What Are E/M Codes?

Evaluation and management (E/M) coding is the use of CPT® codes from the range 99201-99499 to represent services provided by a physician or other qualified healthcare professional. As the name E/M indicates, these medical codes apply to visits and services that involve evaluating and managing patient health. Examples of E/M services include office visits, hospital visits, home services, and preventive medicine services. Codes for services like surgeries and radiologic imaging are found outside of the E/M section of the CPT® code set.

Medicare, Medicaid, and other third-party payers accept E/M codes on claims that physicians and other qualified healthcare professionals submit to request reimbursement for their professional services. E/M service codes also may be used to bill for outpatient facility services. Facilities and practices may use E/M codes internally, as well, to assist with tracking and analyzing the services they provide.

E/M services are high-volume services. Even small E/M coding mistakes can cause major compliance and payment issues if the errors are repeated on a large number of claims. Understanding E/M coding rules, including updates, is crucial to accurate reporting and reimbursement for these services. The E/M coding guidance below is current, and much of it will still be relevant in 2021 when major changes for office/outpatient E/M coding and documentation rules are expected from the Centers for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA).

What a Typical E/M Code Looks Like

CPT® is an abbreviation for Current Procedural Terminology, a set of five-character medical codes maintained by the AMA. “Evaluation and Management Services” is one section in the CPT® code set. Other sections in the CPT® code set include Anesthesia, Surgery, Radiology Procedures, Pathology and Laboratory Procedures, and Medicine Services and Procedures.

There are more than two dozen categories of E/M codes, from office and other outpatient services to advance care planning. You may find further divisions within each category, such as separate options for new patients and established patients.

The CPT® code set uses the same basic format to describe the E/M service levels for many (but not all) categories:

  • A unique code, such as 99203;
  • The place and/or type of service, such as an office or other outpatient visit;
  • The service’s content, such as a detailed history, a detailed examination, and medical decision making (MDM) of low complexity;
  • The nature of the presenting problem or problems usually associated with a given level, such as moderate severity; and
  • The time usually associated with the service, such as 30 minutes of face-to-face time.

When you bring that all together, it looks like this example code with the official descriptor shown in italics: 99203 Office or other outpatient visit for the evaluation and management of a new patient, which requires these 3 key components: A detailed history; A detailed examination; Medical decision making of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family’s needs. Usually, the presenting problem(s) are of moderate severity. Typically, 30 minutes are spent face-to-face with the patient and/or family.

CPT® and Medicare E/M Documentation Guidelines

E/M coding can be difficult because of the many factors involved in selecting the correct code. For instance, determining the type of history, examination, and medical decision making can involve using special grids and tables to check requirements.

The AMA CPT® code set includes E/M guidelines, but CMS has also published more specific guidance on proper E/M coding and documentation. Most notably, CMS issued the 1995 E/M Documentation Guidelines and the 1997 Documentation Guidelines to help providers and medical coders distinguish between the various E/M service levels. Both the 1995 and 1997 E/M Documentation Guidelines from CMS are still in use. Third-party payers other than Medicare may apply these guidelines, as well.

This article references CPT® E/M section guidelines and CMS 1995 and 1997 Documentation Guidelines because all of them are important to proper coding of E/M services.

Commonly Used E/M Terms

When you’re reviewing E/M rules and regulations, there are certain terms you’ll see frequently. Below are definitions to help you understand E/M terminology.

A qualified healthcare professional is “an individual who is qualified by education, training, licensure/regulation (when applicable), and facility privileging (when applicable) who performs a professional service within his or her scope of practice and independently reports that professional service,” according to CPT® guidelines. E/M code descriptors and rules often refer to “physicians and other qualified health care professionals.” This may include advanced practice nurses (APNs) and physician assistants (PAs). Clinical staff do not fall in this category.

A clinical staff member is “a person who works under the supervision of a physician or other qualified health care professional, and who is allowed by law, regulation and facility policy to perform or assist in the performance of a specific professional service, but does not individually report that professional service,” CPT® guidelines state.

A professional service is a face-to-face service by a physician or other qualified healthcare professional who can report E/M codes. This definition of a professional service is specific to E/M coding for distinguishing between new and established patients.

