How physicians, hospitals and health systems should prepare for the operational and financial impact of 2021 E/M code changes

•  New coding guidelines for the evaluation and management (E/M) visit code are set go into effect on Jan. 1, 2021.
• These are the largest E/M guideline changes since 1997, essentially changing the way physicians document office/outpatient codes 99202-99215.
• The American Medical Association led the guideline changes with the intent to ease the administrative burden on physicians.

New coding guidelines for the evaluation and management (E/M) visit code are set go into effect on Jan. 1, 2021. These are the largest E/M guideline changes since 1997, essentially changing the way physicians document office/outpatient codes 99202-99215. The American Medical Association led the guideline changes with the intent to ease the administrative burden on physicians. A brief highlight of the changes include: 

• 99201 is eliminated and codes 99202-99215 are revised.
•  Documentation includes a medically appropriate history and/or examination.
• Code selection is based on medical decision-making or total time on date of the encounter.

In addition, CMS increased most of the wRVU values for these CPT codes. Given the changes in documentation requirements, revisions to codes and the changes to wRVUs, physicians, hospitals and health systems can anticipate workflow and financial implications. I spoke with Craig Joseph, MD, chief medical officer for Nordic Consulting Partners for more insight. 

Q: New E/M coding guideline changes are going into effect on January 1, 2021. Why should physicians, hospitals and health systems pay attention to this?

Joseph: These new guidelines have given physicians a real opportunity to reduce the administrative burden associated with documentation, and the biggest risk is that physicians and organizations do nothing in response to these changes. The new guidelines create an opportunity for physicians to write a clinical note they have always wanted to write in the outpatient setting: clinically relevant, concise  and the important information for continuity of care. No longer will they have to check a box or jump through hoops to meet lengthy and confusing coding requirements. 

Q: How might these changes impact a physician’s workflow?

Joseph: Two big things: First, they can now collect less information; that is, information that is not clinically relevant. For example, a physician will no longer have to document a review of systems not related to the visit. So this can free up some time. In addition, the physician is now more able to leverage the care team. Others, including the patient, can start the note and build the foundation. For example, the patient can enter information into their record (e.g., their symptoms) and the nurse or the medical assistant can start to verify the information. The physician can then edit, update and finalize the note.

Q: What impacts can be expected as related to wRVUs, revenue and compensation?

Joseph: There are potential impacts to all of the above, but with so many variables, awaiting finalization of reimbursement and physician fee schedule changes, and such a diversity of physician compensation methods, it’s difficult to predict broadly the impacts. Based on the proposed rule, the wRVUs associated with these nine codes have mostly increased. Hence, if a physician continues to do the same clinical work and bill the same proportion of E/M CPT codes starting Jan. 1, they will see an increase in wRVUs. Clearly, this will impact physician compensation if they are paid on a wRVU basis. 

Some physicians may see changes in their E/M code distribution. For example, if they code based on medical decision-making, it may be that a physician who previously billed a level 3 now may bill a level 4, based on the types of the patients and visits. In addition, being able to code visits based on total time spent on the day of the encounter is a game changer that might change levels too.

Another consideration is that CMS has made these changes budget neutral, and as a result they have proposed a significant reduction in the conversion factor to offset the increase in E/M payments. This could have significant impact to physicians who bill other services than E/M services such as surgeons and proceduralists, as they could see a reduction in reimbursement.

Q: How can organizations best prepare their staff and clinicians?

Joseph: A tremendous amount of education and then … more education. For many physicians, their current approach to ambulatory visit documentation has been the only way they have done it throughout their career. It will take some effort to change, much more than just sending out a pdf with the new guidelines. Facilitating communication between the physician and coders will be important. For example, with physicians being able to use time to set the level of code, it may require some conversations between the physician and coder to recognize the note will not be as robust as in the past, despite a still significant amount of time spent with the patient.

In addition, if organizations engage physicians in the review of their EHR documentation templates and workflows, identify clinically-extraneous information and build into the process a more streamlined approach, that can help guide physicians to realize the administrative-reduction burden that we all want to see.

Q: Who in the organization needs to be involved in understanding the impact of these changes?

Joseph: Those involved with the revenue aspect of the organization, particularly those who oversee physician pay and compensation, finance and revenue cycle.  And, certainly, clinical leadership to aid with educating physicians on the changes in documentation requirements. Those who work in coding and documentation integrity are obviously essential. And finally, office managers and office staff, or those involved in the operations of the medical practice. It really will require engagement across the organization.

2021 E/M transition and financial impact webinar

Want to learn more about how to project the financial and operational impact to your organization? Check out the Nov. 5 webinar on 2021 E/M transition and financial impact presented by Nordic Consulting Partners.