Insights: Article

The 2019 Final Decision on Evaluation and Management (E/M) Codes

A Breakdown of the Bottom Line

By Kim Hunwardsen, Susan Rohde

December 13, 2018

In 1995, the American Medical Association (AMA) developed what would commonly be known as the “1995 E/M Guidelines” as a way to determine proper code assignment based on documentation. Specialty groups protested, stating they feared the examination guidelines were not specific enough and therefore felt their documentation would not meet the generic and ambiguous 1995 exam guidelines, resulting in lower level E/M codes. Thus, the “1997 E/M Guidelines” were born, and providers were now given the option to use whichever set proved to be more beneficial. In 2018, the Centers for Medicare and Medicaid Services (CMS) proposed changes and implemented final changes not only to the documentation requirements, but also to the payment structure.

What started out as an effort to reduce “note bloat” (or over-documenting, which was taking time from actually seeing patients) turned into a consolidation of codes and payment rates. But how much extra time were clinicians actually spending on documentation, especially in light of the implementation of the Electronic Medical Record (EMR)? According to a 2012 OIG study, providers have found “workarounds” in order to “up code” in the variety of templates that EMR’s offer. Noticing these trends, CMS proposed (and now finalized) documentation changes. They’ve also reduced payment rates for eight existing office visit services (99202-99215) down to two for both new and established patients. The overwhelming majority of providers oppose the rule and said so in as much as 15,000 comments submitted to CMS. Specialists insist that a flat payment rate is not sufficient for providers who spend more time with patients with complex medical conditions and would “incentivize” quicker, more frequent visits. More than 170 provider groups drafted a letter and sent it to Seema Verma, Administrator of CMS, regarding the proposal. Two key paragraphs focus on the payment collapse:

“Regarding the proposal to collapse payment rates for eight office visit services for new and established patients down to two each, the undersigned organizations believe there are a number of unanswered questions and potential unintended consequences that would result from the coding policies in the proposed rule. We oppose the implementation of this proposal because it could hurt physicians and other health care professionals in specialties that treat the sickest patients, as well as those who provide comprehensive primary care, ultimately jeopardizing patients’ access to care. We also urge that the new multiple service payment reduction policy in the proposed rule not be adopted as the issue of multiple services on the same day of service was factored into prior valuations of the affected codes. The proposal also has significant impact on certain services, such as chemotherapy administration, that may be an unintended consequence of altering the current practice expense methodology to accommodate the proposal.

“The medical community wants to help CMS work through the complicated issues surrounding the appropriate coding, payment, and documentation requirements for different levels of E/M services. Toward that end, the undersigned organizations strongly support the American Medical Association’s creation of a workgroup of physicians and other health professionals with deep expertise in defining and valuing codes, and who also use the office visit codes to describe and bill for services provided to Medicare patients. The charge to this workgroup is to analyze the E/M coding and payment issues in order to arrive at concrete solutions that can be provided to CMS in time for implementation in the 2020 Medicare Physician Fee Schedule. A number of CMS personnel monitored the initial conversations of the workgroup and we look forward to their active participation in this process going forward.”

On November 8, 2018, CMS released a “Dear Clinician” letter stating the final decisions on the proposed E/M changes. Changes will come in two separate stages.

Effective January 1, 2019 CMS will:

  • Simplify the documentation of history and exam for established patients so that when relevant information is already contained in the medical record, clinicians can focus their documentation on what has changed since the last visit rather than having to re-document information.
  • Clarify that for both new and established E/M office visits, a Chief Complaint or other historical information already entered into the record by ancillary staff or by patients themselves may simply be reviewed and verified rather than re-entered.
  • Eliminate the requirement for documenting the medical necessity of furnishing visits in the patient’s home versus in an office.
  • Remove potentially duplicative requirements for certain notations in medical records that may have previously been documented by residents or other members of the medical team.

Effective in 2021, CMS will implement payment and coding changes to achieve additional burden reduction. Billing for visits will be simplified and payment will vary primarily based on attributes that do not require separate, complex documentation. These changes will:

  • Implement a single payment rate for visits currently reported as levels two, three, and four. These represent a majority of office/outpatient visits with clinicians. This means that for the majority of visits, the required documentation related to payment will be limited to what is required for a level two visit.
  • Retain a separate payment rate for the most complex patients—those currently reported through use of the level five codes. Also, the current level one visit code will be retained as it is predominantly used for visits with clinical support staff.
  • Introduce coding that adjusts rates upward to account for additional resource costs inherent and routine in furnishing certain types of non-procedural care. These codes would only be reportable with level two through four visits, and their use generally would not impose new per-visit documentation requirements.
  • Introduce coding that adjusts rates upward for use with level two through four visits to account for the additional resource requirements when practitioners need to spend extended time with a patient.
  • Allow for flexibility in how levels two through five visits are documented—specifically introducing a choice to use the current framework, medical decision-making, or time.

Providers are not the only ones that fear these changes. Patient advocacy groups worry that providers will “cherry pick” healthier patients, as they will be compensated the same amount for all patients.

The following are parts of the proposed rule that providers favor and believe will improve workflow and decrease over-zealous (canned/cloned) documentation:

  1. Changing the required documentation of the patient’s history to focus only on the interval history since the previous visit.
  2. Eliminating the requirement for physicians to re-document information that has already been documented in the patient’s record by practice staff or by the patient.
  3. Removing the need to justify providing a home visit instead of an office visit.

Hoping for clarification on this issue, Eide Bailly staff members attended the annual AMA CPT Coding Symposium in Chicago, IL that took place November 14 – 16, 2018. While plenty of questions and concerns were raised, the CMS regulatory panel responsible for the changes had little input into the matter. Our staff left the symposium with more questions than answers. The AMA did however discuss the potential effects on specialty providers; it appears the hardest hit specialty will be palliative care, in which payments could drop as much as 20 percent. AMA estimates a 16 percent decrease for hematologists, 16 percent decrease for gynecology/oncology and 14 percent for medical oncology.

What does this mean for your facility? These changes will not happen overnight; however, early navigation and planning could help ease the transition for your organization. CMS has stated “we believe that a comprehensive reform of E/M documentation guidelines would require a multi-year, collaborative effort among stakeholders.” In the end, CMS acknowledges that “the revised guidelines could reduce clinical burden and improve documentation in a way that would be more effective in clinical workflows and care coordination.”

Eide Bailly will continue to monitor the status of the E/M changes. Contact us today if you have questions regarding the potential impacts on your organization.

Latest Insights

January 3, 2019
Tool
The 2018-2019 Pocket Tax Guide provides a quick view of tax updates, current rates and new tax law summaries for business, estate, general and individuals. It has been designed to be compact and folded into a pocket sized pamphlet.
December 26, 2018
Article
When was the last time your organization looked at your chargemaster? Recent pricing transparency requirements have changed compliance, so it’s important to make sure you’re correctly posting charges.
November 5, 2018
Article
Identify your implementation methodology. There are four practical expedients available. We'll explore each option.
October 26, 2018
Article
Why third-party payor arrangements and contracts should be reviewed to determine potential or known retroactive settlements.
October 19, 2018
Article
While the focus of your practice will always be providing exceptional care for your patients, there is no way to get around the demands of running the business of the practice.
October 2, 2018
Article
One of the provisions of the Tax Cuts and Jobs Act (Act) that has raised significant questions and concerns for exempt organizations is the calculation of unrelated business taxable income (UBTI).
Find A Location