A new patient is a patient who has not received any professional services (remember, that means face-to-face services) within the past three years from the physician or qualified healthcare professional providing the current E/M service, or from another physician or qualified healthcare professional of the same specialty and subspecialty who is part of the same group practice. That’s the definition of new patient according to AMA CPT® E/M guidelines. Medicare refers only to the same physician specialty (not subspecialty) in its definition of new patient for E/M coding, available in Medicare Claims Processing Manual, Chapter 12, Section 30.6.7.A. Physicians self-designate their Medicare specialty when they enroll, choosing from the list of specialty codes in Medicare Claims Processing Manual, Chapter 26, Section 10.8.2.

  • The following is an example of a new patient E/M visit demonstrating the professional services rule: A 65-year-old male sees a cardiologist for an E/M service. Another cardiologist in the practice provided an interpretation of an EKG for the same patient the previous year when he was in the emergency department, but there was no face-to-face service. In this case, the cardiologist providing the E/M can still consider the patient to be new for E/M coding purposes because no cardiologist in the practice provided the patient with a face-to-face service within the past three years.
  • The following is an example of a new patient E/M visit demonstrating the same-specialty rule: A patient has been seeing an internist in a multispecialty group for the past three years for primary care, particularly hypertension. The internist identified some suspicious lesions and sent the patient to a general surgeon in the same practice to evaluate lesion removal. The patient is a new patient to the general surgeon because the surgeon has a different specialty than the internist.

An established patient is a patient who has received professional (face-to-face) services within the past three years from the physician or qualified healthcare professional providing the E/M, or from another physician or qualified healthcare professional of the same specialty (and subspecialty, says AMA) who is part of the same group practice.

  • The following is an example of an established patient E/M visit demonstrating the same-subspecialty rule: A pediatric patient comes to your office complaining of stomach pains. Although this is the pediatric gastroenterologist’s first time meeting the patient, another doctor of the same subspecialty in the same group practice saw the patient two years ago for a similar complaint. In this case, you should consider the patient to be established.
  • When a physician or qualified healthcare professional is on-call or covering for another provider, CPT® guidelines instruct you to classify the patient encounter as new or established based on the patient’s relationship to the unavailable provider.
  • When an APN or PA works with a physician, the CPT® E/M guidelines state you should consider the APN or PA to be the same specialty and subspecialty as the physician.
  • If your practice has multiple locations and a provider in location A sees the patient in year 1 and then a same-subspecialty physician at location B sees the patient in year 2, consider the patient to be established. The different location is not a factor in determining whether the patient is new or established.

The definitions of new patient and established patient for E/M coding can be dense because there are so many elements involved. The decision tree below will help you determine whether a patient is new or established for an E/M encounter. The term QHP used in the graphic stands for qualified healthcare professional.

E/M Decision Tree: New vs. Established Patient

New-vs.-Established-Patient-E/M-Decision-Tree

Components of E/M Service Levels

There are often three to five E/M service levels within each E/M code category or subcategory. Each level has its own E/M code. The intent behind the different levels of E/M services is to represent the variations in skills, knowledge, and work required for different encounters. You should not assume a level in one E/M category or subcategory will match the requirements for the same level in another E/M category or subcategory, so read each descriptor carefully before you make your final code choice.

There are seven components used in the descriptors of many E/M codes. The first three are called key components for E/M level selection.

  1. 1. History
  2. 2. Examination
  3. 3. Medical decision making (MDM)

The next three elements are called contributory factors. The first two are important, but they aren’t required or relevant for every encounter.

  1. 4. Counseling
  2. 5. Coordination of care
  3. 6. Nature of presenting problem

There is one final component for E/M services, which you may use to determine the appropriate code level.

  1. 7. Time

You can read more about the time component of E/M later in this article.

Table 1 provides an example of how the E/M component requirements may vary between two codes even when those codes are both level-one codes.

Table 1: Comparison of E/M Component Requirements for 99221 and 99231

Code 99221 (Level-1 initial hospital care) 99231 (Level-1 subsequent hospital care)

Number of key components required

All three components

At least two of three components

History

Detailed or comprehensive

Problem focused, interval type

Examination

Detailed or comprehensive

Problem focused

MDM

Straightforward or low complexity

Counseling


Consistent with the nature of the problem(s) and the patient's and/or family's needs

Coordination of care

Presenting Problem

Low severity

Stable, recovering, or improving

Time

30 minutes

15 minutes

Number of Key Components Required for E/M Level Selection

For many of the most commonly used E/M service codes, you may select the appropriate level based on the key components of history, exam, and MDM mentioned above. When choosing an E/M code based on these components, pay attention to whether the code requires you to meet the stated levels for three out of three or two out of three key components.

