Physician Fee Schedule Payment for Office and Outpatient Evaluation and Management Visits

Effective January 1, 2021, the Centers for Medicare & Medicaid Services (CMS) implemented a new coding, prefatory language, and interpretive guidance framework that the American Medical Association Current Procedural Terminology Editorial Panel issued for office and outpatient E/M visits. More information is available on the AMA website.

History and exam will no longer be used to select the level of code for office/outpatient evaluation and management (E/M) visits. Instead, an office/outpatient E/M visit will include a medically appropriate history and exam, when performed. The history and exam components will be performed when they are reasonable and necessary, and clinically appropriate.

CPT® code 99201 (Level 1 office/outpatient E/M visit, new patient) has been deleted.

For levels two (2) through five (5) office/outpatient E/M visits, selection of the code level to report will be based on the following:

• Either the level of medical decision-making (as redefined in the new AMA/CPT® guidance framework); or
• The total time personally spent by the reporting practitioner on the day of the visit (including time with and without direct patient contact)

Time 

Time may be used to select a code level in office or other outpatient services whether or not counseling and/or coordination of care dominates the service. Time may only be used for selecting the level of the other E/M services when counseling and/or coordination of care dominates the service.

When time is used to select the appropriate level for E/M services codes, time is defined by the service descriptors. The E/M services for which these guidelines apply require a face-to-face encounter with the physician or other qualified health care professional. For office or other outpatient services: if the physician’s (or other qualified health care professional’s) time is spent in the supervision of clinical staff who perform the face-to-face services of the encounter, use CPT® code 99211. A shared or split visit is when a physician and other qualified healthcare professional jointly provide face-to-face and non-face-to-face work related to the visit.

Total time on date of encounter includes the face-to-face and non-face-to-face time spent by physician and/or other qualified health care professional. Only distinct time (time of one professional) can be counted when meeting jointly with the beneficiary or to discuss treatment. Duplication of counting minutes is not allowed.

2023 updates include not counting time spent on the performance of other services that are reported separately. Travel is not included in reporting time. General teaching that is not limited to discussion that is required for the management of a specific patient also cannot be counted.

Total Time activities include:

• Preparing to see patient (review of tests)
• Obtaining and reviewing separately-obtained history
• Performing medically appropriate examination or evaluation
• Counseling and educating the patient, family or caregiver
• Ordering medications, tests or procedures
• Referring and communication with other health care professionals (when not separately reported)
• Documenting clinical information in electronic or other record
• Independently interpreting and communicating results to the patient, family or caregiver (not separately reported
• Care coordination (not separately reported)

Note: For office/outpatient E/M visits, the 1995 and 1997 E/M guidelines will no longer be used.

The extent of History and physical examination is not an element in selection of office or other outpatient services.

Office and outpatient services include medically appropriate history and/or physical examination when performed.

The nature and extent of history and/or physical examination are determined by professional reporting of the service.

Care team(s) may collect information from patient or caregiver via multiple methods (e.g., portal, questionnaire) for review by reporting provider.

Medical Necessity

Services rendered should be billed to Medicare based on the medical necessity of the visit. If the visit does not necessitate the detail of documentation required to meet the CPT® code, a lower level of service should be billed. Do not include additional components in the record for the sole purpose of meeting a specific CPT® code. 

"Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT® code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported." (CMS Internet Only Manual (IOM) Medicare Claims Processing Manual, Publication 100-04, Chapter 12 (PDF), Section 30.6.1).

Determining the medically necessary level of service (LOS) involves various factors and varies per patient. Publications that can assist providers with coding and determining the level of service are Current Procedural Terminology® (CPT®) and the National Correct Coding Initiative (NCCI). These are strictly guidelines and do not provide a definitive answer to determine the level of service for E/M claims. The coding of services submitted to Medicare is ultimately the responsibility of the service provider. Regardless of a separate entity coding and/or submitting the claims, the provider who rendered the services is held accountable for the level of service billed.

The medical necessity of laboratory tests and/or radiological testing needs to be clearly stated in the medical record. Without the rationale clearly indicated in the medical record, the service becomes not medically reasonable and necessary, and will be denied.

Medical Review When Practitioners Use Time to Select Visit Level
Medical reviewers will use the medical record documentation to objectively determine the medical necessity of the visit and accuracy of the documentation of the time spent (whether documented via a start/stop time or documentation of total time) if time is relied upon to support the E/M visit.

Elements of Medical Decision-Making 

Note: Please see 2023 CPT E/M descriptors and guidelines (PDF) for Levels of Medical Decision-Making (MDM).

One element in the level of code selection for an office or other outpatient service is the number and complexity of the problems that are addressed at an encounter. Multiple new or established conditions may be addressed at the same time and may affect medical decision-making. Symptoms may cluster around a specific diagnosis and each symptom is not necessarily a unique condition. Comorbidities/underlying diseases, in and of themselves, are not considered in selecting a level of E/M services unless they are addressed, and their presence increases the amount and/or complexity of data to be reviewed and analyzed or the risk of complications and/or morbidity or mortality of patient management.

