Evaluation and Management

Introduction and Objectives

Evaluation and management (E/M) services are placedprominently at the forefront of the CPT codebook.For many providers, these services represent the bulk ofcodes reported. Across all medical specialties, correct,consistent E/Mservice reporting is elemental, but maybe achieved only by applying a methodical approach todocumentation and code selection.

Specific objectives for this chapter include:

  • Define E/Mservices
  • Summarize CPT E/Mservice guidelines
  • Review common terms (new patient, establishedpatient, transfer of care, etc.)
  • Explain the key components of history, exam, andmedical decision making (MDM), and the factorsthat comprise each of these
  • Differentiate among the E/Mservice categories(officevisits, hospital visits, consultations, etc.)
  • Provide guidance and tools to select an appropriateE/Mservice level, as determined by the keycomponents
  • Discuss the importance of time, and how it mayfactor into E/Mservice leveling
  • Alert you to important differences between CPTandCMS treatment of E/Mservices
  • Establish the importance ofICD-9-CM codeassignment to support E/Mservices
  • Increase your understanding through examples, todemonstrate the above concepts

E/M Services Defined

E/Mcodes (99201-99499) describe a provider's service including evaluating patient’s condition(s) and determining the management of carerequired to treat that patient. Services based solely ontime, such as physician standby services, also may bedefined as E/Mservices (these will be discussed in detaillater in the chapter).

For example, a patient may visit the family physician atthe physician's office, complaining of sore throat, fever,and body ache that have lasted over a week. Or, a patientmay arrive at the emergency department (ED) with chestpain and shortness of breath. When properly applied,

E/Mservice codes approximately represent the physician'swork in evaluating and treating those patients.E/Mservices may be provided at differing "levels," fromrelatively simple to most complex. Several factorsamongthem the severity of the patient's problem, thedifficulty of determining a diagnosis, and the number ofpossible treatment options-playa role in determining

the overall level of service. How to select an appropriateE/Mservice level based on provider documentation willoccupy the majority of this chapter.E/Mcodes are divided into broad categories representingthe type and/or location of service-such asoffice visits, emergency department visits, or nursingfacility care, to name a few. Some categories, such asneonatal intensive care, may apply only to patients ofa specific age. Categories may be divided further intosubcategories to indicate specific details reflectingpatient status (for instance, new vs. established patient,as defined below). We will discuss the categories of E/Mservice below.

Levels of E/Mcodes in each category are often referredto as level I, level II, level III, etc., depending on the lastnumber of the code referred to in that category.

Example

New Patient Office or Other Outpatient Visits:

99201 Office visit, new patient: level I

99202 Office visit, new patient: level II

99203 Office visit, new patient: level III

Diagnostic or therapeutic procedures (for instance,taking a throat culture, taking a chest X-ray, orperforming emergency surgery to stabilize a traumapatient) are not included as part of the E/M service, andmay be reported separately.

In contrast, many diagnostic and therapeutic proceduresinclude an inherent E/M component. Generally,if a diagnostic or therapeutic procedure is performedor ordered as the result of a same-day E/M service, thediagnostic/therapeutic procedure and E/M service maybe reported separately. If the diagnostic/therapeuticprocedure was scheduled at a previous encounter, an

E/M service may not be reported separately unless thepatient has a new problem, or a significant exacerbationof the current condition, that requires the provider toperform a separate E/M service. This concept will beexplored in detail when discussing application of modifier

25 Significant, separately identifiable evaluation andmanagement service by the same physician on the sameday of the procedure or other service.

CPTE/M Services Guidelines

CPT provides extensive instruction for E/M servicereporting in the E/M Services Guidelines that precedethe E/M code listings. Additional instruction forapplying specific E/M service codes will be foundthroughout the CPT E/M section-in subsection headings,parenthetical notes, and within code descriptors.All coders, and providers, should read these guidelinesand instruction carefully, and review them regularly.

Rather than treat the E/M service guidelines and otherCPT instruction separately, we will introduce individualconcepts and terminology as they become relevantthroughout our discussion of E/M services.