As an example, in Table 1 you saw that initial hospital visit code 99221 requires all three components, but subsequent hospital visit code 99231 requires only two of the three components. Many of the codes requiring three of three components are for new patients or initial services, and many of the codes requiring two of three components are for established patients and subsequent services.

You must meet or exceed requirements stated in the code descriptor for three out of three key components for the types of E/M codes listed below:

  • New patient office or other outpatient services;
  • Hospital observation services;
  • Initial hospital inpatient care services;
  • Office or other outpatient consultation services;
  • Initial inpatient consultation services;
  • Emergency department services;
  • Initial nursing facility care;
  • New patient domiciliary, rest home (e.g., boarding home), or custodial care services; and
  • New patient home services.

You need to meet requirements for only two out of the three key components for these E/M services:

  • Established patient office or other outpatient services;
  • Subsequent hospital care;
  • Subsequent nursing facility care;
  • Established patient domiciliary, rest home (e.g., boarding home), or custodial care services; and
  • Established patient home services.

Many of these E/M codes also include an option to select the level based on time in certain circumstances. You’ll learn more about coding E/M based on time later in this article.

Examples of E/M Coding Based on Key Components

Below are examples of meeting three of three and two of three key components for E/M coding. Remember that the key components for E/M coding are history, exam, and MDM. There are different types (levels) of each component, and a quick look at these types will help you understand the examples.

These are the four types of history in E/M coding, from lowest to highest:

  • Problem focused;
  • Expanded problem focused;
  • Detailed; and
  • Comprehensive.

CPT® E/M guidelines list four types of examination, as well. The terms used for exam type are the same as those used for history type:

  • Problem focused;
  • Expanded problem focused;
  • Detailed; and
  • Comprehensive.

There are also four types of MDM, shown here from lowest to highest:

  • Straightforward;
  • Low complexity;
  • Moderate complexity; and
  • High complexity.

Let’s start with an example of a new patient E/M office visit. For new patient office or other outpatient visit E/M codes that require you to meet or exceed three out of three key components (99201-99205), you have to code based on the lowest level component from the encounter.

Suppose a visit included a comprehensive history, an expanded problem focused exam, and MDM of moderate complexity. You must choose your code based on the lowest documented component because you have to meet (or exceed) the requirements for all three components. The lowest component in our example is the expanded problem focused exam, as shown below in Table 2.

Table 2: New Patient E/M Office Visit Example

Component History Exam MDM

Lowest

Highest

Problem focused

Problem focused

Straightforward

Expanded problem focused

Expanded problem focused

Low complexity

Detailed

Detailed

Moderate complexity

Comprehensive

Comprehensive

High Complexity

The correct code in this case is 99202 Office or other outpatient visit for the evaluation and management of a new patient, which requires these 3 key components: An expanded problem focused history; An expanded problem focused examination; Straightforward medical decision making …. The visit exceeded the 99202 requirements for the history and MDM, and it met the required level for the exam.

If the physician had documented a medically necessary comprehensive exam, you would have met the requirements to report this same visit using higher-level E/M code 99204 … A comprehensive history; A comprehensive examination; Medical decision making of moderate complexity …. Payers reimburse providers more for higher level E/M codes than for lower ones, so capturing the correct code is essential to accurate payment.

For established patient office or other outpatient visit codes that require you to meet or exceed two of three key components (99212-99215), you should disregard the lowest level component and code based on the next lowest requirement met.

Suppose an established patient E/M office visit included a detailed history, an expanded problem focused exam, and medical decision making of high complexity. The lowest requirement met was the expanded problem focused exam. You should disregard this requirement because the code descriptors state you need to meet only two of three key components to report a code. The next lowest level met was a detailed history. Table 3 shows the components for this visit, with the lowest level component crossed out because you can disregard that component when you select your code.

Table 3: Established Patient E/M Office Visit Example

Component History Exam MDM

Lowest

Highest

Problem focused

Problem focused

Straightforward

Expanded problem focused

Expanded problem focused

Low complexity

Detailed

Detailed

Moderate complexity

Comprehensive

Comprehensive

High Complexity

For this scenario, you should use 99214 … requires at least 2 of these 3 key components: A detailed history; A detailed examination; Medical decision making of moderate complexity …, assuming that there was medical necessity for a level four established patient visit. The encounter meets the history requirement and exceeds the MDM requirement. The visit doesn’t meet 99214’s requirement of a detailed exam, but that does not prevent you from reporting this code. You need to meet or exceed only two of the three components to choose this established patient code, and you did that with the history and MDM.

