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Winter 2009

Understanding the Bell-Shaped Curve of Evaluation and Management Services

Deena Andrews, CPC
Coding Department Manager, ABC

Many practices at ABC not only perform anesthesia and pain medicine services, but also see patients for evaluation & management services (E&Ms). The reasons for providing these services vary. They include assessing chronic pain conditions or performing a history and physical to determine the appropriateness of anesthesia. Correct documentation and coding is essential to make sure that the documentation and coding represent what you did for the patient. In this article, we will attempt to give you some fundamentals of these services. We will also look at the bell shaped curve of E&M services.

When documenting an E&M service, the first thing a practitioner needs to decide is whether the patient is new or established. In general, a patient is considered new if he or she has not been seen by anyone of the same specialty in your group within the last 3 years. To clarify, if a provider has the specialty designation of either interventional or chronic pain and the patient had anesthesia by an anesthesiologist in the group without these designations in the last three years, the pain service can be billed as a new patient. On the other hand, if the pain physician does not have an interventional or chronic pain designation, and is billing under the anesthesiology designation, a new visit would not be billable. If a patient is not a new patient based on the above criteria, bill for an E&M service for an established patient.

The next step is to decide the type of service you will be performing: a consult or a visit. A consult can be billed when your opinion is requested by an appropriate source. If the referring provider wants you to take over the care of the patient for the particular condition, you will not have a consult, but a visit (e.g., if you received a referral script for injections). The other requirements of a consult are that there must be an order in the chart for the opinion (in both the requesting & consulting physician’s records), there must be a written report, and this report must be shared with the referring provider.

Should your evaluation not be for a new patient or a consult, you would be looking at a follow-up visit. Note that a follow-up visit is billable separately from and in addition to a procedure only approximately 1-2% of the time. The reason for this is that in order to bill for the visit you must have a separately identifiable diagnosis that does not relate to the procedure that is being performed. The evaluation of the patient prior to a procedure is included in the fee schedule for the procedure.

Once the questions above have been answered, one can move forward with the documentation of the evaluation and management service. The three primary components of an E&M service are: History, Examination, and Medical Decision Making. Another key consideration in deciding the level of service is medical necessity.

“Medical necessity” is the overarching criterion for payment, in addition to the components mentioned above. The volume of documentation should not be the primary influence for choosing a level of service. Therefore, after meeting the documentation requirements as stated above, determine whether the level of service is necessary for the condition evaluated.

All health insurance carriers compare data at national and local levels to target outliers for audits. In general terms, carriers expect the graph that represents the different levels (intensity) of E&M codes to take the shape of a bell curve. To help limit your practice’s vulnerability to an insurance audit, you should compare the data for your practice to national and local benchmarks. On page 8 is a graph (Figure 1) that represents national benchmarks for the second quarter of 2008 for consults and new visits in the ABC claims database. You will see the bell-shaped curve mentioned above. You will further observe that the intensity (CPT level I-V) of new visits skews to the left and the intensity of consults is skewed to the right. This skewing might be explained by the fact that consultations are by definition requested by another provider, which would indicate that the patient likely needs a more comprehensive evaluation than the typical Level III.

The second graph (Figure 2) represents follow-up visits. This includes (1) visits that were not performed in conjunction with a procedure, (2) visits that were performed in conjunction with a procedure but are separately billable and (3) visits that are not separately billable. You will see that there is the same bell shaped curve, but it is narrower. This is because follow-up visits tend to be non-crisis related and therefore would not have the extremes that you would have in consults and new patient visits.

The majority of practices do not follow the bell precisely. There are reasons why a provider might be skewed one way or the other. Some of the reasons for skewing to the left could be that hand-written notes are used. In ABC’s experience with hand-written notes, we find that these notes typically do not support higher levels of service. In the same vein, you might have such a busy practice that there is less time for thorough documentation and therefore, even though the work has been performed, it is not documented to the extent needed to support a higher level of service.

Reasons for the curve skewing to the right include the possibility that you have a newer practice. If so, you may be seeing higher acuity patients and spending more time with them. You also have more time for thorough documentation of your services since you have a smaller volume of patients. Another reason for a skew to the right could be that your practice has a high percentage of elderly patients whot require prolonged services for chronic illnesses. In ABC’s experience, the major factor contributing to higher levels of service is the use of electronic medical records (EMRs). EMRs, by nature, help the provider better document the services that are performed in a shorter period of time. An EMR also requires documentation at the time of service and that is when the details of the service that was delivered are in the physician’s immediate awareness.

There are other reasons for skewing to the left or right, but note that upon an audit either direction will be questioned. Your best strategy is to understand the rules for billing evaluation and management codes and to document correctly.