LawFlash

Medicare’s Proposal to Streamline Evaluation and Management Documentation and Payment—What Practitioners Need to Know

July 24, 2018

Responding to input from stakeholders who have long maintained that evaluation and management documentation guidelines are too complex and fail to meaningfully distinguish differences among code levels, a proposal by the Centers for Medicare & Medicaid Services would reduce the administrative burden on practitioners but also create winners and losers among medical specialties. While the intention is to give practitioners more time to focus on patient care, some specialties may see decreased payments for same-day visits and procedures across group practices.

The Centers for Medicare & Medicaid Services (CMS) proposed rule for the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies for calendar year (CY) 2019 (Rule) proposes major changes to documentation requirements and payments for office/outpatient visit evaluation and management (E/M) codes (CPT codes 99201 through 99215). These changes purport to give practitioners choices with respect to the appropriate basis for distinguishing among E/M visit levels, decreasing documentation requirements, and reducing variation among E/M visit levels.

CMS’s goal in making the changes is to reduce the administrative burden on practitioners so that they can exercise greater clinical judgment and discretion in what they document, focus on what is clinically relevant and medically necessary for the patient, and spend more time on patient care.

CMS notes that although office/outpatient E/M visits compose approximately 20% of allowed charges for PFS services, they haven’t been revalued recently to account for significant changes in the disease burden of the Medicare patient population and changes in healthcare practice. In addition, CMS says it is responding to input from stakeholders who have long maintained that the E/M documentation guidelines are administratively burdensome, too complex, and ambiguous; fail to meaningfully distinguish differences among code levels; and are not up to date for changes in technology.

Reduced Documentation Requirements for Office/Outpatient Visit E/M Codes

In a significant change with respect to documentation for office, other outpatient, and home E/M visits, CMS is proposing to allow practitioners to choose, as an alternative to the current framework specified under the 1995 or 1997 coding guidelines, either Medical Decision Making (MDM) or time as a basis to determine the appropriate level of E/M visit.

1995 or 1997 Coding Guidelines

Practitioners would have the option of continuing to use the existing coding guidelines, but the proposed Rule would minimize documentation by only requiring practitioners to meet the documentation requirements for history, physical exam, and MDM that currently are associated with a level 2 office/outpatient E/M visit (except when using time to document the service, as below) and to document the medical necessity of the visit.

CMS acknowledges that practitioners could choose to no longer document many aspects of an E/M visit that they currently document under the 1995 or 1997 guidelines for history, physical exam, and MDM, but that practitioners could choose to document more information for clinical, legal, operational, or other purposes that are consistent with the level of care furnished.

MDM

Practitioners also would have the choice under the proposed Rule of using just MDM to establish the level of an E/M visit. Under this proposal, Medicare only would require documentation associated with a current level 2 CPT visit code and that needed to support the medical necessity of the visit. The proposed Rule allows practitioners to rely on MDM in its current form to document their visits, but CMS is soliciting public comment on whether and how guidelines for MDM might be changed in later years.

Time

As a third option, practitioners could use time as an indicator of the complexity of a visit and as the single factor in selecting the E/M visit level and documenting the visit. The proposal would require the practitioner to document the medical necessity of the visit and show the total amount of face-to-face time spent with the patient.

Although CMS is soliciting public comment on what that total time should be for payment of the new single rate for E/M visits levels 2 through 5, it has included three possibilities in the proposed Rule, namely

  1. using the typical times for E/M visits in the physician time files used to set PFS rates, where recommended by the American Medical Association to the Specialty Society Relative Value Scale Update Committee and then reviewed by CMS as part of its regular rate-setting process;
  2. applying to the typical times the CPT codebook provision that, for timed services, a unit of time is attained when the midpoint is passed; and
  3. requiring documentation that the typical time for the CPT code that is reported was spent face to face by the billing practitioner with the patient.

Under this approach, the total amount of time spent by the billing practitioner face to face with the patient would inform the level of the E/M visit.

Additional Reduced Documentation Requirements Specifically for Home Visits and Same-Day Visits

Medicare beneficiaries don’t have to be confined to the home to be eligible for home visits as long as the medical record includes documentation of the medical necessity of a home visit as opposed to an office or outpatient visit. In response to stakeholder input that whether a visit occurs in the home or the office is best determined by the practitioner and the beneficiary, CMS proposes to reduce documentation requirements for home visits by eliminating the Medicare Claims Processing Manual provision that imposes this requirement.

CMS also proposes to eliminate the Medicare Claims Processing Manual’s prohibition on billing same-day visits by practitioners of the same group practice and specialty unless there is documentation that the visits were for unrelated problems. Although this policy is designed to address the concern that multiple visits on the same day as another E/M service might not be medically necessary, CMS apparently found persuasive the criticism by stakeholders that this prohibition no longer makes sense because in the current practice of medicine, a practitioner may have areas of medical expertise that are not reflected in the specialty used for Medicare enrollment. For example, a patient may see more than one geriatrician in the same group practice on the same day, but the practitioners have different specialty affiliations. In a situation such as this under the current policy, stakeholders have posited that practitioners often schedule E/M visits on two separate days so that they can get full reimbursement for both visits, thereby unnecessarily inconveniencing the patient.

