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Major Changes to E/M Coding and Documentation Under 2019 Medicare Physician Fee Schedule Proposed Rule

by Bill Finerfrock on July 24, 2018 at 1:07 PM

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On July 12th, the Centers for Medicare and Medicaid Services (CMS) released the 2019 Medicare Physician Fee Schedule (PFS) proposed rule. This annual update to the regulation makes changes to Medicare Part B reimbursements for services covered under this and other outpatient payment models.

Under the proposed 2019 PFS, CMS is making some major changes to Evaluation and Management (E/M) coding and documentation requirements. In this post, the first of a three part series on the 2019 PFS proposed rule, we’ll cover new E/M standards set under the proposed rule and how they might impact you as a provider.

The first of the proposed changes is to allow providers to base E/M coding determinations on medical decision-making or time in addition to the current E/M coding guidelines from 1995 and 1997 that are primarily based on providers’ work and cognitive labor. This change is a result of criticism for the current guidelines, of which rely on relatively subjective determinates that have caused a wide variance in E/M level selection practices between hospitals, at times resulting in compliance risks.

Another major change to E/M billing being proposed by CMS in the 2019 PFS would be to pay a single rate for E/M visit levels two through five. CMS believes this will reduce the burden on providers by decreasing the amount of work and deliberation it takes to document the correct visit level and preventing the need for subsequent audits. Additionally, CMS believes such changes will eliminate the “increasingly outdated distinction between the kinds of visits that are reflected in the current CPT code levels.”

Since the 2019 conversion factor (CF) has not been finalized, CMS modeled this proposed change based on the 2018 CF. If the standardized E/M reimbursement was in place in 2018, E/M levels two through five would be paid at $135 for new patients and $93 for established patients. The proposed 2019 CF update is only a slight change ($0.06) from the finalized 2018 rate. Therefore, assuming the proposed 2019 CF is finalized, the rates outlined in the 2018 model should be an accurate indication of what the actual rates will be under the proposed rule. 

Further, CMS is proposing to relax the requirement for teaching physicians to personally document their participation in an E/M procedure in the medical record. Currently, providers under the supervision of teaching physicians can make notes in the medical record. However, the teaching provider is required to personally document their involvement. In response to stakeholder feedback suggesting that this process is duplicative and burdensome, CMS is proposing to change the requirements so that the medical record must only document that the teaching physician was present at the time the service was furnished. Under the proposed rule, the teaching physician does not have to be the one to document this information.

CMS will be accepting comments on the proposed rule until September 10, 2018. We will continue to keep you informed as updates become available.

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This post was written by Bill Finerfrock

Bill Finerfrock is a consultant at Intermedix and is president of Capitol Associates (CAI). Finerfrock specializes in health care financing, health systems reform, health workforce and rural health. Finerfrock has worked in and with the U.S. Congress and Federal agencies on health policy matters for nearly 40 years