Volume 5, Issue 1 January 2010


It is that time of year again, time to review changes to billing rules and regulations and to make the necessary changes. The good news is that there are relatively few changes to medical oncology billing and coding. In fact, the most significant billing change for 2010 is Medicare’s elimination of payment for consultation codes (with the exception of telehealth consultation G-codes) and their direction to use the existing evaluation and management (E/M) codes instead. The bad news is that the published guidance from CMS on billing for these services leaves some unanswered questions.

Consultation Services
Let us look first at some background surrounding the billing of consultation services.

In November 1990 the American Medical Association (AMA), the organization that develops and maintains the CPT® (Current Procedural Terminology Codes), developed the current physician visit and consultation codes.

In the Medicare Physician Fee Schedule Final Rule published in June 1991, CMS stated their goal for the development of the new visit and consultation codes was that they meet the following two criteria:

  1. They should be used reliably and consistently by all physicians and carriers; that is, the same service should be coded the same way by different physicians; and
  2. They should be defined in a way that enables us to properly crosswalk the new codes to the relative values for the Harvard vignettes so valid RVUs for work are assigned to the new codes.

In 1999, in response to requests from the physician community, CMS provided examples of consultation services as well as clinical scenarios providing examples of services that did not meet Medicare’s criteria for consultation services.

Still, over the next ten years there was much discussion and disagreement over the use of consultation codes and a general lack of consistency in the use of the codes by physicians and the local policy interpretations by Medicare contractors. Physicians lacked a clear understanding of when a “transfer of care” would occur, as clear concise guidance on exactly what constituted a transfer of care was not provided by the AMA or CMS and local Medicare policy varied widely.

In the 2009 CPT® book the AMA defined a consultation as, “a type of service provided by a physician whose opinion or advice regarding evaluation and/or management of a specific problem is requested by another physician or appropriate source.”

In the 2010 Medicare Physician Fee Schedule Rule CMS proposed and later finalized their decision to eliminate payment for consultation codes citing, “ the absence of any guidance in the AMA CPT consultation coding definition that distinguishes a transfer of care service (when a new patient visit is billed) from a consultation service (when a consultation service is billed).”

Subsequently, the AMA did include a definition of “transfer of care” and an expanded definition of a consultation in the 2010 CPT®.

Under the Evaluation and Management Service Guidelines section the AMA provides the following statement:

“Transfer of care is the process whereby a physician who is providing management for some or all of a patient’s problems relinquishes this responsibility to another physician who explicitly agrees to accept this responsibility and who, from the initial encounter, is not providing consultative services. The physician transferring care is then no longer providing care for these problems though he or she may continue providing care for other conditions when appropriate. Consultation codes should not be reported by the physician who has agreed to accept transfer of care before an initial evaluation but are appropriate to report if the decision to accept transfer of care cannot be made until after the initial consultation evaluation, regardless of site of service.”

The expanded definition of a consultation reads as follows:

“A consultation is a type of evaluation and management service provided by a physician at the request of another physician or appropriate source to either recommend care for a specific condition or problem or to determine whether to accept responsibility for ongoing management of the patient’s entire care or for the care of a specific condition or problem.”

Nevertheless, CMS has finalized their proposal to eliminate payment for the consultation codes due to the coding and documentation issues cited above and their determination that the higher payment associated with the consultation services is no longer valid as the associated physician work for these services is clinically similar to that for the initial hospital care and new patient office/outpatient visits.

Therefore, effective for services performed on and after date of service January 01, 2010 the office/outpatient consultation codes 99241-99245 and inpatient consultation codes 99251-99255 will no longer be paid by Medicare and physicians are instructed instead to bill these services with the existing new or established patient codes in the office/outpatient setting and the initial or subsequent care codes in the hospital and nursing facility.

This rule applies to Medicare primary and secondary claims. It does not apply to Medicare Advantage or Medicaid although these plans may choose to follow Medicare rules.

