By now, many of you have read or at least heard about the proposed changes to E/M service reporting included in the CMS proposed rule relating to the 2019 Medicare Physician Fee Schedule. For those of you who have not, please see the highlights below.

To summarize the change, CMS outlined a three-part proposal pertaining to New and Established outpatient E/M services (CPT 99201-99215) that includes: 1) simplifying the documentation of the history and examination to permit providers to focus on only the relevant elements of information at the encounter; 2) remove the history and examination elements from the determination of the level of E/M service and instead focus on medical decision-making as the sole determining factor to the selection of the E/M service level (the option to determine the level based on time where counseling or coordination of care will be maintained but CMS proposes to require providers to document the necessity for the time spent at the encounter) and; 3) establish only four payment rates – a payment rate for 99201, 99202-99205, 99211 and 99212-99215. This proposal would result in providers being paid the same for a 99202, 99203, 99204 or 99205 and the same would be true for established patient visits reported using 99212, 99213, 99214 or 99215. The proposed allowance for 99212-99215 is an amount between the current allowances for 99213 and 99214 and the proposed allowance for CPT 99202-99205 is an amount between the current allowances for 99203 and 99204. The allowances for 99211 and 99201 are essentially unchanged.

After review of the proposal, there are a number of potential issues that come to mind. One of the benefits that CMS does not expressly address is that such a change would effectively eliminate post-payment risk associated with improper coding of E/M services. Because the reimbursement levels are the same for levels 2 through 5 of each visit type, a technical error in the level reported would have no financial impact to either CMS or the provider. As a result, there is no need to validate the code level reported either before or after-the-fact. That issue aside, you might wonder why there would therefore be a need to maintain five different levels of service for both new and established patient E/M services. Wouldn’t it make more sense to change CPT to only reflect two code levels for both new and established patient E/M services? As it is apparent that CMS did not coordinate the proposed change with the CPT Editorial Panel, even absent a change to the actual numerical codes in CPT, given that the level of E/M will no longer be based on history and examination, a corresponding change to the descriptions of the various E/M codes to reflect that history and examination are no longer “key” components would appear to be necessary. Additionally, there is no apparent need to maintain the distinctions as to the various descriptive levels of history and examination since such distinctions would no longer be relevant.

As there will be no apparent change to CPT (presumably to permit commercial payers to maintain the current system) maybe CMS should instead create new Medicare only HCPCS codes for reporting new and established patient E/M services to avoid the confusion that will no doubt be caused when attempting to fit existing codes into this new reimbursement system.

This proposal was published in the July 27, 2018 Federal Register. Because there are only sixty (60) days to submit comments, the National Advisory Board; specifically, the Thought Leadership committee, is evaluating the CMS proposal for the purpose of preparing comments and recommendations to CMS on behalf of AAPC.

Note from your Revenue Cycle Management partner at ebix, Inc. – We are always at the forefront of industry insights and believe this excerpt courtesy of the AAPC Knowledge Center originally published July 19, 2018 will be of interest to you.)