Skip to content

On-Demand: 2021 Evaluation and Management Coding Changes

Oct 7, 2020

Beginning in 2021, Evaluation and Management (E/M) coding guidelines will change. We discussed these new structures for E/M coding, as well as how to frame your practice’s strategy.


Bert Orlov:Good afternoon, everyone. I am Bert Orlov, Managing Director of the Health Care Services Group, and it is my pleasure to welcome you to the first in a series of seminars about coding and documentation and how they relate to health care reimbursement and strategy. Today's session is focused on E/M coding because of the impending substantial changes coming into that universe in January of 2021. On December 9th, you will get a notice. We are doing another webinar about coding and telehealth. And during the year, we anticipate broadcast as needs arise. Finally, every fall, we intend to have this as a series because changes in coding requirements are implemented in January of each year.

Bert Orlov:The reason we have chosen to focus on E/M coding is multifold. First and foremost, E/M coding has long been a problem or challenge, I should say, for practices across the nation. It is always on the OIG work plan for scrutiny to documentation because E/M service has represent approximately 50% of all spending. And obviously, some specialties are more heavily emphasized. Furthermore, according to Medicare studies, more than half of all E/M claims were actually billed in error. That is approximately $7 billion in errors and thus, at-risk mistakes. And that's because providers are facing constant changes in the rules and a lack of clarity.

This session becomes so important because in 2021, there are material changes in the standards for coding. It will be reduced to either time or medical decision-making. Time, there will be changes to the boundaries of what constitutes what's level. Medical decision-making will require new types and details of documentation to support that coding choice. It is therefore critical at practices in light of COVID with likely continuing somewhat depressed volumes, mitigate against any risk and optimize the coding opportunity that they will face beginning in January.

With that brief intro, it is my true pleasure to introduce and hand off to my colleague, Nancy Clark. I would go through her credentials, but we only have half an hour for the webinar. Therefore, Nancy, please take it away.

Nancy Clark:Thank you so much, Bert. Thank you all for having us here. It's such a pleasure to be here. Today, we will be focusing on the 2021 evaluation and management or E/M coding and guideline changes, and we will review the rationale for making these changes, including the error or improper payment rate for E/Ms. We'll also discuss the guideline changes, which include coding by either time or applying the new medical decision-making criteria and discuss the impact on documentation. Then, we'll review a medical chart example to assign the level of E/M code. Last, we'll discuss the next steps your practice should take to prepare.

The Centers for Medicare and Medicaid Services 2020 final rule implemented sweeping changes for E/M codes. Effective January 1st, 2021, there will be an overhaul to CPT code descriptors and guidelines for the office and outpatient services category. Let me reiterate that. The changes we will be discussing today only apply to the range of codes 99201 through 99215 for office and outpatient visits. The other places of service, including inpatient and emergency department will remain under current guidelines and will not change to those we discussed today. We do expect that in future years, CMS will apply these guidelines to other locations. However, for 2021, we will essentially have to code based on a hybrid of guidelines. One set for office and outpatient and a different set for other places of service.

A major goal of these changes is to better align medical record documentation and coding, intending to simplify the administrative burden on providers and other practices. Providers have been requesting these changes for years. In part, they found E/M coding complicated and complained of repetitive documentation requirements that didn't add to the value of patient care. There's also a high rate of noncompliance for E/M documentation in which the medical record does not support the code build, and this has caused many claims to be paid in error. Let's take a look at the data.

In 2010, the OIG reported on inappropriately paid claims based on a retrospective review of medical records. They determined that approximately 55% of these E/M claims submitted to Medicare were either incorrectly coded, meaning that the level or category of code filled was wrong or lacking appropriate documentation, indicating the medical record didn't support the service billed. And that equates to a $6.7 billion overpayment for the E/M codes in one year.

This table focuses on improper payments for outpatient E/M visits alone. The specific range of codes that is currently changing. The data was obtained through Medicare's Comprehensive Error Rate Testing program or CERT. In the year from July 2017 through June 2018, Medicare identified over $1.3 billion in projected improper payments for only the nine codes for outpatient or office services based on their review of E/M documentation received from providers. The error rate for these E/M’s is over 12% of those medical records review.

