CMS has proposed a significant change to the evaluation and management (E/M) code set. This code set represents the highest volume/highest expenditure current procedural terminology (CPT®) code set in the Medicare Physician Fee Schedule (MPFS) — totaling more than $47 billion in spending in 2017, which was approximately half of all MPFS spending. At first glance, this may seem relatively insignificant to the ACR, since clinical encounter codes are not necessarily at the core of what we do. But understanding the changes to the E/M code set may be germane to radiology at two levels:
- The specialty, particularly radiation oncology and IR members, bills E/M frequently.
- The secondary effects and precedent of this policy change are relevant.
Earlier this year, in accordance with the president’s executive order directing federal agencies to reduce regulatory burden, CMS presented its “Patients Over Paperwork” initiative. The policy changes resulting from this initiative have been far-reaching, predicted to reduce an astonishing 6,000 years of burden for healthcare stakeholders over the next three years.
The E/M code changes are a product of this initiative, and CMS is only proposing changes to the physician office-based E/M codes. The codes are differentiated by place of service (inpatient versus outpatient), nature of the encounter (new versus established patient), and level of complexity (on a scale of 1 through 5). The level of complexity is based on a combination of elements associated with medical history, examination, and decision-making. Keeping track of all the associated reporting requirements is burdensome, resulting in billing and documentation challenges for physicians.
Basically, the CMS proposal collapses the E/M codes into two levels by making no payment differential or reporting requirements distinction between levels 2 through 5. Therefore, the reporting requirements are lower, and the payments for more complex services also decrease. As a result, the proposal has received criticism, especially from specialties that see more complicated patients. In response, the AMA has formed a combined CPT/RVS Update Committee workgroup to modernize the E/M code set. The group’s goals include reducing the administrative burden of documentation, including unnecessary documentation for patient care. In other words, it aims to simplify documentation, coding, and compliance.
So what do these E/M code changes mean for radiology? We will need to monitor and contribute to the potential code changes, ensuring that the new codes capture what our members provide. These changes may present us with opportunities. For instance, greater E/M reporting would capture activities related to imaging-directed consultations, pre-procedure planning, and post-procedure follow-up. And from a diagnostic imaging perspective, we want to ensure that the value of diagnostic imaging to E/M-related patient care is recognized and valued.
Secondary impacts and consequences are worth considering. If the E/M codes receive an increase in total payment, a budgetary adjustment to the rest of the fee schedule is possible. In other words, if E/M payments go up, radiology payments could go down. There are potential implications to the technical component payments (which translate to practice expense) due to shifts in a variable called the Indirect Practice Cost Index.
There may not be much we can do about these secondary consequences, but we will monitor them so that policymakers are aware of downstream consequences. Also, if CMS proves willing to simplify the coding, reporting, and payment structure of the largest, most reported code set in the MPFS, the same could be undertaken for other codes, such as those in radiology.
At first glance, the changes to the E/M code sets may seem inconsequential to radiologists. However, as the new E/M coding and documentation requirements change under the proposed rule, the primary and secondary consequences will matter to our specialty.