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2021 E/M Coding Changes: What Physician Practices Need To Know

Feb 15, 2021

Effective January 1, 2021, the Centers for Medicare and Medicaid Services 2020 Final Rule implemented sweeping changes for evaluation and management (“E/M”) codes and overhauled CPT code descriptors and guidelines – but only for the office and outpatient services category, or codes 99201 through 99215. That means for 2021, providers will have to code based on a hybrid of guidelines, one for office and outpatient and another for other places of service such as inpatient hospitals.

The goal was to better align medical record documentation and coding and simplify the administrative burden on providers and practices. Providers had long requested changes due to complicated and repetitive documentation requirements which led to incorrect coding and subsequent improper payments by carriers. In fact, in 2010 the Office of Inspector General reported a 55% payment error rate on E/M codes (equating to $6.7 billion in overpayment). This likely contributed to the implementation of new guidelines.

Providers are under greater scrutiny than ever. While E/M codes account for only 1% of all procedure codes in the CPT manual, in 2017 they accounted for 18% of frequency in codes reported to Medicare, and a whopping 28.4% of all payments. And since Medicare’s Comprehensive Error Rate Testing Program (“CERT”) has shown that a high percentage of these codes are not documented correctly, that is where carriers – both commercial and government – are directing their audits to identify possible

overpayments and demand that physicians repay these amounts. Audits are typically performed on a small number of claims but if they are found to be unsupported, the carrier may request a larger review.

If a carrier asserts that the provider intended to bill at an inappropriate level of service (by selecting codes unsupported by sufficient knowledge of coding concepts), they may allege fraudulent intent. The carrier then may go back an indefinite time period – spanning multiple years, well in excess of existing state and contractual limits – to either request claims to review, or extrapolate financial recoupments. Carriers may support this allegation when the provider has not complied with the OIG recommendation of conducting a coding and documentation review. Conversely, it has also been seen that if a provider has shown he/she has had education and an objective review of some claims, the carrier is more likely to accept inappropriate claims documentation as a mistake, or abusive billing, and not extrapolate over past years.

As with any new guidelines, we can expect to see the new E/M codes audited several months after implementation. An ounce of prevention – meaning a small review of charts as well as education as recommended by the OIG – may avoid quite a bit of discomfort in the long run.

What changed?

There is much detail behind these items, but the main changes include:

  • Previously, E/M was coded by the medical record’s history, exam and medical decision making (“MDM”); now a provider must choose either MDM or time to support the chosen code.
  • Previously, time was only used for E/M office visits when documented as face-to-face time in which counseling or coordination of care dominated the visit. In 2021, providers will consider total time spent caring for the patient on that date of service.
  • Previously, time was indicated as “typical” time. Now there is a new more encompassing time definition involving specific ra
  • Code 99201 has been eliminated, the logic being that since the MDM is straightforward for both codes 99201 and 99202, and new criteria is based on MDM, there would be no way to differentiate between these two codes.
  • Previously, providers used the Table of Risk as part of their MDM calculations. In 2021, providers will rely on the significantly different MDM table, printed in the CPT manual.

What’s next?

The key decision facing providers is which coding methodology to use: MDM or time? Conducting a coding and documentation review to analyze current chart documentation and understand what code level each medical record would support can help inform the decision. An assessment will identify the provider’s current style of documentation, as well as strengths and weaknesses in supporting MDM. A review of as few as ten charts can offer insight and a comfort level that the documentation supports the codes billed. Provider and staff education is strongly advised to ensure compliance and reduce the risk of revenue loss moving forward.

As mentioned above, engaging in both a coding review and education helps prove intent to code compliantly, making an allegation of wrongdoing and potential extrapolation less likely. 

Next steps:

  • Take a look at current documentation and identify areas for improvement, as well as thoughts on whether time or MDM would be a better suited methodology.
  • Educate providers and staff on new guidelines and incorporation into documentation.
  • Providers should learn to routinely document items within notes that will be used to score MDM, including ordering or interpreting tests or X-rays, requesting review of outside documents, having discussions with other health care providers, and using independent historians aside from the patient.
  • Test-drive some new improved notes to see how they would score using the new coding methodologies.
  • Review EHR templates for time and new MDM criteria and determine whether they need to be changed to de-emphasize bullet points for history and exam and emphasize elements of MDM.
  • Lastly, make sure the practice understands carrier-specific guidelines to ensure compliance and reimbursement

The 2021 E/M guideline and code changes are the first major shake-up to coding in many years. Understanding these guidelines will be critical for practices to ensure that documentation supports codes billed in order to prevent loss of revenue from incorrect coding or from carrier audits.

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Nancy Clark

Nancy Clark is a Senior Manager in the Health Care Consulting Group. Her expertise focuses on coding and documentation audits, which includes chart review and report compilation.

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