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Medical Necessity for Evaluation and Management Services
- Federal law requires that all expenses paid by Medicare, including
expenses for Evaluation and
Management (E/M) services, are "medically reasonable and necessary."
- Medical necessity of E/M services is generally expressed in two
ways: frequency of services and intensity of
service (Current Procedural Terminology (CPT) level).
- Medicare's determination of medical necessity is separate
from its determination that the E/M service was
rendered as billed.
- Medicare determines medical necessity largely through the experience
and judgment of clinician coders
along with the limited tools provided in CPT and by the Centers
for Medicare & Medicaid Services (CMS).
- At audit, Medicare will deny or downcode E/M services that, in
its judgment, exceed the patient's
documented needs.
- Information used by Medicare is contained within the medical
record documentation of history,
examination and medical decision-making. Medical necessity of E/M services
is based on the following
attributes of the service that affected the physician's documented
work:
- Number, acuity and severity/duration of problems addressed through
history, physical and medical decisionmaking.
- The context of the encounter among all other services previously
rendered for the same problem.
- Complexity of documented comorbidities that clearly influenced
physician work.
- Physical scope encompassed by the problems (number of physical
systems affected by the problems).
TIPS FOR CORRECT CODING OF E/M SERVICES BASED ON MEDICAL NECESSITY
- Identify all the presenting complaint(s) and/or reason(s) for
the visit for which physician work occurred.
- Demonstrate clearly the history, physical and extent of
medical decision-making associated with each
problem.
- Demonstrate clearly how physician work (expressed in terms
of mental effort, physical effort, time spent and
risk to the patient) was affected by comorbidities or chronic problems
listed.
- Ensure the nature of the patient's presentation corresponds
to CPT's contributory factors of nature of the
presenting problem and/or patient status descriptions for the code
reported. For instance:
- 99231 - "Usually the patient is stable, recovering or improving."
- 99232 - "Usually the patient is responding inadequately
to therapy or has developed a minor complication."
- 99233 - "Usually the patient is unstable or has developed
a significant complication or a significant new
problem."
- Utilize Clinical Examples in CPT Appendix C.
- The clinical examples are believed by CPT to represent
the physician work that is reasonable and necessary
in order to provide appropriate patient care in the specified clinical
circumstance of the example.
- Understand that Medicare expects actual documentation of
services similar to the ones in the examples to
also satisfy CMS documentation requirements to demonstrate that
the service billed was provided.
