When Is Physician Referral Needed for Reimbursement and How to Get It?

Referral in the most basic understanding is a written order from the primary care specialist to see another specialist and get the patient certain medical services. In many Health Maintenance Organizations (HMOs), the patients need to get a referral before they can get medical care from anyone except their primary care doctor. If they don’t get a referral first, the plan may not pay for your services. Referrals are required by some insurance providers to ensure that the patient will receive accurate service from the right people.
 
Patient referral is a common and important medical practice. Sometimes, a patient’s condition is outside a physician’s area of expertise, and the physician needs to refer the patient to a specialist who is more knowledgeable about or experienced in treating the condition. In the United States, for example, doctors refer one in every three patients to a specialist each year. Every referral is meant to ensure the best outcome for the patient.
 
How to Get a Physician Referral
 
Historically, physicians have known that in reporting a consultation service, the three R’s must be documented: Request, Render, and Report. Starting in 2006, CPT requirements have included one more R requirement: a Reason. There must be a request for consulting services from another physician or health care provider, the suspected or known diagnosis requires determination by a specialist who renders his / her opinion, the referring physician and consultant specifies a reason for the consultation, the treatment is undetermined or may be known, and a written report to the requesting physician or referring source reiterating the reason for consultation plus the findings and opinions must be forwarded by the consultant. In most cases, a consultation is a one – time visit.
A New Patient Referral usually has an identified problem which requires a specialist to provide care, and does not require that a written report be sent to the requesting physician or health care provider.
 
The policy changes or clarifications also state that a transfer of care occurs when a physician requests another doctor to assume the care of the patient. Ongoing management of the patient by the consultant physician cannot be reported using a consultation service code. Therefore, a referral for evaluation and management (E/M) cannot be considered a consultation because there has been a transfer of care. There also has been concern regarding language that the consulting physician must document the request and reason for the consultation in the patient’s medical record. Without that documentation, the CPT code for a consultation could not be used.
 
However, according to the E/M documentation guidelines, the consulting physician is not required to confirm that the requesting physician documents his / her request. The documentation criteria for a consultation service requires that the requesting physician and consulting physician both document the request for consultation in their medical records, but each physician is required to keep their own accurate records and code accordingly. In the revised Medicare Claims Processing Manual, the section which discusses consultation followed by treatment, there are also rules governing those occasions when it may be necessary for the consulting physician to assume ongoing care of the patient. It should be emphasized that the above guidelines differentiating a Consultation from a New Patient Referral apply primarily to Medicare patients. Currently it appears that non – Medicare payers have not yet implemented these regulations.
 
Understanding each of these processes and how to determine what is required by the insurance is key to avoiding lost revenue and negatively impacting patients financially.  Having knowledgeable support staff in the area of preservice is crucial to any organization. The return on investment in insurance reimbursement and patient experience alone is worth the cost of having this expertise at your institution.
 
References and Useful Links

Lori. (n.d.). New Patient Consultation and new patient referral – what is the difference. Medicare Payment, Reimbursement, CPT code, ICD, Denial Guidelines. Retrieved August 6, 2022, from https://medicarepaymentandreimbursement.com/2010/10/new-patient-consultation-and-new.html

PatientPop. (2022, April 20). When and how to refer patients to a fellow physician. PatientPop. Retrieved August 6, 2022, from https://www.patientpop.com/blog/physician-to-physician-referrals-reducing-liability-and-improving-patient-care/

The Center of Medicaid and Medicare Services (CMS) form 1500 must be used to bill SFHP for medical services. The form is used by Physicians and Allied Health Professionals to submit claims for medical services. All items must be completed unless otherwise noted in these instructions. A CMS 1500 with field descriptions and instructions is included in the link below: https://www.sfhp.org/wp-content/files/providers/forms/Instructions_for_CMS_1500_Claim_Form.pdf