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2021 E/M Coding Changes Overview

Apr 20, 2021

The 2021 Evaluation and Management guideline and code changes, effective January 1, 2021, were the first major shake-up to coding in many years. Nancy Clark, Senior Manager for the Health Care Consulting Group, discusses why the change was made now, what providers should be concerned about, and how a practice can protect itself.


Linda McDonough: Welcome to EisnerAmper's Healthcare Podcast. Thanks for joining us for the first in a series of podcasts about recent Evaluation and Management code changes. Today I'm joined by Nancy Clark, Senior Manager in the Healthcare Consulting Group where she leads medical coding services.

Nancy is highly credentialed in medical coding, billing, and auditing as well as specialty coding areas and has helped hundreds of organizations improve their medical coding, understand complex guidelines, and incorporate documentation improvement strategies during her 25 year career. Nancy has also been recognized as a fellow by the American Academy of Professional Coders.

Nancy, thanks for joining me today. So let's dive right in. The 2021 Evaluation and Management or E&M guideline and code changes were the first major shakeup to coding in many years. Why were these changes made?

Nancy Clark: We've heard from providers for many years that the previous guidelines were simply not clinically intuitive and were more focused on checking boxes than providing relevant medical record information.

This and some lack of comprehension of the guidelines led to an extremely high error rate in E&M coding. At one point the Office of Inspector General identified that approximately 55% of E&M claims submitted to Medicare were either incorrectly coded, meaning the level or category of code billed was wrong, or lacking appropriate documentation, indicating the medical record didn't support the service billed. And that equated to a $6.7 billion overpayment for all Evaluation and Management codes in one year. The current code revisions were implemented in the Centers for Medicare and Medicaid Services 2020 Final Rule and they were later adopted by the American Medical Association in the 2021 edition of the CPT manual. The goal is intended to put patients over paperwork and reduce practice's administrative burdens.
LD: So Nancy, is this a good thing for providers?
NC: Essentially, yes. The new guidelines eliminate redundancies such as requiring repeated documentation of family history that simply hasn't changed since the last visit. And that helps put the focus back on the medical decision making of the visit.
LD:So should providers have any concerns about the changes?
NC: Yes, yes they should. As the documentation guidelines have changed, the related requirements for supporting an E&M code have changed. While medical decision making or MDM is one of the ways to document a code level, the guidelines for determining MDM have changed considerably. Providers must learn and apply these new concepts to their documentation.
LD: So what happens if the providers don't use the new guidelines Nancy?
NC: We can certainly expect both government and commercial insurance carriers to perform audits retroactively on paid claims as we have seen previously after major coding changes. Carriers usually request a few medical records to review to see if the code billed is supported in the documentation. If the code is not supported, then we can expect the carriers to move to recoup the previously paid reimbursement. Now typically carriers will then perform more audits. If these still don't demonstrate coding compliance these carriers may begin to allege the intent to bill inappropriately, potentially fraudulent or abusive practices. At this point we have seen carriers attempt to extrapolate payment across multiple paid claims or even perform a prepayment review of claims. In the latter instance all claims must be submitted with documentation and the claims are not paid until that documentation is reviewed by the carrier. This can severely impede a practice's reimbursement.
LD:So what can a practice do to protect itself then Nancy?
NC: Their best defense is to be proactive. We recommend having an objective coding and documentation review, as recommended by the OIG Work Plan, and then holding educational sessions with a professional coder. This will both identify if the documentation is supportive of the codes billed as well as provide appropriate remediation. Simply having a coding review helps demonstrate to an external payer that the provider intends to understand the coding guidelines and therefore bill appropriately. It can reduce the risk of both prepayment audits and losing reimbursement through extrapolation.
LD:Nancy, thanks for sharing all your insights today on this important topic. Be sure to look out for the next podcast in the series that takes a deeper dive into the details of the E&M changes.

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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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