Search tips
Search criteria 


Logo of jopHomeThis ArticleASCO JOPSearchSubmitASCO JOP Homepage
J Oncol Pract. 2010 March; 6(2): 102–103.
PMCID: PMC2835474

Consultation Code Confusion

The Centers for Medicare & Medicaid Services (CMS) has eliminated the coverage of consultation codes as of January 1, 2010. Understanding coding policy is confusing enough; however, now there is a mix of coding policy and coverage policy that one is forced to distinguish. This article reviews the Medicare coverage rules surrounding consultations and highlights specific issues such as Medicare as a secondary payer and how private payers may be handling this Medicare coverage change.

Medicare Coverage Rules Surrounding Consultations

A few years ago, the Office of the Inspector General identified consultations as an area of potential concern with Medicare. The Office of the Inspector General stated that it believed CMS was paying inappropriately for consultations. Shortly thereafter, CMS published some instructions related to the billing of consultations in program transmittals and Medicare Learning Network (MedLearn Matters) articles. Attempts by CMS to clarify the use of consultation codes created some confusion within the physician community and with the Current Procedural Terminology (CPT) Editorial Panel of the American Medical Association, which is responsible for adding, editing, and deleting CPT codes.1 There were, at times, varying rules from different Medicare contractors, variations in the definition of “transfer of care,” and disagreement within the physician community on how consultations are handled.

In a bold move, CMS proposed to no longer recognize the consultation codes in its 2010 Medicare Physician Fee Schedule proposed rule. Even though CMS received numerous comments that this change should not be implemented, CMS finalized the proposal in the Medicare Physician Fee Schedule final rule for 2010 and eliminated payment for consultation codes as of January 1, 2010.2 It is important to note that although the consultation codes are no longer recognized by CMS and the Medicare fee-for-service program, the consultation codes still exist in the American Medical Association CPT manual and are recognized, valid codes within the manual.

CMS has eliminated payment for the consultation codes and has redistributed the relative value units (RVUs) from the consultation codes into other evaluation and management codes. CMS has stated that it does not believe there is substantial work involved in the consultation codes over and above regular evaluation and management services as it relates to writing reports; therefore, the redistribution of RVUs is not an exact match. For example, the RVUs from a Level 3 consultation are not totally reassigned to a Level 3 established patient visit.

Coding instructions have been published by CMS and are summarized as:

  • Office Setting—If a consult is provided in the office setting, then either a new patient visit code (99201–99205) or an established patient visit code (99211–99215) should be reported.
  • Hospital Setting (first visit)—If the first visit is in a hospital, then the initial hospital care codes (99221–99223) should be reported.
  • Hospital Setting (subsequent visit)—If a subsequent visit is performed in a hospital, then the subsequent hospital care codes (99231–99233) should be reported.
  • Nursing Facility (first visit)—If the first visit is in a nursing facility, then the initial nursing facility care codes (99304–99306) should be reported.
  • Nursing Facility (subsequent visit)—If a subsequent visit is performed in a nursing facility, then the subsequent nursing facility care codes (99307–99310) should be reported.

Physicians should report the code that most appropriately describes the level of service provided, and documentation should support the level of service reported. (Physicians can use the 1995 or 1997 documentation guidelines.)

In an effort to distinguish the admitting physician from the consulting physicians in the inpatient hospital setting, CMS created a new modifier. The –AI modifier should be reported by the admitting physician, and as stated by CMS, it “will identify the physician who oversees the patient's care from all other physicians who may be furnishing specialty care.” Other physicians who perform an initial inpatient evaluation should bill the appropriate evaluation and management code based on complexity of the service performed.

Medicare As a Secondary Payer and Private Payers

In the instructions for reporting consultation codes, MM6740, CMS clearly notes that physicians billing the Medicare fee-for-service program must comply; however, the instructions do not apply to Medicare Advantage or private payers (non-Medicare insurers). Providers should check with the Medicare Advantage plans and private payers in their area to determine whether or not they will follow the Medicare fee-for-service coverage rules surrounding consultations. Providers should verify specifically whether or not the plans will recognize the consultation codes.

In the CMS 2010 Medicare Physician Fee Schedule final rule, the agency outlined its policy as a secondary payer for claims submitted to a primary payer that continues to recognize the consultation codes. There are two options: (1) bill the initial care codes, which will “preserve the possibility of receiving a secondary payment from Medicare,” or (2) bill the consultation codes, which will result in a denial of payment from Medicare. Physicians need to determine which of the options above to report in situations in which Medicare is a secondary payer.

Author's Disclosures of Potential Conflicts of Interest

The author indicated no potential conflicts of interest.


1. CPT, RBRVS, RUC. A primer on the alphabet soup of coding and reimbursement. J Oncol Pract. 2007;3:20–22. [PMC free article] [PubMed]
2. The Centers for Medicare & Medicaid Services. Final Medicare Physician Fee Schedule Rule. [PubMed]

Articles from Journal of Oncology Practice are provided here courtesy of American Society of Clinical Oncology