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Evaluation and Management 2021 Coding Guidelines: Key Changes and Implications

Evaluation and Management 2021 Coding Guidelines: Key Changes and Implications

New guidelines for the documentation of evaluation and management take effect January 1, 2021, and coding changes may affect payments in outpatient practices.

New documentation guidelines for evaluation and management (E/M) will be implemented on January 1, 2021. The current guidelines have three main components: history, examination, and medical decision-making (MDM). Additional documentation elements include time, counseling, coordination of care, and nature of presenting problem.1 These guidelines have resulted in burdensome requirements due to the influence of the volume of documentation on the level of service billed.2,3  

To reduce documentation overload and allow physicians to spend more time with patients, the American Medical Association (AMA) convened the Current Procedural Terminology (CPT) Editorial Panel and the AMA/Specialty Society Relative Value System Update (RUC) Committee to recommend changes to E/M coding guidelines to the Centers for Medicare & Medicaid Services (CMS). The CPT Editorial Panel focused on four primary objectives in determining revisions: decrease the burden of coding and documentation, decrease audits (via detailing of key definitions and guidelines), reduce unnecessary documentation not needed for patient care, and ensure that payment for E/M is resource-based.2 

The new CMS guidelines will entail changes or eliminations in code calculations. A key revision entails calculating codes for documentation using either total time or MDM; the history and physical exam have been eliminated as elements of code selection.4 Training, educating, and auditing current practices will be necessary to prepare for these changes and successfully implement them to improve workflow and productivity. The purpose of this article is to detail the expected changes and their implications. 

Outpatient E/M Coding Changes
Elimination of the requirement to document history and physical examinations helps achieve the goal of reducing administrative burden. The 2021 guidelines state providers should capture medically appropriate history and/or physical examinations when performed. This information can be collected by the care team and supplied directly from a patient or caregiver. Although performing these exams contributes to time and MDM, the extent of the examination is not considered in the selection of the code level. Since the history and physical exam is no longer required, there is now no distinction between codes 99201 and 99202. Therefore, 99201 has been removed.5

Time alone can be used to determine office or outpatient E/M service code levels (Table 1). Previously, counseling and coordination of care were the only determining factors in using time to select a level of service. With the new guidelines, the code level is determined by total time spent on the day of the encounter. This includes face-to-face and non-face-to-face activities performed by the dermatologist or advanced practice clinician (APC); time spent on non-face-to-face activities beyond the encounter date is not counted. Activities considered toward calculating time include preparing to see a patient; obtaining or reviewing a history, performing an examination or evaluation; counseling and educating; ordering medications, tests, or procedures; consulting with other health care professionals; documenting health records; interpreting results; communicating results; and coordinating care. These activities must occur on the date of the visit to be counted toward the total time. For example, time spent interpreting laboratory results the day after the visit is not counted toward the total. In the case a dermatologist and a APC are both evaluating and managing a patient, the time spent by each that day is reported as a sum. However, if they are both working together or jointly meeting with a patient, time should only be reported by one individual as a single unit. Furthermore, the total time does not encompass time spent by clinical staff; CPT code 99211 can be used to report services performed by clinical staff under direct supervision of a qualified provider. Additionally, time spent by resident physicians with patients in academic teaching practices cannot be counted toward determining the service level. In order to document visits extending beyond the normal time frames, prolonged service codes may be used. Code 99XXX can be used with codes 99205 and 99215 for time spent with or without direct patient contact on E/M services on the date of the visit in 15-minute increments.5 For example, 75 minutes with an established patient would be coded as 99215 (first 54 minutes), 99XXX (next 15 minutes), 99XXX (remaining 6 minutes).


The level of MDM is the second method that can be used for calculating the level of service (Table 1). Three elements are used to define the complexity of MDM: the number and complexity of problems addressed, the amount and/or complexity of data reviewed and analyzed, and the risk of complications, morbidity, and/or mortality associated with management (Table 2). The levels of MDM are straightforward, low, moderate, and high. At least two of three elements in the same level are required to define the encounter at that level of MDM.5

