Rule changes for referral documentation create confusion

Physician organizations have asked CMS to clarify the rules and have requested that the agency eliminate its requirement of additional paperwork for consultation billing.

By Pamela Lewis Dolan — Posted July 9, 2007

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The Centers for Medicare & Medicaid Services implemented changes late last year which now require even more documentation, both from the referring physician and the consulting physician, for a doctor to bill for a consultation instead of the lower-rate E&M visit. Some private insurers have already taken CMS' lead and have implemented the same changes.

But physicians still are confused over what constitutes enough documentation. The American Medical Association and 51 other medical societies sent a letter to CMS asking for clarification, as well as requesting the agency to drop its request for more documentation for a consultation code.

The confusion has doctors who are seeing referred patients trying to find ways to get appropriate documentation so they can be paid for a consultation, and doctors doing the referring complaining about not getting any extra payment for any effort to create that documentation.

"When I occasionally send someone out, I have a scratch pad with my name on it saying please see this patient about such and such and ask the patient to give it to the doctor," said Steve Craig, MD, a dermatologist from Coeur D' Alene, Idaho. "Hopefully that covers me and the person who does the consultation."

But the problem, he says, is when he is asked by another physician to do a consultation, he has no way of knowing whether the referring doctor has included the proper paperwork in his own files. And if the paperwork is not included in the referring physician's file, it would be Dr. Craig who is penalized, and possibly audited, for billing a consultation code without documentation.

Primary care doctors are feeling the confusion from both sides as well, both in getting requests for paperwork, and asking for them.

"Any more pieces of paper you have to deal with is more work, and it's uncompensated work," said Tom Felger, MD, a family physician from South Bend, Ind.

Dr. Felger said if a patient calls for an appointment and says another doctor sent her or him, his staff attempts to get a request in hand before the patient is seen. "If it was dated a week or a day later, I could see [CMS] saying that was fraud."

Dr. Felger said in the past when he referred patients out for a consultation, his staff would call the consulting physician's office and that physician's documentation of that phone call sufficed.

The new rules would require more than a phone call, says David Winker, a health law attorney and founding partner of Zumpano, Patricios & Winker P.A. in Coral Gables, Fla.

Dr. Craig said it's rare that a patient will call for an appointment and already have a consultation request in hand from the referring physician. He said each new patient is asked at the time the patient calls for an appointment if he or she were referred and by whom. If the patient is referred by another physician, Dr. Craig sends his own self-created request form to that physician and asks the referring physician to return it. On the form, it asks the referring physician to detail the reason for the referral and the date of the referral, and asks that the form be included in that doctor's file and a copy be sent back to Dr. Craig.

Even though consultations are paid at a higher rate than a routine E&M visit, Dr. Craig said it's really an issue of the extra time it takes his staff to make sure the paperwork is in order. If none of his visits could be billed as consultations, he wouldn't mind, he said; he would just save his staff the trouble of chasing after each one.

Winker called Dr. Craig's procedure a "creative solution" but he warns physicians to be conservative when billing for these types of consultations. He said the key could be making sure that request form is returned and made part of the file before the patient is seen.

Stephanie Stinchcomb, billing and coding coordinator for the American Urological Assn., one of the signees on the CMS letter, said the important thing for physicians to remember is that the request has to be specific to the doctor doing the consulting.

The referring doctor must say, "I am sending you to Dr. Smith," for example, as opposed to, "You must see a urologist."

Bernadette Murphy, medical practice consultant and office administrator for John Kennedy, MD, an orthopedic surgeon in private practice in New York, agrees it's a challenge. She said she has learned to place part of the burden on the patients. When they call for an appointment, they are told they need to bring a consultation request form with them, she said.

Dr. Craig said he doesn't fault the primary care doctors since they have enough paperwork to deal with on a daily basis. He says most have been cooperative and when they are asked to send a request, most do so promptly. But in cases in which the referring physician fails to send the proper documentation, he just cuts his losses and bills for a regular visit.

Winker says this is probably the best solution until CMS offers clarification on the changes.

In its sign-on letter to CMS dated October 2006, the AMA expressed the same concerns that have caused Dr. Craig and others so much grief.

"We recognize the importance of concise medical documentation," the letter reads. "However, a consulting physician should not be penalized for a referring physician's (or qualified [nonphysician provider's]) failure to document a referral."

The letter went on to request that CMS clarify the changes and that consulting physicians be paid whether or not the referring physician has made the appropriate documentation. CMS has not yet formally responded to organized medicine's request.

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