultation. Rather, you should use the appropriate subsequent hospital care code or office visit code to bill your services.

When a consultation turns into treatment

If the criteria for a consultation are met, a consultant may bill an encounter as a consultation, even if he or she initiates treatment, unless a transfer of care occurs.

A transfer of care occurs “when the referring physician transfers the responsibility for the patient's complete care to the receiving physician at the time of referral, and the receiving physician documents approval of care in advance.” In such a case, the receiving physician should bill an established or new patient office visit code, whichever is appropriate, rather than a consultation code. Any subsequent visits to manage a portion or all of the patient's care should be reported using a visit code.

The bottom line

Staying ahead of Medicare's rules for reimbursement is certainly difficult. As you prepare to bill your next consultation, it would behoove you to get to know the rules noted above, document appropriately, gain an understanding of specific circumstances and bill accordingly. The long-term gain may be a higher rate of reimbursement because you are billing at the consultation level of coding.