3 Tips Provide a Guide to Help You Design Your Internal E/M Guidelines

Ambulatory Coding & Payment Report 2008: Volume 13, Number 9

Periodic self-audits will help you to fine-tune your selection criteria

If you’re hoping to skate by until CMS provides instructions on how to structure internal E/M guidelines for your facility, you’re flirting with disaster. Even by hopeful estimates, national E/M guidelines are years away from completion -- but you must take responsibility for your facility now.

Keep in mind three simple guidelines, and avoid being overwhelmed by the task.

1. Base Levels on Resource Use

In a hospital setting, you should determine the level of E/M service according to facility resources the visit consumes. This differs from the physician criteria for selecting E/M services, which reflect physician effort rather than facility costs, advises Sarah L. Goodman, MBA, CPC-H, CCP, president of SLG Inc. in Raleigh, N.C.

"Many hospitals use a version of the ‘point system,’ for which you assign a point value to individual tasks or services (based on staff intervention or intensity, resources consumed, etc.), then total the points for the entire visit to determine an appropriate E/M level," Goodman says.

"I am partial to the point system," notes Terry Byrne, CPC, FCS, CDM specialist. "This system is objective and easily customized to any facility department."

Other hospitals have developed E/M criteria based on ICD-9-CM diagnosis codes, complexity of medical decision-making, or severity or acuity of patient’s presenting complaint or medical problem.

"Remember, however, that diagnosis-related guidelines must still relate to consumption of facility resources," Goodman reminds. "And of course, medical necessity requirements are always first and foremost. You should never try to game the system by providing more services than are necessary to treat the patient."

A few hospitals have attempted to base E/M standards on time, although these systems tend to be more burdensome to implement than the alternatives. If you choose this system, "Be aware that you can only count the time dedicated directly to care of the patient," Goodman notes. "You shouldn’t count ‘wait’ or ‘standby’ times, for instance."

Minimize the hassle: Regardless of the E/M guidelines you decide to use, the system should require only documentation that is clinically necessary for patient care. If you need additional documentation, your system won’t produce ideal results.

"Don’t develop a complicated system," Byrne confirms. "Most hospitals rely on the nursing staff to utilize the guidelines, and it is unfair to expect them to learn and know coding rules."

Note, also, that E/M guidelines "are not a replacement for medical record documentation," Byrne warns. "The guidelines are strictly a tool to translate the documentation into an E/M code."

Resource: Several organizations, including the American College of Emergency Physicians (ACEP), the AHA (American Hospital Association) and AHIMA (American Health Information Management Association), have drafted recommended standards for hospital E/M services, and you may use these standards as a guide when developing your own criteria.

You can view the AHA/AHIMA "Recommendation for Standardized Hospital Evaluation and Management Coding of Emergency Department and Clinic Services" online at http://www.ahacentraloffice.org/ahacentraloffice/images/EM_Coding_Report2.pdf.

2. Leave Out Separately Billable Services

When devising criteria to determine E/M guidelines, be sure to exclude discrete, separately-payable hospital services, such as lab tests, EKGs, specimen collections and the like, Byrne says.

"For example, x-rays are separately payable, and therefore they should not be one of the variables considered in determining an E/M level -- neither for the fact that the x-ray was taken nor for the staff time involved in making arrangements for the test, transporting the patient, etc.," point out the AHA/AHIMA recommendations.

On the other hand, you may include in your criteria certain packaged services, Goodman says. "Because payment for these bundled services is included in the hospital E/M payment, you could allocate the cost of bundled services as a part of resource cost," she continues.

For example, some facilities have chosen to include moderate (conscious) sedation in their E/M leveling criteria due to the number of rules governing when and how it may be billed separately. In any event, whether a packaged service is included in E/M criteria or billed separately, it must meet medical necessity requirements.

3. Be Consistent

CMS has stated repeatedly that any model a hospital develops to determine E/M level "should be capable of being utilized for all health care payers, not just Medicare." In addition, CMS requires that selection criteria "should not change with great frequency."

"You want to apply whatever E/M guidelines you design to all patients and payers, across the board," Goodman says.

"Have a written system that is used by all staff for all patients," Byrne continues. "Regardless of the methodology used to determine the level of care, ensure it is one that can and will be applied objectively to all patients. The nursing staff or coders responsible for using the guidelines should not allow subjectivity to interfere with the code choice."

Action plan: Be sure to document your E/M selection criteria carefully. These guidelines should be available for inspection, and any member of your coding staff, as well as an outside auditor, should be able to apply the guidelines with consistent results.

In other words: Different people should be able to review your documentation and arrive at the same code assignment. If your system does not allow you to replicate coding results readily, you’ll want to make your guidelines more explicit.

Tip: Avoid electronic systems based on complex algorithms, Byrne suggests. "These systems do not provide a way for an auditor to verify the E/M code selection."

Bonus Tip: Monitor Your Results

Although CMS does not require that your E/M distribution follow an even distribution or bell-shaped curve, you will nonetheless want to monitor your claims over time to fine-tune your selection criteria. If you’ve constructed your E/M guidelines correctly, you will see a mix of low-, medium- and high-level codes, based upon the mix of patients your hospital accommodates.

"If you’re having an unusual number of low- or high-level services, that may be a sign that your E/M guidelines could use some tweaking. You don’t want to make changes every week, but a once-per-quarter or bi-annual audit will provide a necessary opportunity to re-evaluate," Goodman says.

"When developing your guidelines, include nursing staff, coders and revenue integrity in the process. Ensure all pertinent staff ‘buys into’ and supports the guidelines, and perform periodic audits and follow-up with additional staff education as needed," Byrne advises.

Keep in mind: Physician E/M levels and the hospital E/M level do not have to match (although they may in some cases). A service that requires a great deal of physician effort may consume only minimal facility resources, or vice versa.

"Do not duplicate the physician’s E/M code for the facility component," Byrnes stresses. "Although it is left up to each hospital to develop a set of criteria, CMS specifies ‘the hospital visit levels should be based on hospital facility resources, not physician resources.’"

Additional resource: The recent OPPS proposed rule ("Proposed Visit Reporting Guidelines") provides some guidelines from CMS for developing facility E/M visits. You can find the OPPS proposed rule on the CMS Web site: http://www.cms.hhs.gov/HospitalOutpatientPPS/downloads/cms1392p.pdf, pages 502-521 (Section IX, part C).

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