Issue Spotlight: Proposed Changes to Medicare E&M Visits

Originally published in the July 18, 2018 issue of MGMA’s Washington Connection
Reprinted with permission from MGMA

The Centers for Medicare & Medicaid Services (CMS) released the 2019 Medicare Physician Fee Schedule proposed rule that would affect Medicare physician reimbursement policies beginning in 2019. Among other changes, CMS proposes to:

  • Collapse evaluation and management (E&M) Levels 2-5 into one level for new patients and another for established patients. The average national payment would be $135 for new patients and $93 for established patients.
  • Allow clinicians to choose to document office and outpatient E&M visits using medical decision-making or time or continue using the current 1995 or 1997 E&M documentation guidelines.
  • Create a minimum documentation standard so clinicians would only need to meet requirements currently associated with a level 2 visit for history, exam, or medical-decision making (except when using time to document the service).

To help MGMA evaluate the impact of these proposed changes and advocate on behalf of medical group practices, please share your feedback on these proposals by filling out this brief comment form.


MLN Connects: Thursday, February 15, 2018

MLN Connects is the official news source of the Medicare Learning Network (MLN). Here is the latest news, posted February 15, 2018. Click on the header links for detailed information about each bullet item.

News & Announcements

  • MIPS Reporting Deadlines Fast Approaching: 10 Things to Do and Know
  • Quality Payment Program: Performance Scores for 2017 Claims Data
  • Diabetic Self-Management Training Accreditation Program: New Webpage and Helpdesk
  • Measures of Hospital Harm: Comment by February 16
  • EHR Incentive Program: Accepting Proposals for New Measures by June 29
  • New Option for Submission of Medicare Cost Reports

Provider Compliance

  • Home Health Care: Proper Certification Required — Reminder

Claims, Pricers & Codes

  • January 2018 OPPS Pricer File

Upcoming Events

  • Improving Accessibility of Provider Settings Webinar — February 21
  • ESRD QIP: Final Rule for CY 2018 Call — February 22
  • 2018 QCDR Measures Workgroup Webinar — February 27
  • Serving Adults with Disabilities on the Autism Spectrum Webinar — February 28
  • MIPS Quality Data Submission Webinar — February 28
  • Palliative and Hospice Care for Adults with Disabilities Webinar — March 7
  • Low Volume Appeals Settlement Option Update Call — March 13
  • Open Payments: The Program and Your Role Call — March 14
  • MIPS Attestation for Advancing Care Information and Improvement Activities Webinar — March 14

Medicare Learning Network Publications & Multimedia

  • Medicare Enrollment Resources Educational Tool — Revised
  • PECOS FAQs Booklet — Revised
  • PECOS for DMEPOS Suppliers Booklet — Revised
  • Safeguard Your Identity and Privacy Using PECOS Booklet —Revised
  • PECOS for Provider and Supplier Organizations Booklet — Revised
  • PECOS Technical Assistance Contact Information Fact Sheet — Revised
  • Health Professional Shortage Area Physician Bonus Program Fact Sheet — Revised
  • Medicare Secondary Payer Booklet – Reminder
    Beneficiaries in Custody under a Penal Authority Fact Sheet — Reminder

MLN Connects: Thursday, February 1, 2018

MLN Connects is the official news source of the Medicare Learning Network (MLN). Here is the latest news, posted February 1, 2018. Click on the header links for detailed information about each bullet item.

News & Announcements

  • Medicare Diabetes Prevention Program: Supplier Enrollment Open
  • Targeted Probe and Educate: New Resources
  • MIPS Clinicians: 2017 Extreme and Uncontrollable Circumstances Policy
  • Quality Payment Program: Patient-facing Encounters Resources
  • Eligible Hospitals and CAHs: Get Help with Attestation on QNet
  • Find Medicare FFS Payment Regulations
  • February is American Heart Month

Provider Compliance

  • Cochlear Devices Replaced Without Cost: Bill Correctly — Reminder

Upcoming Events

  • eCQM Reporting for Hospital IQR-EHR Incentive Program Webinar — February 6
  • Low Volume Appeals Settlement Option Call — February 13

Medicare Learning Network Publications & Multimedia

  • Next Generation Accountable Care Organization – Implementation MLN Matters® Article — Revised
  • DMEPOS Quality Standards Educational Tool — Revised
  • Home Oxygen Therapy Booklet — Revised
  • Looking for Educational Materials?

