Medical Billing Tip: Consider Time-Based Coding for E/M

November 19, 2020 by Antonio Arias, MBA, CHBME

Topics: Medical Billing

time-based-em-coding

Sometimes a visit goes long – an extra five or ten minutes – and it throws off your morning schedule. Other times, a visit goes way too long – an extra 20, 40, or even 60 minutes – and it practically wrecks your entire day’s schedule.

As a medical billing company, we hear from providers that are hesitant to charge for that extra time, especially if it was spent providing consultative services or addressing a patient’s personal or emotional issues. In certain circumstances, however, it is appropriate to bill for extra time using either a higher-level evaluation and management (E/M) code or prolonged service codes.

What are E/M Codes?

Formally named evaluation and management codes, E/M codes (also abbreviated E&M codes) are essentials to the medical billing process for private healthcare practices. A subset of current procedural terminology (CPT codes) used to represent specific encounters between physicians and patients, E/M codes (CPT code range 99201-99499) are used by commercial insurance providers and Medicare to determine reimbursements. The codes represent three key factors that determine medical billing:

  1. Patient Type: Identifies the patient as new or established.
  2. Setting of Service: Identifies where the healthcare services were provided, such as an office or outpatient setting, hospital, or nursing facility.
  3. Level of Service Provided: E&M codes reflect the complexity of the medical services provided. The more complex the service, the higher the code value.

The levels of E&M coding service originally consisted of three components: patient history, physical examination, and medical decision making. All three factors needed to be documented to determine the appropriate level of service and bill the correct code. However, providers can also use time-based coding to determine the level of service provided. 

What Changes are Coming to E&M Codes?

Effective January 1, 2021, the federal guidelines for a specific subset of E&M codes will undergo a significant change. The revision will impact the codes for office and outpatient visits (CPT codes 99201-99215).

2021 E&M Coding Changes

  • New patient level 1 code (99201) will be deleted, reducing the number of levels for new patient office/outpatient E&M visits to four. Established patients retain five levels of coding.
  • History and physical examination are no longer determining factors in selecting the level of care. Clinically relevant history and examinations must still be documented when necessary, however.
  • The level of service can be determined based on medical decision-making or time criteria.
  • Medicare reimbursements for E&M codes will be adjusted.

While the inclusion of time as a definition of E/M service levels has been implicit before these adjustments, its inclusion as an explicit factor to determine the most appropriate level of E/M services is part of the new changes in 2021. 

Why Your Medical Practice Needs to Use the Proper E/M Codes

Proper medical billing and coding ensures that all insurance billing is accurate and will not negatively affect your business. Insurance companies and patients can be undercharged when the incorrect E/M codes are filed. Proper E/M codes ensure that you are providing the right type of information required for insurance reimbursement

Medical billing errors, including incorrect E/M codes, can negatively impact your practice. A major problem could be increased denial rates. The more claims you have denied, the fewer insurance reimbursements you will get approved. Not only can just a few claim denials put your practice in jeopardy, but a bill that's rejected due to coding errors can take up to twice the amount of time to process, taking time and energy away from providing services to patients.

Additionally, your practice runs the risk of being audited for suspected fraud and abuse due to too many denied claims or upcoding and undercoding. Even though the latter can occur accidentally, it can still bring about an audit, which can carry serious penalties of nearly $23,000 per claim. To avoid serious problems with E/M codes, this is why medical practitioners need to be experienced with medical billing and coding. 

When to Leverage Time-Based Coding in Your Medical Practice

To ensure the proper time-based coding, how should medical practices bill visits? While time can be used as a determining factor for the level of service provided, it’s important to understand the guidelines with time-based coding.

Evaluation & Management: The ‘Three Cs’

E/M codes have many applications, but utilizing them for time spent with patients is about Counseling and/or Coordination of Care. Many discussions fall under the umbrella of the ‘three Cs’: medication or treatment options and their associated risks, lifestyle changes, diagnostic testing orders or results, patient education, referrals, and more.

If more than 50% of the provider's face-to-face visit time with a patient is spent in counseling or coordination of care, E/M codes 99201-99215 can be applied. The key, however, is documentation.

With the new 2021 changes, time may be used to select a code level in office or other outpatient services whether or not counseling and/or coordination of care dominates the service. However,  time may only be used for selecting the level of the other E/M services when counseling and/or coordination of care dominates the service.

When time is used to select the appropriate level for E/M coding, time is defined by the service descriptors. The E/M services for which these guidelines apply require a face-to-face encounter with a physician or other qualified healthcare professional. If the physician or other qualified health care professional’s time is spent supervising the clinical staff performing the face-to-face encounters, the code is 99211.  

The following activities are considered physician/ qualified health professional time and can be selected for E/M coding when performed: 

  • Preparing to see the patient, for example reviewing test results or charts
  • Obtaining and/or reviewing separately-obtained history 
  • Performing a medically appropriate examination and/or evaluation 
  • Counseling and educating the patient/family/caregiver 
  • Ordering medications, tests, or procedures 
  • Referring and communicating with other health care professionals when not separately reported 
  • Documenting clinical information in the electronic or other health records 
  • Independently interpreting results (not separately reported) and communicating results to the patient/family/caregiver 
  • Care coordination, when not separately reported

Prolonged Services: The 60-30 Rule

Prolonged physician services can be billed in the instance in which a provider spends at least one hour of face-to-face time with the patient beyond the typical E/M visit length. When this prolonged time occurs, the appropriate add-on code may be reported and the appropriate time should be documented in the medical record for code selection.

In the outpatient setting, the CPT code for this is 99345; inpatient is 99356. The appropriate companion E/M code must be used at the same time as 99345 or 99356 for prolonged services to be payable.

On the occasion that a visit goes an hour-and-a-half longer than it should, there are codes for that, too. Each additional 30 minutes of face-to-face patient time that follows the first ‘prolonged services’ hour can be billed with CPT code 99355 (outpatient) or 99357 (inpatient). Document visits diligently and applies E/M and prolonged services codes with care to avoid denials. 

Drive Revenue for Your Medical Practice with NCG Medical's Billing and Coding Solutions!

By using these medical billing and coding tips, we hope you make the most of your practice’s revenue and avoid any errors associated with time-based coding when these changes become effective January 1, 2021. It’s important, however, to note that inexperience with medical billing and coding will likely be fraught with errors. For error-free billing, choose an expert in the field. 

NCG Medical is your go-to source for outsourced medical billing services. With more than 40 years of experience in the industry, we’ve dealt with just about every kind of medical billing error a practice can make. That’s why we’re trusted by our clients to manage their insurance billing and claims, helping them avoid lengthy negotiations with insurance companies and investigations by federal and state auditors. 

So, ready to find out how NCG Medical’s medical billing services can improve your revenue cycle management? Contact us today.

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