New vs. Established Patient

Many E/M service categories differentiatebetween "new" and "established" patients. Presumably,the work of evaluating a patient is less if the provider hasseen the patient previously, whereas the work requiredis greater if the provider is seeing a patient for the first

time (for instance, initially gathering and assessing thepatient's past medical history).

A patient is new if he or she has not received anyface-to-face professional services from the physician, or aphysician of the same specialty/subspecialty within thegroup practice, within the last three years (36 months).This is the so-called "three year rule." If a patient isseen by another member of the group within the pastthree years, but that physician is of a different specialty/

subspecialty, the patient may still be new. For example,a patient sees an orthopedist in a group practice to beevaluated for possible hip replacement. The same patienthas seen an internist in the same group practice severaltimes over the past three years. The patient is "new" to

the orthopedist but "established" for the internist.

This paragraph will answer many concerns about one of the questions on Practice Test # One:

Where the patient is seen is not a factor in determiningnew vs. established. For example, Mrs. Jones' generalpractitioner, Dr. Smith, joins a new group practice across

town. As long as Dr. Smith has seen Ms. Jones withinthe past three years, she is an established patient atthe new location. Likewise, if a physician has provided

services face-to-face with a patient in the hospital, andsees the same patient in his or her office within threeyears, the patient is established.

The Key Componentsof an E/M Service

There are seven components that make up an E/Mservice: history, exam, medical decision making (MDM),counseling, coordination of care, nature of presentingproblem, and time. Three of these components-history,exam, and MDM-are considered key components todetermining the overall level of an E/M Service. Undersome circumstances, time will be the deciding factor indetermining the E/M service level.

Using his or her best clinical judgment, experience,and training, the provider determines the extent of thehistory (and other key components) based on medicalnecessity. For instance, the physician could spend onehour documenting an exhaustive medical history fora patient with a splinter in her finger, but this wouldnot be necessary or appropriate to the circumstances.

Likewise, if a new patient presents with a wide varietyof health problems, such as hypertension, diabetes, andsymptoms of stroke such as slurred speech, a quick fiveminutehistory would not suffice..

Serious problems may arise when the provider documentsa history and/or exam at a level not supportedby medical necessity. The Medicare Claims ProcessingManual (12-30.6.1.A) states, “It would not be medicallynecessary or appropriate to bill a higher level of evaluation

and management service when a lower level ofservice is warranted. The volume of documentationshould not be the primary influence upon which aspecific level of service is billed"[emphasis added].

Medical necessity is supported, in part, by ICD-9-CM code assignment.

In some cases, to report a given level of service, youmust meet all three key components. In other cases, the code descriptor mayallow you to report a given level of service by meeting

two of the three key components at the specified level.For example, the code descriptor for a level II establishedpatient outpatient visit specifies that to report theservice, at least two of three key components-a problemfocused history, a problem focused examination, andstraightforward MDM-must be documented.

In the description of the majority of evaluation andmanagement codes, the number of key components isspecified. For example:

99201 Office or other outpatient visit for the evaluationand management of a new patient, which requires these3 key components:

  • a problem focused history;
  • a problem focused examination;
  • straightforward medical decision making.

99213 Office or other outpatient visit for the evaluationand management of an established patient, whichrequires at least 2 of these 3 key components:

  • an expanded problem focused history;
  • an expanded problem focused examination;
  • medical decision making of low complexity

Highlight or underline the components required foreach code.

We will explain in detail how to distinguish amongthe various levels of history, exam, and MDM whenreviewing provider documentation. For now, a basicunderstanding of the key components and howthey factor into E/Mlevel selection will allow you toappreciate better the review of E/Mservice categoriesthat follows.

E/M Service Categories

When selecting an E/Mservice code, the first step is todetermine the appropriate E/Mcategory for the serviceprovided. What follows is an overview of the availableE/Mcategories, along with basic coding instruction.

