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  • Evaluation and Management Coding Changes for 2021

    Authors: Luis M. Tumialan, MD
    John K. Ratliff, MD
    Joseph D. Cheng, MD





    In part 1 of our series on changes that are afoot in evaluation and management (E/M) coding for clinic services (office and outpatient clinic visits), we reviewed how two different proposals for changing E/M were considered and how a set of new descriptors for E/M codes were brought to the Current Procedural Terminology (CPT) code set.

    This effort grew out of a larger Centers for Medicare & Medicaid Services (CMS) directive titled “Patients over Paperwork.” CMS proposed several changes in the way in which clinic visits are documented and valued to better reflect physician work. As anyone who has studied E/M coding would attest, the current rules are byzantine, and correctly coding for a level 5 clinic visit requires an onerous amount of documentation that may have little or no relevance to the clinical care being provided to a given patient. The current E/M coding scheme promotes a system of checking boxes to ensure there is adequate evidence to support the level of service. It is not a rational representation of the work a physician does in evaluating and managing a patient in an outpatient environment. To address the shortcomings of this complex system, CMS undertook a comprehensive reassessment of how we report physician billing for E/M services.

    While neurosurgeons generate most of our billing via surgical procedures, the very nature of our profession requires the evaluation of patients in clinic for surgical options. In some settings, E/M billing generates 25-30% of a neurosurgeon’s revenue. As such, the upcoming E/M changes will have a large impact on every neurosurgeon in the United States.

    It is important to recognize that these changes do not affect all E/M billing — hospital admissions, consultations and other E/M services will remain the same. The codes that are changing are the new patient visit codes — 99202 to 99204 (99201 was eliminated) — and the established patient visit codes — 99211 to 99215. These changes do not take effect until January 1, 2021. Since the changes will affect nearly every practicing neurosurgeon, we are starting our educational effort early to prepare practices for the transition.

    AMA CPT Panel Approves New CPT Code Descriptors

    The AMA CPT Panel developed a new set of E/M code descriptors, focused either solely on medical decision making or on total time. Physicians would also be allowed to continue to document using the present descriptors for the relevant E/M codes. The descriptors allow for some time both before and after the day of service for preliminary work and follow-up after the clinic visit.

    As the CPT workgroup reviewed the new CPT descriptors for E/M codes, the AMA emphasized that the goal of this effort was to improve documentation requirements and to reduce the burden on physicians for documenting outpatient visits, not to change the fee schedule or to direct more funds to outpatient, clinic tasks as opposed to specialty care or procedures.

    CMS Provides E/M Clarification in 2020 Fee Schedule Final Rule

    The final version of the Medicare Physician Fee Schedule (MPFS) for 2020, released on November 1, 2019, gives us insight into how these changes will be implemented in 2021 by CMS. CMS rescinded its proposal to flatten all E/M reimbursement to just two values and they will continue to pay higher values for higher levels of service. CMS also accepted the new descriptors provided by the CPT Editorial Panel and accepted the recommendation to value E/M work based on medical decision making or on time. These changes are a substantial improvement, decreasing requirements for documentation and eliminating the burdensome checkbox nature of E/M coding. 

    After the family of E/M office/outpatient visit codes was redefined by the CPT Editorial Panel, the codes were referred to the AMA/Specialty Society Relative Value Scale Update Committee (RUC) for re-valuation. The RUC conducted a thorough discussion of the valuations of these codes and whether this effort would entail increasing valuations for E/M services. A group of 52 specialty societies, including the CNS and AANS, participated in the RUC survey for the new codes.

    After a spirited debate, the RUC passed new values for E/M codes that, as noted in the proposed 2020 MPFS, will go into effect in 2021. With the new valuation, most values for E/M go up, some quite significantly. A level 5 new patient visit, 99205, increased from 3.17 work RVUs to 3.5 work RVUs. This may sound like a small change, but there were 2,860,667 claims for 99205 recorded in the CMS database for 2017. Small changes on such a scale can add up quickly to significant value.

    CMS Fails to Include E/M Increases in Global Surgical Codes

    Over the strenuous objection of the CNS, AANS, surgical community and the AMA, the 2020 MPFS final rule notes that the values for global surgery codes will not reflect the increased E/M office/outpatient visit values. Thus, the value for procedures will not go up. The sequence of events with the modification of these E/M office/outpatient visit codes is a substantial departure from the approach that CMS had taken in the past when there was a seismic change in the MPFS resulting from E/M changes. Since the MPFS was established, E/M codes have been increased three times. Each time the payment for E/M values were increased, CMS adjusted the bundled payments to account for the increases in the E/M portion of the global surgical codes — most recently in 2010 when some E/M codes were increased following the elimination of consultation codes.

    Impact of E/M Code Increases on the 2021 Conversion Factor

    It also may be anticipated that CMS will need to decrease the conversion factor on which the agency bases MPFS payments to account for the expense of the new E/M valuations. The conversion factor is the mechanism by which Medicare converts RVUs into dollars and determines how much they pay for a given service (figure 1). E/M services are about 40% of the MPFS. To create a fiscal balance, when E/M values go up, something has to go down. With a decrease in the conversion factor, everything else in the fee schedule will decrease in value to maintain budget neutrality. Private insurance contracts negotiated on a percentage of Medicare or tied to the CMS conversion factor will potentially be affected, with widespread ramifications to overall reimbursement.

    Potential Impact on Neurosurgery

    What’s the impact on neurosurgery? The net impact from the change in E/M valuations alone is about negative 3-5%, as estimated in the information included in the 2020 MPFS final rule. The decrease may be even greater. We will not know until CMS publishes the final policies and conversion factor in the 2021 MPFS final rule or about November 1, 2020.

    At this time, the changes to E/M are just a part of a proposed policy and, at press-time, open to comment through the end of December 2019. The CNS/AANS Washington Committee is hard at work advocating to improve the final version of these changes and to maintain focus upon the key elements of the original E/M documentation reduction effort. A concerted effort is underway to make sure that the change in E/M values for 2021 will be included in the global surgery package. We will keep neurosurgeons apprised of these changes as we move forward.

    References: “Medicare PFS Payment Rates Formula.”  Accessed December 12, 2019

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