According to CMS the elimination of the higher paid consultation codes will not impact Medicare spending because they have increased the work relative value units (RVUs) for new and established office visits, increased the work RVUs for initial hospital and initial nursing facility visits, and incorporated the increased use of these visits into the practice expense (PE) and malpractice (MP) calculations. CMS also increased the incremental work RVUs for the E/M codes that are built into the 10-day and 90-day global surgical codes.

Still, most specialty practices including oncology can expect to see some decrease in payments associated with E/M services due to these changes.

For specific information on coding these services read, Tips for Appropriate Coding of Medicare Consultation Services in 2010 in this newsletter.

Drug Administration ServicesDrug Administration Services
There are no new, deleted or revised fluid/drug administration CPT codes in 2010. However, the AMA did revise the guidelines to include directions on how to determine which fluid/drug administration service should be reported as the “initial” service.

When the services are reported by a physician the selection of the initial code is determined by the physician’s knowledge of the clinical condition(s) and treatment(s). In this scenario the “initial” code should describe the key or primary reason for the encounter.

When the services are reported by a facility the selection of the initial code is determined using a hierarchy based on a structural algorithm (illustrated in figure 1) whereby:

  • Chemotherapy services are primary to therapeutic, prophylactic, diagnostic services which are primary to hydration services.
  • Infusions are primary to pushes, which are primary to injections.

Figure 1

Medicare Physician Payment

On December 19, 2009, the President signed into law H.R. 3326, the Department of Defense Appropriations Act, 2010. This bill delays for two months the -21.2 percent update to the Medicare Conversion Factor (CF), scheduled to take effect on January 01, 2010, replacing it with a zero percent update for two months. As a result, a CF of 36.08460 will be effective January 01, 2010 through February 28, 2010.

If no further congressional action is taken the scheduled -21.2% cut to physician payments will become effective March 01, 2010. It is expected that Congress will once again pass legislation to avert the negative update, what remains to be seen is what the Congressional fix will look like.

Lower Payment for Drug Administration Services
There are two factors causing a decrease in payment amounts for most drug administration services in 2010. First, in 2010 the four-year transition from a top down to a bottom up methodology of calculating Practice Expense (PE) Relative Value Units (RVUs) begun in 2007 is complete. In 2010 as in each year since 2007 the transition has resulted in a slight decrease in payment amounts for most drug administration services. As illustrated in figure 2 this transition to the new methodology is now complete.


Second, CMS reports that changes in Work, Practice Expense (PE) and Malpractice (MP) Relative Value Units (RVU), which will be transitioned in over four years, will result in a 1% decrease for hematology/oncology in 2010 and a 6% decrease when fully transitioned. These changes to the drug administration RVUs will result in significant decreases in reimbursement for these services.

Work GPCI Floor Expires
The 1.0 Work Geographic Practice Cost Indices (GPCI) floor originally established by the Medicare Modernization Act (MMA) and extended by the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA) expired on December 31, 2009,  the permanent 1.5 work floor for Alaska established by MIPPA is not affected by the expiration of the 1.0 work floor. The work floor was established to ensure that practices in geographic areas with relatively low work costs are not paid less than average for the work RVU component. The expiration of the Work floor will largely affect practices in rural states and localities.


ASP Calculation             
CMS finalized their proposal to remove physician-administered drugs from the calculation of the physician update formula. This action will not change the update for 2010 but will reduce the past discrepancy between actual and targeted expenditures and would reduce the number of years in which physicians are projected to experience a negative update.

Competitive Acquisition Program
The Competitive Acquisition Program (CAP) for physician-administered Part B drugs was established through a mandate in the Medicare Modernization Act of 2003 (MMA). The stated purpose of this voluntary program is to provide a delivery model for covered Medicare Part B drugs through a contracted vendor who would then bill Medicare directly for the drugs, as an alternative to the physician buy and bill model.

The CAP was first implemented on July 01, 2006 when Noridian Administrative Services was named as the designated CAP contractor and BioScrip was awarded the sole vendor contract. The CAP as originally implemented was ultimately not a successful program and the program was postponed for 2009 while CMS called for comments on how to improve the program.

