What we have learned about E/M coding and reimbursement in 2021

By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, manager, coding & reimbursement, April 1, 2021

Academy coding staff address important coding topics each month in Derm Coding Consult. Read more Derm Coding Consult articles.

On Jan. 1, 2021, changes were implemented to the code descriptors and guidelines for evaluation and management (E/M) services delivered during office visits. Components for code selection were narrowed down to medical decision making (MDM) and the total time the dermatologist or non-physician clinician (NPC) spends addressing the patient’s problem(s) on the day of the encounter.

The MDM criteria were revised to make them more “clinically relevant” to the physician. This revision is expected to reduce variation among Medicare contractors and private payers by removing ambiguous and irrelevant terminology. This uniformity in MDM criteria will provide for greater consistency in claim review and adjudication; however, with change comes challenge. Dermatologists and NPCs are encountering issues interpreting and applying the new rules.

This article helps clarify MDM elements, some of the terminologies, definitions, and how they affect the office visit E/M code selection.

MDM elements, terminologies, and definitions

The number and complexity of problems addressed during the encounter.

• A problem is defined as a disease, condition, illness, injury, symptom, sign, finding, complaint, or other matter noted at the encounter, with or without a diagnosis being established at the time of the encounter.

• A problem is considered to be addressed or managed when it is evaluated or treated at the encounter by the dermatologist or NPC reporting the service.

  • Only report those diagnoses being addressed or managed during the encounter.

The amount and/or complexity of data to be reviewed and analyzed.

• This element is focused on activities that affect patient care beyond the number of documents or test results reviewed.

• The focus on number of documents or test results reviewed is expected to help reduce “cut-and-paste note bloats.” Dermatologists and NPCs are not required to enter “voluminous,” repetitive test data that is irrelevant or ancillary to the purpose of the visit.

• Data include medical records, tests, and/or other information that must be obtained, ordered, reviewed, and analyzed for the encounter.

  • When a test is ordered and the results are reviewed, it is counted as one completed item in the data element.

Risk of complications and/or morbidity or mortality of patient management.

• The changes have increased the emphasis on work performed by the dermatologist or NPC in addressing patient management decisions made at the visit, associated with the patient’s problem(s), diagnostic procedure(s), and/or treatment(s).

• The level of risk is based on the thought process of the dermatologist or NPC based on the condition(s) being managed and the treatment plan under consideration — including those treatments that are considered but not selected after discussion with the patient and/or family.

  • This may involve factoring in the patient’s social determinants of health in assessing the viability of a treatment plan and reasons behind the decision not to implement a treatment plan or other interventions.

• The final diagnosis for a condition does not in itself determine the complexity or risk. An extensive evaluation may be required to conclude that the signs or symptoms do not represent a highly morbid condition. Multiple problems of a lower severity may in the aggregate create a higher risk due to interactions between these conditions.

In general, comorbidities or underlying diseases, in and of themselves, are not considered in selecting a level of E/M service, unless they are addressed and their presence increases the complexity of data to be reviewed and analyzed or the risk of complications and/or morbidity or mortality of patient management.

AADA MDM terminologies, definitions, and frequently asked questions (FAQs)

The AADA has created a table at staging.aad.org/MDMdefinitions (PDF) to assist dermatologists and NPCs to understand and interpret the terminologies used on the updated MDM Elements table. Below are a few dermatology-relevant examples based off of FAQs.

Question: Using the 2021 E/M office visit guidelines and rules, can I bill an E/M service code on the same date as a minor procedure?

Answer: The rules that apply to reporting an E/M service on the same date as a procedure have not changed. Most payers will bundle an E/M service reported with a procedure if the documentation does not support a significant, separately identifiable E/M service above and beyond the other service(s) provided or beyond the usual pre- and post-operative care associated with the procedure that was performed on the same date of service by the same dermatologist or NPC.

See Modifier 25 in a nutshell and Medicare 2021 NCCI Coding Policy Manual: Section D. Evaluation and Management (E&M) Services (page I-17) (PDF).

Private payers may interpret and apply the NCCI policy differently. Please check directly with them for specific coding guidance and policy.

Question: Is it true that preventive visits in patients with or without a history of malignant neoplasm (Z85.8xx) are not considered an "active" problem and cannot be reported with the expectation to be covered by the payer?

Answer: In the Derm Coding Consult article Coding for preventive skin examination in 2021 and beyond we explain that routinely, Medicare and some private payers do not cover screening for skin cancer in asymptomatic patients. However, they will cover a visit initiated by a concerned patient who has noticed, for example, a change in the color of a skin lesion, or a new skin growth. To avoid unexpected claim denials it is worth considering reporting the Z85.8xx code as a secondary diagnosis in conjunction with other findings during the encounter.

Please check directly with your payers for specific coding guidance regarding the use of "history of" codes when reported as a primary diagnosis.

Question: Does the review of previous encounter notes by the same dermatologist or NPC count toward the review of prior external note(s) from each unique source under the amount and/or complexity of data to be reviewed and analyzed in the MDM table?

Answer: No. According to the 2021 E/M coding guidelines, review of external records, communications, and/or test results count if they are from a physician, NPC, facility, or health care organization not affiliated with the dermatology practice or are from a different specialty or subspecialty.

Private payers do not typically recognize sub-specialties in the credentialing profiles. Please check directly with the private payer and seek clarification on how they will apply this policy.

Question: If a patient presents with one stable chronic illness AND one acute uncomplicated illness, can I sum these up and report the moderate level under number and complexity of problems addressed element of the MDM?

Answer: No. If the MDM table does not specifically list the problems as combinable, you cannot sum up the problems in order to bill at a higher level under number and complexity of problems addressed.

Question: A 29-year-old female patient currently on isotretinoin therapy for acne treatment presents for routine monitoring lab test. Would this qualify as “drug therapy requiring intensive monitoring for toxicity” under the risk management element?

Answer: The American Medical Association (AMA) defines intensive drug therapy monitoring for toxicity as an activity that meets the criteria for a high level of morbidity. A drug that requires intensive monitoring as a therapeutic agent that has the potential to cause serious morbidity or death. The monitoring is performed for assessment of adverse effects and not primarily for assessment of therapeutic efficacy.

The monitoring should be generally accepted practice for the agent but may be patient-specific in some cases. Intensive monitoring may be long term or short term.

Long-term intensive monitoring is conducted not less than quarterly. The monitoring may be by a lab test, a physiologic test, or imaging. Monitoring by history or examination does not qualify. The monitoring affects the level of MDM in an encounter in which it is considered in the patient's management.

This may include periodic monitoring of blood and hepatic laboratory parameters during hydroxychloroquine therapy for discoid lupus.

Examples of monitoring that do not qualify include monitoring quantitative human chorionic gonadotropin (hCG) levels during isotretinoin therapy, even though pregnancy is a concern in individual patients of childbearing age and potential.

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