CMS Proposes Sweeping Changes to E/M Service Codes and Telemedicine

The Centers for Medicare & Medicaid Services (CMS) recently published a proposed rule that, if codified, would bring about sweepings revisions to many Medicare payment policies under the physician fee schedule. Among many other changes CMS is proposing to simplify the documentation requirement for evaluation and management (E/M) code levels 2 through 5 but also proposes a flat fee for those levels of services. These and certain other proposed policy changes are briefly summarized below. 

E/M Services – Major Changes Suggested; New Podiatry Codes

The agency’s most drastic change to E/M services is a proposal to pay a single rate for an E/M visit levels 2 through 5 for new patients as well as a single rate for an E/M visit levels 2 thought 5 for established patients. (CPT codes 99202 through 99205 and 99212 through 99215, respectively). This payment change also comes with a proposal to simplify the documentation requirement – a step that many practitioners may welcome.

Under the new proposal, practitioners would be able to document their services using either medical decision making (MDM) or time instead of the current framework which relies on the 1995 or 1997 guidelines. Practitioners, however, will have the choice to continue documenting an E/M visit by using the existing guidelines as that will not be abolished by the proposed rule. All practitioners (even those choosing to retain the current documentation framework), would be paid at the proposed new payment rate.

CMS is also proposing to simplify the documentation requirement to one where practitioners would only need to document to what is currently associated with a level 2 visit for history, exam and/or MDM (except when using time to document the service) if practitioners use the current framework to document services for any visit level 2 through 5. Practitioners could choose to document more information for clinical, legal, operational or other purposes, however, for payment and audit purposes, CMS would only seek information currently associated with a level 2 visit.

If the practitioner was choosing to document based on MDM alone for any E/M visit level 2 through 5, Medicare would only require documentation supporting straightforward medical decision-making measured by minimal problems, data review, and risk (two of these three). In proposing to allow practitioners the option to use time as the single factor in selecting visit level and documenting the E/M visit, the current reliance on whether counseling or care coordination dominate the visit will be disregarded. Under the proposed rule, practitioners electing to use time to document an E/M visit would be required to document the medical necessity of the visit and show the total amount of time personally spent by the billing practitioner face-to-face with the patient.

In its proposed rule, CMS has stated that “eliminating the distinction in payment between visit levels 2 through 5 will eliminate the need to audit against the visit levels, and therefore, will provide immediate relief from the burden of documentation. A single payment rate will also eliminate the increasingly outdated distinction between the kinds of visits that are reflected in the current CPT code levels in both the coding and the associated documentation rules.”

CMS also seeks to further simplify the documentation requirement of history and exam for established patients such that, for both of these key components (ROS and/or PFSH), practitioners would only be required to focus their documentation on what has changed since the last visit or on pertinent items that have not changed (rather than re-documenting a defined list of required elements). Similarly, CMS is also proposing that that for both new and established patients, practitioners would no longer be required to re-enter information in the medical record regarding the chief complaint and history that are already entered by ancillary staff or the beneficiary. The practitioner would have the option to indicate in the medical record that they reviewed and verified this information. Practitioners, however, can continue to use the current framework to document E/M visits (i.e., more detailed information could continue to be entered, re-entered or brought forward in documenting a visit).

CMS has also proposed eliminating documenting the medical necessity for home visits. Currently, Medicare pays for E/M services furnished in the beneficiary home who does not need to be confined to the home to recieve those services. The Medicare Claims Processing Manual, however, requires the practitioner to document the medical necessity of the home visit made in lieu of the office visit. In response to stakeholder suggestions that “whether a visit occurs in the home or the office is best determined by the practitioner and the patient without applying additional rules,” CMS is proposing to remove the requirement that the medical record must document the medical necessity of furnishing the visit in the home rather than in the office (codes 99341 through 99350).

The agency is also seeking public comments on its proposal to eliminate the prohibition on billing same-day visits by practitioners of the same group and specialty.

Podiatry codes are being re-examined by the agency. Here, CMS is proposing to establish new G-codes rather than reporting visits under the general E/M office/outpatient visit code set. The proposed rule would have podiatrists reporting visits under the new code sets that more specifically identify and value their services. CMS is proposing to keep the simplified documentation standards for these proposed new podiatry-specific codes as for other office/outpatient E/M visits.

CMS recognized that the proposed changes concerning E/M services constitute a “relatively broad outline of changes …, and we anticipate that many details related to program integrity and ongoing refinement would need to be developed over time through subregulatory guidance.”


Beginning January 1, 2019, CMS is proposing to pay separately for a newly defined type of physicians’ service furnished using communication technology. This service would be billable when a physician or other qualified health care professional has a brief nonface-to-face check-in with an established patient via communication technology, to assess whether the patient’s condition necessitates an office visit. However, in instances when the brief communication technology-based service leads to an E/M in-person service with the same physician or other qualified health care professional, this service would be considered bundled into the pre- or post- visit time of the associated E/M service, and therefore, under the proposal, would not be separately billable.

This proposal is one of several Medicare physician payment for communication technology-based services that would not be subject to the limitations on Medicare telehealth services in section 1834(m) of the Social Security Act (42 U.S.C. 1395m(m)). As detailed in the proposed rule, CMS does not consider such services to be Medicare telehealth services; instead, they would be paid under the physician fee schedule like other physicians’ services. The proposed services are still subject to applicable privacy and security laws, including the HIPAA Privacy Rule.

Similarly, beginning January 1, 2019, CMS is proposing to create specific code that describes the remote professional evaluation of patient-transmitted information conducted via pre-recorded “store and forward” video or image technology. CMS is proposing that this service would be a stand-alone service that could be separately billed to the extent that there is no resulting E/M office visit and there is no related E/M office visit within the previous 7 days of the remote service being furnished.

Diagnostic Imaging

Among the many changes CMS is setting forth is a proposal to specify that all diagnostic imaging tests may be furnished under the direct supervision (rather than personal supervision) of a physician when performed by radiologist assistants in accordance with state law and state scope of practice rules. The proposal would not change the level of physician supervision to direct supervision for those diagnostic imaging tests requiring only a general level of physician supervision.

Proposed Changes to Modifier -25

CMS is proposing to reduce payment by 50 percent for the least expensive procedure or visit that the same physician (or a physician in the same group practice) furnishes on the same day as a separately identifiable E/M visit, currently identified on the claim by an appended modifier -25. In making this proposal, CMS made comparisons to surgical payment reductions whereby Medicare reduces payment by 50 percent for the second and subsequent surgical procedures furnished to the same patient by the same physician on the same day based on CMS calculated efficiencies in PE and pre- and post-surgical physician work. Similarly, according to CMS, “the efficiencies associated with furnishing an E/M visit in combination with a same-day procedure are similar enough to those accounted for by the surgical [multiple procedure payment reduction] to merit a reduction in the relative resources of 50 percent.”

Stakeholder comments on the proposed rule are due by September 10, 2018.

If you have questions regarding any aspect of the proposed rule or have other health law related questions please contact our office.