July 17, 2018

CMS Proposes Major Overhaul of E/M Visit Payment Scheme and Revisions to Documentation Requirements

By Jennifer R. Breuer

CMS has proposed a major reworking of its evaluation and management (E/M) visit payment scheme to reflect more accurately the resources used in different types of care. The revised payment scheme also would allow for more streamlined documentation by clinicians. The overhaul is described in CMS’ Notice of Proposed Rulemaking, titled “Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2019,” which will be published in the Federal Register on July 27, 2018.

Proposed Revisions to E/M Visit Payment Scheme

CMS proposes to simplify payment for E/M visits in an office/outpatient setting by eliminating payment differentials and paying a single rate for Level 2 through Level 5 E/M visits. Under the Proposed Rule, CMS would develop a single set of relative value units (RVUs) under the Physician Fee Schedule (PFS) for Level 2 through Level 5 E/M office-based and outpatient visits for new patients (CPT codes 99202 through 99205), and a single set of RVUs for Level 2 through Level 5 visits for established patients (CPT codes 99212 through 99215).

If finalized as proposed, practitioners would bill the CPT code for whichever level of E/M service they furnished, but be paid at the single PFS rate. Eliminating the distinction in payment between Level 2 through Level 5 visits will eliminate the need to audit against the visit levels, and provide immediate relief from certain documentation burdens. CMS believes a single payment rate also will eliminate the increasingly outdated distinction between the kinds of visits reflected in the current CPT code levels in both the coding and the associated documentation rules.

In order to set RVUs for the proposed single payment rate for new and established patient office/outpatient E/M visit codes, CMS has developed RVUs based on those for the existing individual E/M codes, generally weighted by the frequency at which they are currently billed, based on the five most recent years of Medicare claims data (CY 2012 through CY 2017). As a result, CMS proposes a work RVU of 1.90 for CPT codes 99202–99205, a physician time of 37.79 minutes, and direct PE inputs that sum to $24.98. Similarly, it proposes a work RVU of 1.22 for CPT codes 99212–99215, with a physician time of 31.31 minutes and direct PE inputs that sum to $20.70.

The dollar amounts in the charts below reflect how CMS’ proposed changes would affect payment rates for CY 2018.

Preliminary Comparison of Payment Rates for Office Visits (New Patients)

HCPCS Code CY 2018 Non-facility Payment Rate Proposed Non-facility Payment Rate
99201 >$45 $44
99202 $76  
99203 $110 $135
99204 $167  
99205 $211  

Preliminary Comparison of Payment Rates for Office Visits (Established Patients)

HCPCS Code CY 2018 Non-facility Payment Rate Proposed Non-facility Payment Rate
99211 $22 $24
99212 $45  
99213 $74 $93
99214 $109  
99215 $148  

CMS then would allow “add-on” payments for certain types of visits that have higher resource costs, including: (1) separately identifiable E/M visits furnished in conjunction with a 0-day global procedure; (2) primary care E/M visits for continuous patient care; and (3) certain types of specialist E/M visits, including those with inherent visit complexity. More specifically,

  • CMS would eliminate the prohibition against paying for multiple E/M visits billed by the same physician (or physician of the same specialty from the same group practice) in the same day, recognizing that practitioners may have multiple specialty affiliations.
  • To recognize efficiencies associated with furnishing an E/M visit on the same day as a procedure (as identified by Modifier -25), CMS would reduce payment by 50 percent for the least expensive visit or procedure furnished on the same day.
  • To more accurately account for the type and intensity of E/M work performed in primary care–focused visits with established patients, CMS would create a HCPCS add-on G-code (GPC1X) that may be billed in addition to the E/M visit. Primary care and specialist physicians also could use the code for other forms of face-to-face care management, counseling, or treatment of acute or chronic conditions not accounted for by other coding.
  • CMS would create a new HCPCS add-on G-code (GCG0X) to account for the additional resource costs incurred by specialists in endocrinology, rheumatology, hematology/oncology, urology, neurology, obstetrics/gynecology, allergy/immunology, otolaryngology, cardiology, or interventional pain management–centered care, whose treatment approaches are generally reported as level 4 and level 5 E/M visits. 
  • To reflect the lower resource costs of podiatric visits, CMS would create two HCPCS G-codes (GPD0X, for new patients, and GPD1X, for established patients) to describe podiatric E/M services. Podiatric E/M services would be billed using these G-codes instead of the new “generic” office/outpatient E/M visit codes to account for the fact that most podiatric visits are billed as Level 2 or Level 3 E/M codes.
  • CMS would create a new HCPCS code (GPRO1) for prolonged E/M or psychotherapy services requiring direct patient contact beyond the usual service of 30 minutes. 
  • CMS would create a single practice expense (PE)/human resource (HR) value for all E/M visits (including all of the proposed HCPCS G-codes discussed above) of approximately $136, based on an average of the PE/HR across all specialties that bill these E/M codes, weighted by the volume of those specialties’ allowed E/M services.