Did you catch the references to “medical necessity” in the examples? Medical necessity is an overriding factor when coding E/M. Even if a provider documents enough information to check all the boxes for a higher level of service, the claim should not include a higher-level code if the medical necessity supports only a lower-level code.

Nature of Presenting Problem in E/M Coding

The nature of the presenting problem is a contributory factor, rather than a key component, for your E/M code choice, but the presenting problem is still an important element to understand. The nature of the presenting problem carries weight when determining the medical necessity of an E/M service.

A presenting problem is the reason for the encounter, as described by the patient. Examples include an illness, injury, symptom, finding, or complaint. Many E/M code descriptors reference the presenting problem by using one of the five types described below.

Minimal means the problem is one for which the physician or other qualified healthcare professional may not need to be present in the room. An example would be a nurse working under the supervision of the billing provider to perform a follow-up service and suture removal for a simple repair of a superficial wound.

Self-limited or minor refers to a problem that is expected to have a definite course and is temporary. This level problem is unlikely to alter the patient’s health status permanently, or the problem has a good prognosis if the patient complies with the treatment plan. An insect bite is a possible example.

Low severity problems have a low risk of morbidity (disease/medical problems) and little or no risk of death even with no treatment. The patient should be able to recover from this level of problem without functional impairment. Depending on the case, sinusitis may be an example.

Moderate severity problems have a moderate risk of morbidity or death without treatment. The prognosis is uncertain or extended functional impairment is likely. Some cardiac events may fit this category.

High severity problems have a high to extreme risk of morbidity without treatment. The risk of death with no treatment is moderate to high, or severe, extended functional impairment is highly likely. Sepsis may fit this level.

As an example, the descriptor for the highest-level ED E/M code, 99285, states, “Usually, the presenting problem(s) are of high severity and pose an immediate significant threat to life or physiologic function.”

Definition of Time for E/M Service Levels

Now let’s move on to the E/M component of time. Many CPT® E/M code descriptors include the typical amount of time spent on that level of service. The times identified in the CPT® code descriptors are averages, representing a range of times. An individual encounter may have a time that is longer or shorter than the time in the code descriptor, depending on the clinical circumstances. Providers may use that listed time, rather than the key components, to choose the appropriate E/M service level if the visit meets certain criteria, explained in the next section.

The time component does not apply to all E/M codes. For instance, you should not consider time to be a component for emergency department (ED) E/M services. Most ED services are provided in a setting where multiple patients are seen during the same period of time, and it would be difficult to calculate time for any one patient.

For E/M codes that do include time, the times listed in the descriptors are intraservice times, not total times. Intraservice time is either face-to-face time for office and other outpatient visits, or unit/floor time for hospital and other inpatient visits. The reasoning provided in the CPT® E/M guidelines is that intraservice time correlates to the total amount of work an E/M service requires, and intraservice time is easier to calculate than total time.

Face-to-face time is the time that the provider of an office or other outpatient visit spends face-to-face with the patient and/or family, including time that the provider uses to get a history, perform an examination, and counsel the patient. The provider likely also spends time pre- and post-encounter on reviewing records and tests, arranging further services, or other activities related to the visit. This time is not included in the intraservice time listed in the E/M code descriptor, but CPT® guidelines explain that the total time reported in provider surveys was used to determine how much work is usually involved in performing a particular E/M service.

Unit/floor time is the time that the hospital or other inpatient provider is present on the patient’s facility unit and at the bedside rendering services for the patient. You should factor in time the provider spends creating or reviewing the patient’s chart, examining the patient, writing notes, and communicating with other professionals and the patient’s family. Intraservice time does not include any time spent before and after the encounter in another section of the hospital performing tasks like reviewing test results. But, again, that extra time was included when determining the total work involved for an individual E/M service. That means payers have an idea of the total time spent to use when calculating rates.

Using Time to Choose an E/M Code

In some cases, using time to select an E/M code may result in a higher-level code than if you based the coding on history, exam, and MDM. But you should consider time to be the controlling factor in your E/M code choice only when counseling, coordination of care, or both make up more than 50 percent of the face-to-face time with the patient or family in the office or other outpatient setting, or more than 50 percent of the floor/unit time in the nursing facility or in the hospital.

