Why you may not have seen a pay increase from the 2021 E/M code revaluation

The 2021 Medicare Physician Fee Schedule (MPFS) included a revaluation of the work relative value units (wRVUs) for many office/outpatient evaluation and management (E/M) services, such as codes 99202-99215. The expected result was an increase of more than 10% in Medicare payments for primary care physicians — and a decrease for some specialists, due largely to a 3.3% decrease in the Medicare conversion factor.

Given the significant increases in wRVUs for E/M services, many primary care physicians have been asking, “Why hasn’t my pay increased?” There are two main factors to consider:

1. The payment and bonus terms in your employment contract

Employed physician compensation often includes a base salary plus a productivity bonus based on wRVUs, collections, etc. If wRVUs make up a significant portion of your compensation formula, your pay should have increased under the new values. To calculate the impact of the increased wRVUs, check out the 2021 wRVU Variance Calculator. If your pay didn’t increase, a key factor to consider is whether your employer revised its compensation plan at the start of 2021. Many employers anticipated that adopting the 2021 wRVU increases for primary care would have been financially untenable while overall revenues were declining due to COVID-19, the reduced conversion factor, and other reasons. Instead of using the new wRVUs in the 2021 MPFS, they may have continued using the wRVUs in the prior year’s fee schedule. Or they may have adopted the new wRVUs but adjusted other parts of the compensation formula, such as the conversion factor or base pay, to help alleviate the economic impact.

Employers that continue to compensate physicians at pre-2021 levels are not passing along the meaningful investments in primary care called for in the 2021 MPFS. Physicians should check their contracts, ask their employers about any discrepancies, and renegotiate as needed. The American Academy of Family Physicians has developed a letter template physicians can use as they advocate with their employers for fair compensation.

Note that your non-Medicare payers may not yet have adopted the wRVU increases in the MPFS. Payment for commercial payers is based on negotiated contracts, which may need to be renegotiated.

2. Your productivity and coding patterns

It’s also possible that your productivity levels aren’t as high as they were pre-COVID due to lower office-visit volumes, which can affect your productivity bonus. Or perhaps your productivity just appears lower due to undercoding under the new E/M coding rules. To evaluate coding patterns, groups can run a report of the frequency with which CPT codes 99202-99215, 99354-99356, 99417, etc., have been billed in 2021 per clinician. The report should be adjusted to take into account patient volume. The same report can be run for 2020 to compare billing patterns. (The Centers for Medicare & Medicaid Services publishes E/M code frequency by specialty, but the data is not yet available for 2020 or 2021.) A chart audit or root cause analysis can then be performed to identify why undercoding may exist and whether clinicians and coders may need some additional coding education.

Physicians’ services may be undercoded for a number of reasons. First, as part of the 2021 changes to E/M coding for outpatient/office settings, clinicians can choose to bill based on total time spent. Both face-to-face time and non-face-to-face time personally spent by the physician or other qualified health care professional on the date of the encounter counts toward total time. The 2021 guidance allows physicians to include the following activities:

• Preparing to see the patient,
• Obtaining and/or reviewing separately obtained history,
• Performing a medically appropriate examination and/or evaluation,
• Counseling and educating the patient, family, or caregiver,
• Ordering medications, tests, or procedures,
• Referring and communicating with other health care professionals (when not separately reported),
• Documenting clinical information in the electronic or other health record,
• Independently interpreting results (not separately reported) and communicating those results to the patient, family, or caregiver,
• Care coordination (not separately reported).

The American Medical Association (AMA) guidance does not require physicians to delineate how much time they spent on each component of the visit. Total time is sufficient. Though it may seem cumbersome, failing to track total time for the visit could result in undercoding of the services rendered.

Another cause of undercoding is lack of documentation in physician notes. Coders can only code based on what is charted. The completeness of the documentation of services rendered may affect the level of E/M services that can be billed using time or medical decision making (MDM). Some examples in which failure to completely document E/M services may affect reimbursements are listed below:

• When diagnostic tests are ordered, physicians should document whether the test was planned, scheduled, or ordered at the time of the E/M encounter. Timing of the test affects whether the test can be counted toward the amount and complexity of data for the visit. Also, the number of tests ordered, reviewed, and interpreted are factors in determining whether the amount and/or complexity of data fits within the low, moderate, or high MDM levels.
• The modified 2021 templates coders use to determine elements of MDM do not track the risk analysis that physicians employ in the treatment of patients. The coder cannot determine the physician’s assessment of a risk that is not documented. The new AMA guidelines permit risk for purposes of E/M service levels to be “based upon the usual behavior and thought processes of a physician or other qualified health care provider in the same specialty.”¹ For example, when physicians determine that a condition has a low probability of death but represents a high risk, a higher E/M code can be assigned, but only if the physician’s notes document the increased risk. Evidence of the physician’s thought processes could be documented in the number and complexity of tests ordered or documents reviewed; the extent of counseling as to treatment options, both considered and rejected; and/or the urgent and emergent procedures required to stabilize the patient. The determination of risk vs. severity of condition must be discussed clearly in physician documentation. Any gap in such documentation affects a coder’s ability to understand the complexity of the problems addressed by the clinician, and most likely will result in the E/M services being undercoded.
• Counseling, or the sharing of information with the patient and family, is part of the problem addressed by the physician and part of the risk of complication and/or morbidity of patient management decisions. As such, it is considered in determining the E/M level. However, it is insufficient to chart "counseled family." To document services that support a higher E/M code, physicians must identify not only their discussion as to the agreed upon treatment plan, but also options discussed and not selected. This documentation directly affects the level of MDM related to risk of complication and/or morbidity or mortality of patient management decisions made at the time of visit.
• Documenting that the physician considered social determinants of health (codes Z55-Z65) could support a moderate E/M code as opposed to a lower level.
• Clear documentation is required to demonstrate care coordination. Notation in the patient’s medical record that another professional is managing the problem, without documenting the additional assessment or care coordination, is not reimbursable because the limited notation cannot be considered as supporting the "problem addressed" element of MDM. Likewise, a referral to another physician without documentation of a history, examination, or results of diagnostic tests does not support an assessment that the physician addressed that problem.

The 2021 E/M code revaluation should have resulted in an investment in primary care. Employers that did not implement these changes will have to wrestle with them again in 2022. Physicians may need to address these issues with their employers and examine their coding patterns to ensure they are being reimbursed adequately for their work.

— Sabrina Skeldon, JD, CPC-A, CIA, CCEP, CHC, CFE

1. CPT Evaluation and Management (E/M) Office or Other Outpatient (99201-99215) and Prolonged Services (99354, 99355, 99356, 99417) Code and Guideline Changes. AMA; 2021:7.