Removing Redundancy in E/M Visit Documentation

In addition to choosing to use the current documentation framework, MDM, or time to determine the level of E/M visit, the practitioner also has the option of applying proposed policies regarding redundancy and who is required to document information in the medical record.

In response to stakeholders who have expressed that CMS should not require documentation of

information in the billing practitioner’s note that is already present in the medical record,

particularly with regard to history and exam, CMS proposes to simplify the documentation of history and exam for established patients and only require practitioners to document what has changed since the last visit or pertinent items that have not changed, “rather than re-documenting a defined list of required elements such as review of a specified number of systems.”

CMS expects nevertheless that practitioners still would conduct the clinically relevant and medically necessary elements of history and physical exam, but they would not need to re-record these elements if there were evidence that the practitioner reviewed and updated the previous information. CMS is seeking comment on whether there may be ways to implement a similar provision for MDM or for new patients, not just established patients.

CMS also is proposing to eliminate the requirement for both new and established patients that practitioners reenter information in the medical record regarding the chief complaint

and history that already have been entered by ancillary staff or the beneficiary. The practitioner only need to indicate in the medical record that the information has been reviewed and verified.

Simplifying Payment Amounts by Applying a Single Rate for E/M Levels 2–5

CMS reports in the proposed Rule that, according to input received from stakeholders, the burdens of documenting E/M visits originate not only from the current documentation guidelines, but also from the coding structure itself. Not wanting to create chaos given the wide and longstanding use of these visit codes by both Medicare and private payers, Medicare chose not to propose new coding and opted to stay with the current code set. Rather, the proposed Rule attempts to simplify payment amounts and minimize documentation requirements by reimbursing a single rate for level 2–5 E/M visits for new patients and a different single rate for established patients. These new single payment rates would apply no matter the option chosen by the practitioner to document the visit.

Practitioners still would bill the CPT code for whichever level of E/M service they furnished. CMS believes that by eliminating the distinction in payment among levels 2–5, the need to audit against the visit levels will be eliminated, which will further lessen the burden of documentation.

In order to set relative value units (RVUs) for the single payment rates, CMS proposes to use the five most recent years of Medicare claims data (CY 2012 through CY 2017) to develop resource inputs based on the current inputs for the individual E/M codes, generally weighted by the frequency at which they are currently billed.

Adjusting Single Payment Rates for Resource Costs Associated with Different Types of E/M Visits

After proposing single payment rates for level 2–5 office/outpatient E/M visits that are supposed to appropriately value a typical E/M service, the proposed Rule also plans to create new add-on codes to better capture the differential resources involved in furnishing certain types of E/M visits. The three specific types of E/M visits identified by CMS that differ from the typical E/M visit and have different resource costs are the following:

  • Separately identifiable E/M visits furnished in conjunction with a zero-day global procedure
  • Primary care E/M visits for continuous patient care
  • Certain types of specialist E/M visits, including those with inherent visit complexity

As detailed below, CMS proposes to address this issue with the following policies and rate-setting adjustments to the base single payment rates for new and established patients:

  • A multiple procedure payment adjustment to account for duplicative resource costs when E/M visits and procedures with global periods are furnished together
  • HCPCS add-on G-codes to account for additional relative resources for primary care visits
  • HCPCS G-codes to describe podiatric E/M visits
  • An additional prolonged face-to-face services add-on G-code
  • A technical modification to the practice expense (PE) methodology to address indirect PE associated with E/M visits

Resource Overlap Between Standalone Visits and Global Periods

CMS notes that in cases where a physician furnishes an E/M visit to a beneficiary on the same day as a procedure and gets paid for both because it has been documented that the visit is separately identifiable from the procedure, there are certain duplicative resource costs that are not accounted for in the current E/M code set and associated payment rates, which warrants a payment adjustment. As a result, the proposed Rule reduces by 50% the payment for the least expensive procedure or visit that the same physician (or a physician in the same group practice) furnishes on the same day as a separately identifiable E/M visit.

HCPCS Add-on G-Code for Primary Care E/M Visits

The proposed Rule asserts that, based on feedback received from practitioners who furnish primary care, primary care E/M visits have greater complexity than other types of E/M visits and have distinct resource costs as a result of the additional time necessary to consider and review the patient’s medical needs, coordinate patient care and collaborate with other practitioners, and communicate with and educate patients. CMS notes that because there currently are codes that address non-face-to-face work, such as chronic care management (CCM) and behavioral health integration (BHI), the proposed Rule only addresses the face-to-face portion of a primary care E/M visit service by creating a HCPCS add-on G-code—GPC1X—to be billed with the appropriate level 2–5 E/M code to adjust payment for additional resource costs.

The new primary care G-code only would be used with a standalone E/M visit (as opposed to a separately identifiable visit furnished within the global period of a procedure) with an established patient. CMS anticipates that the new primary care G-code will be billed with

every such visit and that it also may be billed with the proposed new code for prolonged

E/M services described below.

