E/M Coding Changes for 2023

The last time that evaluation and management (E/M) coding guidelines were significantly overhauled was in 1995 and 1997.

To put that timeframe in context? Hospitalist was a term coined in a 1996 New England Journal of Medicine article.

Well, change is coming to current procedural terminology (CPT) codes on January 1—and with not nearly as much fanfare as some coding experts and policymakers would like.

Among the largest changes:

• The observation CPT codes are collapsing into the inpatient codes so hospitalists would bill the same code for patients regardless of whether they are inpatient or observation.
• There no longer will be an option to bill by history and physical exam. Code leveling will be based on Medical Decision Making and Time, not History and Physical, which will match the previous documentation update for ambulatory services made in 2021.  
• Clinicians don’t need to document a certain number of systems, past medical and family history, etc., anymore. Instead, a “medically appropriate history and physical” is required but does not play a role in code selection.
• The medical decision making table is shifting to align with the office/outpatient table.

“A big part of the driver of all of these changes was a desire to reduce documentation burden and streamline billing and coding rules,” said Joshua Lapps, director of policy and practice management for SHM. “And, along with that, update the values of the codes.” 

Complaints about coding date back as far as most physicians’ careers, as hospitalists have long lamented the lack of HM-specific CPT codes. Still, many physicians now believe that the new coding changes going into effect in January are an opportunity for hospitalists to be more detailed bout the work they do.

“Honestly, this is not a bad upgrade to E and M coding,” said Heather Miles, MHA, CPC, the practice administrator for the department of hospital medicine at St. Dominic Hospital in Jackson, Miss. 

“We’re moving away from unnecessary documentation ‘note bloat’ and moving towards the pertinent values of medical management, medical decision making, and time spent doing it. So, having one primary set of CPT codes on the observation/inpatient side will be extremely helpful for hospitalists.” 

Ms. Miles notes that after January 1, evaluation and management CPT codes will look the same for both observation and inpatient admission unless patients are released within the first 24 hours. Then the “in and out” CPT codes 99234-99236 remain in effect. Ms. Miles, who provides onboarding and provider education at St. Dominic Hospital, adds that the impact of changes in 2023 has almost all medical societies, billing and coding groups, and provider educators planning to bring providers quickly up to speed.

To that end, SHM is committed to developing resources, from a Fact Sheet published earlier this month, and a webinar for hospitalists on Dec. 20, to additional programming and education throughout 2023. And most, if not all, large hospitalist practices are setting up training modules, webinars, and other educational materials for frontline practitioners.

“These changes will impact every facet of billing, coding, and reimbursement, so getting it right the first time is critical to financial stability and sustainability for hospitals and practices seeing patients in the hospital setting,” Ms. Miles said.

Kathryn Raney, RN, MBA, FHM, says training is key to making the transition into the new codes successful—especially as no one goes to medical school to learn CPT coding.

“Physicians, in general, are not trained on this,” said Ms. Raney, a member of SHM’s Public Policy Committee and supervisor of hospitalist operations and utilization review at Hannibal Regional Hospital in Hannibal, Mo. “It’s imperative physicians understand this and realize, ‘If I bill this or that, it can significantly impact my payment structure.”

“Organizations and hospitalists are really going to have to step up and make sure to audit their providers and provide that education and feedback. And if providers are not getting it, they need to go to their coders and say, ‘How am I doing? Where am I at?’ Get that continual feedback to make sure that they’re hitting the mark.”

One of the potential changes many hospital medicine leaders hope to see from the coding transition is cutting down on that so-called “note bloat.”

“It’s not unusual to see a progress note that’s over five pages long, and the relevant portion might be as little as one page,” said SHM Board member Robert Zipper, MD, MMM, SFHM. “I’ve seen five-page problem lists in EMRs that included things like antibiotics given 15 years earlier for a week.”

Dr. Zipper, who served as SHM’s liaison to the American Medical Association’s Relative Value Scale Update Committee (RUC) during the coding transition talks, adds he’s hopeful that a greater focus on medical decision making when selecting billing codes will encourage hospitalists to do less “copy/paste” of past problems and more detailed documentation of what they did in each and every encounter.  

“Documentation should answer the question: What did I do for this patient today?” Dr. Zipper said. “Most documentation today does not do that.” 

While there are concerns about how the new codes might impact compensation, Dr. Zipper notes that AMA did not implement coding changes to impact what providers earn. That said, payors, Medicare contractors, and others will likely be auditing bills closely over the coming months and years, so that makes the accuracy of coding and billing even more important. 

“This can affect multiple budget years,” said Dr. Zipper, chief medical officer for physician advisory and health policy for Sound Physicians in Bend, Ore. “I don’t know that every hospitalist in the U.S. has access to a compliance resource that can give them feedback on their documentation, but for any hospitalists who do, whether it’s their employer or a third party, it’s imperative to be engaging them now.” 

At Sound, Dr. Zipper says they’ve created education and training guides to help physicians find the balance of how much they need to know. 

“People could take hours and hours of compliance training in order to get comfortable with this,” he said. “I don’t think that’s necessary for most clinicians. But I think it’s necessary to spend at least one to three hours learning these materials. And it’s necessary to have direct feedback.” 

Mr. Lapps says SHM recognizes there will be a learning curve this year, particularly as billing under the new rules begins to get audited. He says the Society will work to provide as much support as possible. 

“It’s like how younger generations don’t know a world without a cell phone,” he said. “Given the relative youth of the specialty, most hospitalists don’t know a world where codes were ever any different. Now, all of a sudden there’s a shift happening…hospitalists are going to have to learn the new rules and train themselves and their groups in order to be as successful as they were in 2022.”

Richard Quinn is a freelance writer in New Jersey.