Managing Evaluation and Management Coding
Applies the 2021+ CMS/AMA E/M documentation framework to select the correct E/M code level based on medical decision-making (MDM) complexity or total physician/qualified health professional (QHP) time on the date of encounter. Covers office/outpatient (99202–99215), inpatient/observation (99221–99223, 99231–99236), consultations, and subsequent care services.
Why This Skill Exists
The 2021 E/M restructure eliminated history and exam as code-level determinants for office/outpatient visits, making MDM or time the sole drivers. In 2023, CMS extended similar logic to inpatient and observation services. Misapplication of MDM elements — especially risk table interpretation and data element counting — is the most common source of E/M level errors. CMS CERT data consistently shows E/M services among the highest-error service categories, with improper payments exceeding $2 billion annually for E/M alone.
Checkpoint A — Intake
Questions to Confirm Before Starting
- What E/M category is being coded? (office new/established, inpatient initial/subsequent, observation, consultation, ED)
- Is the provider selecting code level by MDM or by time?
- What is the date of service and patient status (new vs. established, initial vs. subsequent)?
- Is there a separately reportable procedure on the same date requiring modifier 25 consideration?
- Does the encounter involve shared/split visit rules (physician + NPP)?
- Are there prolonged services to consider (99417 for office, 99418 for inpatient)?
- Is the payer Medicare, Medicaid, or commercial (commercial may not recognize all CMS rules)?
Documents Required
- Complete encounter note (HPI, ROS, exam, assessment/plan)
- Problem list with status of each condition addressed
- Orders placed during the encounter (labs, imaging, referrals, prescriptions)
- Time documentation if time-based coding is used (total time on date of encounter)
- Prior visit notes if referenced for data review
- Test results reviewed during the encounter
- Any care coordination or consultation documentation
Step 1 — Determine E/M Category and Patient Status
Identify the correct code family before assessing level.
- New patient: No professional services from the same provider or same-specialty/same-group provider in the prior 3 years.
- Established patient: Any professional service within 3 years from same provider or same-specialty/same-group.
- Office/Outpatient: 99202–99205 (new), 99211–99215 (established). Note: 99201 was deleted in 2021.
- Inpatient/Observation: 99221–99223 (initial), 99231–99233 (subsequent), 99234–99236 (same-day admit/discharge).
- ED visits: 99281–99285 — still use the 1995/1997 guidelines (MDM, history, exam) until CMS updates. New/established distinction does not apply.
- Consultations: 99241–99245 (office), 99251–99255 (inpatient). Medicare does not recognize consultation codes — use initial visit codes with modifier AI for teaching physicians.
Step 2 — Assess Medical Decision-Making
MDM has three elements; the level is determined by meeting or exceeding the threshold in 2 of 3.
Element 1: Number and Complexity of Problems Addressed
| MDM Level |
Problem Types |
| Straightforward |
1 self-limited or minor problem |
| Low |
2+ self-limited problems; 1 stable chronic illness; 1 acute uncomplicated illness |
| Moderate |
1+ chronic illness with mild exacerbation; 2+ stable chronic illnesses; 1 undiagnosed new problem with uncertain prognosis; 1 acute illness with systemic symptoms |
| High |
1+ chronic illness with severe exacerbation; 1 acute/chronic illness posing threat to life or bodily function |
- A "problem addressed" must have assessment, plan, or management documented — listing it in the problem list alone is insufficient.
- Stable chronic conditions count only when the provider documents management actions taken during the visit.
Element 2: Amount and/or Complexity of Data Reviewed and Analyzed
| MDM Level |
Data Requirements |
| Straightforward |
Minimal or none |
| Low |
Review of prior external note/test OR order of test |
| Moderate |
Order and review of tests; review of prior external notes with independent interpretation of an image/tracing/specimen; discussion of management with external physician |
| High |
As moderate, PLUS independent interpretation of test performed by another physician/QHP |
- "Independent interpretation" means the provider personally reviews the raw data (image, tracing, specimen) and documents their own findings — not simply reading another provider's report.
- Each unique test ordered = 1 data point. A panel (e.g., CMP) = 1 test, not 14 individual analytes.
