E&M services are cognitive (as opposed to procedural or surgical) services provided by a physician in connection with a particular patient encounter. E&M services can be diagnostic (i.e., provided for purposes of determining what, if anything, is wrong with the patient), therapeutic (i.e., provided for purposes of treating the patient), or both diagnostic and therapeutic.
A two-step process is required for selecting the appropriate E&M code for a given patient encounter. First, based on the medical record, the applicable category/subcategory (see the above list) is selected that best describes the type of service provided. The selection of the appropriate category/subcategory is typically based on the location where the service was provided.
For example, there are one or more separate categories for each of the following service locations: (1) Office or other Outpatient; (2) Hospital; (3) Emergency Department; (4) Nursing Facility; (5) Domiciliary or Rest Home Facility; or (6) Patient Home. Other categories/subcategories are selected, often without regard to the location where the services were provided, based on one or more of the following factors: (1) Whether the service was a “consultation;” (2) Whether the patient was a “new” or “established” patient; (3) The nature of the services provided (e.g., prolonged services, critical care services, preventative medicine services, etc.); or (5) The patient's status (e.g., whether the patient was a neonate).
Second, once the correct category/subcategory has been selected, the correct code within the category/subcategory is then selected (again based on the medical record). This step is also referred to as “level selection” in the Services Guidelines. The manner in which the appropriate code (i.e., level) within a category/subcategory is selected depends on the particular category/subcategory. For most of the E&M categories/subcategories, code selection is typically based on “key components” (discussed below). For other categories/subcategories, code selection is typically based on one of the following factors: (1) The amount of time spent providing the services (e.g., critical care); (2) The patient's condition (e.g., neonatal intensive care); (3) The patient's age (e.g., preventive medicine services); or (4) The nature of the services provided (e.g., newborn care).
For many E&M categories/subcategories, code (i.e., level) selection is based on a combination of (1) the extent of the patient history obtained, (2) the extent of the patient examination performed, and (3) the complexity of medical decision making involved. These three factors are referred to as the “key components.” For some categories/subcategories (e.g., new patient office visits) code selection is based on all three of the key components. For other categories/subcategories (e.g., established patient office visits) code selection is based on two of the three key components.
In general, modifiers are used to provide additional information about the service performed (or the circumstances under which the service was performed) that goes beyond the CPT code description. CPI modifiers are typically two-digit numeric codes preceded by a hyphen (e.g., -25). Modifiers are appended to the end of the applicable CPT code. Excerpt from Hugh E. Aaron, Physician Evaluation and Management Service, AHLA Seminar Materials (2001).
CMS has published “Documentation Guidelines” for Evaluation and Management Services (the first section of CPT). There are currently two versions of the Documentation Guidelines, a 1995 version and a 1997 version. Medicare permits physicians to use whichever version of Documentation Guidelines are most favorable to the physician.
Excerpt from Robert A. Pelaia, Primer on Coding Issues for Payment Lawyers, Institute of Medicare and Medicaid Payment Issues (American Health Lawyers Association, March 21-27, 2007).