MLN Connects: Thursday, January 18, 2018

MLN Connects is the official news source of the Medicare Learning Network (MLN).  Below is the latest news from Thursday, January 18th:

News & Announcements

  • 2018 Value Modifier Results and Payment Adjustment Factor
  • Final DMEPOS Quality Standards for Therapeutic Shoe Inserts
  • Glaucoma Awareness Month: Make a Resolution for Healthy Vision

Provider Compliance

  • CMS Provider Minute Video: CT Scans – Reminder

Upcoming Events

  • New Medicare Card Project Special Open Door Forum – January 23
  • ESRD QIP: Final Rule for CY 2018 Call – January 23
  • MIPS Annual Call for Measures and Activities Webinar – February 5
  • Comparative Billing Report on Opioid Prescribers Webinar – February 21

Medicare Learning Network Publications & Multimedia

  • QRUR Video Presentation – New
  • Low Volume Appeals Settlement Call: Audio Recording and Transcript – New
  • Avoiding Medicare Fraud & Abuse: A Roadmap for Physicians Web-based Training – Revised
  • How to Use the Medicare Coverage Database Booklet – Revised
  • Behavioral Health Integration Services Fact Sheet – Revised

Value-Based Coding in a Changing Environment


With ICD-10-CM comes a new dawn in physician documentation and a much more transparent clinical footprint.  Government payers, insurers, hospitals, health systems, medical groups and others will use ICD-10’s granular data to determine accurate, fair physician compensation and reimbursement.

Diagnosis Coding is Vital to Fair Provider Compensation.   Medical groups are signing payer contracts that adjust payment for a contract year based on quality measures, outcomes, utilization and the acuity of care for a patient population. The payor measures acuity of care by reviewing the patient’s age, gender and medical conditions. Where does the payor get the list of medical conditions? Diagnosis codes on claims!  Medicare Advantage Plans base incentive payment on Risk Adjustment Factor (RAF) Scores.

Diagnosis Coding is Vital to Fair Funding to Insurance Plans. The purpose of a Risk Adjustment model is to predict the future health care costs for enrollees in Medicare Advantage plans. CMS is then able to provide capitation payments to these plans. Additional funding to the plans in the form of Capitation payments help the health plans to enroll not only healthier individuals but those with chronic conditions or who are more seriously ill.

HHS Payment Goals are to help drive the health care system towards greater value-based purchasing. Rather than continuing to reward volume regardless of quality of care delivered CMS is focused in improving outcomes and reducing cost. Alternative payment models include Accountable Care Organizations (ACOs), bundled payments, and advanced primary care medical homes. Specifically, they want to:

  • move 50% of Medicare payments into alternative payment models by the end of 2018.
  • move 90% of Medicare payments to a model tied to quality or value by 2018.

Under MACRA (Medicare Access and Chip Reauthorization Act) there is a merge of previously introduced payment incentive programs, including: 

  • Merit-Based Incentive Program (MIPS)
  • Physician Quality Reporting System (PQRS)
  • Value-Based Payment Modifier (VBM)

Clinical Practice Improvement Programs have included Meaningful use of certified EHR technology and Alternative Payment Models (APMs). From 2019-2024, some providers will receive a lump-sum payment for Increased transparency of physician-focused payment models. Starting in 2026, CMS will offer some providers higher annual payments.  APM Criteria includes coordinating care; improving quality, reducing costs.

Hierarchical Condition Category Model (HCC) affects Medicare Advantage Plans (aka Medicare Part C) which have been paid under an HCC model since 2004. HCC is a risk adjustment model which identifies patients with serious acute or chronic illnesses and assigns a risk factor score to the beneficiary based on the patient’s demographics and medical history.  The government contracts with for-profit insurers to manage health care for these patients, and pays insurers a yearly fee for each member they enroll. The higher the risk score, the higher the annual fee.