The number and complexity of problems are categorized from minimal to high. Problem descriptions include minor problem (eg, skin tag), stable chronic illness, acute uncomplicated illness (eg, abrasion), chronic illness with exacerbation (eg, psoriasis with guttate flare), undiagnosed new problem with uncertain prognosis, and chronic illness with severe exacerbation. Once the problem is categorized into an MDM level, the next step is to select the level of data. Within this element, there are three categories to determine the complexity: the number of tests, documents, orders, or information obtained (not from the patient) that are reviewed or analyzed; the interpretation of tests from other providers; and the discussion of management or interpretation of tests with other providers. However, interpretation and/or report should not be counted toward MDM if a separate CPT code is used to document that interpretation and/or report. After selecting an MDM level for data, the element of risk is determined. The level of this element is determined by the risks associated with decisions and management options (even if they did not ultimately occur) during the visit. This entails evaluating the morbidity and mortality of the presenting problems. After a level is selected for all three elements, the MDM level and associated code can be determined.5

T2In addition, CMS has proposed updates to work relative value unit (wRVU) values corresponding with the new CPT guidelines (Table 1). Codes 99202 and 99211 will remain the same. New patient E/M codes (99203-99205) will see a 7% to 13% wRVU value increase. Established patient E/M codes (99212-999215) will see an increase in wRVU values ranging from 28% to 46%.6 Furthermore, the new prolonged services code (99XXX) will have a value of 0.61 for each 15-minute increment.

Over the years, physician responsibilities have evolved in order to deliver high-quality care. This includes increased time spent on coordinating team-based care and population management and increased time spent on documentation.6 However, the current E/M coding guidelines have been used to bill for the level of service for office visits for over 20 years with little update, leaving these guidelines regarded as overly complex and outdated. Due to ambiguity in differentiating levels of service as well as a focus on volume of documentation, E/M coding has been an administrative burden.2 The current requirements fail to reflect appropriate and clinically meaningful differences in the complexity and care of patients.3 The establishment of electronic health records (EHR) allowed providers to easily review the patient’s medical history, but instead of alleviating the documentation burden, EHRs have augmented “note bloating” to meet requirements for billing.2 This has resulted in increasing amounts of time spent on EHR documentation, limiting patient-physician interaction and resulting in poor coding accuracy. CMS audits report outpatient claims error rates as high as 91%.7 The 2021 guidelines aim to address shortcomings through more intuitive and clinically relevant requirements. The reduction of regulatory obstacles was inspired by the goal of creating flexible and meaningful documentation as well as increasing clinician time with patients. The changes will save physicians an estimated 180 hours of paperwork annually—time that can be spent with patients rather than behind a computer screen.6

In order to prepare for these changes, outpatient practices will need to make adjustments in their current operational and administrative workflows. A key step is reviewing practice protocols. This will help identify issues and areas requiring changes. For example, new guidelines do not require dermatologists to re-record the history and physical; it is adequate to document review of information already recorded by support staff or the patient regarding the chief complaint and history.2 Therefore, practices can consider expanding the role of clinical support staff. The AMA recommends consulting with existing coding resources and expertise to help update practice procedures and protocols. Since the changes will impact all members of the practice, complete team meetings should be held to review the coding changes and subsequent protocol changes that are expected in 2021.8

In addition to workflow, these revisions may have a financial impact on practices. CMS is required to maintain budget neutrality when making changes to the Medicare fee schedule. E/M billing accounts for about $23 billion in Medicare spending.4 In 2019, $630,706,066 in dermatology E/M claims were paid by Medicare.9 Therefore, small changes in E/M code wRVUs will result in large changes in Medicare spending. To maintain neutrality, a decrease in wRVU conversion factor is required, decreasing payments for all services. However, the ultimate impact of these changes will vary based on specialties and individual practices. Offices that bill more E/M services may see an increase in reimbursement while those that bill more procedural and surgical services may see a decrease.10 The E/M level of service code accompanying an in-visit procedure (eg, 11102) may be different with the new guidelines depending on the additional complexity of the visit not associated with the procedure itself. This elimination of the extensive requirements of the history and physical exam components will also impact E/M billing in this situation. In certain situations, a general dermatologist may be able to bill a high E/M code in addition to performing procedures such as a tangential biopsy of the skin. However, procedural dermatologists may see a cut in reimbursement—Mohs surgeons may see an estimated 6.5% cut in wRVU accrual. CMS has increased the pay for E/M level of service codes but did not increase reimbursement for procedure codes with built-in follow-up visits and that have 10- and 90-day global periods.11 Overall, practices that do not bill office/outpatient E/M codes will see the greatest relative decrease in payment. Given these implications, it is vital for each practice to perform a financial analysis to anticipate changes in revenue; reviewing current coding practices and reviewing future protocols may aid in doing so.

