Consultation fee cut by CMS increased overall outpatient spending

The Center for Medicare and Medicaid Services' (CMS') elimination of payments for consultations in 2010 actually increased total outpatient spending by 6.5% for the first full year of the program, according to a new report from researchers at Harvard Medical School.

CMS instituted the consultation fee cut in 2010 and increased fees for office visits in an attempt to redistribute Medicare payments from specialists to primary care physicians (PCPs), the study notes. After the program change, the number of consultation appointments billed to Medicare decreased, but a significant increase in the volume of regular office visits did not occur.

In 2009, Medicare’s average consultation payment was $125, compared with about $92 for a new-patient office visit and $61 for an established-patient visit. Although CMS increased the rate for new-patient and established-patient office visits by 5% to 6%, they still remained 16% to 61% lower than prior consultation fees.

The first full year saw the elimination of $18.52 per beneficiary per quarter in consultation spending but a $13.64 increase per beneficiary per quarter on new-patient visits and a $15.08 increase on established-patient visits, according to the study. Overall, the change resulted in about $10 more spending per beneficiary per quarter.

Although cost savings were not achieved, researchers note that the policy did appear to narrow the gap in Medicare payments for office encounters between specialists and PCPs, with PCPs securing a greater portion of the increased spending for the year.

The full study, published in the Archives of Internal Medicine, was funded by The Commonwealth Fund.