Reduce Your E&M Documentation and Coding Headaches, and Exposure to Medicare E&M Audits

Physicians and Medicare alike have struggled for many years with correct coding, documentation, and payment of evaluation and management (E&M) services. For more than a decade, the government, its Medicare contractors, private industry coding experts, health care organization compliance staff, physician organizations, and others have lectured and written about correct E&M coding for services reported to Medicare. Among them, TrailBlazer Health Enterprises, the Medicare contractor for Texas, has dedicated significant educational and medical review resources over the past several years to correcting E&M Comprehensive Error Rate Testing (CERT) errors. Despite all of the attention given to E&M coding, the errors continue for many reasons.

E&M services, by their nature, are a diverse set of cognitive procedures. The American Medical Association's complex CPT E&M code set describes the various physician work and expense scenarios encompassed within the procedures. Medicare is required by federal law to pay only for services that are medically reasonable and necessary. For E&M services, medical necessity applies to both the frequency and the intensity of paid E&M services. Add to these the conflicting information available about work-based coding and the relative lack of medical necessity-based coding instruction (not to mention the myriad issues that arise simply from the technical variability of physician and practitioner record-keeping), and it's easy to understand the current conundrum of recalcitrant E&M CERT error rates.

Medicare's definition of medical necessity requires that paid services meet but not exceed the patient's medical needs and be provided in accordance with accepted standards of medical practice. Accordingly, TrailBlazer believes that the patient's condition (e.g., severity, acuity, number of medical problems) is the key determinant for the frequency and intensity of E&M services for which Medicare pays. Coding E&M services first on the basis of medical necessity followed by verification of documentation of required key work components for the selected code allows coders and clinicians to avoid several common pitfalls of E&M documentation and coding. The CPT E&M codes, their CPT section preamble, and the CPT clinical examples (Appendix C) contain material that is useful for classifying severity of illness usually associated with the various E&M services. TrailBlazer uses the CPT definitions in its medical necessity determinations of E&M services and recommends that clinicians and coders do so as well.

Given this framework for E&M coding, the TrailBlazer medical directors offer the following highly simplified but very useful "bottom-line" E&M coding advice. 

Regardless of how much history, physical examination, and/or medical decision-making related to an E&M encounter are recorded …

  • Do not consider reporting the highest two codes of any code family:
    • When fewer than three distinct medical conditions/complaints   were evaluated and managed during the encounter, OR
    • No problem evaluated and managed, without appropriate intervention, conferred at least a 50/50 likelihood of worsening, disability, or death between the time of the current encounter and the next physician encounter.   
  • Do not consider reporting the highest codes of any code family:
    • When fewer than four distinct medical conditions/complaints   were evaluated and managed during the encounter, OR
    • No problem evaluated and managed, without appropriate intervention, conferred at least a 50/50 likelihood of worsening, disability, or death between the time of that encounter and the next physician encounter.  

This approach simplifies coding E&M services by eliminating from consideration the highest-level codes for reporting services that (by their clinical nature) usually do not require a detailed or comprehensive history and physical, high (and sometimes moderate) complexity medical decision-making, or lengthy counseling and coordination. When clinicians and coders use the number of conditions stated above for selecting a CPT E&M code, the medical record must demonstrate clearly that the conditions were significant and distinct, and the physician evaluated and managed those conditions in a manner consistent with accepted standards of care. It is insufficient to simply count the patient's conditions or problems if documented physician work to evaluate and manage those conditions or problems is absent from the record. Also, key component work elements required by the CPT code definition and CMS' E&M Documentation Guidelines absolutely must have been performed and properly documented in the patient's record.

This "bottom-line" advice addresses the most common source of known Medicare E&M coding errors: failure of medical records to demonstrate the work of and/or medical necessity of higher level E&M services reported for payment. Adopting this coding approach will likely reduce the level of and payment for E&M services reported by some physicians and practitioners. But it does so by reducing inappropriate Medicare resource utilization. This approach can provide the tangible payoff of substantially reducing the burden and risk associated with unnecessarily documenting and coding clinically irrelevant key component work. And isn't a reduction in any administrative headache a welcome relief for clinicians and coders alike? 

(Source: TrailBlazer Health Enterprises, From the Desk of the Medical Director)



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