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Coding tips: Level 3 vs. 4 evaluation and management

Medical Economics JournalJuly 25, 2018 edition
Volume 95
Issue 14

To payers, these visits tell a completely different story about the work that’s required to treat a patient.

The difference between a level 3 and level 4 office visit might not seem like much, but to payers, these visit types each tell a completely different story about the work that’s required to treat a patient.

When physicians report a level 4 evaluation and management (E/M) code, they’re telling payers they should be paid more because their patient requires medical management for an exacerbation of an existing chronic condition, a complication, or a new problem, says Raemarie Jimenez, CPC, vice president of membership and certification solutions at AAPC in Salt Lake City, Utah. Payers may deny level 4 E/M codes for patients who respond well to treatment and are generally well-managed, she adds.

When using an EHR, though, it’s easy for physicians to default to a level 4 E/M code that might not be justified, says Jimenez. That’s because the EHR pulls information forward that might not be clinically relevant or even pre-populates information that falsely inflates the actual work the physician performs. “The computer just picks up on keywords and boxes, but it’s not smart enough to realize that a visit might be over-documented,” she adds.

For example, pulling information forward, such as a comprehensive family history or a complete review of systems, can inadvertently drive a level 4 E/M code when the nature of the presenting problem (e.g., otitis media) in no way supports this level of service, explains Jimenez. Over time, it may appear to payers that a physician is upcoding as compared to peers.

To avoid payer scrutiny, Jimenez advises physicians always to ask themselves these three questions before assigning a level 4 E/M code:

1. Is this patient sicker than most of the patients I see?
2. What specifically elevates the level of effort that’s required to treat this patient? Have I documented this information in the record?
3. Have I reported the most specific ICD-10-CM diagnosis code to justify patient severity?

Physicians should also know whether their EHR might be putting them at risk for upcoding. Jimenez says to consider these three questions:

1. Does the EHR auto-populate information and require physicians to deselect what’s not pertinent to the visit?
For example, an EHR might auto-populate a complete review of systems and require physicians to deselect the systems they don’t review with the patient. This practice is extremely risky because physicians don’t often remember to review the information or they may simply forget to deselect it, says Jimenez. Best practice is for physicians to manually select what they want to bring forward. It shouldn’t happen automatically, she adds.

2. Do diagnosis-specific templates require physicians to perform certain tasks every time they see a patient?
All work must be clinically relevant, says Jimenez. “Physicians shouldn’t be forced to do something just because the EHR is telling them to do it. Everything they do should be based on their own clinical judgment.”

3. Does the EHR require physicians to bill a certain code?
The code that the system calculates may not be accurate, and physicians always need the ability to override it when necessary, says Jimenez. She provides the example of a physician who includes rule-out diagnoses for continuity-of-care purposes. If the physician isn’t actively managing these conditions, they shouldn’t be counted toward the visit’s E/M level. If the EHR gives credit for this information, physicians need to recognize that the E/M level may be inflated, and they should override the code manually, she says.

CPT code 



2018 national average Medicare Payment


Level 3 office visit

New patient



Level 4 office visit

New patient



Level 3 office visit

Established patient



Level 4 office visit

Established patient



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