CMS and other payers collect data on the utilization of E/M services within each category of service. For example, for all of the established patient visits billed using codes 99211 to 99215 by Rheumatologists, CMS keeps track of what percentage are level one’s, level two’s, level three’s, level four’s, and level five’s, within each category for each specialty designation. CMS publishes this data in raw form on its web site. It is national data, which can be analyzed on a state-by-state basis for those so inclined. The data is also available nationally in easy to use form from certain commercial vendors.

Why is it important for physicians to think about their coding distribution? It is important for two reasons:  For many physicians, the E/M services make up a high percentage of their total revenue. Coding services at too low a level is a significant revenue loss.  Second, compliance is a huge issue for physician practices. Coding services at a higher level than documented puts them at risk for a payer audit and the possibility of returning money to the government or to the payer. 

Physicians should compare their profile quarterly or biannually with their own older profile, with the profile of other physicians of their same specialty in their practice, and with the national norms. Variation from the norm, although not a problem in and of itself, should get the attention of the physician in the practice.

In general, never bill all of your services at one level within any one category. If you are a nursing home physician, for example, do not bill all of your services as a level two nursing home visit, 99308. The profile that is most likely to get the notice of your carrier is when all services in any one category are billed at one level.

After comparing each physician's profile with the profiles of the other physicians in the group and with the CMS norm, take some time to think about any variations and the reasons for the variations.  For example, if a physician works in a walk-in clinic, they may have more lower level visits than others in their specialty.  A physician whose patients are older may have more high level visits. 

Physician Assistants and Nurse Practitioners are compared with all other Physician Assistants and Nurse Practitioners.  They are not divided by specialty.

Some physician practices differ from others, and there are good reasons for a variation in the norm.   If the physician is significantly under billing, there is the opportunity for a revenue gain.  If a physician is over-reporting their services this is a compliance risk. In both cases, education is important. 

Finally, Medicare states this in their claims processing manual: 

Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT® code.  It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted.  The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported.  The service should be documented during, or as soon as practicable after it is provided in order to maintain an accurate medical record.