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A simple system for coding E/M services

By James Davidson, MD

Editor’s Note: This information has been updated
Updating office E/M coding

Four tables and a point system help determine Evaluation and Management coding

As a practicing orthopaedic surgeon, I am required to properly code for Evaluation and Management (E/M) of patients at every office visit. Unfortunately, the rules for E/M coding are both lengthy and very specific, and the charts designed to assist orthopaedic surgeons in properly coding E/M services are cumbersome.

As a result, I have developed a series of tables—based on information from the AAOS, the Arthroscopy Association of North America, the American Medical Association (AMA), the Centers for Medicare and Medicaid Services (CMS), Jack Ritchie, MD, and others—that summarize and organize material necessary for correct orthopaedic E/M coding.

I use these tables and their corresponding point system to help me correctly code office E/M services. The tables—New Patients and Consultations, Established Patients, History and Physical Examination, and Useful E/M Modifiers—along with instructions on how to use them can be found at the bottom of this page. Physicians are encouraged to download the tables for reference when dictating and coding.

New patients vs. consultations
Determining whether the patient is new or established is the first step in the E/M coding process. New patients have not been seen by the treating orthopaedist or another orthopaedist in the same practice in the past three years. Established patients have been seen by the treating orthopaedist or another orthopaedist in the same practice within the last three years.

For a visit to be considered a consultation, four specific requirements must be met. First, the requesting physician must be seeking advice and not transferring care. Although the orthopaedist may order tests and/or institute treatment at the time of the consultation, the visit should not be considered a consultation if the orthopaedist accepts transfer of care before seeing the patient for the first time.

Second, the patient’s records must indicate that a consultation was requested. For example, the requesting physician can send a letter to the orthopaedist asking for the consultation. The orthopaedist may give requesting physicians a pad of consultation request slips to use. Or the orthopaedist may include a statement such as “I was asked to see this patient in consultation by Dr. X for evaluation of problem Y” in the documentation.

Third, the documentation criteria for the level of service must be met.

Finally, the patient’s record must reflect that the orthopaedist communicated the findings in writing via a separate written report to the requesting physician.

The three-year rule for new patients does not apply to consultations. For example, a primary care physician may ask the orthopaedist for advice and a consultation for a patient’s foot problem this year and then ask for a second consultation for the same patient’s new shoulder problem next year. Both visits may be reported as consultations if all requirements for consultation are met.

Under very special circumstances, an orthopaedist in a practice may consult an associate within the same practice. For example, a general orthopaedist may ask for advice from a subspecialist about a difficult problem, such as whether to perform a total knee or a unicompartmental arthroplasty or an osteotomy on a particular patient. This may qualify as a consultation. In contrast, if a hand specialist refers a patient to a joint reconstruction specialist to treat a degenerative hip, a transfer of care occurs. Similarly, a referral by a physician’s assistant or an “office-only” orthopaedist to another orthopaedist for additional treatment would not qualify as a consultation.

Be aware that a practice with a large number of consultations or high-level codes may raise a red flag to CMS carrier medical directors. Because unusual coding profiles are likely to result in audits, orthopaedic surgeons should follow all coding criteria closely.

History component
The orthopaedic evaluation is made up of three key components: the history, the physical examination, and medical decision making.

The history component consists of the chief complaint (CC), history of present illness (HPI), review of systems (ROS), and past, family, and social history (PFSH) sections. A chief complaint should be documented for every visit often in the patient’s own words. If the patient states “my back is killing me” for the first visit chief complaint, “follow-up for low back pain” might then be the chief complaint for a follow-up visit.

The HPI uses descriptive elements to document the current problem. This section of the history should be gathered and described by the physician, although the next two sections (ROS and PFSH) can be recorded on an office health history questionnaire completed by the patient or ancillary staff. The data may then be rerecorded into the orthopaedic evaluation or may be referred to by date in the note.

