CMS Proposal Simplifies E&M Coding, Complicates Payments

CMS proposed major changes to E&M coding but still solicits feedback from stakeholders.

The Centers for Medicare & Medicaid Services (CMS) wants to simplify outpatient E&M coding by letting providers choose an office visit code level based on the most important component, medical decision making (MDM), or face time spent with the patient – without the existing requirement that the visit be counseling-dominated.

This bombshell provision, appearing in the 2019 Physician Fee Schedule (PFS) proposed rule, would be the most far-reaching and consequential change to E&M coding since CMS established the 1995 and 1997 guidelines more than two decades ago. Affecting most provider types and all physician specialties, it would easily eclipse in magnitude CMS’ last major E&M change in 2011, when it stopped reimbursing consultation codes (CPT® 99241-9945 and 99251-99255).

While CMS proposes to give providers the choice between basing their E&M level on MDM or total personal face time (regardless of counseling time), it would still allow providers to code based on the current 1995 and 1997 guidelines. In fact, the agency states in the proposed rule that it wouldn’t eliminate the components of history and exam as described by CPT. “We expect that practitioners would still conduct clinically relevant and medically necessary elements of history and physical exam, and conform to the general principles of medical record documentation in the 1995 and 1997 guidelines,” CMS writes in the rule.

Nor is there any guarantee that private payers would immediately choose to follow CMS in relaxing the documentation requirements for E&M codes, which CMS is also pairing with major changes to how it reimburses E&M services (detailed later in this article).

Given the scope and scale of E&M utilization – CMS estimates all E&M codes account for 40 percent of physician fee schedule (PFS) charges while office/outpatient E&M codes account for 20 percent– the agency wants to adopt a “step-wise approach” to tweaking the E&M guidelines. Thus the proposed changes to coding and payment would be limited to 99201-99205.

E&M payments get more complex

CMS pairs these concessions to provider discretion with changes to E&M payment that are both unprecedented and nuanced. As part of the E&M provision, CMS would standardize its payment for all new and established patient office visits.

New patient visits would be reimbursed at a single flat rate for codes 99202-99205 (99201 would be paid at a lower rate) while a corresponding, lower flat rate would apply to established patient visit codes 99212-99215 (99211 would be paid a lower rate). The level 1 codes don’t get the flat rate because they don’t require the presence of a physician.

Below are two tables showing the estimated payments for outpatient codes 99201-99205, using the 2018 Medicare conversion factor ($35.99) and relative value unit (RVU) values based on the national average geographic practice cost indices (GPCI) for non-facility practice and malpractice expense.

“We believe allowing practitioners to choose the most appropriate basis for distinguishing among the levels of E&M visits and applying a minimum documentation requirement, together with reducing the payment variation among E&M visit levels, would significantly reduce administrative burden for practitioners, and would avoid the current needs to make coding and documentation decisions based on codes and documentation guidelines that are not a good fit with current medical practice,” CMS states in the proposed rule.

New add-on codes for complex E&M visits and primary care

CMS acknowledged that standard payment rates based only on whether a patient is new or established could wind up reducing reimbursement for some physician and specialties that tend to see sicker patients, manage more complex conditions, or otherwise have legitimate reasons to have a significantly higher utilization of the higher-level E&M codes.

The answer in the CMS proposal would be the introduction of new, add-on HCPCS G-codes to “recognize additional relative resources for primary care visits and inherent visit complexity,” the agency states in the proposed rule. Proposed add-on code GPC1X would be reported by primary care providers for all established patient visits to boost payment for the “inherent” complexity of primary care services. GPC1X would have a work RVU of just 0.07, and factoring in the other proposed RVUs, could add between $5 to $6 to each primary care visit.

The other proposed add-on code would be GCG0X for complexity inherent to specialty care, and would be worth more with a proposed work RVU of 0.25; factoring in the other proposed values, GCG0X could add between $11 to 12. CMS suggests, without stating so explicitly, that primary care providers must use GPC1X and cannot use GCG0X, nor can any other specialty bill both add-on codes.

Submit comments on E&M changes and time thresholds

Given the scale and potential impact of these major changes in the proposed rule, it’s important for stakeholders to share their thoughts with CMS. The agency has been clear that it would welcome as much provider feedback as possible on the E&M provisions, which suggests it could be open to significant revisions and changes.

One question CMS has yet to resolve, and thus wants feedback on, is what revisions it should make to time thresholds for each E&M code level. Because the proposal standardizes payments and eliminates the current requirement that more than 50 percent of personal face time must be spent on counseling and/or coordination of care, CMS wants to set two new time thresholds, one for all new patients and one for all established patients.

One has until 5 p.m. on Sept. 10, 2018, to submit comments, and one of the easiest ways is online submission. Click here to visit the comments page for the 2019 PFS proposed rule.

CMS typically releases the PFS final rule in early November.

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