Overhaul of the Evaluation and Management Coding System

CMS is calling it “historic.” Providers may be feeling shock.
CMS said it listened and heard the provider community pleas for a reform to Evaluation and Management (“E&M”) services. To resuscitate what is often considered an ailing system, CMS has put forth a proposal in the 2019 Medicare Physician Fee Schedule (“MPFS”) Proposed Rule for substantial changes to how physician visits will be documented. CMS also included a new E&M payment methodology, something providers did not anticipate. This is all part of CMS’s “Patients Over Paperwork” initiative to reduce administrative burden for providers while improving care coordination, health outcomes, and patients’ ability to make decisions about their own care.

CMS is proposing to adopt these changes on January 1, 2019 but is soliciting comments until September 10, 2018 to consider delaying implementation for a year, or until January 1, 2020.
Most practitioners would agree that the use of the Electronic Medical Record (“EMR”) for documenting E&M visits has been the single biggest obstacle in delivering patient care. Documentation is no longer a record of the patient’s clinical care but a means to meet coding and billing requirements. The EMR created “note bloat,” and screen clutter with practitioners given access to templates for documentation which created another set of documentation, compliance, and potentially patient safety challenges related to the use of copy/paste and pull-forward functionalities, duplication of information and increasingly, inaccurate documentation.
In this article, we will highlight what practitioners, and the organizations with which they work, need to know about the 2019 MPFS Proposed E&M changes. 

Brief Background  

E&M codes represent a very complex system built on vague CPT descriptions, such as “expanded problem focused exam”; with payers, providers and billing organizations each developing their own interpretations. Despite CMS’s addition of the specialty exams in the 1997 guidelines, the system remains inherently inflexible to account for medical specialty differences in focus, medical decision making, and time.
The guidelines, now twenty plus years old, are out of date and conflict with new models of team based care. The E&M services’ system is also a poor fit for chronic care as it has not changed to keep up with the increased acuity and complexity of clinic/office-based care where preventive, chronic care, counseling and education may be provided in the same visit. Furthermore, the valuation of E&M services has not evolved with the increased scope and complexity of care.

CMS Proposed Changes to E&M Services

Documentation of E&M Visits

The proposed changes would only apply to office/outpatient, new and established visit codes (CPT 99201 through 99215). CMS acknowledges that the changes are broad, and many details related to program integrity and ongoing refinement will need to be developed through sub-regulatory guidance.  A summary is provided below:

> To assign an E&M visit code, practitioners may use one of three (3) methods; 1) either the current 1995 or 1997 E&M guidelines for documenting office/outpatient visits, 2) time spent with the patient, or 3) E&M code selection based only on medical decision making.

  • Practitioners need only follow a minimum documentation standard to support a level 2, but may choose to document more information for clinical, legal, operational or other purposes.
  • Practitioners would continue to report the level of E&M visit they believe to be appropriate under the current CPT coding structure.

(This is to account for private payers who will be maintaining the current E&M coding structure for the foreseeable future.)

  • For practitioners billing their E&M level based on time alone, CMS proposes that the practitioner would have to document the medical necessity of the visit and total time spent face to face with the patient.

> Regarding the history and exam, practitioners would only need to focus their documentation on what has changed since the last visit, or on pertinent items that have not changed, rather than re-documenting information as is currently required.

>  Practitioners have the option to review and verify certain information entered by ancillary staff or the patient, rather than re-entering it, specifically the chief complaint and patient’s history.

Payment of E&M Visits

CMS acknowledges in the 2019 Proposed Rule that the current set of new and established office/outpatient E&M visits and their respective payment rates no longer reflect the complete range of services and resource costs associated with furnishing E&M services to a continuum of patient types and physician specialties. CMS is therefore proposing the following:

>  Current E&M levels 2 – 5 will be collapsed into a single payment rate for “new” and a single payment rate for “established” office/outpatient visits.

  • Removing the payment variances between levels 2-5 eliminates the need to audit, providing immediate relief from the burden of documentation.
  • A single payment rate also eliminates the increasingly outdated distinction between the kinds of visits reflected in the current CPT code levels.