Counseling is a discussion with the patient, family, or both that covers at least one of the following, according to CPT® E/M guidelines:

  • Diagnostic results, impressions, or diagnostic studies recommended for the patient;
  • The patient’s prognosis;
  • Treatment options’ risks and benefits;
  • Instructions regarding treatment or follow-up;
  • Reasons why complying with the selected treatment or management options is important;
  • How to reduce risk factors; and
  • Education for the patient and family.

For E/M coding based on time, “family” includes those who are responsible for patient care or decision making, such as foster parents or a legal guardian. But pay attention to payer rules, which may differ from CPT® guidelines. Medicare states that you can count time in an office or outpatient setting only if it is face to face with the patient (Medicare Claims Processing Manual, Chapter 12, Section 30.6.1.C).

To support reporting E/M based on time, documentation should include the “extent” of counseling and/or coordination of care, according to CPT® E/M guidelines. The 1995 and 1997 Documentation Guidelines expand on this, stating the provider should document the total length of time of the encounter and the counseling or activities performed to coordinate care. The documentation also will need to show that the encounter exceeded the 50 percent threshold for time spent on counseling, coordination of care, or both.

In a best-case scenario, documentation of time for an E/M visit should include the following to determine if the counseling and care coordination accounted for more than half the time:

  • The beginning and ending time of the counseling and/or coordination of care
  • The beginning and ending time for the overall face-to-face or floor/unit service.

The provider also should include the components of history, exam, and MDM — even if cursory — in the documentation. Good medical record keeping requires that the provider document pertinent information. Using time as the determining factor to choose the E/M level does not change that documentation requirement.

Here is an example of coding based on time: A patient with a possible diagnosis of colon cancer visits a surgeon to discuss the results of a previous colonoscopy. The surgeon and patient spend 20 minutes of a 25-minute visit discussing test results and treatment options, which the surgeon summarizes in the medical record. The history, exam, and MDM are minimal in this case, but because counseling dominates the encounter, you can use time as the controlling factor when assigning the E/M service level. You should code the visit as 99214 Typically 25 minutes are spent face-to-face with the patient and/or family … based on the 25 minutes documented for the total visit and the percentage of time spent on counseling.

For complete information about reporting E/M based on time, you should check with individual payers to see if they require you to meet the time stated in the code descriptor or allow you to round up to the closest reference time.

If the E/M codes you are choosing from have no reference time, you cannot use time as a controlling factor when determining the appropriate service level.

What Is Not Included in E/M Codes

Along with knowing the components that affect E/M code selection, you also need to know what not to include in an E/M code:

  • You may separately report performance and interpretation of diagnostic tests and studies ordered during the E/M service, assuming documentation meets those codes’ requirements for separate reporting.
  • In some cases, reporting a procedure or service code on the same day as the code for a significant, separately identifiable E/M service may be appropriate.
    • The separate E/M can be prompted by the same symptoms or condition (diagnosis) the provider performed the other procedure or service for, but documentation must show that the E/M meets the requirements of the appropriate E/M code’s definition. In other words, you shouldn’t count work performed for the other procedure or service when you are choosing the E/M code level.
    • You should append the appropriate modifier to the E/M code to show it meets requirements, such as modifier 25 Significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service.

Unlisted E/M Services and Special Reports

Two final basic E/M concepts you should know are unlisted services and special reports.

An unlisted E/M service is an E/M service that the CPT® code set does not identify with a specific code. You should report these services using 99429 Unlisted preventive medicine service and 99499 Unlisted evaluation and management service. When you report these codes, the AMA’s CPT® guidelines for E/M state you should use a “special report” to describe the service.

A special report is documentation that demonstrates the medical appropriateness of an unlisted service or a service that is new, is not usual, or may vary. In other words, the special report shows why a patient needed a particular service, which may help support payment for the claim.

The report should include a clear description of the “nature, extent, and need for the procedure and the time, effort, and equipment necessary to provide the service,” the CPT® E/M guidelines state. Noting if the symptoms were particularly complex, what the final diagnosis was, relevant physical findings, procedures performed to diagnose or treat the patient, concurrent problems, and follow-up care also may help show medical necessity for the service.

For special reports that you’re sending to payers, experts advise using plain language so that reviewers can understand what happened and why, even if they aren’t experts in the type of case involved.

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