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CMS Proposes Changes to E&M Services Coding

On July 27, 2018, as part of the 2018 Medicare Physician Fee Schedule, CMS proposed changes to the coding and documentation requirements for E&M services which would have a substantial impact on providers if finalized. In proposing these changes, CMS reasoned that the current E&M rules are outdated, have been criticized by providers as administratively burdensome, and do not recognize the significant changes in health care practice since the E&M levels and documentation requirements were created. Of particular concern is the increasing complexity of patients' conditions and the need for ongoing and active management of chronically ill patients. In addition, CMS stated that its primary goal for these proposed changes is to reduce administrative burden so that providers can focus on patient care.

CMS proposed the following changes: (1) simplifying documentation requirements to limit providers' documentation to information pertinent to the encounter (providers would still be able to document using the 1995 or 1997 E&M documentation guidelines if desired); (2) using medical decision-making as the sole determining documentation factor for leveling (rather than the history and examination elements) or allow time-based E&M coding based on face-to-face time spent with the patient, regardless of whether or not counseling and care coordination dominated the visit; and (3) establishing only four payment levels for new and established patient office visits.

For documentation requirements, if a provider chose to continue to follow the 1995 or 1997 documentation guidelines, the minimum documentation CMS is proposing that would be required for any level 2 through 5 E&M level code would be: (1) a problem-focused history that does not include a review of systems or a past, family, or social history; (2) a limited examination of the affected body area or organ system; and (3) straightforward medical decision-making measured by minimal problems, data review, and risk (two of these three). For those providers choosing to document based on medical decision-making alone, the minimum documentation CMS is proposing is: straightforward medical decision-making measured by minimal problems, data review, and risk (two of these three).

The four payment levels for E&M visits would be as follows:

  1. 99201 – Level 1 new patient office visit
  2. 99202 through 99205 – Levels 2 through 5 new patient office visit
  3. 99211– Level 1 established patient office visit
  4. 99212 through 99215 – Levels 2 through 5 established patient office visit

The proposed reimbursement amount for CPT codes 99202 through 99205 would be an amount between the current reimbursement amounts for 99203 (Level 3 new patient office visit) and 99204 (Level 4 new patient office visit). CMS has proposed that this payment rate be $135. Likewise, the proposed reimbursement amount for CPT codes 99212 through 99215 would be an amount between the current reimbursement amounts for 99213 (Level 3 established patient office visit) and 99214 (Level 4 established patient office visit). CMS has proposed that this payment rate be $93. CMS is proposing a work RVU of 1.90 for CPT codes 99202 through 99205 and a work RVU of 1.22 for CPT codes 99212 through 99215. The reimbursement amounts and work RVUs for 99201 and 99211 would not be changed.

One benefit of the proposed change would be the impact on post-payment audits. Essentially, with no reimbursement difference for Medicare patients for E&M levels in the Level 2 through 5 categories, there would be little reason to conduct post-payment auditing of E&M levels. In addition, arguably there would be no need to validate the coding choice selected by a provider, as long as the provider understands the definitions of new and established patients and when it is appropriate to use the lowest level E&M codes (99201 and 99211) versus the other E&M codes. The proposed changes may benefit physicians who frequently assign lower level E&M codes for their services, as they would likely see an increase in overall reimbursement.

Some of the difficulties with the proposal are that it is unclear whether or not commercial payers and other governmental payers would adopt these same changes. Also, the CPT code descriptions incorporate the current leveling requirements, so those code descriptions would need to be revised. CMS also needs to clarify that the descriptions are optional, or CMS could reconsider establishing G codes for E&M coding for Medicare patients. (CMS indicated that it was concerned that creating and requiring the use of G codes would burden providers if other payers continued to utilized the standard E&M codes.)

In addition, under the current coding and documentation guidelines, there are four levels of medical decision-making (straightforward, low, moderate, and high), so this would not match up with CMS's current proposal of recognizing only two payment levels. Finally, for specialists and other physicians with complex patients who frequently code using higher level E&M codes, the proposed changes would likely result in decreased reimbursement. The impact of that decreased reimbursement could be offset, however, by the reduced documentation burden for providers and the elimination of most if not all post-payment review audits and recoupments based on E&M leveling. As a final note, the documentation structure of electronic medical record systems would potentially have to be changed in order to reap the benefit of the reduced burden of documentation for providers.

Other changes being proposed include but are not limited to: (1) eliminating documentation requirements for home visits (that require providers to document the medical necessity of a home visit instead of an office visit; (2) eliminating the blanket prohibition on billing office visits on the same day by providers in the same group and same specialty (recognizing the sub-specialization of physicians is not always possible to be reflected in the formally designated specialty for enrollment purposes); (3) allowing the chief complaint and history to be entered by the patient or ancillary staff, as long as the provider documents he or she has reviewed and verified the information; (4) creating new G-codes for podiatrists to use to report their visits instead of using E&M codes; (5) using an E&M multiple procedure adjustment to account for duplicative resource costs when E&M visits and procedures with global periods are furnished at the same time; (6) creating new G-code add-on codes to recognize additional resources used in primary care visits and inherent visit complexity that requires additional work beyond what is accounted for in the base E&M codes (to help equalize reimbursement to those physicians who primarily provide office visit services rather than a mix of office visits and procedures); and (7) creating an additional prolonged face-to-face services add-on G code.

In order to understand the revenue impact of these proposed changes, providers should look at their current E&M coding level distribution and model the reimbursement impact of the proposed rules would be--although it may be difficult to account for some of the proposed add-on codes and G-codes in that modeling.

Comments regarding the proposed rule may be submitted to CMS until September 10, 2018. Comments can be submitted electronically via the "submit a formal comment" button here.


Kimberly A. Lammers

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