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2021 evaluation and management coding update

Contemporary PEDS Journal, Vol 38 No 5,

A new evaluation and management coding system for outpatient visits was implemented earlier this year. This article details the nuances of the new system.

Effective January 1 this year, the Centers for Medicare & Medicaid Services (CMS), with guidance from the American Medical Association (AMA), implemented a new evaluation and management (E/M) coding system for outpatient visits. The first change in 25 years, it was developed to ease the documentation burden on medical providers. This article details the nuances of the 2021 E/M coding system, to help keep office notes in compliance with the new guidelines.

Implications for medical practice

In order to comply with the pre-2021 coding guidelines, physicians were spending too much time writing bloated notes to justify the level of service billed; many were frequently completing their notes at home. This was just one of many factors contributing to physician burnout. Recognizing the burden that documentation was placing on medical providers, CMS launched their “Patients Over Paperwork” initiative in 2017, and finalized guidelines based on the 2020 AMA relative value scale (RVS) Update Committee (RUC) suggestions. A benefit of the updated guidelines is that pediatrician work relative value unit (wRVU) productivity will increase for well visit codes and acute visit codes. As a consequence, compensation will likely increase by as much as 9% for pediatricians whose pay is based predominantly on wRVU output.1 On December 22, 2020, congress adjusted the Medicare Physician Fee Schedule (MPFS) conversion factor, a change that will likely improve 2021 pediatrician compensation further.2

Prior to 2021, billing for an outpatient visit required a very complicated mixture of documenting appropriate elements of the patient’s history and physical along with the medical decision-making (MDM) associated with the visit or time spent counseling patient or coordinating care. The updated CMS guidelines are based only on 1) a clearer method of assigning MDM or 2) a new methodology for assigning a time component to the visit on the date of service.

Medical decision-making: 2021 guidelines

As they did previously, CMS recognizes 4 levels of MDM (straightforward, low complexity, moderate complexity, and high complexity). MDM quantifies the complexity of establishing a diagnosis and/or selecting management options by measuring:

  • The number and complexity of problems addressed at the encounter
  • The amount and/or complexity of data to be reviewed and analyzed
  • The risk of complications and/or morbidity with patient treatment

This year, to guide MDM decisions, providers must become familiar with the coding table. As in the past, the table columns list the number and complexity of problems addressed, the data reviewed for the visit, and the risk associated with treating the patient. The performance and interpretation of in-office tests (rapid strep, rapid flu tests, etc.) as well as external tests, such as complete blood count (CBC) or an x-ray done at a hospital are appropriate to consider as data elements. Each test counts as 1, if it is performed or evaluated on the day of service (see Figure 1).

Looking at the coding table, determining the level of MDM associated with a visit depends on 2 of 3 scores associated with elements of care columns. To qualify for an MDM level, 2 of the 3 elements for that level of decision-making must be met or exceeded. Keep in mind that, for pediatricians, the majority of outpatient visits are low complexity (level 3 – 99203 new patient, 99213 established patient) and moderate complexity (level 4 – 99204 new patient, 99214 established patient).

Level 3 visits

Level 3 low-level visits are associated with the evaluation of 2 self-limiting or minor problems, 1 stable chronic illness, or a new uncomplicated illness or injury. Data to meet threshold criteria for a low-complexity visit include reviewing documents from an external source or ordering or reviewing tests (that are not in-office tests). Each document and unique test or order is counted and must add up to 2 or higher to meet the threshold for data analysis for a level 3 visit.

Alternatively, obtaining a history from an independent historian (ie, a parent or guardian in the case of a pediatric visit) alone satisfies the data element for a level 3 visit. The risk associated with level 3 visits is associated with a low risk of morbidity from additional tests or treatment, such that there would be a minimal amount of discussion involved in completing the visit.

For most pediatricians, level 3 or low-complexity visits are straightforward. The American Academy of Pediatrics (AAP)3 suggests assigning level 3 visits to the following conditions:

  • Mild upper respiratory infection and mild diaper rash, with home care recommendations
  • Pharyngitis with negative streptococcal test, with independent historian
  • Acute gastroenteritis, with independent historian, instructions for symptom management
  • Follow-up of stable attention-deficit/hyperactivity disorder (ADHD), with limited data, drug management
  • Follow-up of stable asthma, with limited data, prescription drug management
  • Uncomplicated hand, foot, and mouth disease, with advice for home care and infection control
  • Allergic rhinitis due to pollen, with advice for over-the-counter medication
  • Minor sprain, with recommendation for use of soft brace
  • Wound repaired in emergency department or urgent care requiring evaluation and suture removal
  • Overuse injury requiring order for physical therapy

Level 4 visits

Level 4 moderate-level visits are associated with the evaluation of 1 or more chronic illnesses with exacerbation, progression, or adverse effects of treatment; 2 or more stable chronic illnesses; 1 undiagnosed new problem with uncertain prognosis; 1 acute illness with systemic symptoms; or 1 acute complicated injury. Data required to meet the threshold criteria for moderate-complexity visits require satisfying 1 out of 3 categories. The first includes the data count described in a level 3 visit, including a data point if the history is obtained in full or in part from an independent historian. Credit for category 1 of level 4 visits requires a data count of 3 or higher. The second data category is the interpretation of a test performed by another physician, and the third is a discussion of treatment with an external physician.

