CMS proposes significant changes to E&M services.

There has been much confusion over the years regarding documenting for evaluation and management (E&M) services since the 1997 Official Guidelines were released. The Centers for Medicare & Medicaid Services (CMS) kept promising revised guidelines for years without delivering results. 

During that time, documentation has become burdensome, especially since the adoption of electronic health records (EHRs). Sometimes, the information documented is inaccurate, incomplete, or not relevant to the patient care for the date of service. On July 27, 2018, CMS released Proposed Rule CMS-1693-P. This article will focus only on the proposed E&M documentation guideline changes.

The E&M changes in the CMS Proposed Rule involve only new and established patient office visits. The Rule does not include emergency department visits, outpatient observation, initial hospital care, subsequent hospital care, or adult and pediatric critical care codes. Currently, CMS is taking a step-wise approach and only limiting the initial changes to office/outpatient E&M codes. CMS has suggested in the proposed rule that they might consider addressing other E&M services beyond office/outpatient codes in future years.

There will be a slight increase in the conversion factor, from $35.99 to $36.05.

CMS is also asking for comments regarding the elimination of the rule that two E&M visits cannot be billed on the same date of service when a provider has a multi-specialty affiliation. CMS is asking for feedback during the comment period regarding whether exceptions should be created. 

In the proposed rule, it is said that a practitioner may still use either the 1995 or 1997 Documentation Guidelines for E&M services. In addition, practitioners could use medical decision-making or time to document an E&M visit, in lieu of the documentation guidelines. If a practitioner is using time as the level for the visit, it must be documented as long as the medical necessity for the visit persists, regardless of whether counseling or coordination of care is provided. 

Typical time for the proposed new rule for levels 2-5 for a new patient is 38 minutes, and for an established patient, 31 minutes. CMS has proposed an alternative for a timed service. Once the mid-point is reached and documentation produced of a minimum of at least 20 minutes for a new patient and 16 minutes for an established patient during a face-to face visit, it could support payment for levels 2-5. Another alternative is to use the American Medical Association’s (AMA’s) Current Procedural Terminology (CPT) code requirement for documenting time. Public comment is being solicited for these potential approaches.

CMS is proposing two payment rates for both new and established patients: one payment rate for level 1 and one payment rate for levels 2-5. Documentation for levels 2-5 would only need to meet documentation requirements for level 2 history, examination, and/or medical decision-making unless time is used to document the service. Medicare could use medical decision-making as required documentation to support medical necessity for the visit, as well as the documentation associated with a level 2 E&M visit code. If medical decision-making is to be used as the sole decision for the level of service, CMS is asking for comments as to whether its current form is acceptable or if it might be changed in subsequent years.

CMS also proposed to develop a single set of relative value units (RVUs) under the Physician Fee Schedule: a single set of RVUs for new patient visit codes 99202-99205 and a single set for established patient visit codes 99212-99215. CMS is proposing a work RVU of 1.90 for CPT codes 99201-99205, and a work RVU of 1.22 for CPT codes 99212-99215.


Here is a comparison between 2018 and the proposed 2019 changes:


CPT Code

2018 Non-facility Payment Rate

2019 Non-facility Payment Rate






















Note: Based on CMS 2016 data, the average for a level 3 new patient visit is 33 percent, and a level 4 visit is 44 percent.


CPT Code

2018 Non-facility Payment Rate

2019 Non-facility Payment Rate






















Note: Based on CMS 2016 data, the average for a level 3 established patient visit is 39 percent, and a level 4 visit is 50 percent.

CMS is also proposing an add-on payment for office visits for more complex patients. These would be reported with an add-on G code billed with the E&M primary code to adjust payment for additional costs beyond the typical resources used in levels 2-5. Only certain specialties are proposed to use this complexity code. Add-on payment would be $5.00 for primary care and $14.00 for approved specialties paid over and above the E&M levels 2-5. Specialties approved for reporting a complexity code include:

  • Endocrinology
  • Rheumatology
  • Hematology/Oncology
  • Urology
  • Neurology
  • Obstetrics/Gynecology
  • Allergy/Immunology
  • Otolaryngology
  • Cardiology
  • Interventional Pain-Centered Care

There are several specialties missing, such as pulmonology, cardio-thoracic, and others that treat many complex patients, but currently, under the proposed rule, these are not listed as eligible for the additional add-on code for payment.

In addition, CMS is proposing changes to the prolonged services threshold, since the first-hour time frame is difficult for a practitioner to meet (with separate HCPCS G-codes for podiatry).


Multiple Procedure Reduction Policy for Procedures and E&M visits on the same Date

CMS proposes that for an E&M visit level 2-5 for new or established patients, when a minor procedure is performed on the same date, that payment would be reduced by 50 percent for the least expensive procedure or visit by the same physician (or a physician in the same group practice). Modifier 25 would be appended to the E&M service. For many practitioners who evaluate patients using an E&M code prior to performing a procedure in the office, this will represent a significant loss of revenue. It might even encourage the practitioner to have the patient come back at another time to perform the recommended procedure, causing unnecessary inconvenience to the patient.



CMS is proposing these changes to reduce the practitioner’s documentation burden and allow the physician to spend more time with the patient. For patients who are healthy or have minor conditions or problems, a practitioner might benefit from the reduced documentation requirements. But for the many physicians who see patients with multiple medical problems and complex conditions that require more time and effort, revenue in the practice could be lost. Some specialties could lose 3 percent or less of their total revenue, whereas other specialties could lose more. For example, according to the CMS data in the proposed rule, a hematology/oncology practice could lose 7 percent of its E&M revenue; a dermatology practice could lose 4 percent; and an endocrinology practice could lose 10 percent. These are just CMS estimates, and each individual practice would have to evaluate their level 2-5 visits to calculate the potential financial impact.

I encourage everyone to review the proposed E&M documentation changes and submit comments prior to the deadline. CMS is accepting comments until Sept. 10, 2018. In commenting, please refer to file code CMS-1693-P. Comments, including mass comment submissions, must be submitted in one of the following three ways:

  • Electronically. You may submit electronic comments on this regulation to Follow the “submit a comment” instructions.
  • By regular mail. You may mail written comments to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1693-P, P.O. Box 8016, Baltimore, MD, 21244-8016. Please allow sufficient time for mailed comments to be received before the close of the comment period.
  • By express or overnight mail. You may send written comments to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1693-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850

The proposed rule can be found online at:

In my opinion, as a former practice administrator and a consultant, changes should be made to the E&M guidelines to loosen the documentation requirements. This will impact every primary care and specialty practice that sees patients in the office. Practitioners may be confused as to what they should document, so I fear they will code just based on time. 

The reason these levels were developed in the first place in 1995 is that previously, the codes were time-based, and documentation did not reflect the physician and patient encounter appropriately. Many times, documentation would contain only a sentence or two, and it was hard for another practitioner to determine what transpired during the visit.

Practitioners must consider medical-legal issues as well when documenting the patient encounter, and by changing the guidelines in this manner, it puts the physicians at risk. Yes, making these changes will reduce the documentation burden and the time it takes to document, but keep in mind that you must support medical necessity, and again, there are medical-legal issues to consider.

By making these changes, CMS will save millions of dollars in administrative costs, but I cannot foresee how it will benefit all practitioners. It will only reduce revenue for many primary care and specialty practices that treat patients with more complex and multiple chronic medical problems. 

Program Note:

Listen to Deb Grider report this topic today on Talk Ten Tuesday at 10 a.m. Eastern.

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