Although the changes increase coding flexibility, practices should consider legal implications of documentation habits. The new E/M documentation requirements have been lessened, but physicians should continue to carefully document their work. Improper documentation leaves clinicians vulnerable to medical malpractice lawsuits. In addition, inappropriate documentation may result in inadvertent overbilling as well as fraud and abuse law infractions. Implementing or updating a compliance plan may help practices avoid mistakes with ethical and legal implications.8

Practices may also benefit from reaching out to entities such as EHR vendors and other payers. EHR vendors may be updating their platforms to account for new coding guidelines. Communicating with the vendors may help with updating practice protocols as well as confirming an implementation schedule. Furthermore, dermatologists should consult with their employers and payers to determine any changes, or lack thereof, to documentation required by those entities.8

The new coding and documentation changes are the first major overhaul to E/M guidelines in over 20 years. Working with the AMA and specialty societies, CMS has recognized changes in the process of health care delivery and has taken a step toward putting patients over paperwork through flexible but clinically relevant documentation standards. Although all the implications are not definite, it is hoped the changes will improve efficiency while reducing administrative burdens and ultimately improve patient care.

Mr Ranpariya is a medical student at Robert Wood Johnson Medical School at Rutgers University in New Brunswick, NJ, and a research fellow at Center for Dermatology Research in the department of dermatology at Wake Forest School of Medicine, Winston-Salem, NC. Ms Cull is a medical student and research fellow at Center for Dermatology Research in the department of dermatology at Wake Forest School of Medicine. Dr Feldman is with the Center for Dermatology Research and the departments of dermatology, pathology, and social sciences & health policy at Wake Forest University School of Medicine and the department of dermatology at the University of Southern Denmark in Odense, Denmark. Dr Strowd is an assistant professor at the Wake Forest School of Medicine, department of dermatology.

Disclosures: Mr Ranpariya and Ms Cull have no relevant financial relationships. Dr Feldman has received research, speaking and/or consulting support from a variety of companies including Galderma, GSK/Stiefel, Almirall, Leo Pharma, Boehringer Ingelheim, Mylan, Celgene, Pfizer, Valeant, Abbvie, Samsung, Janssen, Lilly, Menlo, Merck, Novartis, Regeneron, Sanofi, Novan, Qurient, National Biological Corporation, Caremark, Advance Medical, Sun Pharma, Suncare Research, Informa, UpToDate and National Psoriasis Foundation. He is founder and majority owner of and founder and part owner of Causa Research, a company dedicated to enhancing patients’ adherence to treatment. Dr Strowd has received grant awards from Pfizer and other support from Galderma, Sanofi, Regeneron, Actelion, and Lilly.

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2. CPT® evaluation and management. American Medical Association. Accessed October 16, 2020.

3. Hitzeman D. What’s next for E/M visits: now and a look ahead. Presented at: LEAD Conference 2019; January 24-25, 2019; Las Vegas, NV. Accessed October 16, 2020.

4. AMA issues checklist for the transition to E/M office visit changes. Press release. American Medical Association; December 16, 2019. Accessed October 16, 2020.

5. CPT evaluation and management office or other outpatient and prolonged services code and guideline changes. American Medical Association. Accessed October 16, 2020.

6. 2021 evaluation and management CPT codes: understanding the impact on physician compensation. SullivanCotter. Accessed October 16, 2020.

7. Paz KB, Halverstam C, Rzepecki AK, McLellan BN. A national survey of medical coding and billing training in United States dermatology residency programs. J Drugs Dermatol. 2018;17(6):678-682.

8. 10 tips to prepare your practice for E/M office visit changes. American Medical Association. Accessed October 16, 2020.

9. American Academy of Dermatology. Dermatology evaluation and management (E/M) service code utilization. Accessed October 16, 2020. 

10. Wang KY, Hirsch JA, Nicola GN, Golding LP, Lee RK, Chen MM. Implications of the revisions and revaluation of office/outpatient evaluation and management codes for neuroradiology reimbursement. Am J Neuroradiol. 2020;41(7):1160-1164. doi:10.3174/ajnr.A6619

11. Coldiron B. The 2021 Medicare proposed rule: the good, the bad, and the ugly. Dermatology News. Published August 17, 2020. Accessed October 16, 2020.

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