Traps for the Unwary: E/M Coding & Time Guidelines

There is a prevalent misconception that time is the primary component in determining the use of E&M codes. Time is merely a guideline in most situations. Time becomes the controlling factor where counseling and/or coordination of care dominates (more than 50%) the physician/patient and/or family encounter the encounter (face to face time) in the office or outpatient setting, then time may be considered the key or controlling factor to qualify for a particular level of E/M services. Conversely if you are relying upon the three required components, history, examination and medical decision-making, you are not required to document time. You must remember to document the three required components.

“Where providers get tripped up with assigning E/M codes is forgetting the requirement to document total face to face physician/patient time, AND the actual amount of time spent in counseling and/or coordination of care, AND a description of the actual counseling and/or coordination of care.”

Where providers get tripped up with assigning E/M codes is forgetting the requirement to document total face to face physician/patient time, AND the actual amount of time spent in counseling and/or coordination of care, AND a description of the actual counseling and/or coordination of care. Counseling may include a discussion with the patient and/or family concerning one or more of the following: diagnostic results, impressions and/or recommended studies, prognosis, risks and benefits of management or treatment options, instructions for management/treatment options or follow-up, importance of compliance, risk education, patient and family education. Please note that taking patient history, your examination and medical decision-making is NOT counted towards your 50+% of time.

When dealing with new patients, for example, all three components (history, examination and decision-making) must meet or exceed the stated requirements.

Medical Decision-making

# of Diagnoses Complexity of Data Complications or Morbidity/Mortality Type of Decision-making
Minimal Minimal or none Minimal Straightforward
Limited Limited Low Low Complexity
Multiple Moderate Moderate Moderate Complexity
Extensive Extensive High High Complexity

So if the new patient history is comprehensive and the examination is comprehensive, but the medical decision-making is straightforward, then you cannot use CPT 99204 because all three components have not met or exceeded the requirements. In the foregoing example, you would be limited to 99202 which includes expanded problem focused history, expanded problem focused exam, and straightforward decision-making. Unless time spent on counseling or coordination dominates the encounter (50+%) you cannot use a higher code.

Time Guidelines (Used only when counseling/coordination dominates encounter)

Established Patient New Patient Consultation
99212 10 minutes 99201 10 minutes 99241 15 minutes
99213 15 minutes 99202 20 minutes 99242 30 minutes
99214 25 minutes 99203 30 minutes 99243 40 minutes
99215 40 minutes 99204 45 minutes 99244 60 minutes
99205 60 minutes 99245 80 minutes

If you fail to comply with these E/M guidelines and the requisite documentation, you are leaving yourself vulnerable to healthcare audits and recoupment demands.

Simply spending time with a patient will not qualify as counseling or coordination of care. If a patient is receiving infusion therapy, and you simply sit and chat with the patient to be friendly and supportive, it would an error to treat such socialization as “counseling and coordination” for the purpose of using time as the primary component.

Improper Entity Selection

A common error, usually caused by accountants or attorneys without experience in healthcare law, arises in the mistaken belief that doctors can form regular for profit corporations (Inc.). In fact, with a few esoteric exceptions, healthcare licenses must form either a professional services corporation or professional limited liability company. A standard Inc. or LLC will lead to problems with carriers, particularly if you are treating patients insured by Allstate. Allstate has one of the most active special investigation units (SIU) in the state.

The bulk of the description of how a professional corporation is to be organized arises from Ch. 18.100 RCW and the enabling statute for PLLC (RCW 25.15.045) simply refers back to Ch. 18.100 RCW. Shareholders, directors and most officers must be licensed healthcare providers, although secretary/treasurer positions may be held by laypersons.

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