Follow-up Visit Billing Patterns Can Uncover E/M Risks

Perform follow-up visit reviews to be sure providers know the difference between medical necessity and MDM.

By Gene Clarke, MBA, CIA, CISA

In the primary care setting, managed care generally means a patient presents with an illness or injury, and the provider coordinates a course of treatment and schedules follow-up visits to monitor the patient’s progress. Coders can gain insight into follow-up evaluation and management (E/M) billing patterns and potential coding risks by reviewing the episode of care, or the sequence of managed care events for a patient’s presenting problem.

Evaluation and Management – CEMC

For example, a coder reviews an internal medicine provider’s progress note. A summary of relevant documentation states:

A 52-year-old female patient presents for a third follow-up exam for ankle sprain (845.01 Sprain of deltoid (ligament), ankle). The patient has type II diabetes mellitus, is being treated for chronic obstructive pulmonary disease (COPD), and has a negative surgical history.

The patient states that the ankle pain resolved following the prescribed treatment of RICE [rest, ice, compression taping, and elevation], ibuprofen, and physical therapy for mobility and strengthening exercises. The patient denies low blood sugar reactions. The last A1C test was 6.0 percent. A recent eye exam tested normal.

COPD is stable and manageable with oral steroids. The patient is asking to supplement oral treatments with an inhaler. The provider prescribes Proventil for sudden sever episodes of shortness of breath.

The provider’s note is detailed and well documented, using a practice-developed electronic health record template. The service is reported 99214 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A detailed history; A detailed examination; Medical decision making of moderate complexity.

The coder reviews the E/M episode of care for this patient, and finds:

Initial Sprain of deltoid 99214 Establish plan
Follow up One week 99214 Con’t with plan
Follow up One week 99214 Con’t with plan
Follow up Two week 99214 Resolved

The coder discusses the progress notes with the provider. The provider states she reviewed all active problems with the patient during each follow-up visit to ensure conditions are managed and that the patient is compliant with treatment plans. The provider feels this is a very complex patient, that the level of medical decision-making (MDM) supports her evaluation of three problems, and that all services provided were medically necessary and best for the patient to ensure a successful outcome. The provider believes that complex patients with multiple chronic conditions dictate a high level of effort and an appropriate billing level. Reviewing all problems with the patient each visit eliminates scheduling additional visits, saving time and money in the long run, and increasing the provider’s overall patient satisfaction scores.

Medical Necessity and MDM Aren’t Equal

When coding E/M services, providers don’t necessarily think in terms of “medical necessity related to the presenting problem” and “MDM.” This billing terminology may be foreign to them because it has no bearing on their day-to-day practices of clinical medicine. As a result, providers may mistakenly think MDM satisfies all medical necessity requirements for services they provide and/or diagnostic tests they order.

Regarding to billing compliance, however, the two terms are not synonymous when selecting E/M codes, and failure to educate providers about their differences can lead to incorrect coding. The key components of MDM and the concept of medical necessity should be continually reinforced for providers:

  • MDM involves choosing a level of service (based on the documentation) that reflects the provider’s effort when deciding a course of treatment.
  • Medical necessity involves substantiating that the patient’s condition required the treatment.

Any service reported to a payer must be supported by medical necessity. Medical necessity simply means the presenting problem and diagnosis documented merits the level of investigation and treatment administered to the patient. In our example, even though the provider evaluated the patient’s complex chronic medical issues during each follow-up visit, it’s not appropriate to perform level 4 E/M services for an ankle sprain with no modifications to the treatment plan. It’s simply not medically necessary or relevant to the presenting problem.

On the other hand, MDM is used to capture the effort the provider must exert in deciding how to treat the patient’s presenting problem and the influence of co-morbidity on the clinical progression of the primary physical disorder. In this case, although the patient has diabetes and COPD, these co-morbidities have not been established as associated with the presenting problem and should be treated as separate E/M encounters.

The goal is to avoid payment denials or take-backs that result from a lack of medical necessity for the presenting problem, or unsubstantiated MDM. The provider in this example may feel confident that her MDM, based on three conditions, will justify a high level of E/M billing for these visits. But most of the record related to the two co-morbidities is irrelevant to the treated diagnosis.

Audit Steps to Identify E/M Follow-up Risk

To identify episodic billing risks, perform an analysis of E/M follow-up visit claims. If it looks like providers are billing the same E/M levels for patient follow-up visits, single these out for review. In your review:

  1. Assess each provider’s E/M bell curve* distribution and determine if any E/M services are outliers compared to state and national utilization data.
  2. Audit providers with potential risk by reviewing “episodes of care” or consecutive patient visit notes.
  3. Assess for medical necessity and documented information that contains little or no relevance to the presenting problem. Highlight these notes for a further discussion with the provider.

To prepare for provider education, review organizational procedures, instructions, and guidelines, and study provider educational materials related to definitions and examples at the clinical level for medical necessity and MDM.

Based on audit findings, conduct a peer review during provider meetings to determine the extent of existing risk and how to move toward better billing compliance. This is a critical step in moving providers to a conscience understanding and gaining consistency in medical record documentation.


Gene Clarke, MBA, CIA, CISA, is an internal auditor focused on risk assessments and risk management.


Renee Dustman

Renee Dustman

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.
Renee Dustman

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Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.

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