In the 2010 Medicare Physician Fee Schedule (MPFS) Final Rule CMS finalized several changes to the CAP program including:

  • Quarterly drug payment adjustments for CAP Vendors
  • A provision that permanently excludes CAP sales from ASP calculations
  • A decrease in the number of approved CAP drugs
  • A geographic area limited to the 48 contiguous states and the District of Columbia
  • Permitting of a nominal CAP drug stock at the physician’s office
  • Allowing the transport of CAP drugs between practice sites

Although there is no word from CMS on when the CAP program will be re-implemented the CAP changes finalized in the 2010 MPFS are effective January 01, 2010.

ASP Drug Pricing Files
CMS updates and publishes the Medicare Average Sales Price (ASP) files quarterly. However, occasionally CMS will retroactively update the ASP of a drug. As shown in figure 3 (taken from the CMS October 2009 ASP Pricing File Updated 12/14/09), when CMS retroactively updates the quarterly payment amount of a drug the updated payment is entered in Column D and the date of the update is entered in Column L of the ASP file.  

When CMS retroactively changes the payment amount of a drug they instruct Medicare contractors not to search and adjust claims that have already been processed unless brought to their attention. Providers are responsible to file for any additional amounts due based on the retroactive update but the ASP files posted on the CMS website are updated with the new payment amount without reference to the previous amount allowed therefore archiving ASP files for quick reference is strongly recommended.

The January 2010 ASP Drug Pricing Files are now available on the Medicare website.

October 2009 ASP Pricing File – Updated 12/14/09   

Column A

Column B

Column C

Column D

Column L

HCPCS code

Short description

HCPCS dosage

Payment Limit



Natalizumab injection

1 mg


Updated January 2010

Figure 3

New & Deleted HCPCS
There are several HCPCS changes relevant to hematology/oncology, figure 4 below contains a list of some of the new HCPCS codes effective for dates of service on and after January 01, 2010  and HCPCS codes that have been deleted effective for dates of service after December 31, 2009. Refer to the HCPCS files on the CMS website for all new, revised and deleted codes. CMS HCPCS files include the annual file and quarterly updates.




J0460 up to 0.3mg

Atropine Sulfate

Deleted 12/31/2009

J0461  0.01mg

Atropine Sulfate*

Effective 1/1/2010

J0718 1mg

Certolizumab pegol (Cimzia)

Effective 1/1/2010

J2796 10 micrograms

Romiplostim (Nplate)

Effective 1/1/2010

J9155 1mg


Effective 1/1/2010

J9170 20mg


Deleted 12/31/2009

J9171 1mg


Effective 1/1/2010

J9328 1mg

Temozolomide (Temodar)

Effective 1/1/2010

Q0138 1mg

Ferumoxytol (Feraheme)
non- ESRD use

Effective 1/1/2010

Q0139 1mg

Ferumoxytol (Feraheme)
ESRD use on dialysis

Effective 1/1/2010

Figure 4
*Note new billing unit for this drug

Tips for Appropriate Coding of Medicare Consultation Services in 2010

With Medicare’s elimination of the use of consultation codes (with the exception of telehealth consultation G-codes) providers are instructed instead to use the appropriate new or established patient visit codes for Medicare patients. The elimination of the consultation codes applies to Medicare Part B primary & secondary claims however it does not apply to Medicare Advantage or Medicaid although they may choose to follow Medicare.

If a consultation code is billed for dates of service on and after January 01, 2010 the claim will be returned with the message that Medicare uses another code for the services. When this occurs the provider must bill the appropriate code for the service and may not bill the patient for the non-covered service.

CMS has not provided specific crosswalks from the eliminated consultation codes to the existing E/M codes saying, “It is not necessary to develop any complicated coding crosswalk or guidelines for translating the consultation code requirements for purposes of applying the visit codes. The major effects of the provision may actually simplify coding because physicians will use the office and hospital visit codes in place of consultations and will not have to determine whether the requirements to bill a consult are met.”