While the error rate varies by level of code, it clearly shows that provider documentation is not supporting the E/M codes bill. Of interest, here is that the most frequently utilized E/M codes for many providers, establish patient visits 99214 and 3, and new patient visit code 99204 are high on the list of inappropriate overpayments. Likely indicating that providers are not currently complying with or even understanding documentation requirements. This lack of understanding and compliance has contributed to the new guideline changes. Let’s take a look at what is changing.

Currently, E/M is coded by the medical records history, exam, and medical decision-making or MDM. In 2021, either MDM or time is necessary to code E/M levels. Currently, time is only used for E/M office visits when it’s documented as face-to-face time with the patient. In 2021, total time spent caring for the patient on that date of service will apply. Time currently is only utilizing when only 50% or more of the visit is spent on counseling or coordination or care. Going forward, there is a new more encompassing time definition which we will discuss in just a few slides.

E/M code levels currently begin at 9901 but this code will be eliminated beginning next year. The logic behind that since the MDM is straightforward for both codes 99201 and 99202 there will be no way to differentiate between the two codes. In our current E/M calculations, we use the table of risk but going forward were going to rely on the new MDM table which will now be printed in the CPT manual.

While the E/M guideline changes are intended to simplify patient medical record-keeping, we need to understand that this doesn’t imply that documentation is no longer important. The patient record is still the primary source for continuity of care and is a legal document. Documentation is still utilized for quality reporting, such as the Merit-based Incentive Payment System, or MIPS. And the medical record still acts as supportive documentation for medical decision making by providers. Specifically, I want to emphasize the importance of continuing to document the history and exam during the patient encounter. Even though these components are no longer utilized for computation of the level of E/M, they are still integral to the patient encounter. CPT 2021 indicates that codes require “a medically appropriate history and/or examination.” In other words, the clinician determines the level of history and/or exam provided. Additionally, the time spent on both obtaining the history and performing the exam will count towards the “total time” spent with the patient on that date. Let’s discuss the new calculation of Time on our next slide.

The first new option of coding that we are reviewing is based on time.  In CPT, Time, for coding purposes, will be defined as the total time on the date of the encounter. Total time will include review of the patient’s chart prior to their visit, but only if done on that date of service. Time will include both the face-to-face and non-face-to-face time personally spent by the physician and/or other qualified health care professional. This time specifically includes activities that require the physician or other health care professional, such as a nurse practitioner or physician assistant; and does not include time in activities normally performed by clinical staff such as a Medical Assistant or nurse. CPT further clarifies time calculation when more than one provider, such as a physician and nurse practitioner, both see the patient on the same day. Any time that the providers spend together to meet with or discuss the patient counts only once, as if you are counting the time of one individual. Total time for 2021 includes preparing to see the patient, obtaining history and performing an exam, counseling the patient and any caregivers who are present, ordering medications, tests, or procedures, referring to and communicating with other health care professionals, documenting clinical information in the medical record; and independently interpreting and communicating results. What’s important to note the concept of “double dipping”. If the provider bills separately for a test, such as a lab test or bills for consulting with another physician or for coordination of care, then this time cannot be used towards the E/M calculation. Any time that is billed with another CPT code by that provider cannot be used towards “total time” for the encounter.

Let’s take a look at how “typical time” by 2020 standards will increase to “total time” next year. There is no longer a single time for each code, but rather a range of times. This emphasizes the importance of exact and accurate time calculation. For example, If every patient has the exact same time for a level 4, when the records are reviewed, then this will likely trigger a red flag to audit additional records. If your current E/M templates include a specific time; for example 40 minutes for a level 99215, we strongly recommend that you remove them going forward, as it is not likely that you see each patient for exactly 40 minutes.

Let’s take a look at 99214, for example. Currently, 25 minutes is sufficient to document this code based on Counseling or Coordination of Care. However, 30 to 39 minutes will be required of Total Patient Time in 2021. Given these new guidelines, we might expect audits to encompass viewing the providers’ schedules for viability of their billing.

CPT will also be adding a new “prolonged service code” to be used with office and outpatient visits. That can only be appended to the highest level of office E/M’s, 99205 and 99215, and must be documented on the same date of service. This code represents 15 additional minutes to the highest base time of the E/M code; and the entire 15 minutes is required to bill this code, with no code applicable for less than that amount of time. The code can be used with or without direct patient contact, so there is no face-to-face requirement. The tables on the bottom of the slide show appropriate use of the codes. For example, with a code 99205, if the physician was coding on time, not medical necessity, and documents 90 minutes of appropriate time spent, then code 99205 and the prolonged code 99417 x 2 would be reported. As an important note, this table is based on CPT. Manual calculations. CMS has recently identified a slightly different range of times for prolonged care use. If you're billing Medicare or Medicaid, check those specific guidelines and requirements.

