Establishing Medical Necessity for E&M Services

With few exceptions, Medicare — and private health plans — pay only for medically reasonable and necessary services. They determine “medically reasonable and necessary” separately from determining that the physician performed the work described by a reported CPT code. Be sure that your documentation supports the E&M services you code for, and that the level of work described is appropriate for the patient’s condition.

Documentation
For evaluation and management (E&M) services, the medical record documentation must:  

  • Demonstrate the physician performed the reported service:
    • As described in the CPT book, and  
    • For Medicare, as required by Centers for Medicare & Medicaid Services E&M documentation guidelines; and    
  • Support the intensity and frequency of the reported E&M service but not exceed the patient’s clinical needs. Information within the medical record about the patient’s condition (e.g., severity, acuity, number of medical problems), not the diagnosis alone, determines the level of service payable. The Texas Medicare carrier, for example, reports that practitioners often include unnecessary material while failing to record clinically pertinent information needed to determine medical necessity of the service. Your records must:
    • Describe the patient’s condition and reason for the visit in enough detail for a reasonable observer to understand the patient’s need, and  
    • Document that the nature of the patient’s presenting problem and/or status is consistent with the level of service reported.  

 Level of Service
The E&M code chosen must reflect both work performed and medical necessity. Though an E&M service may code to a high level based on the documentation of key component work, it is inappropriate to request payment when the patient’s effective management does not require the code’s work.   

The sample record below illustrates deficiencies commonly found within medical records for Medicare claims. Try your hand at determining the appropriately reimbursed E&M code considering medical necessity and key component work. Then check how Medicare’s comments about the case compare with your own impressions.   

 

Patient Name: John Doe                           Date of Service: 01/01/2015

Date of Birth: 01/01/1935

Chief Complaint: “Osteoarthritis”

History of Present Illness (HPI): 
75-year-old male with a history of osteoarthritis.

Review of Systems (ROS): 
Constitutional symptoms — No fever, no loss of appetite.
Cardiovascular — Negative for chest pain.
Respiratory — No shortness of breath.
Gastrointestinal — No nausea or vomiting.
Genitourinary — No difficulty urinating.
Musculoskeletal — Pain in joints intermittently.
Integumentary — No rash.
Neurological — Denies disorientation.
Endocrine — No cold intolerance.
Allergic/Immunologic — Positive for seasonal hay fever.

Past, Family, Social History (PFSH):
See visit record for date of service 1/1/2010.

Physical exam:
Vital signs — T 98.7, P 76, R 20, BP 130/80.
Head, Ears, Eyes, Nose, Throat — Oropharynx clear, no mucosal ulcerations and auditory canals clear.
PERRLA.
Neck — Trachea midline, supple.
Lungs — Clear to auscultation bilaterally.
Cardiovascular — Regular rhythm and rate.
Abdomen — Soft, nontender.
Extremities — Normal.
Musculoskeletal — Bilateral knees with normal range of motion, crepitus on motion, pain with ambulation rated 3 out of 10 and tenderness upon palpation.
Neurologic — Oriented to time, place and person.
Hematologic/Lymphatic/Immunologic — No bruising, no lymphatic swelling.
Skin — Normal temperature, turgor and texture. No rash.
Psychiatric — Appropriate mood and affect.

Assessment:
Occasional joint pain.

Plan:
1. Continue same treatment.
2. Return to office in three months.

 

Medicare Comments
“The patient presented with a single, chronic, well-controlled problem. Unfortunately, the practitioner’s explanation of the nature of this patient’s problem is too vague to get even a sense of whether this service is at all medically necessary. Osteoarthritis is a chronic problem that appears to be stable in this patient. Is a three-month follow-up reasonable and necessary for stable osteoarthritis? Why or why not? Those are the questions the information in the record should address for Medicare payment to be determined appropriate.   

“If one assumes this was a medically reasonable and necessary visit, what level of service is needed for a follow-up visit with a patient who has one stable problem (for which the likelihood of death or disability before the next visit is very unlikely)? The answer is that this visit would appropriately be paid as a low-level E&M service, probably code 99212. Consequently, while the very brief HPI and medical decision-making could be appropriate for the care of this patient’s osteoarthritis, the comprehensive ROS and examination exceeded the level of care needed for the patient’s presenting condition.” 

Provider Signatures
For Medicare claims, the medical record also must have a legible signature from the rendering provider that meets Medicare’s documentation signature requirements (PDF). This applies to all staff participating in the care of the patient.   

More Information
More information about the accurate billing of E&M services for Medicare patients is available on TrailBlazer’s Evaluation and Management Services Specialty Services webpage, including:

In addition, the CPT E&M codes, CPT section preamble, and CPT clinical examples (Appendix C) contain material that is useful for classifying severity of illness usually associated with the various E&M services.


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Last Updated On

October 20, 2017

Originally Published On

November 04, 2010

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