Tables 1 and 2 outline a preview of potential payment rates for new and established office/outpatient visits:

*   Current Payment for CY 2018

** Represents CY2019 proposed relative value units and the CY2018 payment rate.

  • Office visits furnished on the same day as a procedure with a global period of “0”, billed with modifier -25, would be paid at 50% of the payment rate to account for duplicative resource costs not accounted for by the current coding structure and payment.
  • A HCPCS “G” code will be established that can be billed with any primary care new and established patient E&M visit. This will add additional RVUs and payment to account for the additional resources of the cognitive work of primary care physicians (and specialists who provide primary care services).
  • A separate HCPCS “G” code will be established for E&M office visits by specialists in the following specialties: endocrinology, rheumatology, hematology/oncology, urology, neurology, obstetrics/gynecology, allergy/immunology, otolaryngology, cardiology, and interventional pain management. This will also add additional RVUs and payment to the E&M visit to account for the complexity of the issues facing Medicare patients cared for by these specialties.
  • A new prolonged services HCPCS “G” code will be established for care 30 minutes beyond the typical time for the base code.

CMS provides a payment example to illustrate this new payment methodology:
“As an example, in CY 2018, a physician would bill a level 4 E/M visit and document using the existing documentation framework for a level 4 E/M visit. Their payment rate would be approximately $109 in the office setting. If these proposals are finalized, the physician would bill the same visit code for a level 4 E/M visit, documenting the visit according to the minimum  documentation requirements for a level 2 E/M visit and/or based on their choice of using time, MDM, or the 1995 or 1997 guidelines, plus either of the proposed add-on codes (HCPCS codes GPC1X or GCG0X) depending on the type of patient care furnished, and could bill one unit of the proposed prolonged services code (HCPCS code GPRO1) if they meet the time threshold for this code. The combined payment rate for the generic E/M code and HCPCS code GPRO1 would be approximately $165 with HCPCS code GPC1X and approximately $177 with HCPCS code GCG0X.”


Brief Analysis

CMS’s proposed change to the documentation and billing of E&M office/outpatient visits raises some additional questions and issues.


Foremost on practitioners’ minds will likely be reimbursement concerns. While the elimination of the burdensome documentation requirements will be welcomed, a blended reimbursement rate could elicit controversy. Physicians, typically specialists treating complex patients with multiple chronic conditions, currently billing largely level 4 or level 5 visits may be concerned that they will now receive the same payment as a physician who did a brief, level 2 visit.
CMS attempted to address these concerns during a public media call on July 18, 2018, maintaining those who experience decreased reimbursement will be made up for because of the reduced documentation burden, reduced costs with post payment review and refund risk.
Providers should begin to look at their physicians’ E&M reporting profile to determine if the revised payment methodology will result in an overall net increase or decrease in reimbursement to include data regarding office visits with a modifier 25 assigned and with a procedure of “0” global days.

Documentation Incentive

With the creation of essentially two levels of E&M visits, post payment risk associated with improper coding of E&M visits should be significantly reduced and/or eliminated since technical errors should no longer have a financial impact. However, with the minimal documentation standards to support an E&M visit level, will the industry experience a decline in the content and quality of practitioners’ documentation?
CMS stated that “our expectation is that practitioners would continue to perform and document E/M visits as medically necessary for the patient to ensure quality and continuity of care. For example, we believe that it remains an important part of care for the practitioner to understand the patient’s social history, even though we would no longer require that history to be documented to bill Medicare for the visit.”


CMS is asking for comments about these proposed changes by September 10, 2018. Given the magnitude of these proposed changes, providers are encouraged to offer their opinions and recommendations to www.regulations.gov.
SunStone offers services specifically geared to assisting hospital based and independent multi-specialty physician groups manage the ever-changing professional regulatory environment.  If you have any questions, please contact Joli Fitzgibbons at jolifitzgibbons@sunstoneconsulting.com or Georgia Rackley, Senior Clinical Specialist at georgiarackely@sunstoneconsulting.com.