HCPCS Add-on G-Code for E/M Visits with Specialists

The proposed Rule also creates a new HCPCS add-on G-code—GCG0X—to be billed with the appropriate level 2–5 E/M code to adjust payment for the additional resource costs associated with specialty practitioners, specifically E/M visits associated with endocrinology, rheumatology, hematology/oncology, urology, neurology, obstetrics/gynecology, allergy/immunology, otolaryngology, cardiology, and interventional pain management.

According to CMS, these specialties apply nonprocedural approaches to “complex conditions that are intrinsically diffuse to multi-organ or neurologic diseases” and that warrant an adjustment for additional resource costs noting that their visits predominantly are reported using E/M visit codes rather than procedural codes. As with the proposed new primary care G-code, this new add-on G-code for specialists only could be used with a standalone E/M visit.

New HCPCS G-Codes for Podiatric E/M Visits

The proposed Rule also creates separate coding for podiatry visits rather than continuing to report them as E/M office/outpatient visits. Using the same options for documentation described above, podiatrists would report visits under new G-codes—GPD0X for new patients and GPD1X for established patients—that more accurately reflect the resource costs of podiatric visits. CMS chose to use this option rather than propose a negative add-on adjustment to the proposed new single payment rates for level 2–5 E/M visits.

Adjustments to PE/HR Calculation

Because indirect costs for each code generally are allocated on the basis of the direct costs specifically associated with a code, and the greater of either the clinical labor costs or the work RVUs, CMS recognized that establishing single payment rates for new and established patient level 2–5 E/M visits could have unintended consequences on certain specialties because the single payment rates no longer will reflect the indirect PE costs previously allocated across the different E/M visit codes.

CMS’s proposed solution is to create a single practice expense per hour (PE/HR) value for all E/M visits, including the proposed new HCPCS G-codes, based on the average of the PE/HR across all specialties that bill these E/M codes, weighted by the volume of those specialties’ allowed E/M services. CMS believes this more accurately will reflect the mix of specialties billing both the E/M code set and the add-on codes.

New Additional HCPCS G-Code for Prolonged Services

CMS posits in the proposed Rule that now that practitioners have the option of using time to document the appropriate level of E/M visit, there are not adequate existing codes to capture the time of additional services beyond the typical service time. Although CPT codes 99354 (first hour of prolonged E/M beyond the typical service time) and 99355 (each additional 30 minutes of prolonged E/M beyond the typical service time) describe additional time spent face to face with a patient, stakeholders have informed CMS that the “first hour” time threshold is difficult to meet and is an impediment to billing these codes.

In response, CMS is proposing to create a new HCPCS code—GPRO1—for prolonged E/M visit services beyond the typical service time with an initial 30-minute threshold. Because the new prolonged services G-code requires half the time assigned to CPT code 99354, CMS is proposing a work RVU that is half the work RVU of code 99354.

Finally, when a practitioner chooses to document an office/outpatient E/M visit using time and also reports the prolonged services G-code, CMS will require the practitioner to document the typical time required for the initial E/M visit code exceeded by the amount required to report prolonged services.

Predicted Impact of the Proposed Rule

Specialty Specific Impacts

CMS notes that prior attempts to revise the E/M guidelines were unsuccessful or resulted in additional complexity due to a lack of stakeholder consensus, particularly among specialties. We suspect that will continue to be the case with respect to the proposed Rule. CMS predicts that specialties that bill a large portion of E/M visits on the same day as procedures would experience a decrease in payments. In addition, specialties such as allergy/immunology and cardiology are likely to be negatively impacted by the proposed single payment rates themselves, although not to the same degree as they would have been without the new add-on G-codes. The specialties that CMS predicts will see an increase in payments due to a combination of the new single payment rates and the add-on G-codes include psychiatry and endocrinology.

General Impact

CMS predicts that the documentation changes for office/outpatient E/M visits and the implementation of single payment rates may reduce the documentation time by one quarter of the current time for the average office/outpatient visit. If that is the case, the proposals would save clinicians approximately 1.6 minutes of time per office/outpatient E/M visit, which for a full-time practitioner with a payer mix that is 40% Medicare (60% other payers), the practitioner would have approximately 51 additional hours to spend with patients every year.

The proposed Rule’s policy changes would apply to Part B services beginning January 1, 2019. Comments are due September 10, 2018.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:

Houston
Donna Clark
Greg Etzel
Susan Feigin Harris
Scott McBride
Kathleen Rubinstein, Senior Health Policy Analyst
Summer Swallow
Jessica Adams
Banee Pachuca

Washington, DC
Joyce Cowan
Kathleen McDermott
Scott Memmott
Andrew Ruskin
Albert Shay
Howard Young
Holly Barker
John Cosgriff
Lauren Groebe
Jacob Harper
Eric Knickrehm
Jonelle Saunders

San Francisco
Reece Hirsch

Los Angeles
Brian Jazaeri