Now that we've reviewed the codes, let's take a look at the code descriptor changes for one of the ENM codes. Currently, 99204 on the left of your screen requires a comprehensive history and exam and medical decision-making of moderate complexity. Time is only applicable for face to face time of counseling or coordination of care. That typical time is 45 minutes. In 2021, the descriptor is much simpler, indicating the documentation only requires a medically appropriate history or exam and a moderate level of MDM. Time is no longer face-to-face only, and the range increases from 45 minutes to 59 minutes.

Now that we've looked at the time changes in ENM, let's take a look at the medical decision-making changes to code selection, which can be used instead of time-based coding. These are the three elements we reviewed to identify the MDM level. In order to support a level of medical decision-making, two out of these three elements must be documented in your medical record. The areas identified in red font represent the changes from the previous categories for MDM. included with the new MDM label, CMS has also clarified definitions of many of these terms.

First, identify the number and complexity of problems addressed. New to this table is the complexity of the problems. The documented problems can be either or minor, which represents a minimal problem that may resolve without the need to provide. An example would be simple, non-infected insect bite, or perhaps allergic rhinitis, a chronic illness with or without exacerbation. An example of exacerbation would be uncontrolled diabetes or an acute illness or injury, which is a recent or new short-term problem, either uncompensated or conflict. An example of this colitis.

The second component is the amount and/or complexity of data to be reviewed and analyzed. The phrasing “and analyzed” was added to include the providers’ interpretation of tests. New this year, we have three categories of data. Category one includes tests and documents as well as discussion with an independent historian. Tests can include imaging, laboratory, or physiologic data. A clinical lab panel such as a CBC is a single test. Review of the document includes external records, communications or test results. These external notes need to come from an outside provider, facility or healthcare organization. Each provider or note is considered a unique source of data and ordering each unique test that's identified by a separate CPT code would also count as would any discussion with an independent historian, which is either a patient, a parent, caregiver, or other who provide additional history. This addition to the data element would likely benefit practices such as pediatrics, who or why an independent historians.

Category two includes the independent interpretation of tests. However, we can't count this insurer towards MDM if the provider is also filling the CPT code for that service. That also would be considered double dipping. Category three includes discussion of management or test interpretation. Discussion of management refers to patient management, which is discussed with what we call an appropriate source and this could either be a healthcare or other professional, including a case manager, a lawyer, a teacher, but it would not include family or informal caregivers.

The third component is the risk of complications and/or morbidity or mortality of patient management. This area office categories for treatment risks, including prescription drug management. In our new guidelines, it's clarified that this drug must be prescribed by and monitored by the attending provider. This must be documented in the patient record in order to support the level of risk. Another option that would support crediting the provider with prescription drug management is if the underlying disease process being treated by the drug is a co-morbidity or complication, it impacts the provider's treatment on this date of service and that is also documented.

The next example refers to surgery. An important change here is that simply discussing the need for or recommendation for surgery would be considered a surgical MDM even if the patient ops for more conservative treatment. Last we have a new category, the diagnosis or treatment significantly limited by social determinants of health. This refers to economic and social conditions that may influence the health of people and communities. For example, if a patient cannot afford their medication, they may not get the care they're prescribed and if a patient is homeless, their diet and environment will likely impact their health choices.

Here, we see the 2021 medical decision making table. In typical CMS fashion, it is created with very tiny font and it's hard to read. This will also be printed in the new sequencing manual. Then this is the current source for coding based on MDM and replaces previous tables and tools. The first column lists the CPT codes 99211 is listed on the table, but it's not linked to a level of MDM as it represents a service typically provided by a non-physician. 99201 as we indicated, has been diluted for 2021. The remaining some sequences are in pairs representing their levels.

Each remaining numerical level of code in the first column is linked to a single level of medical decision making in the second column. 99202 and 99212, new and established level two visits are linked to straightforward medical decision-making. Going down to the next rows, 99203 and 213 and linked to row MDM. 99204 and 14 are linked to moderate and 99205 and 215 are linked to hot.