The ROS is an inventory of 14 body systems focusing on a description of symptoms (chest pain or shortness of breath) rather than diseases (heart attack or COPD). The PFSH is a review of three areas: past history, family history and social history.

Because every note must be a stand-alone note, a physician who chooses to refer to the ROS or the PFSH on a health history form must initially sign the form and then reference the form by date in future notes (“ROS, PFSH reviewed from March 1, 2007, no changes, or changes as follows…”).

Physical exam component
The second key component is the physical exam. Most orthopaedic surgeons use the Musculoskeletal Single Specialty Examination, which includes both a general examination and six musculoskeletal areas: neck, back, right and left upper extremities, and right and left lower extremities. Each examined area should be described in the report. Descriptions of a body area or joint include inspection/palpation, range of motion, stability, and strength.

Orthopaedists who prefer to use a general examination instead of the musculoskeletal subspecialty examination should check the AAOS Orthopaedic CPT Coding Guide for information.

Medical decision-making component
The medical decision-making component (MDM) is made up of three parts: data, diagnosis, and risk. It is a measure of the complexity of the case and the recorded evaluation. Medical decision-making is more complex for patients who undergo multiple tests or have multiple diagnoses, and those with increased risk factors. The physician should document all the data reviewed, the comorbidities considered, and the risk factors reviewed.

In some cases, time may be a stand-alone contributing factor in determining the level of service. Although time is generally not meant to be used in selecting the level of E/M service, an exception is made for visits that consist predominantly of counseling or coordination of care. The total time must be spent face-to-face with the patient, and more than half of that time must be spent counseling or coordinating care, and the content of those activities should be summarized. Time spent reviewing records while the provider is not with the patient does not qualify. Time should be rounded down, not up.

Modifiers and templates
With certain exceptions, E/M codes should not be billed during the global period. Modifiers explain/allow E/M services to be billed with additional services that might otherwise be considered bundled in a global fee. CPT modifiers that can be used with E/M coding are listed in Table 4

The use of office forms and templates can greatly simplify documentation of orthopaedic evaluations. See the AAOS Now Web site for a link to an excellent discussion of this topic by Ritchie.

More complete documentation of care provided to patients leads to better medical record keeping and improved compliance with E/M coding guidelines. This article presents a simplified method for the orthopaedic surgeon to accurately code office E/M reports. Following these guidelines will help the orthopaedist to code office visits correctly and confidently. Refer to the practice management center on the AAOS Web site (www.aaos.org), and submit specific questions to Physicians Reimbursement Systems (www.prscoding.com) or KarenZupko & Associates, Inc. (www.karenzupko.com).


  1. AAOS CPT Guide, 2007 http://www4.aaos.org/productcode=02834
  2. AMA Principles of CPT coding, 2005 https://catalog.ama-assn.org/prod=56001
  3. CMS 1997 Documentation Guidelines for Evaluation and Management Services http://www.cms.hhs.gov/MLN.pdf
  4. CPT 2007
  5. KarenZupko & Associates, Inc. www.karenzupko.com.
  6. Beach WR, Ritchie J, Bert JM: Coding and reimbursement in arthroscopic surgery. Arthroscopy Vol 18, No 2 (February, Suppl 1), 2002: pp 96–121 http://www.arthroscopyjournal.org.pdf (login required)

James Davidson, MD, practices with Canyon Orthopaedic Surgeons in Phoenix, Arizona. The author acknowledges the assistance of Mary LeGrand, RN, MA, CCS-P, CPC, KarenZupko & Associates, Inc., in preparing this article. This information is for reference use only and does not constitute the rendering of professional consulting or legal advice by the AAOS or the author. Samples of all tables and a description of how to use them can be found on the AAOS Now Web site, www.aaos.org/now.

Using the tables to determine Levels of E/M service for office visits

Step 1
Determine whether a visit should be coded as a New Patient, Consultation, or an Established Patient as defined in table 1 or 2. The tables are divided into columns corresponding to the level of E/M service and E/M code. The level of service of the visit and level of code is determined by the number of bullets/elements recorded in the note for each of the Key Components.

