What is all this talk about 2021 Evaluation and Management changes and why?

Shauna Baughcum, MSHA, CHC, CHPC, CPC
Assistant Director-Compliance

For the first time in more than two decades, the evaluation and management (E/M) office visit code set (99202-99215) is subject to significant changes, as public and private entities converged to create a new model of coding documentation and payment.

Critically, the documentation guidelines that support the code level selection have undergone a vast overhaul.  The old guard, embodied in the 1995 and 1997 E/M documentation guidelines, is fading into the sunset.

A new era is dawning on physicians, providers, medical practices, coders, billers, auditors, payers and other stakeholders involved in the enormous world of E/M office visits coding and claims reporting.

Starting January 1, 2021, you’ll find that previously vital components of code level selection-namely, the history and exam components-no longer factor into the coding decision-making.

Instead, determining a level of E/M will come down to one of two components:  Medical decision-making (MDM) or time.  While providers will be required to document the history and exam components as medically necessary, those components will no longer determine the level of an E/M service.

In addition to refurbished documentation guidelines, the sweepings E/M office visit changes that take hold January 1, 2021, make multiple code updates, with one core E/M code deleted and add-on codes tacked onto the coder’s arsenal.

What’s more, the payment landscape is set to tilt dramatically.  The Centers for Medicare and Medicaid Services(CMS), following the lead of the American Medical Association (AMA), made good on its longstanding objective to right-size payments for primary care practitioners and other medical specialties that report a sizable chunk of E/M services.  The E/M office visit code set was long considered undervalued in proportion to other elements of the Medicare physician fee schedule.

To that end, medical practices can expect a significant increase in Part B payments for E/M office visit encounters, particularly for the mid- to high-level codes (99212-99215) that comprise the established patient visit portion of the code set.  The four established office visit codes are on pace for an average 15% pay increase in 2021, according to the latest available fee schedule data.

To provide some background on E/M changes the new era of E/M coding and documentation emerged from a multiyear process.  In part, the changes sprouted as a result of a general conception that the old standards no longer adequately captured the work of today’s health care providers.

“Stakeholders have long maintained that all of the E/M documentation guidelines are administratively burdensome and outdated with respect to the practice of medicine,” CMS stated in the final 2019 Medicare physician fee schedule.

Through public comment periods that garnered tens of thousands of responses, providers and medical practice personnel “told CMS that they believe the guidelines are too complex, ambiguous, fail to meaningfully distinguish differences among code levels, and are not updated for changes in technology, especially electronic health record (EHR) use,” CMS added.

Under the previous E/M reporting structure, providers could use the 1995 or 1997 E/M documentation guidelines, which were the official guiding principles of CMS.  The 1995 and 1997 guidelines specified the medical record information within each of the three key components, such as number of body systems reviewed, that served as support for billing a given level of E/M visit.  The 1995 and 1997 guidelines were similar to the guidelines for E/M visits within previous versions of the AMA’s Current Procedural Terminology (CPT) codebook for E/M visits.  For example, the core structure of what comprises or defines the different levels of history, exam and MDM in the 1995 and 1997 guidelines were the same as those in the CPT codebook.

Yet differences between the CMS guidelines and the MA’s own coding rules remained.  For instance, the 1995 and 1997 guidelines include extensive samples of clinical work that comprise different levels of MDM that did not appear in the AMA’s CPT codebook.

Working in a loose collaborative, CMS and the AMA embarked on an effort to modernize the E/M office visit guidelines- and to do so in a cohesive way that sought to eliminate disparities in documentation guidance.

In the early 2019, CMS hosted a series of listening sessions of the proposed E/M office visit coding, documentation and payment changes.  As first, CMS has proposed bundling multiple E/M codes into the same level of service and payment amounts.  “Our goal was to continue to listen and consider perspectives form individual practicing clinicians, specialty associations, beneficiaries and their advocates, and other interested stakeholders to prepare for implementation of the office/outpatient E/M visit policies that we finalized for CY 2021,” the agency stated in the final 2020 Medicare physician fee schedule.  Ultimately, the agency retreated from its proposal to flatten E/M payments.

