Most state Medicaid programs do not recognize the traditional Current Procedural Terminology (CPT) consultation codes for reimbursement, aligning with a major federal policy change that occurred over a decade ago. Medicaid is not a single entity, but rather a collection of fifty-six different state and territory programs, each setting its own specific billing rules and fee schedules. This results in a varied landscape where providers must check local guidelines, though the general trend is away from using the old consultation codes. National standards for reporting these services have shifted, forcing providers to adapt their billing practices regardless of the specific payer.
The Historical Context of Consultation Codes
Before the shift in coding policy, consultation codes were distinct Evaluation and Management (E/M) codes used to report services provided by a specialist at the request of another physician or appropriate source. The purpose of these codes was to capture the unique work of providing an expert opinion and advice regarding a patient’s condition, without the consulting physician necessarily taking over the patient’s comprehensive care. The CPT code sets included ranges for both outpatient consultations (99241–99245) and inpatient consultations (99251–99255).
A consultation service required strict documentation to qualify for reimbursement. The documentation had to clearly show a specific request from the referring physician for an opinion or advice. The consulting provider was also required to generate a written report back to the requesting physician detailing their findings and recommendations. This documentation, often referred to as the “three R’s” (Request, Reason, and Report), separated a consultation from a standard new patient visit.
The National Transition Away from Dedicated Consultation Codes
The Centers for Medicare & Medicaid Services (CMS) eliminated the use of traditional consultation codes for Medicare Part B payment, effective January 1, 2010. CMS, as the largest federal payer, announced it would no longer recognize the CPT consultation codes (99241–99255) for reimbursement. This policy change was intended to simplify coding and documentation, although it initially caused confusion among providers.
Instead of using consultation codes, Medicare mandated that physicians report these services using standard Evaluation and Management (E/M) codes corresponding to the location and complexity of the service. This move established a national coding standard that many other payers, including most state Medicaid programs, eventually adopted. This change required a shift in documentation, as the new E/M codes are selected based on the level of medical decision making or the total time spent on the service, rather than the old consultation criteria.
The American Medical Association (AMA) maintained the consultation codes in the CPT manual for use by other insurers. However, the AMA later deleted the lower-level codes, 99241 and 99251, in 2023 to reduce complexity. This action finalized the movement away from dedicated consultation codes within the main coding system.
State-Specific Medicaid Policies and Code Usage
While the federal Medicare program set the precedent by eliminating consultation codes, each state Medicaid program had to independently decide whether to follow suit. The vast majority of state Medicaid agencies ultimately aligned with the CMS and CPT guidelines, discontinuing the recognition and reimbursement of the old consultation codes.
Providers who submit claims to Medicaid using the old CPT consultation codes (99241–99245 or 99251–99255) will typically receive a denial. This forces providers to submit corrected claims using the appropriate Evaluation and Management code. The primary guidance for providers is to check the specific state Medicaid Fee Schedule and the Provider Manual for the state where the service was rendered.
While most states align with the national standard, some state Medicaid programs have created unique, proprietary codes or maintained special rules for limited types of services. For instance, a state may use a Healthcare Common Procedure Coding System (HCPCS) Level II code or a state-specific code to report certain behavioral health or dental consultations. These exceptions are rare, and a provider cannot assume that their state is one of them without first confirming the policy in the state’s official documentation.
Current Reporting for Consultation Services
Since the specific consultation codes are largely obsolete for government payers, services that function as a consultation are now reported using standard Evaluation and Management (E/M) codes. The choice of the replacement E/M code depends on the location where the service was provided.
For a consultation performed in an office or other outpatient setting, providers are instructed to use the New Patient Office/Outpatient Visit codes (99202–99205). This is because a consultation service nearly always involves a patient who is “new” to the consulting physician, meaning the physician or a member of the same specialty group has not seen the patient within the last three years. For services provided to a patient who has been admitted to a hospital, the consultation is reported using the Initial Hospital Care codes (99221–99223).
The level of the E/M code selected is determined by either the total time spent on the encounter or the complexity of the medical decision making (MDM) involved. The documentation must support the chosen level based on these current E/M guidelines, not the old consultation criteria. When billing for initial hospital care, the physician who oversees the patient’s care may append a specific modifier to their E/M code to distinguish their role from other consulting providers.