E&M Coding About to Change
By Sean Price Texas Medicine August 2020


First, the bad news: Physicians need to take some serious time between now and Jan 1, 2021, to study changes that are coming to Medicare outpatient evaluation and management (E&M) codes – changes most private insurers likely will follow.

The revisions – which affect office or other outpatient visit codes and prolonged services codes – will affect physicians in every specialty. (For details visit tma.tips/AMAEMChanges.)

“When you’re working on an outpatient basis, you’re using those codes about 99.5% of the time. They’re the mainstay of the office visit codes,” says Karl Krohn, MD, a Lufkin internal medicine specialist who has been closely following the revamp conducted by the Centers for Medicare & Medicaid (CMS) and the American Medical Association (AMA).

Now the good news: The changes should reduce the amount of documentation needed with each patient, says Dr. Krohn, whose practice consists of more than 80% Medicare patients.

“I think it will go over fairly well once people get used to it,” he said. But he added: “It’s definitely going to change workflows.”

Texas Medical Association experts say the revisions are meant to encourage physicians to spend more quality time with their patients and stress less about administrative burdens.

While the updated rules will affect how practices get paid for patient care, they do not alter how much physicians get paid, nor does TMA expect the changes to interfere with patient care, says Carra Benson, manager of practice management and reimbursement services at TMA. Instead, they should improve physician efficiency by reducing unnecessary paperwork.

“I see this as a positive change,” she said.

However, CMS has yet to explain the framework for the documentation physicians will have to provide. The new E&M guidelines were created in part to reduce audits of physician records, and such ambiguity could undermine the effort to reach that goal, Ms. Benson adds.

Out with the old

Medicare payments for outpatient visits are based on the complexity of treatment, which physicians rank from 1 to 5, with Level 5 patients requiring the most complex care.

In 2018, CMS proposed a plan to reduce documentation on outpatient visits that would have collapsed those levels from five to three and modified the resulting payments. TMA, AMA, and other medical organizations vehemently opposed the plan because it would have led to physicians doing more work for less money while needlessly forcing patients to come in for extra visits. (See “Buying Time: Medicine’s Warnings Prompt CMS to Delay Dramatic Coding and Payment Changes,” January 2019 Texas Medicine, pages 36-39, www.texmed.org/CodingChanges.)

“That was a disaster in the making,” Dr. Krohn said.

CMS agreed to delay those changes and instead accepted AMA’s recommendation for a work group made up of physicians, payers, and health care professionals, among others, to draw up an alternative plan. CMS adopted the work group’s new guidelines in 2019, and they will take effect in January.

Medicare has two sets of guidelines on E&M coding, one written in 1995 and another in 1997. Physicians can choose which one they prefer to follow.

The January revisions update both sets, but they especially revise some of the 1997 guidelines physicians have found difficult to follow, Ms. Benson says.

Under the old system, for both sets of guidelines, physicians document the level of complexity by providing information in three categories: patient history, physical exam, and medical decisionmaking. For each of those three categories, physicians are expected to provide greater amounts of documentation as the complexity level rises.

This documentation has been especially difficult for physicians under the 1997 guidelines. For instance, a lower level of complexity might require a physician to show in the physical exam category that the heart, lungs, and abdomen were checked, Dr. Krohn says. For the next level of complexity, the physician would have to show that the eyes, ears, throat, and extremities were checked as well, and that a neurological examination had been done.

For billing purposes, what counted was the actual number of exam elements, or “bullet points,” that have been checked off, not whether they have anything to do with the patient’s condition, he says.

“We’re talking [the sheer number of] items – so much in the history, so much in the physical exam, so much in the medical decisionmaking,” he said. “And it really doesn’t matter what they are as long as you include them. And of course, as you go up to the higher levels, you have to put more in. So, you’re basically just adding things in to get to the higher level of coding. That may make it easier for the coders to review a chart, but it really doesn’t add much to medical care.”


Medical judgment, time matter

The new system simplifies this in three ways, Ms. Benson says.

First, the history and physical exam are no longer counted in determining the level of service, although they still should be documented to indicate the care provided. Second, physicians no longer need to document specific bullet points. Third, the physician now can base the E&M level on either the amount of time they spend with the patient or on their medical decisionmaking.

“Instead of having this multitude of [bullet points] to determine the level of the evaluation and management code, it’s been condensed to two options,” Ms. Benson explained.

For instance, physicians who spend a lot of time with a patient may opt to bill based on time.

On the day of a visit, physicians frequently review information before a patient arrives or after they’ve left. Often this is routine lab work or something similar that takes a few moments. But if the physician spots something that requires deeper attention, these matters can take a lot of time when no patient is present, Dr. Krohn says.

“That’s the first time that [CMS has] acknowledged that not all of our work has to be done when we’re sitting in the exam room,” he said.

The new guidelines also get rid of the requirement that 50% of a physician’s time must be spent counseling a patient, Dr. Krohn says.

“Sometimes you’ll spend 45 minutes in the exam room with the patient trying to get the story out of them so you can figure out what’s going on,” he said. “And that’s not counseling, that’s doing your history and physical. Some patients are simply not good describers of their own symptomology.”

A physician who chooses to document based on medical decisionmaking will have more freedom to determine how much documentation is needed, Dr. Krohn adds.

“It leaves the amount that you document up to the discretion of the physician, which I think is appropriate,” he said. “There are some people who document a lot, and there are some people who don’t.”

However, physicians are still waiting for CMS to fully define the baseline requirements for that documentation. Further clarification may come before the beginning of 2021, Ms. Benson says.

“The term [CMS has] applied to it is ‘medically appropriate,’ and they have not defined medically appropriate,” she said. “As we get closer [to Jan. 1], there will be more guidance.”

Tex Med. 2020;116(8):43-44
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Last Updated On

August 03, 2020

Originally Published On

July 30, 2020

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Sean Price


(512) 370-1392

Sean Price is a reporter for Texas Medicine and Texas Medicine Today. He grew up in Fort Worth and graduated from the University of Texas at Austin. He's worked as an award-winning writer and editor for a variety of national magazine, book, and website publishers in New York and Washington. He's also helped produce Texas-based marketing campaigns designed to promote public health. Sean lives in Austin and enjoys hiking, photography, and spending time with his wife and two sons.

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