In response to CMS’ early proposals, the AMA established the Joint AMA CPT Workgroup on E/M to develop an alternative solution to the bundled payments proposal.  This workgroup developed an alternative approach for an effective date of January 1, 2021.  Specifically, the CPT Editorial Panel adopted revisions to the office E/M code descriptors, and substantially revised both the CPT prefatory language and the CPT interpretive guidelines that instruct practitioners on how to bill these codes.

CMS soon signed on the support of the AMA framework.  “The AMA believes its approach will accomplish greater burden reduction, is more clinically intuitive and reflects the current practice of medicine,” CMS stated in the 2020 fee schedule.  “We agree that the MDM guidelines as revised by the AMA/CPT represent a good first step in reducing burden and updating the different levels of MDM for the current practice of medicine.”

Ultimately, CMS gave the green light to the AMA’s new E/M model, signaling its intention to proceed with the changes during the 2020 and 2021 rulemaking periods.  That model, with a focus on MDM and time, is the basis for outpatient E/M coding moving forward.

The utilization trends of E/M visits comprise approximately 40% of allowed charges for services rendered under the Medicare physician fee schedule.  The subset of E/M office visits-that is, the 99202-99215 series- account for approximately 20% of allowed charges.  That utilization is linked to significant spending- about $25 billion, according to statistics from the AMA.

Within the E/M services represented in these percentages, there is wide variation in the volume and level of E/M visits billed by different specialties.  According to Medicare claims data, E/M visits are furnished by nearly all specialties but represent a greater share of total allowed services for physicians and other practitioners who do not routinely furnish procedural interventions or diagnostic tests.  Generally, these practitioners include primary care practitioners and certain specialists such as neurologists, endocrinologists and rheumatologists. 

In 2018, providers reported more than 264 million office E/M encounters, according to the latest available Medicare claims data.  The bulk of those, 233.9 million, were for established patient visits (the 99211-99215 code services), comparted to 30.3 million visits for the 99201-99205 series.

In April 2019, the relative value scale update committee (RUC) of the AMA provided CMS with the results of its review, and its recommendations for work relative value units (wRVU), practice expense (PE) inputs and physician time (number of minutes) for the revised E/M office visit code set.  During the 2020 rulemaking period, CMS adopted the RUC recommendations.  The outcome is a net pay gain for E/M office visits codes.

The payment outlook for 2021 and beyond reveals significant money moving around the budget-neutral Medicare physician fee schedule.  Many specialties, such as family practice and internal medicine, are expected to gain substantial pay increases as a result of the revalued E/M office codes. 

Yet concerns about the E/M fees, and their impact on other code valuation levels, remain.  During 2020 rulemaking period, many commenters expressed concerns about the redistributive impact of revaluing of the E/M office visits code set, particularly for practitioners who do not routinely bill E/M office visits.  Commenters suggested a number of strategies CMS could use to mitigate the negative redistributive impact, such as phasing the changes in over four or five years, capping increases or decreases, conducting claims-based analysis and working with Congress to ensure that these changes would not negatively impact the CY 2021 conversion factor.  “We understand commenters’ concerns with the magnitude of the redistributive adjustment necessary to budget neutralize the increased values,” CMS said.  However, the agency proceeded with its plan to redistribute allowable fees under the physician fee schedule.  Below are the projected 2021 E/M office visit payment rates.

Code

2020 Fee

2021 Fee (Proposed)

YTY Fee Change

YTF % Change

99202

$77

$69

-$8.19

-10.6%

99203

$109

$106

-$3.21

-2.9%

99204

$167

$159

-$7.73

-4.6%

99205

$211

$211

-$0.46

-0.2%

99211

$23

$22

-$1.20

-5.1%

 

99212

$46

$54

$8.00

17.3%

99213

$76

$87

$10.63

14.0%

99214

$110

$123

$12.48

11.3%

99215

$148

$172

$23.94

16.1%

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