Why Medical Decision-Making Is the Best Predictor of E/M Service Level

Medicare’s Claims Processing Manual, section 30.6.1.A, stipulates, “Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT code.” But in the everyday struggle to assign E/M codes, medical decision-making (MDM) is usually the best indicator of the E/M service level.

When two of three components (history, exam, or MDM) are necessary to support the level of service, CPT® does not require that MDM must be one of those elements; but, the wise coder will proceed with caution if the levels of history and exam exceed the level of MDM. The history and exam should approximate the level of MDM because MDM influences the extent of history and exam that are required.

Evaluation and Management – CEMC

Additionally, the use of templates can make it too easy for a provider to document more detail in the history and exam than is necessary, which can lead to upcoding. As the Claims Processing Manual clarifies, “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.”

You cannot rely exclusively on MDM to determine the level of service, however. For example, when the E/M code requires three of three components to qualify for a given level of service, the lowest component (whether history, exam, or MDM) always determines code selection.

The bottom line: You must consider the entire E/M service, as documented. MDM is a good guide to the overall E/M level, but by itself if can determine nothing. Medical necessity remains the overarching criteria for all services.

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John Verhovshek

John Verhovshek

John Verhovshek, MA, CPC, is Managing Editor at AAPC. He has covered medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University, and a member of the Asheville-Hendersonville AAPC Local Chapter.
John Verhovshek

About Has 404 Posts

John Verhovshek, MA, CPC, is Managing Editor at AAPC. He has covered medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University, and a member of the Asheville-Hendersonville AAPC Local Chapter.

2 Responses to “Why Medical Decision-Making Is the Best Predictor of E/M Service Level”

  1. geri says:

    I code vein ablations, office visits etc, we have patients who come in for a diagnostic U/S only, then return a few days later for their initial visit. Because they have been in for the U/S, the office consult is billed as an established patient. On most of these visits the doctors are documenting a comprehensive HPI and exam, but not always documenting enough to get the high level of MDM. I have been coding these as 99215 because they meet the 2 out of 3 rule; should I be coding them as 99214 instead? it is essentially the patients initial office visit with a doctor and so I feel it should warrant the higher level based on the extent of the other two criteria.

  2. Madeline Murphy says:

    Mr. Verhovshek:

    Would you have any CMS sources stating MDM should be one of the 2 components used in determining LOS for established patient visits? I am researching for a policy committee. I appreciate any help you may offer. Thank you,

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