Evaluation & Management Services

Affected Providers

Physicians and non-physician practitioners (NPPs) who bill for evaluation and management (E/M) services.

Background

According to the 2024 Medicare Fee-for-Service Supplemental Improper Payment Data, the improper payment rate for all E/M codes is 10.3%, with a projected improper payment amount of $3.9 billion.

Denial Reasons

Incorrect coding accounted for 49.1% of improper payments for overall E/M codes during the 2024 reporting period, while insufficient documentation (34.1%), no documentation (13.1%), and other errors (3.7%) also caused improper payments. “Other” errors include duplicate payment, non-covered or unallowable service, or ineligible Medicare patient errors.

Preventing Denials

Medical Record Documentation

For E/M services, the nature and amount of physician work and documentation varies by type of service, place of service, and the patient’s status.

These medical record documentation requirements apply to all types of medical and surgical services in all settings, and you may change them to account for variable circumstances in providing E/M services:

• Make sure the patient’s medical record is complete and legible
• Document each patient encounter with:
  • The reason for their encounter and relevant history, physical exam findings and earlier diagnostic test results
  • An assessment, a clinical impression, or a diagnosis
  • The rationale for ordering diagnostic and other ancillary services
  • A medical plan for care
  • The date of service and legible identity of the observer
• Make the patient’s past and present diagnoses accessible to the treating or consulting physician
• Identify any appropriate health risk factors
• Document the patient’s progress, response to any changes in treatment, and updated diagnosis
• Make sure the documentation in the patient’s medical record supports the CPT, HCPCS, and ICD-10-CM codes reported on the claim form or billing statement

For specifics of the listed documentation principles for E/M Services, see the 2023 Documentation Guidelines.

Coding

Using CPT Codes

A service’s medical necessity is the main criterion for payment besides the individual requirements of a CPT or HCPCS code.

It’s not medically necessary or right to bill a higher level of E/M service when a lower level of service is warranted.

Document the service during the visit or soon after you provide it to keep a correct medical record.

Selecting the E/M Service Level

For most E/M visit families, select the visit level based on the level of medical decision making (MDM) or the amount of time spent by the physician or NPP.

For certain services, like emergency department (ED) visits and critical care, per the CPT codes, you don’t have this choice and will use only MDM or only practitioner time to bill. The CPT E/M guidelines for MDM apply.

For all E/M visits, you should include a medically appropriate history and physical exam, when performed, per the code descriptors. However, history and exam no longer affect visit level selection.

When you use practitioner time to select the visit level, you must complete the full time; the general CPT rule regarding the midpoint for certain timed services doesn’t apply.

The volume of documentation shouldn’t be the primary influence on which you bill the level of service. Documentation should support the level of service you report.

The Medicare Administrative Contractor will pay any physician or NPP authorized to bill Medicare services the appropriate physician fee schedule amount based on the rendering NPI number.

Split (or Shared) E/M Service

A split (or shared) visit is an E/M visit in the facility setting that’s done by both a physician and an NPP who are in the same group, according to applicable law and regulations, where either the physician or NPP could bill the service if only 1 of them provided it independently.

We pay the practitioner who does the substantive portion of the visit, which can be more than half of the total time spent by the physician and NPP, or a substantive part of the MDM (as defined by CPT).

Other E/M Visits

We made other E/M coding changes to hospital inpatient, hospital observation, ED, nursing facility, home services, residence services, and cognitive impairment assessment visits:

• We revised CPT codes for other E/M visits (except prolonged services), to include:
  • Merger of hospital inpatient and observation visits into a single code set
  • Merger of domiciliary, rest home (for example, boarding home), or custodial care and home visits into a single code set
  • Choice of MDM or time to select visit level (except visits that aren’t timed, like ED visits)
  • End use of history and exam to decide visit level (instead, we require a medically appropriate history and exam, when performed)
  • New descriptor times (where relevant)
  • Revised CPT E/M guidelines for levels of MDM
• We created 3 new Medicare-specific HCPCS G codes to report other prolonged E/M services (1 per E/M family):
  • G0316 for reporting prolonged hospital inpatient or observation services
  • G0317 for prolonged nursing facility services
  • G0318 for prolonged home or residence services

Starting in 2024, for prolonged visits, the substantive portion is more than half the practitioners’ total time. Because you only bill prolonged services when you use time to select the visit level, determination of who provided the substantive portion is based on time.