In MLN Matters Number: MM6740, CMS instructs providers to code E/M services based on where the visit occurred and the complexity of the visit. CMS also reminds providers that all applicable documentation guidelines must be followed for E/M services. Providers may use either one of two documentation guidelines for correct reporting of E/M services: the 1995 documentation or 1997 documentation guidelines.

Providers should carefully review the documentation guidelines for each of the inpatient and office/outpatient E/M visit codes to ensure proper coding. Both the 1995 & 1997 E/M Documentation Guidelines can be found on the CMS website.

Key Factors
Key  Factors for Coding Evaluation and Management Services

  • Where the visit occurred
  • The complexity of the visit

Effective for dates of service on and after January 01, 2010 the following consultation codes will not be recognized by Medicare:

Office consultation for new or established patient:
99241, 99242, 99243, 99244, 99245

Inpatient consultation for new or established patient:
99251, 99252, 99253, 99254, 99255

Instead for 2010 providers are to report these services with the existing E/M codes.

In the office setting use the new or established patient visits codes:

  •  99201-99205 for new patient visits*
  •  99211-99215 for established patient visits

* The CMS Claims Processing Manual, Chapter 12 §30.6.7 A, defines a new patient as “one who has not received any professional services from the physician, or another physician of the same specialty who belongs to the same group practice, within the past three years.”

In the hospital inpatient setting use the initial or subsequent hospital care codes:

  • 99221-99223 for initial hospital care*
  • 99231-99233 for subsequent hospital care

* CMS instructs Medicare contractors that in the inpatient hospital setting more than one physician may be paid for an initial hospital care visit code however, the principle physician of record (admitting physician) will be required to use modifier AI Principal Physician of Record on the initial hospital visit.

In the nursing facility use the initial or subsequent nursing facility care codes:

  • 99304-99306 for initial nursing facility care*
  • 99307-99310 for subsequent nursing facility care

* CMS instructs Medicare contractors that in the nursing facility setting more than one physician may be paid for an initial nursing facility visit code however, the principle physician of record (admitting physician) will be required to use modifier AI Principal Physician of Record on the initial nursing home visit.

For Medicare patients the concept of a new patient does not apply to the inpatient hospital and nursing facility codes. The initial hospital care codes 99221-99223 and initial nursing facility care codes 99304-99306 are to be used for the first encounter in the facility with the patient by the physician.

While CMS has published several documents pertaining to the elimination of the consultation codes not every scenario is directly addressed and as is often the case much is left to contractor discretion. For this reason it is vitally important that providers monitor both CMS and their Medicare contractor for further clarification on this issue.

Currently, there is confusion surrounding the coding of inpatient hospital and nursing facility visits. In particular when these services are performed by a physician other than the admitting physician and when the services do not meet the criteria for the lowest level of initial inpatient hospital (99221-99223) or initial nursing facility (99304-99306) care codes.

The revised Medicare Claims Processing Manual Publication 100-04, Chapter 12, § F, includes the following direction, “All physicians who provide an initial visit to a patient during hospital care shall report an initial hospital care code (99221-99223). “

However, there are differing interpretations among Medicare contractors on how to code this service when an initial inpatient hospital or nursing facility service is performed and that service does not meet the criteria for even the lowest level initial care code (99221 in the hospital and 99304 in the nursing facility).

In an article dated December 30, 2009  and posted on their website, WPS, Medicare Administrative Contractor (MAC) for Jurisdiction 5 (Iowa, Kansas, Missouri & Nebraska) and current Part B  contractor for legacy states Illinois, Michigan, Minnesota and Wisconsin,  advised physicians to report the Not Otherwise Classified (NOC) care code 99499 when the initial hospital or nursing facility visit does not meet the requirements of the lowest initial care code. WPS cited IOM Pub. 100-04, Chapter 12, Section 30.6.1. B, which states:

In the rare circumstance when a physician (or NPP) provides a service that does not reflect a CPT code description, the service must be reported as an unlisted service with CPT code 99499. A description of the service provided must accompany the claim. The carrier has the discretion to value the service when the service does not meet the full terms of a CPT code description (e.g., only a history is performed). The carrier also determines the payment based on the applicable percentage of the physician fee schedule depending on whether the claim is paid at the physician rate or the non-physician practitioner rate.

