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Doctors May Be Underbilling For Advance Care Planning. Why That Matters To Patients.

Doctors May Be Underbilling for Advance Care Planning. Why That Matters to Patients.

Various review boards have described advance care planning as a critical component of healthcare for people with a serious illness.1,2 This refers to meetings where a doctor, hospice nurse, or other healthcare professional guides a patient through informed decision making about the healthcare he or she would want under different circumstances. The advance directives that often come from these meetings help doctors deliver care that is concordant with each patient’s individual values. However, some new evidence suggests doctors may be dramatically underbilling for this care. Unfortunately, underbilling can result in lesser delivery of care.

Unreimbursed Care Planning as an Obstacle to Care

The insurance industry as well as state and federal regulations tend to use doctors as gatekeepers to other healthcare services. Doctors are expected to document why patients qualify for various services that other providers (and often other companies) will deliver, to communicate the referral to the other healthcare provider, and to oversee the progress of care. One of the recurring problems with this arrangement is that taking time out of the day to do these things can result in pay cuts and schedule interruptions for doctors. Resultantly, doctors may strive to minimize the time spent with referred-to services.

While these shortcomings are still abundant in America’s healthcare system, Medicare has recognized the negative effects of pressuring doctors to provide care planning for free or at a significant discount. Over the past few years, Medicare has launched several billing codes designed to recognize and reimburse the significant time that quality care planning requires. Among these codes is the Advance Care Planning procedural code that the Centers for Medicare and Medicaid Services launched in 2016.  

CPT 99497 / 99498 Advance Care Planning

This billing code recognizes the additional time needed when healthcare professionals discuss advance care planning with patients and family. Nationwide, CPT 99497 pays roughly $90 for up to 30 minutes of meeting time (for the first 30 minutes), and CPT 99498 pays about $75 for each additional 30 minutes. Fees are adjusted up and down based on regional modifiers and other issues. Planning can include conversations about hospice, palliative care, advance directives, and other end-of-life issues. The conversations can occur almost any time a provider deems appropriate – not just at end-of-life. At one time, it was anticipated that doctors would discuss advance directives with patients during their Welcome-to-Medicare visit, but this more recent coding recognizes the reality that advance care planning occurs in other meetings. If an advance-care-planning discussion takes place during the annual wellness visit, it will be considered a preventive service, and the patient’s coinsurance and deductible will be waived.

Only 5% of Patients are Billed for Advance Care Planning

A study recently published by the Journal of the American Medical Association observed that only 5% of patients with serious illness were billed for CPT 99497. This would seem to indicate that 95% of patients do not receive advance care planning. However, in a different study published by the Journal of Pain and Symptom Management, seven out of ten Caucasians and four out of ten African Americans report having an advance care planning meeting with their healthcare professionals.3 These studies used different criteria in group creation, so any observations gleaned by comparing them will be rough. However, this does suggest that doctors may be billing for normal consultations when they could be billing for Advance Care Planning in up to 90% of advance care planning encounters. More importantly, if medical billing practices are causing doctors to be under-reimbursed for advance care planning, the long-standing theory is that doctors will also be inclined to try to shorten these visits, lessen their availability, or lessen their frequency.

The Role of Hospice in Improving Advance Care Planning

A reminder to doctors about the relatively new billing code may be indicated, and the best people for this job are hospice agencies. Hospice agencies constantly seek to inform doctors about hospice referrals and to be helpful to doctors. Reminding doctors that they could be getting paid more for the care they are already delivering is a good way to earn favor from referral sources, so hospice has a financial incentive to get this word out. Furthermore, patients who receive advance care planning prove more than twice as likely to choose hospice at some point. Therefore, any measures that can improve the quality or utilization of advance care planning can have a positive financial impact on hospice agencies.


Various bodies have described advance care planning as a critical component of quality health care in serious illness. There may be room for improvement in utilization, especially for African American patients, and lack of awareness of improved billing codes may be an impediment to more widespread availability of advance care planning. Hospice agencies should work to ensure their referral sources are fully using CPT 994997 / 99498 and that clinicians are aware these codes pay up to $165 per hour. Good utilization of advance care planning raises the quality of patient care and increases the number of referrals to hospice.  


  1. Tulsky JA. Improving quality of care for serious illness: findings and recommendations of the Institute of Medicine report on dying in America. JAMA Internal Medicine. 2015 May 1; 175 (5): 840-1.
  2. Sanders J. Finding the right words at the right time—high-value advance care planning. New England Journal of Medicine. 2015 Feb 12; 372 (7): 598-9.
  3. Luth EA, Prigerson HG. Unintended harm? Race differences in the relationship between advance care planning and psychological distress at the end of life. Journal of Pain and Symptom Management. 2018 Nov 1;56 (5): 752-9.