Diagnosis Coding Impact on E/M Level Analysis

May 28, 2021 | Article

By Susan Roehl, RHIT, CCS

Data Analytics: Transforming Healthcare

With the use of data analytics tools becoming more common in the healthcare industry, the likelihood exists for payers to utilize these tools for appropriateness of risk adjustment and reimbursement. Massive amounts of data can be filtered in seconds to determine medical practice patterns, clinical data and patient care quality.  

Healthcare analytics tools have the potential to reduce costs of treatment and identify abnormal practice patterns that may indicate inappropriate reporting. These tools can also help practices develop reimbursement methodologies for the future. As data analysis continues to be more readily available to all payers, providers should document thoroughly and assign both CPT and ICD-10-CM codes to accurately reflect the condition of the patient and the treatment provided.  

Anthem’s Announcement Related to Healthcare Analytics

Anthem Blue Cross announced in late 2020 they will be using an analytic solution to facilitate a review of whether coding of Evaluation and Management (E/M) services is aligned with national industry coding standards. 

Specifically Anthem notes:

“Providers should report E/M services in accordance with the American Medical Association’s (AMA’s) CPT Manual and the Centers for Medicare and Medicaid Services (CMS) guidelines for billing E/M service codes: Documentation Guidelines for Evaluation and Management. The appropriate level of service is based primarily on the documented medical history, examination, and medical decision-making. Counseling, coordination of care, the nature of the presenting problem, and face-to-face time are considered contributing factors. The coded service should reflect and not exceed that needed to manage the member’s condition(s).” 

We do note the above paragraph contains verbiage related to the 1995/1997 E/M Guidelines; as of January 1, 2021, the AMA, in conjunction with CPT, have established new E/M guidelines for outpatient/clinic visits (99202-99215). These updated guidelines establish that an E/M level is chosen based on Medical Decision Making (MDM) and Time and have removed the History and Examination component from the E/M assignment. These guidelines only pertain to outpatient/clinic visits, but not other E/M categories, such as emergency department, inpatient and observation. The 2021 guidelines have been adopted by CMS and other payers.

Anthem has indicated the claims will be selected from providers who are identified as coding at a higher E/M level compared to their peers with similar risk-adjusted members. Not every provider will be reviewed, and not every level IV or V E/M level claim will be analyzed or reviewed.

Develop a risk-based internal audit plan focused on billing and coding issues.

Accurate Diagnosis Coding is Essential

The above components, which we utilize to determine the appropriate E/M code, cannot flow into a data analytics tool. So, what is analyzed in these tools? Our assumption is the following items will be included (along with many other data elements):

  • E/M code
  • Provider identification
  • Facility identification
  • Diagnosis code(s)

Why Use Diagnosis Codes for E/M Analysis

While diagnosis codes do not necessarily impact the E/M code assignment or reimbursement, we know they do impact coverage of diagnostic tests and medications and are utilized in prior authorization of surgical procedures.

When data analytics tools are utilized, the inclusion of diagnosis codes may, in essence, support or not support a Level IV or Level V E/M professional management code. With MDM as a major driving force of E/M assignment, thorough, accurate and specific diagnosis code assignment is essential. Take time to answer these types of questions: 

  • Was the provider evaluating an acute diagnosis or a chronic condition?
  • Is there an exacerbation of the patient’s COPD or is COPD a chronic condition that was only briefly assessed in the Review of Systems or Physical Exam?
  • Are there social determinants which impact the patient’s visit?
  • Is the patient currently homeless, unable to afford their medications or without anyone to care for them in the home?
  • Is the patient’s atrial fibrillation persistent or paroxysmal?

If the documentation is not complete, unspecified or chronic codes will be assigned, which do not indicate these diagnoses acutely impacted the visit. These conditions may all be assigned ICD-10-CM codes if they are pertinent to the visit, and they may factor into the analysis of the assigned E/M level.

Healthcare providers should always document thoroughly and assign both CPT and ICD-10-CM codes to accurately reflect the condition of the patient and the treatment provided to assure any future claim data analysis provides a valid portrayal of each encounter.  

The Importance of Understanding Diagnosis Coding and E/M Analytics

The use of data analytics to help drive healthcare decisions is not going away. Taking the time to understand how data analytics will impact your organization is key.


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