Element 3: Risk of Complications, Morbidity, or Mortality
| MDM Level |
Risk Examples |
| Straightforward |
OTC medications, minor surgery with no risk factors |
| Low |
Prescription drug management, minor surgery with identified risk factors, diagnostic procedures with no identified risk factors |
| Moderate |
Prescription drug management requiring monitoring for toxicity; decision for minor surgery with identified risk factors; diagnosis/treatment significantly limited by social determinants of health |
| High |
Drug requiring intensive monitoring (e.g., chemotherapy, immunosuppressants); decision for major surgery; decision for emergency major surgery; DNR decision; parenteral controlled substances |
- Risk is assessed based on the decision made at THIS encounter, not outcomes.
- Social determinants of health can raise the risk level to moderate when they significantly limit diagnosis or treatment.
Step 3 — Apply Time-Based Code Selection (Alternative Path)
If the provider documents total time, time alone determines the code level.
- Office/Outpatient time ranges (established):
- 99211: Not time-based (typically nurse visit)
- 99212: 10–19 minutes
- 99213: 20–29 minutes
- 99214: 30–39 minutes
- 99215: 40–54 minutes
- 99417: Each additional 15 minutes beyond 99215 (55+ minutes)
- Office/Outpatient time ranges (new):
- 99202: 15–29 minutes
- 99203: 30–44 minutes
- 99204: 45–59 minutes
- 99205: 60–74 minutes
- 99417: Each additional 15 minutes beyond 99205 (75+ minutes)
- Time includes face-to-face and non-face-to-face activities on the date of encounter: reviewing records, ordering tests, care coordination, documentation, counseling.
- Time documentation must state the total time — "approximately 45 minutes" is acceptable; vague statements like "extended visit" are not.
- For prolonged services (99417), the first unit requires the minimum threshold time for the base code to be exceeded by at least 15 minutes.
Step 4 — Handle Split/Shared Visits
Apply when a physician and NPP both provide services in the same encounter.
- The billing provider must perform a substantive portion of the visit.
- For time-based coding: combine the time of both providers, but the billing provider must have performed the substantive portion.
- For MDM-based coding: the billing provider must personally perform one of the three MDM elements.
- Document who performed which elements and which provider is billing.
- Medicare requires the physician to bill if using the split/shared visit rules in facility settings.
Step 5 — Evaluate Modifier 25 Necessity
When a procedure is performed on the same date, assess whether a separately identifiable E/M is supported.
- The E/M must represent a significant, separately identifiable service beyond the typical pre-operative and post-operative work of the procedure.
- The documentation must support the E/M through a distinct problem or distinct MDM elements not related to the procedure decision.
- Do not automatically append modifier 25 to every E/M billed with a procedure — this is a top OIG audit target.
Checkpoint B — Review
Quality Audit
Guidelines
- Apply AMA/CMS 2021+ E/M guidelines for office/outpatient visits (99202–99215)
- Apply CMS 2023+ guidelines for hospital inpatient/observation services (99221–99236)
- Reference the AMA MDM grid published in CPT Professional Edition Appendix for MDM element definitions
- Follow CMS MLN Matters articles for Medicare-specific interpretations of E/M rules
- For ED visits (99281–99285), continue applying 1995/1997 Documentation Guidelines until CMS issues revised criteria
- Never upcode based on assumed complexity — the documented MDM elements or documented time must support the level selected
- Mark with [VERIFY] and escalate any encounter where MDM elements are borderline between two levels
- Include disclaimer that E/M code selection is based on documentation as presented and does not constitute legal compliance advice
1---2name: managing-evaluation-management-coding3description: Applies 2021+ E/M guidelines with medical decision-making or time-based code selection. Use when coding E/M services, determining MDM level, or selecting E/M codes.4---5
6# Managing Evaluation and Management Coding
7
8Applies the 2021+ CMS/AMA E/M documentation framework to select the correct E/M code level based on medical decision-making (MDM) complexity or total physician/qualified health professional (QHP) time on the date of encounter. Covers office/outpatient (99202–99215), inpatient/observation (99221–99223, 99231–99236), consultations, and subsequent care services.
9
10## Why This Skill Exists
11
12The 2021 E/M restructure eliminated history and exam as code-level determinants for office/outpatient visits, making MDM or time the sole drivers. In 2023, CMS extended similar logic to inpatient and observation services. Misapplication of MDM elements — especially risk table interpretation and data element counting — is the most common source of E/M level errors. CMS CERT data consistently shows E/M services among the highest-error service categories, with improper payments exceeding $2 billion annually for E/M alone.