At the top of the second column, it's noted that the level of MDM is based on two out of three elements of MDM. The next three columns refer to these three elements we just discussed and identified the requirements to meet the individual component level. The number and complexity of problems addressed, the amount and/or complexity of data and the risk of complications and/or morbidity.

The number and complexity problems addressed range from 99202 as minimal, a self-limited or minor problem, down to the lowest block of high, which includes one acute or chronic illness or injury that poses a threat to life or bodily function.

 Under the column, the amount and/or complexity of data to be reviewed and analyzed. Notice that each level has different requirements based on the three categories that we just reviewed and require differing amounts of data for each level.

And the last column, risk of complications and/or morbidity or mortality of patient management uses the examples for we discussed on prescription drug management and major or minor surgery.

As an example, in order to support CPT code 99203, we would need two of these three elements to be supported: a low level of problems addressed, limited data, and/or a low risk of morbidity from testing or treatment. The levels should be consistent with both Let's review one quick redacted example to get feel for the new coding levels.

So, a new patient presents to the office with a chief complaint of difficulty learning. A history of present illness is taken, as the provider believes is appropriate. The patient presents with pain in the back and flank area that radiates to his groin. Three weeks has been going on, pain is worse when urinating, and he indicates that recently he's been running a low grade fever and felt nauseous. Nothing's alleviated the pain but acetaminophen has lowered his fever.

A relevant review of systems is also documented, including constitutional as positive for fever, musculoskeletal for back and flank pain, GI for nausea but denying vomiting. The exam documented is clinically appropriate. And all of the above is perfectly acceptable and no longer needs to be graded to identify levels of history in the exam.

The impression is back and flank pain, dysuria and fever, and the patient plan is to order a CBC-MS panel, renal bladder ultrasound, and a uranium urine culture.

So, let's pull this data into our new MDM table. In order to compute the level of NDN, we look at the number and complexity of problems addressed, which can best be described as one acute illness for systemic symptoms. And there's a sudden onset associated with fever and nausea.

For the amount or complexity of data, we have five unique tests ordered from Category One, including a CBC-CMT, ultrasound array, and a culture. Each test counts separately. And one of the options to meet a moderate level is ordering or reviewing three tests from Category One, which we have now.

And there is a low risk of morbidity or complications from this additional testing as ordered today.

Based on the two out of three rule, the level of our documentation is moderate. We don't need all three elements to meet the level supported, just two. If the provider had chosen to go on time, he would have needed to document 45 to 59 minutes. But since this is a new patient, visit code 99204 would be appropriate.

Now that we've narrowed the two methodologies of coding for 2021, how do you choose which method to select? MDM or time?

We recommend having a coding and documentation review to analyze your current chart documentation and understand what code levels your current documentation would support. This will help you identify both the provider's current style of documentation and strengths and weaknesses in supporting MDM.

A review of as few as 10 charts even can provide you with insight and future compliance, as well as a comfort level that your documentation supports the codes billed.

Under the new guidelines, consider that voluminous documentation does not impact the code level. Rather, precise concepts must be documented. We also recommend reviewing your patient mix, including whether types of conditions treated may lend themselves better to either time-based or MDM coding.

As an example, weigh the options of the extra time needed to communicate to either a geriatric or cognitive-impaired patient versus the additional level of MDM supported by exacerbation diseases and the communication with an independent historian.

We also strongly advise provider and staff education based on individual providers' documentation in order to ensure compliance and reduce the risk of revenue loss from payer audits moving forward. This will additionally help in solidifying providers' mind of what is important to document.

So, what's next?

Take a look at your current documentation and identify areas for improvement, as well as thoughts on better suited methodology. Educate your providers and staff on documentation needs and apply these new guidelines into your documentation. Ensure that the documentation of time or MDM criteria and understanding of the new definition to use.

For example, providers should learn to document routinely items within the notes that have been used to score MDM. Then take those notes for a test-drive and see how they would score using the new coding methodologies.

Review your templates for time and new MDM criteria and determine whether your EHR templates need to be changed to de-emphasize the bullet points for history and exam and emphasize the elements of MDM. And of course, make sure you understand any payer-specific guidelines to ensure compliance in reimbursement.

I don't believe we have any time for questions, but we'll certainly be glad to answer questions sent to us directly by email or that we had during the presentation. Our emails are on this slide.

Thank you so much for your time today.

Transcribed by

What's on Your Mind?

Start a conversation with the team

Receive the latest business insights, analysis, and perspectives from EisnerAmper professionals.