Physician Client Alert


CMS Final Rule Changes Office/Outpatient Evaluation and Management Coding Methods

On January 1, 2021, new rules from the Centers for Medicare & Medicaid Services (CMS), located at 85 FR 84472 in the Federal Register, became effective changing coding methods and procedures for Office and Outpatient (O/O) Evaluation and Management (E/M) services.

Generally, these changes simplify physicians’ coding processes and increase the valuation of certain O/O E/M services and visits. Under these new rules, physicians may choose to document office visits on either medical decision-making (MDM) or the total time of the encounter. Patient history and examination are no longer used to select the code level for O/O E/M visits. Instead, the new rules require medical history and examinations only as they are medically necessary, i.e., reasonable, necessary, and clinically appropriate. Further, the changes remove or define previously ambiguous concepts and focus coding decisions on tasks that affect the patient’s management and care, instead of adding up tasks to arrive at a code.

Alternatively, a physician may document and code office visits based on the total time spent on the patient encounter on the date services are rendered, including time that is not spent face-to-face with the patient. Time under the new rules is measured as the actual total time. Actual total time sums the pre-visit, visit, and post-visit time the physician spends on a patient visit.

CMS implemented these E/M coding changes to reduce the administrative burden on physicians from documenting and coding their patient encounters and improve payment accuracy. Previous requirements encouraged “copy and paste” and “check the box” documentation, which often resulted in unnecessarily lengthy patient medical records. These E/M coding changes are intended to address these issues and better reflect the current practice of medicine.

Unfortunately, there is still some confusion regarding the E/M coding changes. First, the Biden administration could review and further alter these rules in the coming weeks and months. Second, the new rules for prolonged O/O E/M visits contain the unclear and undefined terms “total time” and “usual service.” “Total time” is unclear because O/O E/M visits may now be coded based on total time, which could include prolonged time. “Usual service” is not defined, and total time replaced typical time in the code descriptors. CMS has attempted to clarify this confusion by stating that the prolonged O/O E/M code should be used only when the maximum total time for a O/O E/M visit is exceeded by at least 15 minutes on the date of service. Adding to the confusion, however, CMS created a separate HCPCS code for billing Medicare for prolonged O/O E/M visits. Finally, confusion could arise during the practical calculation of actual total time by either aggregated time or by identifying the start/stop time.

Office and outpatient physicians should review their internal coding policies and procedures for adherence to CMS’s new O/O E/M rules, update their compliance plans, and work with their electronic health records vendor. Please contact us if you have any questions or if you would like assistance with this or other matters.

This summary is provided as an informational tool. It is not intended to be and should not be considered legal advice, and receipt of this information does not establish an attorney-client relationship. For legal advice, please contact one of our attorneys.