March 11, 2022 | By Grant Huang, CPMA, CPC
For the first time since CMS and the AMA implemented their 2021 revisions to office/outpatient evaluation and management (E/M) guidelines, we now have data on how those revisions may have impacted actual E/M code selection by healthcare providers.
Utilization of level 4 visits is up sharply from 2020 to 2021, while level 5 visits are also up, though not as dramatically. This should come as no surprise, given how the 2021 guidelines make it easier to code higher-level E/M services using either time or medical decision making, with the previous key components of history and physical exam no longer being scored for level selection.
Our data is based on an analysis of nearly 10 million new patient office visits and 47 million established patient office visits reported by users of the Compliance Risk Analyzer (CRA) program, developed by The Frank Cohen Group, the analytics division of DoctorsManagement.
Takeaways from 2021 E/M utilization data:
- COVID-19 may have hurt E/M volume. Comparison of CRA data from 2019, 2020, and 2021 shows that office visits of all types declined by 18% from 2019 to 2020 – reflecting what seems to be a reduction in E/M volume for 2020, the first year of the COVID-19 pandemic. In 2021, E/M volume rebounded, jumping 21.2% from 2020, back to the about the same levels as were seen in 2019. This data includes both in-person and telehealth encounters, which spiked sharply in 2020 with the pandemic and the regulatory flexibilities expanding telehealth reimbursement for providers.
- 99201’s deletion didn’t increase 99202 utilization. New patient code 99201, barely used, was deleted in 2021, and you might expect that this would increase utilization of the next highest level code, 99202. This would typically reflect a nurse-level visit without much work by the physician. However, our data shows that 99202 saw less utilization in 2021 as compared to 2020, and all the increases in utilization went to 99204/99205. This pattern does not apply on the established patient side, which saw a big uptick in 99215 but a slight drop in 99214.
- Internal audit pass rates remained high. The CRA software allows users not only to track E/M utilization, but also to capture the results of internal audits. This gives us a “pass rate” for each code, meaning the rate at which an internal auditor agreed with the provider’s coding. A higher pass rate means that the auditor agrees when, for example, a 99205 is supported. Pass rates for 99204 went from 75.5% in 2020 to 85.1% in 2021; for 99205, from 69.8% to 72.2%. On the established patient side, pass rates for 99214 went from 87% in 2020 to 87.2% in 2021; for 99215, from 71.2% to 71.1%.
- New patient codes are a key audit target. The biggest shifts in utilization are clearly found in new patient codes 99204 and 99205; the shifts on the established patient side are far less dramatic, according to the CRA data. This makes sense; new patient codes previously required both history and exam, and thus they benefitted the most from the 2021 guidelines doing away with history and exam for scoring purposes. Your providers’ utilization of 99204 and 99205 should be the point of focus for your next internal audit.
|New patient visits||2019 distribution||2020 distribution||2021 distribution||Variance (2019-2020)||Variance (2020-2021)|
|Est patient visits||2019 distribution||2020 distribution||2021 distribution||Variance (2019-2021)||Variance (2020-2021)|
Conclusion: The value of benchmarking
As we have shown, data and analytics are playing an increasingly important role in healthcare compliance, and nowhere is this more apparent than in the field of medical record auditing. Both payers and providers rely on statistical sampling, auditing, and analyses of the results to determine where their vulnerabilities lie. The practice of benchmarking – of regularly conducting internal audits for providers, storing their results, and having that data to compare future audits against – is the best defense against payer audits. Don’t forget that E/M services will always be seen by payers as an easy and valuable target. They account for roughly a third of all Medicare Part B expenditures annually and are widely reported by all medical specialties across all settings.
Over the past year, we have seen commercial payers enact aggressive policies to try and reduce their spending on E/M payments. For example, UnitedHealthcare famously began denying all level 5 emergency department codes, then shifted to downcoding level 5 and level 4 services, then expanded their policy to target office/outpatient E/M codes, requesting complete medical records for level 4 and 5 visits. When one payer appears to have found an effective way to reduce provider reimbursement, other payers are often quick to duplicate their successful tactics.
Regular audits and a history of audit data will give your providers confidence that their E/M level selection, particularly for level 4 and 5 services, will hold up in case of payer audit. This gives you a firm foundation upon which to formulate appeals – and successful appeals are a surefire way to incentivize payers to stop wasting their recoupment efforts on your resistant and compliant providers.