Medical decision-making in the office and other outpatient services code set is defined by three elements. Level of MDM is based on meeting two out of three elements:

• The number and complexity of problem(s) that are addressed during the encounter
• The amount and/or complexity of data to be reviewed and analyzed. These data include medical records, tests and/or other information that must be obtained, ordered, reviewed, and analyzed for the encounter.
• The risk of complications, morbidity, and/or mortality of patient management decisions made at the visit, associated with the patient's problem(s), the diagnostic procedure(s), treatment(s)

The final diagnosis for a condition does not in itself determine the complexity or risk, as extensive evaluation may be required to reach the conclusion that the signs or symptoms do not represent a highly morbid condition. Multiple problems of a lower severity may, in the aggregate, create higher risk due to interaction.

There are twenty-two definitions relating to the elements of MDM or office/outpatient services (defined by AMA) and an abbreviated list of the elements that garner more questions.

Problem: A problem is a disease, condition, illness, injury, symptom, sign, finding, complaint or other matter addressed at the encounter with or without a diagnosis being established at the time of the encounter.

• Problem addressed
• Minimal problem
• Self-limited or minor problem
• Undiagnosed new problem with uncertain prognosis

Problem addressed: A problem is addressed or managed when it is evaluated or treated at the encounter by the physician or other qualified health care professional reporting the service.

Minimal problem: A problem that may not require the presence of the physician or other qualified health care professional, but the service is provided under the physician's or other qualified health care professional's supervision (see CPT® code 99211).

Self-limited or minor problem: A problem that runs a definite and prescribed course, is transient in nature, and is not likely to permanently alter health status.

Stable, chronic illness: A problem with an expected duration of at least a year or until the death of the patient. To define chronicity, conditions are treated as chronic whether stage or severity changes (i.e., uncontrolled diabetes and controlled diabetes are a single chronic condition).

Acute, uncomplicated illness or injury: A recent or new short-term problem with low risk of morbidity for which treatment is considered. There is little to no risk of mortality with treatment, and full recovery without functional impairment is expected. 

Chronic illness with exacerbation progression, or side effects of treatment: A chronic condition that is acutely worsening, poorly controlled or progressing with an intent to control progression and requiring additional supportive care or requiring attention to treatment for side effects, but that does not require consideration of hospital level of care.

External physician or other qualified health care professional: An individual not in the same group practice or who is of a different specialty or subspecialty.

• Includes licensed professional practicing independently 
• May also be facility or organizational provider (i.e., hospital, nursing facility, home health care agency) 

Independent historian(s): An individual (e.g., parent, guardian, surrogate, spouse, witness) who provides history in addition to history provided by patient who is unable to provide complete or reliable history (e.g., due to developmental stage, dementia or psychosis), or because confirmatory history is judged to be necessary. In case where there may be conflict or poor communication between multiple historians and more than one historian(s) is needed, independent historian(s) requirement is met. 2023 addition independent historian does not include translation services.

Independent interpretation (2023 addition): This does not apply when the physician or other qualified health care professional who reports the E/M service is reporting or has previously reported the test.

Risk (2023 addition): "For example, a low probability of death may be high risk, whereas a high chance of a minor, self-limited adverse effect of treatment may be low risk."

Social Determinants of Health

• Economic and social conditions that influence the health of people and communities
• Examples: Food or housing insecurity

Drug therapy requiring intensive monitoring for toxicity: A drug that requires intensive monitoring is a therapeutic agent that has the potential to cause serious morbidity or death. The monitoring is performed for assessment of these adverse effects and not primarily for assessment of therapeutic efficacy. The monitoring should be that which is generally accepted practice for the agent but may be patient specific in some cases. Intensive monitoring may be long-term or short term. 

Drug therapy requiring intensive monitoring for toxicity (2023 addition): "Long term intensive monitoring is not performed less than quarterly. The monitoring may be performed with a laboratory test, a physiologic test, or imaging."

New Definitions 2023

• Acute, uncomplicated illness or injury requiring hospital inpatient or observation level of care: A new or recent short-term problem with low risk of morbidity or which treatment is required. There is little to no risk of mortality with treatment, and full recovery without functional impairment is expected. The treatment required is delivered in a hospital impatient or observation level setting.
• Acute, stable illness: A problem that is new or recent for which treatment has been initiated. The patient is improved and, while resolution may not be complete, is stable with respect to this condition. CPT® codes 99211 and 99281 face-to-face may be performed by clinical staff.

Additional Terms Defined for Documentation

• Appropriate source 
• Morbidity 
  • Risk
  • Test 
  • Acute, complicate injury 
  • External
  • Drug therapy 
  • Stable chronic illness
  • Acute, uncomplicated illness or injury
  • Chronic illness with exacerbation, progression of side effects of treatment
• Acute illness with systemic symptoms
• Chronic illness with severe exacerbation, progression or side effects of treatment
• Acute or chronic illness or injury that poses a threat to life or bodily function
• Independent interpretation

Resources

• MLN Matters Number: MM12071 (PDF) 
• CPT® Evaluation and Management
• AMA website (PDF) 
• Medicare Physician Guide 1995 Guidelines (PDF)
• Medicare Physician Guide 1997 Guidelines (PDF)
• American Medical Association. 2022. CPT Evaluation and Management (E/M) coding and Guideline Changes (PDF) 
• American Medical Association. 2022. CPT Evaluation and Management (PDF)
• CMS, Health and Human Services (HHS). 2022. CY 2023 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment Policies