See Exhibit A for CMS’ estimates of reimbursement impact of the new payment scheme by specialty.

Proposed Revisions to Documentation Requirements

Facilitated by the revised payment system, CMS proposes additional choices for documentation, including that which is based on medical decision-making (MDM) or time, in addition to the current documentation framework described in the E/M Documentation Guidelines published in 1995 and 1997, respectively. This would allow practitioners in different specialties to choose to document the factors that matter most given the nature of their clinical practice. In addition, for payment purposes, CMS would require documentation only as necessary to support the medical necessity of the visit and the documentation that is associated with a current level 2 CPT code visit. For example, for a practitioner choosing to document using the current framework (1995 or 1997 Documentation Guidelines), CMS proposes that the minimum documentation for any billed level of E/M visit from levels 2 through 5 could include: (1) a problem-focused history that does not include a review of systems (ROS) or a past, family or social history (PFSH); (2) a limited examination of the affected body area or organ system; and (3) straightforward MDM measured by minimal problems, data review and risk (two of these three). If the practitioner chose to document based on MDM alone, Medicare would only require documentation supporting straightforward MDM measured by minimal problems, data review and risk (two of these three).

CMS currently allows time or duration of visit to be used as the governing factor in selecting the appropriate E/M visit level only when counseling and/or coordination of care accounts for more than 50 percent of the face-to-face physician/patient encounter (or, in the case of inpatient E/M services, the floor time). Under the Proposed Rule, practitioners would have the choice to use the time-based standard for all E/M visits. CMS proposes to require practitioners to document the medical necessity of the visit and show the total amount of time spent by the billing practitioner face-to-face with the patient. CMS is seeking comments as to how to set the time requirements for reimbursement.

In addition:

  • CMS would eliminate the need to document medical necessity for a home visit in lieu of an office or outpatient visit, leaving it to the practitioner to determine the best venue for care.
  • For established patient visits, CMS would eliminate the requirement that the billing practitioner’s documentation include a notation supplementing or confirming any ROS or PFSH completed by the patient or documented by ancillary staff. Instead, the practitioner’s documentation would focus on what has changed since the last visit or pertinent items that have not changed.
  • For new and established patient visits, CMS would no longer require practitioners to re-enter information in the medical record regarding the chief complaint and history already entered by ancillary staff.

CMS’ proposed payment and documentation changes would apply only to the office/outpatient E/M code set, as there are additional issues to consider with respect to E/M codes used in other settings, such as inpatient or emergency department care. CMS is seeking comments on both the proposed changes and a broader revision of E/M payment policies applicable to other settings in the future. In the Proposed Rule, CMS suggests the payment changes could take effect January 1, 2019. If so, the documentation changes would be optional, as providers could continue to document under the 1995 and 1997 Documentation Guidelines. Recognizing the breadth of the proposed documentation changes and the need to transition clinical workflows, EHR templates, processes and procedures (including those for provider-based practitioners), CMS also is seeking comment on whether to delay implementation, such as to January 1, 2020. Comments are due by 5:00 p.m. on September 10, 2018.

Exhibit A

Specialty-Specific Impacts Including Payment Accuracy Adjustments


Specialty Allowed Charges (in millions) Estimated Potential Impact of Valuing Levels 2-5 Together, With Additional Adjustments
INTERVENTIONAL PAIN MGMT $839 Less than 3% estimated increase in overall payment
UROLOGY $1,772
INTERVENTIONAL RADIOLOGY $362 Minimal change to overall payment
NEUROLOGY $1,565 Less than 3% estimated decrease in overall payment
DERMATOLOGY $3,525 -4%
PODIATRY $2,022 -4%
TOTAL $93,486 0%

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