Office or Other Outpatient Services

Office or Other Outpatient Services is divided intosubcategories of new and established patients. This categoryrepresents visits performed in the physician's office,outpatient hospital, or other ambulatory facility such asan urgent care center or nursing home.

Hospital Observation Services

When a patient has a condition that needs to bemonitored to determine a course of action, he may beadmitted to "observation status." For example, a patientpresents to the emergency department (ED) with aconcussion. In this case, the provider can admit thepatient to observation status. After a period of monitoring,the patient may be discharged, or-if the conditionworsens-may be admitted to the hospital as aninpatient for additional treatment.

The patient is not required to be in a specific area of thehospital to be deemed in "observation status." Thereis no distinction between a new or established patientfor observations services. When the patient is seen atanother site of service (eg, emergency department), and

observation status is initiated at that site of service, allE/Mservices provided by the admitting physician areconsidered part of the initial observation care and notreported separately.

Hospital Observation includes three types of service:Observation Care Discharge Services, Observation Care,and Subsequent Observation Care.

The initial observation care should be reported onlyby the physician admitting the patient to observationstatus. Initial Observation Care codes require three ofthree key components be met to report the chosen levelof service.

Subsequent Observation Care is used when the patientis seen on a day other than the date of admission ordischarge.

Observation Care Discharge Services are used to reportthe final exam and discharge of the patient. Typically, apatient is admitted to observation care for less than 24hours; however, a patient can remain in observation carefor up to three days.

The Initial Observation Care and the Observation CareDischarge should be reported separately only if theyoccur on separate dates of services.

Example

A patient arrives at the hospital and is admitted toobservation status at 9:30 PM, Oct 1. The patient isdischarged from observation status and sent homeat 8:30 AM, Oct 2. In this case, a code from InitialObservation Care would be reported for Oct 1, andthe Observation Care Discharge Services would bereported for Oct. 2.

If the patient is admitted to observation status, anddischarged on the same date of service, a code fromthe Observation or Inpatient Care Services (IncludingAdmission and Discharge Services), range 99234-99236,would be reported.

When a patient is admitted to the hospital during anobservation stay, the observation services should not bereported separately. The observation services providedon the same date as a hospital admission should beincluded as part of the admission. An observationdischarge should not be reported on the same date as thehospital admission.

Hospital Inpatient Services

Hospital Inpatient Services are subcategorized by InitialHospital Care and Subsequent Hospital Care.

Initial Hospital Care should be reported only by theadmitting physician, according to CPT guidelines.Medicare allows the use of the initial Hospital Carecodes in place ofInpatient Consultation codes.

Any services performed on the same date of service,when related to the admission, should be included in theinitial hospital care code and not reported separately.This includes officevisits, observation visits, and nursingfacility visits if provided by the same provider on the

same date of service. Initial Hospital Care requires thatthree of three key components be met to report thechosen level of service.

Subsequent Hospital Care is used to report the subsequentvisits to the patient, while the patient is in thehospital. These codes include the provider reviewing themedical record, diagnostic test results, and changes inthe patient's status since the last physician assessment.Subsequent Hospital Care codes require that two of thethree key components be met.

Observation or Inpatient Care Services (IncludingAdmission and Discharge Services) codes should beused to report an admit and discharge on the same dateof service.

Hospital Discharge Services report the total time spentby the physician on the date of discharge. Dischargeservices include the final examination, discussion of thestay, continuing care instructions, discharge paperwork,prescriptions, and referral forms. This service is reported

by the amount of time spent by the physician on the dateof discharge, even if the time is not continuous. Visits tothe patient on the date of discharge by physicians whoare not the attending physician should be reported usingSubsequent Hospital Care codes (99231-99233).

