E/M coding refresher: Education on top errors with E/M coding

By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, Manager, Lead Coding and Reimbursement Strategist, November 1, 2022

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

It has been more than a year since dermatologists and non-physician clinicians (NPC) began using the revised guidelines for office and other outpatient evaluation and management (E/M) services. In comparison, it seems like yesterday we were all scrambling to prepare the dermatology practice (dermatologists, mid-level practitioners, coders, and billing staff) for the changes to come.

Dermatologists indicate they have struggled with the categorization of conditions and levels of service

The coding team has spent many hours speaking to dermatologists and coding staff who have indicated that categorizing conditions treated in a dermatology setting as well as choosing the appropriate level of E/M service can be challenging. This is coupled with a non-specialty-specific Medical Decision Making (MDM) algorithm (PDF) developed by the American Medical Association (AMA) E/M Workgroup to support and guide E/M coding for the house of medicine.

It has become apparent that most conditions treated in a dermatology setting are not directly associated with the MDM table. It is with these concerns in mind and following AMA E/M Workgroup guidance that the AADA E/M Workgroup decided to develop enhanced Definitions for the MDM Elements Terminology (PDF) to provide dermatologists with a tool that helps categorize dermatology conditions accurately in the MDM table. The Definitions for the MDM Elements Terminology is premised on a similar table created by AMA that does not have specific disease/diagnoses examples.

The dermatologist-developed Definitions for the MDM Elements Terminology document provides many dermatology diagnoses as examples of conditions that can qualify under the “Complexity of Problems Addressed” categories. However, the condition examples listed in the document can and may qualify under multiple categories, depending on disease severity and patient-presenting circumstances at the time of the encounter.

It is important to note that dermatologists treat a myriad of diseases, hence the examples provided in the Definitions for the MDM Elements Terminology do not constitute an exhaustive list. Placement of a condition in a category does not exclude it from being placed in other categories. The complexity of the problem addressed for each encounter is determined by the diagnosis AND the presence of additional patient comorbidity factors which may reduce or elevate the risk of the patient’s presenting problem.

Fewer documentation requirements – A welcome reprieve

One of the positive outcomes of the E/M coding guideline updates was the simplified documentation requirements and ability to assign office and other outpatient service E/M codes. The fundamental improvement between E/M coding in 2020 and before and E/M coding in 2021 and beyond is that the performance and documentation of history and exam are only required as medically appropriate.

This means that the complex rules for counting the elements in the history of present illness (HPI), the number of elements in the review of systems (ROS), and the number of body areas/organ systems examined all became irrelevant. Instead, dermatologists and NPCs have the choice to code based on either MDM or time spent addressing the patient’s concerns during any individual office encounter.

Confusion persists

While the new guidelines simplified the rules for which office and other outpatient service E/M codes are assigned, some confusion surrounding the categorization under ‘complexity and number of problems addressed’ persists. The AMA attempted to help and published the March 2021 technical clarifications to the guidelines (PDF) for the gray areas.

Unfortunately, these clarifications did not provide ample dermatology-specific guidance that would support coding based on the nuances of medical necessity and clinical judgment. Now that we have been using the revised guidelines for over a year, several dermatologists have noted that they have noticed a ‘shift’ and ease of coding higher levels of E/M services. Overall, this change has been received as good news, resulting in both excitement and fear that this may also be viewed as over coding. This has caused some dermatology practices to not adjust and streamline their medical record documentation to be simple and concise while supporting the level of E/M service reported.

Code with confidence

We continue to hear of bloated medical record documentation, an indication that dermatologists and NPCs continue to follow the old documentation guidance. This defeats the intent of the AMA E/M Workgroup to reduce administrative burden by encouraging medical record documentation to be focused on items relevant to the clinical management of the patient.

The revised guidelines recognize the importance of non-face-to-face activities performed by the dermatologist and/or NPC and use easy-to-remember time increments that clear up past confusion when coding based on time. To reduce note bloating and unintentional auditing, dermatologists and NPCs must ensure that documentation only includes information of clinical importance to the encounter.

Some dermatologists and/or NPCs continue to struggle with changing their way of medical record documentation and coding to a more clinical approach in selecting the MDM level. They still look for words to put into checkboxes. Some dermatologists have said to me “I have never billed a level 4 for this type of visit,” or “How can this be a level 4 when my history and examination are not comprehensive?” This is clear evidence that old habits and the little voice in the mind cautioning you not to ‘up-code’ keep kicking in. These pesky habits are hard to break! Use the AADA practice management resource “Applying the 2021 E/M coding concepts in everyday practice” to gain confidence in simple and concise medical record documentation.

We have also noticed that some dermatologists and/or NPCs who over-document are hesitant not to document issues that are not pertinent to code selection, making sure they include the HPI and a comprehensive examination, rather than just documenting the elements that are medically necessary and relevant to the care of the patient. On the opposite side of the pendulum, we have dermatologists and/or NPCs who do not document enough information to support the service rendered. Although it is exciting to know they have embraced the initiative to “lighten the documentation burden” and are not documenting an HPI or an interval history, medical record documentation needs to reflect an accurate picture of the encounter so others — during the coordination of care, medical record review, etc. — can comprehend the patient’s condition and what transpired during the encounter.

Coding with confidence takes time. Dermatology practices can avoid inadvertent claim denials based on a lack of medical record documentation by implementing repetitive ‘quick and easy’ internal audit programs. On a set cycle, review up to 10 patient encounter dates of service (DOS) for medical documentation and compare it to the level of E/M service code that was reported. If the medical record does not support the E/M code reported, provide the appropriate one-on-one feedback and educational hints required for each physician or NPC so that the error(s) are corrected, and improvement is made to documentation to include only information pertinent to and that which supports the level of service reported. Frequent audits reduce errors and increase the accuracy of claim submissions. The AADA Definitions for the MDM Elements Terminology (PDF) help with accuracy in the categorization and complexity of the conditions treated in a dermatology setting.

It may take time to see the impact of your audit program. However, with dedication and constant analysis of your audit results, improvements with your workflows, clinical documentation, and coding will be inevitable. It’s important to look at both short- and long-term goals as your dermatology practice strives for perfection.

Remember, the general principles for documenting the medical record have not changed with the transition from 1995/1997 to 2021 E/M guidelines.

More information on accurate evaluation and management coding can be reviewed in the AAD Derm Coding Consult article series.

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