Hierarchical Condition Category Model (HCC) Calculations

Each patient is assigned a Risk Adjustment Factor (RAF) score. RAF scores are based on:

  • Patient’s age and sex
  • Medicaid or disability status
  • Total of all chronic conditions and disease interactions

RAF scores identify the patient’s health status. Lower RAF scores indicate a healthier patient and higher RAF scores indicate a sicker patient.  The Average FFS patient has a score of 1.00.

How does HCC Affect Payment? RAF scores are additive. All qualifying diagnoses are included in the RAF score. Risk factors are added to achieve total RAF scores for each patient. RAF scores are predictive, and ICD-10 codes reported this year determine payments for next year.  Remember, the payment for the RAF score is from CMS to the Medicare Advantage Plan. Then Plan distributes the incentive bonus to all providers participating in the care of the patient.  This payment is in addition to the contractual fee-for-service payments and is paid annually.

It is important to remember that the health status is re-determined each year, therefore codes must be submitted every year to be counted.  Past data is not carried forward, and the RAF for each patient is reset every year.  Also, payment is made per HCC category (not per diagnosis code). A patient with 4 ICD-10 codes from category E11 for Type II Diabetes Mellitus with complications will only receive credit once for complicated Diabetes Mellitus (HCC 18), and not 4 times that value in the RAF score.

How to Achieve Accurate RAF Payment

The Annual Health Assessment is very important. Consider implementing a program to have a staff member call all Medicare Advantage members to schedule their Annual Wellness Visit and be sure the Risk Assessment, required screenings, and status of all chronic conditions is addressed and documented to qualify as a “reportable” diagnosis.  The claim should include accurate and specific diagnosis coding.

Example of How Diagnosis Codes Affect Payment

Table1A patient is seen in your office.  Patient is a 64-year-old disabled female.  She has Type II diabetes and Diabetic Chronic Kidney Disease. The patient also has congestive heart failure and Stage IV CKD (GFR 24 ml/min Filtration).  The patient is obese with a BMI of 56, is on insulin and is paraplegic.  (see table)

Common HCC Categories

Chronic Kidney Disease
Diabetes Mellitus
Peripheral Arterial Disease (PAD)
Major Depressive Disorders
Stroke and Late effects of prior Stroke
Chronic Conditions
History of Heart Attack
Renal Dialysis Status
Tracheostomy Status
Respirator Dependence
Lower Limb Amputee
Organ Transplant Status
Asymptomatic HIV Status
Protein Calorie Malnutrition
Alcohol Dependence & Drug Dependence

What supports coding for HCC?

Use Current ICD-10 Codes. Effective October 1, 2017 the Centers for Medicare & Medicaid Services (CMS) and the Centers for Disease Control and Prevention (CDC) added or updated approximately 620 diagnosis codes in the 2018 ICD-10-CM coding classification.

  • 360 new codes added
  • 226 code descriptions revised
  • 34 codes changed from valid to invalid
    • Validity changes are the result of new codes being added to the classification, changing a previously valid code to an invalid code, creating a new subcategory
    • Example: a valid 4-character code now requires 5 characters
  • There are also updates to the 2018 ICD-10-CM Official Guidelines for Coding and Reporting that impact medical record documentation, code selection and sequencing.

Adherence to the Guidelines when assigning ICD-10-CM diagnosis codes is required under HIPAA in all healthcare settings.

ICD-10-CM and Documentation – Use the MEAT Acronym.  A condition is reportable when the condition was Monitored, Evaluated, Assessed or Treated.  Do not report a diagnosis code that was not addressed during the encounter or documented in the note.  Our auditors have found errors when the main note does not mention a problem, but ancillary documentation such as medication lists and referrals contains orders for those conditions. The medication list may include Prednisone 5mb PO daily for asthma, but asthma is not mentioned in the history, exam or assessment portion of the note.  Referrals for consultations and tests can be found in the note (Ex: chest x-ray confirms pneumonia) without mentioning pneumonia in the assessment portion of the note.

