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Change in Billing Option Leads to an Increase in Medicare Spending

May 17, 2015

A new study has found that a Medicare policy change which was intended to be spending-neutral in fact led to a 6.5 percent increase in spending on medical office visits during the year 2010. This measure, which eliminated a popular consultation billing option, has been tied to a resultant increase in billing by physicians for other higher-intensity services.

Because of the elimination of the consultation billing code, CMS proportionally raised the rates for other outpatient services. This was predicted to allow costs to remain flat. But although the number of patient visits did not change over the course of 2010, the resulting Medicare costs which were billed did. The findings of this study, which examined the claims of 2.2 million beneficiaries, found that per quarter in 2010, costs per beneficiary increased by $10.20.

The authors of the study caution that their findings do not make any broad statements about the effects of coding changes in general. It is important to realize that the spike in Medicare spending during the year of 2010 could in fact be a one-off anomaly as opposed to a trend. But the researchers were able to conclude that in this particular case of Medicare billing structure alteration, the projected results of the change were out of alignment with the actual real-world repercussions.

In the years since this change was made to policy, both the American Medical Association and American College of Cardiology have pushed to have the removed consulting code reinstated. In an arena where public policy shifts can affect your bottom-line, it is important that as a physician you stay abreast of the implications of these changes. In order to ensure your continued prosperity, having a skilled medical billing provider is a logical and necessary step.

For informational purposes only.