What changes to E/M coding could mean for physician practice finances

October 10, 2018

Proposed CMS billing changes have physicians concerned about revenue.

The Centers for Medicare and Medicaid (CMS) has proposed changes to evaluation and management (E/M) billing codes. The changes, which would take effect January 2019, if approved as is, have the intent to “increase the amount of time that doctors and other clinicians can spend with their patients by reducing the burden of paperwork that clinicians face when billing Medicare,” according to CMS.

Physicians currently have to provide justification for one of five billing code levels they use based on what tasks they perform during an evaluation. As it currently stands, physicians use the lower levels of documentation for less complex patients and the higher numbers for more complex cases. The proposed change collapses these five levels down to just two.

While the proposed change is “well-intentioned,” it is going to have a significant impact on physician revenue, according to Jan Powell, CEO of Alpha II, a company that creates software tools for coding and reimbursement based in Tallahassee, Fla.

Powell says the change in levels means that physicians would only be able to bill $93 at the highest level, two, down from a maximum of $148, though there will be little change from the lowest level, which rises from $22 to $24 under the proposal.

“These significant differences in payment amounts is what has a lot of the provider community concerned right now, because they’re not sure exactly what the impact is going to be on the revenue side,” Powell says.

The biggest area of change will be the physical exams, Powell says. “They will have to document fewer items in that physical exam to reach level two, which now would be the highest visit.”

Plus, she says, it is unlikely that physicians will skip doing quality care just because they can, for the sake of billing. “Won’t they still document those thirty or forty items and not just the one required to reach that level two?” she asks.

In other words, she wonders whether the change will really reduce the amount of charting time for the physician, or if it will just result in lower levels of reimbursement.

“In order to document what changed [with a patient] you still have to go through all the history of what was there and note those differences,” Powell says.

Moreover, she says it’s yet another change at a time when “the industry has just been layered with new legislative changes. The healthcare industry right now can’t get a break, between quality reporting and ACO’s, new ways of referring and prior authorizations,” she says.

“To impose these changes on the billing side of the practice is going to be quite an undertaking,” she says.

She’s also concerned about the impact this billing change will have on recently introduced merit-based incentive programs (MIPS), which are dependent upon documentation in the medical record to prove physicians have done their quality reporting.

“The changes may save the physician a little bit of time documenting, but their staff may end up spending more time trying to comply with the new rules and regulations because everything’s not right there in the current visit.”

Since there is little physicians can do to prevent such changes other than to make comments, Powell recommends that physicians stay on top of the new codes that my be implemented in 2019.

Additionally, it will be crucial for staff and physicians to study the new rules and learn how they work.

“If indeed physicians know what measures they are going to report on, they need to start reviewing those measures for documentation requirements,” she says.