Considering the Impact of Diagnosis Codes in the E/M Encounter

It has been nearly seven years since the United States implemented ICD-10-CM, and along the way we have become better at infusing clinical documentation with the details that allow for assignment of high-specificity ICD-10-CM codes. With the release of ICD-11 to the world in 2022, a new push for ICD-11 implementation is on the rise, and only time will determine how quickly the United States will consider an implementation goal and begin evaluating how that will be accomplished.

Assigning correct diagnosis codes is more important than ever, especially with the increase in commercial payer risk adjustment plans, both through CMS and the Affordable Care Act. These plans are paid with federal and state funds to manage higher risk patients with chronic conditions that increase risk of hospitalization, morbidity, and/or mortality. Each diagnosis code that risk adjusts and is reported correctly (supported by the documentation) adds to the overall risk score of the patient and annual funding to the payer. The amount in funding is staggering just to think about, let alone manage.

Diagnosis Codes Influence E/M Service Levels

In 2021, we experienced significant revisions to the Evaluation and Management (E/M) coding guidelines specific to office and other outpatient services (99202-99215). The three key components scored to determine the level of E/M service reported included the history, examination, and medical decision making (MDM), with time as a contributing component only when the time spent counseling and/or coordinating care dominated more than half of the time spent face-to-face with the patient.

As of 2021, and only for codes 99202-99215, history and exam no longer are part of the scoring process. Now, the entire E/M level of service is determined by scoring just the MDM or amount of time spent.

Note: Time spent is quantified by both face-to-face time and non-face-to-face time spent performing patient services related to the encounter on the day of the encounter.

While the three elements of MDM continue to score diagnoses, data, and risk, even the descriptions of these elements have changed with the new guidelines, resulting in a different understanding of the scoring process. The following three MDM elements are scored to determine the overall level of E/M service specific to codes 99202-99215:

1. Number and complexity of problems addressed at the encounter (diagnoses)
2. Amount and/or complexity of data to be reviewed and analyzed (data)
3. Risk of complications and/or morbidity or mortality of patient management (risk)

While each MDM element contributes to the service level, for scoring purposes, only two of the three MDM elements must equal or exceed the service level requirement to qualify for a specific E/M code. We already understand how to score "the number and complexity of problems addressed at the encounter" but do we really understand the impact that can be had by including SDoH diagnoses, especially when the SDoH documented prevents the provider from diagnosing or treating a condition?

For example, let's address the patient who is struggling with at-home energy insecurity or sheltered homelessness who simply does not have access to a working refrigerator to store medications that require refrigeration for a chronic condition. Or, maybe due to job loss or financial insecurity they do not have access to transportation to see a specialist recommended by their primary doctor, or follow-through with an MRI or other diagnostic testing to obtain a diagnosis and subsequent treatment. Because of the patient's SDoH, these chronic conditions will either remain untreated, worsen, or never be diagnosed. If the provider documents the SDoH and how it is limiting diagnosis and treatment, an otherwise low complexity MDM may actually increase to moderate (99204/99214) and at the same time, the provider may be able to assist the patient in obtaining transportation or other treatment/testing options instead of ignoring the situation.

Providers need to improve the interview process, patient questionnaires, and opportunities for ancillary staff to contribute information from patient conversations while in the office setting to allow for improved documentation. Additionally, coding processes and computer-assisted programs that auto-suggest codes should be closely looked at and reviewed to ensure documentation confirming SDoH is captured in the code for reporting purposes. The SDoH codes are located in the ICD-10-CM codebook in category Z55-Z65 and in 2022, 11 new codes were added to the section.

Tip:  To learn more about the importance of accurately documenting and reporting diagnosis codes and its impact on risk adjustment and MDM scoring, join us for a webinar on Thursday, March 31, 2022.

About the Author: Aimee Wilcox is a medical coding, billing, and auditing consultant, author, and educator with more than 30 years of clinical and administrative experience in healthcare, coding, billing, and auditing. Medicine, including coding and billing, is a constantly changing field full of challenges and learning and she loves both. She believes there are talented medical professionals who, with proper training and excellent information, can continue to practice the art of healing while feeling secure in their billing and reimbursement for such care.

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