WPS says they previously asked CMS for clarification on the issue and were told by CMS, "We follow AMA CPT coding logic and it is not permissible to bill a subsequent prior to an initial. Bottom line, always bill an initial service prior to a subsequent hospital visit."

WPS said they will continue to follow CMS direction when and if CMS issues further clarification.

Another recent article, Inpatient and Nursing Facility Billing by a Secondary Physician by Noridian Administrative Services, J3 MAC (Arizona, Montana, North Dakota, South Dakota, Utah & Wyoming) and Part B contractor for legacy states Alaska, Oregon & Washington, provides a different interpretation of billing for initial services that do not meet the requirements of the lowest initial care code.  

According to the Noridian article posted on January 7, 2010, when necessary inpatient hospital and nursing facility visits, performed by a physician other than the admitting physician of record, do not meet the criteria for even the lowest level of initial care but all of the required components performed and appropriately documented meet the criteria for one of the subsequent care codes, then that level of service (99231-99233 in the hospital and 99307-99310 in the nursing home) is appropriate for billing and payment.

Furthermore, Noridian states that only in the very rare circumstance when a necessary service is performed and documented but does not meet even the criteria for a 99231 or 99307, should a 99499 be paid. Providers are strongly encouraged to monitor communications from CMS and their local Medicare contractors for further clarification and interpretation on this new and evolving policy. Written clarification and interpretation provided by CMS and local Medicare contractors should be filed for easy reference in the event your practice is audited on these services.

Other payers & Medicare as secondary payer
The AMA has not eliminated the consultation codes.  Nevertheless, there have been various reports of private payers announcing they will no longer recognize consultation codes. Consequently, providers need to determine which if any private payers have adopted this Medicare rule.
Furthermore, if Medicare is secondary and you bill a consultation code to the primary payer Medicare will not make a secondary payment on that service. In the MPFS final rule CMS states, In those cases where Medicare is the primary payer, physicians must submit claims with the appropriate visit code in order to receive payment from Medicare for these services. In these cases, physicians should consult with the secondary payers in order to determine how to bill those services in order to receive secondary payment. In those cases where Medicare is the secondary payer, physicians and billing personnel will first need to determine whether the primary payer continues to recognize the consultation codes. If the primary payer does continue to recognize those codes, the physician will need to decide whether to bill the primary payer using visit codes, which will preserve the possibility of receiving a secondary Medicare payment, or to bill the primary payer with the consultation codes, which will result in a denial of payment for invalid codes.”

In MLN Matters Number: MM6740, CMS outlines two options providers may use when payers primary to Medicare continue to recognize consultation codes:

  • Bill the primary payer an E/M code that is appropriate for the service, and then report the amount actually paid by the primary payer, along with the same E/M code, to Medicare for determination of whether a payment is due; or
  • Bill the primary payer using a consultation code that is appropriate for the service, and then report the amount actually paid by the primary payer, along with an E/M code that is appropriate for the service, to Medicare for determination of whether a payment is due.

CMS notes that the first option may be easier from a billing and claims processing perspective.


Published by Rise Marie Cleland. Sponsored by Lilly Oncology

Medicare Prompt Payment Interest Rate  

The Omnibus Budget Reconciliation Act (OBRA) requires Medicare contractors to pay interest on all “clean” claims not paid timely. A clean claim is defined as a claim which does not require investigation or development outside the Medicare Contractors operation on a prepayment basis.

The Department of the Treasury announced the new Prompt Payment Interest Rate is 3.250 percent effective January 1, 2010. The new rate is effective for scheduled Medicare payment dates of January 1 through June 30, 2010 and is applicable to clean electronic and paper claims that have not been paid by the 30th day after the date of receipt.