Step 2:
Review the History key component. Every note needs a Chief Complaint. For the History of Present Illness section, score one bullet for each descriptive element recorded in table 3. For the Review of Systems, score one bullet for each system described. For the Past Medical, Family History, and Social History, score one bullet for each history area described: past, family, and social. The number of bullets scored determines which coding level or column of the table is met for the History key component (table 1 and 2). The criteria for each section—CC, HPI, ROS, and PFMH—must be met or exceeded for the history component to qualify for a given code level or column in the table. For example, the minimum requirement for a detailed new patient history requires that the chief complaint, four elements describing the HPI, two systems from ROS, and one area from PFSH be documented.

Step 3:
Review the Physical Exam component, using the Musculoskeletal Exam bullet counter (table 3). The minimum requirement for a comprehensive exam is documentation for all 4 bullets (Inspect/palpate, ROM, Stability, and Strength) in 4 body areas and Skin in 4 body areas in addition to all other exam elements noted in the table. If you evaluate the involved extremity as well as the contralateral extremity for comparison, you should document this appropriately. Documentation of multiple joints in the same body area are scored as one bullet for each descriptor. For example, range of motion of the right shoulder, right elbow, and right wrist is one bullet. But range of motion from four different body areas—right shoulder, left shoulder, right knee, left knee, neck and back—is six bullets. The number of bullets scored determines which coding level or column of the table is met for the Physical Exam key component (table 1 and 2).

Step 4:
Review the Medical Decision Making (MDM) key component. In the Data section, points are given for several data-gathering tasks. These points are listed in parentheses in table 1 and 2. Add up the points to determine the level of complexity. For example, ordering an X-ray and then providing an independent interpretation totals three points of complexity—one for ordering the study and two for the interpretation. This has been referred to as the “orthopedic three-point play.” But ordering multiple X-rays—knee, hip, and ankle—still only scores one point for ordering imaging. Likewise, reviewing and summarizing one page of old records or 100 pages scores the same two points.

The Diagnosis section is similarly scored (tables 1 and 2). For example, evaluating a new problem without a planned work up and reassessing another improved established problem at the same visit totals 4 points of complexity—three for the new problem, and one for the established problem.

Finally, the Risk section of the medical decision making is a measure of the risk of complication, morbidity or mortality of the management options selected, diagnostic procedures ordered, or presenting problems. Examples of these from CMS and AAOS are listed in tables 1 and 2. The highest level of risk from any one category (management options selected, diagnostic procedures ordered or presenting problem) determines the overall risk. Two of the three MDM elements—Data, Diagnosis, and Risk—must be met or exceeded for the MDM component to qualify for a given code level or column in the table (table 1 and 2).

Step 5:
Choose a code. For a New Patient visit or Consultation, documentation for all three of the key components must meet or exceed the level for the code to qualify. The left-most column of the table determines the code. For example, a new patient visit note that documents a detailed history, a detailed exam, and a low complexity MDM qualifies for a 99203 level of service. A new patient visit note that documents detailed history, an expanded exam, and a low complexity MDM qualifies for a 99202 level of service.

For an Established Patient visit, documentation of only two of three key components must meet or exceed the level for the code to qualify. The left-most column of those two key components chosen determines the code. For example, an established visit note that documents an expanded history, a focused exam, and a low complexity MDM qualifies for a 99213 level of service.

Alternatively, and less frequently, time can be used as a stand alone factor in determining the level of service and code with minimum time and documentation requirements specified in tables 1 and 2. If time is used as the determining factor, the appropriate time column demonstrates the level of service and code.

Finally, the level of service that is reported must reflect the medical necessity of the problem. For example, the treatment of a simple bug bite would not qualify for a comprehensive level of service regardless of the history and physical exam documented.

May 2007 AAOS Now