Consultations

Consultation codes are divided into two subcategoriesbased on the location of the consult: Office or OtherOutpatient Consultations and Inpatient Consultations.All consultation services must meet all three keycomponents. According to CPT, a consultation has the followingcomponents:

  • A physician (or other appropriate source) requestsanother physician (or appropriate source) toevaluate a patient's specific problem or conditionand render an opinion. The request can be writtenor verbal; if verbal, the request must be documentedin the patient's medical record.
  • The opinion or advice of the consultant can resultin giving requesting physician recommendationsfor the patient's condition, or in the consultantproviding ongoing management of the patient'scondition.
  • The consultant's written report back to therequesting physician (or other appropriate source).

A consultation differs from a referral. A referral occurswhen a patient is sent to another physician for care of aspecific problem or condition. The requesting physicianis not expecting to receive recommendations back fromthe referring physician.

Example

Consultation: A patient's family physician requests thepatient to see a cardiologist to

evaluatea heart murmurfound during examination and give recommendations

for the patient's care.

Referral: A patient's family physician refers the patientto see a cardiologist to treat a heart

murmur foundduring examination.

If another physician requests an opinion or advice onthe same condition, or a new condition, for the samepatient in the outpatient setting, the consulting providercan again report a consultation code. If an additionalconsultation is requested in the inpatient setting, theconsulting provider reports a subsequent hospital carecode. According to CPT guidelines, only an inpatient

consultation can be reported by a provider during theadmission.

When transfer of care has been established, the provideraccepting care bills subsequent visits with the appropriateestablished patient visit codes based on the location;Office or Other Outpatient Established PatientVisit (99211-99213), Domiciliary or Rest Home (99334-

99337), Home Visit (99347-99350), Subsequent HospitalCare Services (99231-99233), or Subsequent NursingFacility (99307-99310).

Consultations requested by a patient or family membershould be reported using the appropriate codes fromcategories other than consultation; Office or OtherOutpatient Visits, Home Service, or Domiciliary or RestHome. When a consultation is mandated by a thirdparty payer, or by government, legislative, or regulatoryrequirement, append modifier 32 Mandated servicesto

the consultation code.

Reporting Consultations for Medicare

As is true with all services, payers may have their ownpolicy regarding the use of consultation codes. Medicareno longer pays for consultation codes (except telehealthconsultations), and has provided guidelines on howconsultation codes should be reported.

Medicare requires that consultations services be billedwith the most appropriate (non-consultation) E/Mcodefor that service. Outpatient consultations should bereported by selecting the appropriate level code fromthe Office or Other Outpatient Services (99201-99215).

Report inpatient consultations using theInitial Hospital Care code (99221-99223) for the initial

evaluation, and a Subsequent Hospital Care code(99231-99233) for subsequent visits. The physician whoadmitted the patient as a hospital inpatient (whetherthat physician is the "consultant" or another physician),should append modifier AI Principal physician of record

to indicate that he or she is the admitting physician,and to distinguish that physician from others who mayprovide inpatient services.

Other payers may allow you to continue to reportConsultation codes. Check with individual payers forguidelines.

Emergency Department Services

An emergency department (ED) is a section of a hospitalorganized and designated to treat unscheduled patientvisits for immediate medical attention. Emergencydepartments must be open 24 hours a day, 7 days aweek. A patient may receive critical care treatment in an

emergency department. In this event, critical care codes(discussed below) will be reported.

Another service found in this category is the physiciandirection of emergency medical services (EMS) emergencycare, advanced life support (99288). This codereports the services of a physician, located in a facility'semergency department or critical care department,

who is in two-way communication with emergencyservices personnel. The physician directs the personal inperforming life-saving procedures.

Critical Care Services

Critical Care Services codes are used to report the directdelivery, by a physician, of medical care to a criticallyinjured or critically ill patient. According to CPT, "acritical illness or injury acutely impairs one or morevital organ systems, such that there is a high probability

of imminent or life-threatening deterioration in thepatient's condition."

Critical care is a condition, not a location. A patient doesnot have to be in an intensive care unit (lCU) or otherdesignated area to meet the requirements of critical care.Nor do all patients in an lCU or other designated unitqualify automatically for critical care. Only patients who meet the definition of criticallyill or critically injured may qualify for critical care.