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Dynamic Chiropractic – April 3, 2000, Vol. 18, Issue 08

Selecting the Appropriate Level of E&M Code

By Alan Lyons

The basis for billing for medical services under the laws of the United States and California are the current procedural terminology (CPT) codes. These codes, which are used universally, govern all covered medical services referred or prescribed by physicians.

The CPT is a listing of descriptive terms and five-digit numeric identifying codes and modifiers for reporting medical services and procedures performed by physicians. The identifying relative-value scale codes and modifiers referred to in CPT codes and modifiers describe the amount of work or level of service performed, and the degree of diagnostic acumen used in providing services. In the case of identifying codes for evaluation and management (E&M), they describe the nature of the presenting problem and the skill, effort, time, responsibility and medical knowledge required for the prevention or diagnosis and treatment of illness or injury. A physician's use of a CPT code is a material factual representation by the physician regarding the medical service or procedure performed. In the case of E&M codes, it is also a material factual representation by the physician regarding the health status of the patient.

Each CPT code has a corresponding relative unit value. The relative unit value increases as the level of service, amount of work performed, or degree of diagnostic acumen increases. The CPT coding system provides for the computation of the physician's fee by multiplying a scheduled per-unit rate by the relative unit value of the appropriate CPT code. In the California workers' compensation system, a separate value is assigned to each code. This compilation of values is called the official medical fee schedule (OMFS).

The CPT coding rules provide that, regardless of the category of services or supplies furnished by a physician, all services and supplies provided to a person must be medically necessary, as defined therein.

We must first understand the two definitions of a new patient. The first, found in the CPT 1999, states: "A new patient is one who has not received any professional services from the physician or a physician of the same specialty who belongs to the same group practice, within the past three years." The second is found in California's new OMFS for workers' compensation:

"A new patient is one who is new to the physician or an established patient with a new industrial injury or condition."

If a former patient returns within three years, a new patient E&M code cannot be used outside of California's workers' compensation system. After three years, however, a new patient E&M code is legal.

Many district attorneys, along with the California attorney general's office, are prosecuting providers for the misuse of E&M codes.

The primary criterion to consider when selecting an appropriate code is the chief complaint, not the amount of time the physician spends face-to-face with the patient. Only in the consultation codes is time the most important criterion.

To use a level of service higher than one, there must be one or more factors that put the patient at increased risk of further morbidity or mortality because of the physician's proposed treatment. Just because the physician wants to do a very comprehensive examination as protection from malpractice, does not mean it is medically necessary; that the patient is at risk; or that it is legal to bill for such a level of service.

It is also necessary to document the service according to HCFA requirements. Merely having lots of documentation and time spent does not legally justify a certain level of service. I like the exam charts available for free download at

This is not to say that a chiropractor may not use a level-four service code. A level four may be appropriate if the patient has multiple conditions that would put him/her at moderate risk of further injury or death due to the proposed treatment (e.g., spinal manipulation).

Generally speaking, a child involved in an auto accident who has no complaints, but is brought in to be checked, would not require higher than level-two service at most. If the doctor can prove there is something wrong, a level-three might be correct. If it were a teenager without complicating factors, but with relatively minor complaints, a level three service would possibly be appropriate.

A 50 year old with a history of prior injuries, hypertension, disk pathology, spine surgery, or heart surgery, would almost certainly be a level four.

If, upon examination, it was proven that this person had tuberculosis of the spine, there would probably be sufficient risk to justify a level five. A level five is someone who is at extreme risk of further injury or death.

Remember, documentation is everything! If it is not in the records, it did not take place. Always record negatives as well as positives.

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