13
14---
15
16## Checkpoint A — Intake
17
18### Questions to Confirm Before Starting
19
201. What E/M category is being coded? (office new/established, inpatient initial/subsequent, observation, consultation, ED)
212. Is the provider selecting code level by MDM or by time?
223. What is the date of service and patient status (new vs. established, initial vs. subsequent)?
234. Is there a separately reportable procedure on the same date requiring modifier 25 consideration?
245. Does the encounter involve shared/split visit rules (physician + NPP)?
256. Are there prolonged services to consider (99417 for office, 99418 for inpatient)?
267. Is the payer Medicare, Medicaid, or commercial (commercial may not recognize all CMS rules)?
27
28### Documents Required
29
30- Complete encounter note (HPI, ROS, exam, assessment/plan)
31- Problem list with status of each condition addressed
32- Orders placed during the encounter (labs, imaging, referrals, prescriptions)
33- Time documentation if time-based coding is used (total time on date of encounter)
34- Prior visit notes if referenced for data review
35- Test results reviewed during the encounter
36- Any care coordination or consultation documentation
37
38---
39
40## Step 1 — Determine E/M Category and Patient Status
41
42Identify the correct code family before assessing level.
43
44- **New patient**: No professional services from the same provider or same-specialty/same-group provider in the prior 3 years.
45- **Established patient**: Any professional service within 3 years from same provider or same-specialty/same-group.
46- **Office/Outpatient**: 99202–99205 (new), 99211–99215 (established). Note: 99201 was deleted in 2021.
47- **Inpatient/Observation**: 99221–99223 (initial), 99231–99233 (subsequent), 99234–99236 (same-day admit/discharge).
48- **ED visits**: 99281–99285 — still use the 1995/1997 guidelines (MDM, history, exam) until CMS updates. New/established distinction does not apply.
49- **Consultations**: 99241–99245 (office), 99251–99255 (inpatient). Medicare does not recognize consultation codes — use initial visit codes with modifier AI for teaching physicians.
50
51## Step 2 — Assess Medical Decision-Making
52
53MDM has three elements; the level is determined by meeting or exceeding the threshold in 2 of 3.
54
55### Element 1: Number and Complexity of Problems Addressed
56
57| MDM Level | Problem Types |
58|-----------|---------------|
59| Straightforward | 1 self-limited or minor problem |
60| Low | 2+ self-limited problems; 1 stable chronic illness; 1 acute uncomplicated illness |
61| Moderate | 1+ chronic illness with mild exacerbation; 2+ stable chronic illnesses; 1 undiagnosed new problem with uncertain prognosis; 1 acute illness with systemic symptoms |
62| High | 1+ chronic illness with severe exacerbation; 1 acute/chronic illness posing threat to life or bodily function |
63
64- A "problem addressed" must have assessment, plan, or management documented — listing it in the problem list alone is insufficient.
65- Stable chronic conditions count only when the provider documents management actions taken during the visit.
66
67### Element 2: Amount and/or Complexity of Data Reviewed and Analyzed
68
69| MDM Level | Data Requirements |
70|-----------|-------------------|
71| Straightforward | Minimal or none |
72| Low | Review of prior external note/test OR order of test |
73| Moderate | Order and review of tests; review of prior external notes with independent interpretation of an image/tracing/specimen; discussion of management with external physician |
74| High | As moderate, PLUS independent interpretation of test performed by another physician/QHP |
75
76- "Independent interpretation" means the provider personally reviews the raw data (image, tracing, specimen) and documents their own findings — not simply reading another provider's report.
77- Each unique test ordered = 1 data point. A panel (e.g., CMP) = 1 test, not 14 individual analytes.
78
79### Element 3: Risk of Complications, Morbidity, or Mortality
80
81| MDM Level | Risk Examples |
82|-----------|---------------|
83| Straightforward | OTC medications, minor surgery with no risk factors |
84| Low | Prescription drug management, minor surgery with identified risk factors, diagnostic procedures with no identified risk factors |
85| Moderate | Prescription drug management requiring monitoring for toxicity; decision for minor surgery with identified risk factors; diagnosis/treatment significantly limited by social determinants of health |
86| High | Drug requiring intensive monitoring (e.g., chemotherapy, immunosuppressants); decision for major surgery; decision for emergency major surgery; DNR decision; parenteral controlled substances |
87
88- Risk is assessed based on the decision made at THIS encounter, not outcomes.
