E/M Level Selection Under Audit After the 2021 Changes

The office and outpatient evaluation and management (E/M) codes physicians bill most, 99202 through 99215, changed how they are leveled on January 1, 2021, when the American Medical Association's revised Current Procedural Terminology (CPT) guidelines, adopted by the Centers for Medicare & Medicaid Services (CMS), removed history and physical exam as factors in code selection. Five years later, that same framework, time or medical decision making (MDM), is the primary target of Medicare Administrative Contractor (MAC) and Recovery Audit Contractor (RAC) review. An auditor who concludes the documentation supports a lower level than billed calls it upcoding, and the consequence is a recoupment demand that can reach back across the full audit lookback period.

The 2021 E/M Framework: Time or Medical Decision Making

Effective January 1, 2021, CMS adopted the AMA's revised guidelines for codes 99202-99205 (new patient) and 99212-99215 (established patient), eliminating code 99201 and removing history and exam as level-determining elements. A physician now selects the level using either total time personally spent on the date of the encounter or MDM, whichever reflects what the visit actually involved. Total time counts all time the billing practitioner spends on that date, face-to-face and non-face-to-face: reviewing records, examining the patient, counseling, ordering tests, documenting, and coordinating care. New patient time thresholds run from 15-29 minutes for 99202 up to 60-74 minutes for 99205; established patient thresholds run from 10-19 minutes for 99212 up to 40-54 minutes for 99215.

How the Medical Decision Making Level Is Set

MDM is scored across three elements: the number and complexity of problems addressed, the amount and complexity of data reviewed and analyzed, and the risk of complications, morbidity, or mortality from the management decisions made. The overall level is the highest level met or exceeded by at least two of the three elements, not the highest element alone. A stable chronic condition scores differently than one with severe exacerbation, and the physician's own judgment about stability, not the diagnosis code, drives that distinction. History and exam still belong in the record for clinical continuity, but they no longer support the billed level on their own.

Where Audits Target the Level Billed

A RAC, UPIC, or MAC review of an E/M claim asks one question: does the note support the method the physician actually used to select the code. That review typically opens with an additional documentation request asking the physician to produce the visit note and supporting records within a set window. CMS's CERT program applies the same coding standard when it samples claims nationally to calculate the Medicare fee-for-service improper payment rate. A note billed by time that does not state the total time and the activities performed collapses on review; a note billed by MDM that does not document the problems, data, and risk considered gets the same treatment. When a sample shows a pattern of unsupported levels, the finding is subject to extrapolation across the full audit period, and the extrapolated total becomes the recoupment demand.

A visit note only has to support the method the physician actually used to bill the code, but it has to support that method completely: the total time and the activities performed, or the specific problems, data, and risk considered.

Why Early Legal Counsel Is Critical

It is critical that physicians promptly retain experienced healthcare defense counsel upon receiving a Medicare E/M audit notice, an additional documentation request, or notice of a post-payment review. Early legal intervention can protect the physician's rights, ensure appropriate responses to the reviewing contractor, avoid inadvertent admissions in the audit response, preserve appeal rights, and let counsel communicate with auditors on the physician's behalf. Delaying representation can significantly affect the outcome, particularly once an extrapolated demand is already in motion.

How Health Law Alliance Can Help

Health Law Alliance defends physicians against Medicare E/M audits at every stage, from the initial documentation request through appeal and, where extrapolation is at issue, the statistical challenge to the sample. The firm's Medicare audit defense practice reviews the visit notes against whichever method, time or MDM, the physician used to bill the code, and builds the response around what the documentation actually supports. If your practice has received an E/M audit notice, contact us for a free, confidential consultation.