The government updates the interest rate January 1 and July 1 each year, the prompt pay interest rate is available on the Treasury’s Financial Management Service page.  

Interest Rate on Overpayments & Underpayments

CMS Transmittal 165 (Change Request 6652) advises Medicare contractors of the quarterly update to the interest rate for Medicare overpayments and underpayments.  Effective January 25, 2010, the interest rate will be 11.25 percent.

Medicare regulations (42 C.F.R. 405.378) provide for the assessment of interest on Medicare overpayment and underpayments.  This regulation states that CMS will charge interest on overpayments, and pay interest on underpayments, to providers and suppliers of services (with certain exceptions as outlined in the regulation) including physicians and other practitioners. The interest rate is set at the higher of the current value of funds rate (1 percent for calendar year 2010) or the private consumer rate as fixed by the Department of the Treasury.  According to Transmittal 165 the private consumer rate has been changed from 10.875 percent to 11.25 percent. Therefore, effective January 25, 2010 the interest rate that may be charged on Medicare overpayments and underpayments is 11.25 percent.

When a provider receives a demand letter instructing repayment of an overpayment, the entire amount must be paid within 30 days of demand. Interest accrues from the date of the final determination and either is charged on the overpayment balance or paid on the underpayment balance for each full 30-day period that payment is delayed. Interest will continue to accrue during periods of administrative and judicial appeal until final disposition of the claim. If the overpayment determination is later reversed, the amount recouped plus the interest will be repaid to the provider.
If an intermediary or a carrier makes a final determination that an underpayment exists, interest to the provider or the supplier will accrue from the date of notification of the underpayment.


The Sustainable Growth Rate (SGR) formula was created by Congress in 1997 as a way to control money spent on physician services. The SGR sets an annual target for expenditure for physician services based on growth of the gross domestic product.  When actual expenditures for physician services exceed the annual target the SGR formula cuts physician payments in the following year. 

Flawed Formula
Since 2003 the SGR formula has resulted in a scheduled cut to physician payments and each year Congress has acted to temporarily stop these cuts in lieu of a permanent solution to the flawed SGR formula.  However, because the scheduled cuts are cumulative the temporary fixes serve only to delay the cuts and each year the scheduled reduction in physician payments increases. 

In 2010 the SGR formula resulted in a scheduled 21.2 percent reduction in physician payments (which has been temporarily halted through a two-month freeze on the Medicare Conversion Factor) and it is predicted that the SGR formula will result in a 40 percent cut by 2016.

Several legislative bills aimed at fixing or replacing the flawed SGR formula have been introduced and every major physician group is advocating for a permanent fix.




Risë Marie Cleland

Oplinc, Inc.
113 W. 7th Street
Suite 205
Vancouver, WA 98660
360.695.1608 office
360.695.6937 fax







Comments and suggestions for future issues are welcome, please forward correspondence to Risë Marie Cleland by email at: Rise@Oplinc.com







Access all of our previous newsletters.






Risë Marie Cleland is the founder and President of Oplinc, Inc., a national organization of oncology professionals. Through Oplinc, Inc. Ms. Cleland publishes the weekly Oplinc Fast Facts focusing on the timely dissemination of information pertaining to billing, reimbursement and practice management in the oncology office and Oplinc’s Best Practices Review, which provides a more in-depth look at the issues and challenges facing oncology practices. Ms. Cleland also works as a consultant and advisor for physician practices, pharmaceutical companies and distributors.







Please note that this newsletter is presented for informational purposes only. It is not intended to provide coding, billing or legal advice. Regulations and policies concerning Medicare reimbursement are a rapidly changing area of the law. While we have made every effort to be current as of the issue date, the information may not be as current or comprehensive when you review it. Please consult with your legal counsel for any specific reimbursement information. For Medicare regulations visit: www.cms.hhs.gov.



CPT® is a Trademark of the American Medical Association Current Procedural Terminology (CPT) is copyright 2010 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein.



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