Steps to take in your Practice: Identify HCC Categories that are clinically meaningful. What chronic diseases do your sickest patients have?  The HCC diagnosis categories are well defined. Meet with your clinicians and decide which specific diseases/conditions are common. The ICD-10 codes are grouped to each HCC category.  There are more than 9,000 ICD-10-CM codes map to 79 HCCs in the current risk adjustment model.  Diagnosis codes are excluded from mapping when they do not predict future cost or are vague or variable in diagnosis, coding or treatment. An example is symptom codes or osteoarthritis.

Risk Adjustment Data Validation (RADV) are a reality when participating in an incentive program.  CMS audits Medicare Advantage (MA) plans for accuracy of risk-adjustment payments and compares accuracy of coding to medical record. Medicare Advantage (MA) plans can be audited annually.  MA plans audit provider records to ensure compliance.  If you are selected, you will be required to submit medical records to substantiate coding. Audits may include the entire note to verify that it supports the level of service billed, medical necessity, and all codes reported.  Common errors from RADV audits show that electronic medical record was not authenticated, or medical record does not have legible signature or appropriate credentials

Parting Thoughts.  Does your practice have a compliance program? Make it stronger by Including risk adjustment audits to validate clinical documentation. Use audit results to provide education to all clinicians and coders, and continue to audit CPT coding documentation. Continue to monitor patient visits to ensure annual reporting.

About the Author: 

Nancy M Enos, FACMPE, CPC-I, CEMC is an independent consultant with the MGMA Health Care Consulting Group.   Nancy was a practice manager for 18 years before she joined LighthouseMD in 1995 as the Director of Physician Services and Compliance Officer.  In July 2008 Nancy established an independent consulting practice.

As an Approved PMCC Instructor by the American Academy of Professional Coders, Nancy provides coding certification courses and consultative services.  Nancy frequently speaks on coding, compliance and reimbursement issues.  Nancy is a Fellow of the American College of Medical Practice Executives. She is a Past President of MA/RI MGMA.  EMAIL:

MLN Connects: Thursday, January 11, 2018

MLN Connects is the official news source of the Medicare Learning Network (MLN). Here is the latest news, posted January 11, 2018.  Click on the header links for detailed information about each bullet item.

News & Announcements

  • New Payment Model to Improve Quality, Coordination, and Cost-effectiveness for Both Inpatient and Outpatient Care
  • SNF Quality Reporting Program Confidential Feedback Reports
  • Hospital Quality Reporting: Updated CY 2018 QRDA I Schematron
  • January is Cervical Health Awareness Month

Provider Compliance

  • Proper Use of the KX Modifier for Part B Immunosuppressive Drug Claims – Reminder

Upcoming Events

  • New Medicare Card Project Special Open Door Forum – January 23
  • ESRD QIP: Final Rule for CY 2018 Call – January 23

Medicare Learning Network Publications & Multimedia

  • Major Joint Replacement (Hip or Knee) Booklet – New
  • Medicare-Required SNF PPS Assessments Educational Tool – Revised

MLN Connects: Thursday, January 4, 2018

News & Announcements

  • CMS Launches Data Submission System for Clinicians in the Quality Payment Program
  • CMS Updates Website to Compare Hospital Quality
  • Patients over Paperwork: Get Updates on Burden Reduction
  • Quality Payment Program: Qualified Registries and QCDRs
  • Quality Payment Program Resources
  • EHR Incentive Program Hospitals: Use QNet to Attest
  • Medicare Diabetes Prevention Program Resources
  • Post-Acute Care Quality Reporting Program Section GG Web-based Training
  • Hospice Compare Update
  • Are You Prepared for a Health Care Emergency?
  • Get Your Patients Off to a Healthy Start in 2018

Provider Compliance

  • Hospice Election Statements Lack Required Information or Have Other Vulnerabilities – Reminder

Upcoming Events

  • Low Volume Appeals Settlement Option Call – January 9
  • ESRD QIP: Final Rule for CY 2018 Call – January 23

Medicare Learning Network Publications & Multimedia

  • Dementia Care Call: Audio Recording and Transcript – New
  • Avoiding Medicare Fraud & Abuse: A Roadmap for Physicians Booklet – Revised