89- Social determinants of health can raise the risk level to moderate when they significantly limit diagnosis or treatment.
90
91## Step 3 — Apply Time-Based Code Selection (Alternative Path)
92
93If the provider documents total time, time alone determines the code level.
94
95- **Office/Outpatient time ranges (established)**:
96 - 99211: Not time-based (typically nurse visit)
97 - 99212: 10–19 minutes
98 - 99213: 20–29 minutes
99 - 99214: 30–39 minutes
100 - 99215: 40–54 minutes
101 - 99417: Each additional 15 minutes beyond 99215 (55+ minutes)
102- **Office/Outpatient time ranges (new)**:
103 - 99202: 15–29 minutes
104 - 99203: 30–44 minutes
105 - 99204: 45–59 minutes
106 - 99205: 60–74 minutes
107 - 99417: Each additional 15 minutes beyond 99205 (75+ minutes)
108- Time includes face-to-face and non-face-to-face activities on the date of encounter: reviewing records, ordering tests, care coordination, documentation, counseling.
109- Time documentation must state the total time — "approximately 45 minutes" is acceptable; vague statements like "extended visit" are not.
110- For prolonged services (99417), the first unit requires the minimum threshold time for the base code to be exceeded by at least 15 minutes.
111
112## Step 4 — Handle Split/Shared Visits
113
114Apply when a physician and NPP both provide services in the same encounter.
115
116- The billing provider must perform a substantive portion of the visit.
117- For time-based coding: combine the time of both providers, but the billing provider must have performed the substantive portion.
118- For MDM-based coding: the billing provider must personally perform one of the three MDM elements.
119- Document who performed which elements and which provider is billing.
120- Medicare requires the physician to bill if using the split/shared visit rules in facility settings.
121
122## Step 5 — Evaluate Modifier 25 Necessity
123
124When a procedure is performed on the same date, assess whether a separately identifiable E/M is supported.
125
126- The E/M must represent a significant, separately identifiable service beyond the typical pre-operative and post-operative work of the procedure.
127- The documentation must support the E/M through a distinct problem or distinct MDM elements not related to the procedure decision.
128- Do not automatically append modifier 25 to every E/M billed with a procedure — this is a top OIG audit target.
129
130---
131
132## Checkpoint B — Review
133
134- [ ] Correct E/M category and code family selected for the encounter type
135- [ ] MDM grid applied correctly — 2 of 3 elements meet or exceed the billed level
136- [ ] Each problem counted is actually addressed with documented management
137- [ ] Data elements counted are supported by documentation showing review/order
138- [ ] Risk level matches the CMS risk table — not over-interpreted
139- [ ] If time-based: total time is explicitly documented and falls within the correct range
140- [ ] Split/shared visit rules applied correctly if applicable
141- [ ] Modifier 25 used only when documentation clearly supports a separately identifiable service
142
143---
144
145## Quality Audit
146
147- [ ] Code level is supportable by either MDM OR time (not mixing elements from both)
148- [ ] New vs. established patient status verified against 3-year rule
149- [ ] All problems counted as "addressed" have documented assessment/plan entries
150- [ ] Independent interpretation of data is documented with the provider's own findings
151- [ ] Risk table application does not conflate overall patient risk with encounter-specific risk
152- [ ] Prolonged service add-on codes (99417) meet the minimum time threshold
153- [ ] Documentation timestamps are internally consistent (not contradicted by schedule or other notes)
154
155---
156
157## Guidelines
158
159- Apply AMA/CMS 2021+ E/M guidelines for office/outpatient visits (99202–99215)
160- Apply CMS 2023+ guidelines for hospital inpatient/observation services (99221–99236)
161- Reference the AMA MDM grid published in CPT Professional Edition Appendix for MDM element definitions
162- Follow CMS MLN Matters articles for Medicare-specific interpretations of E/M rules
163- For ED visits (99281–99285), continue applying 1995/1997 Documentation Guidelines until CMS issues revised criteria
164- Never upcode based on assumed complexity — the documented MDM elements or documented time must support the level selected
165- Mark with [VERIFY] and escalate any encounter where MDM elements are borderline between two levels
166- Include disclaimer that E/M code selection is based on documentation as presented and does not constitute legal compliance advice
CaseMark