The risk associated with moderate-complexity visits includes prescribing medication, decisions regarding minor surgery with risk factors, decisions regarding elective major surgery without risk factors, or diagnosis or treatment limited by social determinants of health. Social determinants of health refer to a patient’s ability to adhere to recommendations based on their economic situation (eg, insurance status) or social situation (eg, homelessness). However, when a physician is deciding whether a visit merits a level 4 designation, the landscape can be murky. What about an uncomplicated conjunctivitis for which an antibiotic is prescribed? How about when a patient presents with an ear infection with pain or fussiness and no other symptoms? Fortunately, as with level 3 visits, the AAP3 gives examples of the types of encounters that merit a level 4 evaluation. These include, but are not limited to:

  • Fever, cough, and third episode of otitis media within 3 months in infant; antibiotics prescribed
  • Acute gastroenteritis with dehydration; administration of antiemetic drug, oral rehydration plan
  • Follow-up of stable ADHD; discussion with school nurse, medication management
  • Asthma with exacerbation but not respiratory distress, requiring prescription drug management
  • Asthma with report of increased symptoms, requiring medication change
  • Follow-up for stable asthma and stable anxiety disorder with medication management
  • Symptoms and findings supporting strep throat; positive streptococcal test, antibiotic prescribed
  • Unexplained bruising; with independent historian and 2 or more laboratory tests ordered and/or results reviewed
  • Follow-up of head injury with brief loss of consciousness with intermittent headaches and confusion; order for cognitive testing, review of radiology report from initial treatment at hospital, and independent historian
  • Foreign body in ear, with decision regarding removal of foreign body under anesthesia
  • Caregiver refusal of testing or consultation for an undiagnosed new problem due to out-of-pocket costs

Level 5 visits

Level 5 high-level visits are associated with 1 or more chronic illnesses with severe exacerbation or progression. They are also associated with the adverse effects of treatment of an acute or chronic illness or injury that poses a threat to life or bodily function. Data to meet threshold criteria for high-complexity visits must satisfy 2 out of 3 categories (see Level 4). The risk associated with high-level visits is a high risk of morbidity from additional diagnostic testing or treatment.

According to the AAP,3 examples of level 5 visits would include:

  • Decision for or against hospital admission in a patient with acute respiratory distress (eg, status asthmaticus)
  • In-office hydration therapy for dehydration, with plan for hospitalization if patient is unable to tolerate oral rehydration before leaving office
  • Infant with fever, tachycardia, lethargy, and dehydration, with decision to admit to hospital
  • A patient is seen for recent seizures requiring hospital management. The physician reviews hospital records including recent video electroencephalogram test results read by another physician, obtains history from caregivers who witnessed seizures, and monitors for toxicity due to long-term use of an antiepileptic drug.
  • Parents seek hospitalization of their child who planned suicide but was stopped before injury occurred
  • Decision for hospitalization for suspected or confirmed appendicitis

If you use MDM to code, you must accurately determine those elements of MDM that contributed to your determination of the level of service. Usually, your assessment and plan will contain enough details to justify the level of MDM billed for. The prudent pediatrician will conclude a level 4 or 5 note by presenting the MDM elements documented in the note (Figure 1). The note in Figure 1 was presented in table format with invisible borders to conserve space, which enables reading without scrolling. Important components of the note are highlighted to capture the reader’s attention. Documenting MDM at the end of your note reduces the chance of an insurance company audit. It also serves as a reminder to document the elements needed to justify the level of service you submit.

Coding by time

Using time to determine a level of service can be less confusing compared to assigning a level of service using MDM. Time now consists of:

  • Preparing to see the patient, reviewing tests and external notes
  • Obtaining a history from the parent
  • Performing an examination
  • Ordering medication or tests
  • Referring to and possibly communicating with other health care providers on management
  • Documenting in the health record
  • Communicating results (on day of service) with the patient
  • Time spent in care coordination

Coding by time is dependent on providers being honest in their determination of time elements during a visit. As such, visits coded by time are quite difficult for insurance companies to reject.


A brief webinar on the guidelines is available on the medgizmos.com website. You can also visit MDMTool.org (Figure 2) which helps providers code more accurately.


  1. 2021 evaluation and management CPT Codes. Sullivan Cotter. Accessed January 26, 2021. https://sullivancotter.com/2021-evaluation-and-management-cpt-codes/
  2. Rules Committee print 116-68: text of the house amendment to the senate amendment to H.R.133. House Committee on Rules. December 21, 2020. Accessed February 2, 2021. https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-116HR133SA-RCP-116-68.pdf
  3. American Academy of Pediatrics. Office E/M 2021: examples of pediatric medical decision-making for office evaluation and management services. AAP Pediatric Coding Newsletter. 2021; 16(4):9-11.