Department of Health and Human Services 
OFFICE OF 
 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
C   T
ODING  RENDS OF 
 
  MEDICARE 
 
E
 VALUATION AND 
 
M S  
AN AGEMENT  ERVICES 
 
 
 
 
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
May 2012 
OEI-04-10-00180   
EXECUTIVE SUMMARY:  CODING TRENDS OF MEDICARE EVALUATION 
AND MANAGEMENT SERVICES 
OEI-04-10-00180 
 
 
WHY WE DID THIS STUDY  
 
Between 2001 and 2010, Medicare payments for Part B goods and services increased by  
43 percent, from $77 billion to $110 billion.  During this same time, Medicare payments 
for evaluation and management (E/M) services increased by 48 percent, from 
$22.7 billion to $33.5 billion.  E/M services have been vulnerable to fraud and abuse.  In 
2009, two health care entities paid over $10 million to settle allegations that they 
fraudulently billed Medicare for E/M services.  The Centers for Medicare & Medicaid 
Services (CMS) also found that certain types of E/M services had the most improper 
payments of all Medicare Part B service types in 2008.  This report is the first in a series 
of evaluations of E/M services.  Subsequent evaluations will determine the 
appropriateness of Medicare payments for E/M services and the extent of documentation 
vulnerabilities in E/M services.    
 
HOW WE DID THIS STUDY 
 
Using the Part B Analytics Reporting System, we analyzed E/M services provided to 
beneficiaries to determine coding trends from 2001 to 2010.  Using Part B Medicare 
claims data, we analyzed physicians E/M claims to identify physicians who consistently 
billed higher level (i.e., more complex and more expensive) E/M codes in 2010.  We did 
not determine whether the E/M claims from these physicians were inappropriate.  
 
WHAT WE FOUND 
 
From 2001 to 2010, physicians increased their billing of higher level E/M codes in all 
types of E/M services.  Among these physicians, we identified approximately 1,700 who 
consistently billed higher level E/M codes in 2010.  Although these physicians differed 
from others in their billing of E/M codes, they practiced in nearly all States and 
represented similar specialties.  The physicians who consistently billed higher level E/M 
codes also treated beneficiaries of similar ages and with similar diagnoses as those treated 
by other physicians. 
 
WHAT WE RECOMMEND 
 
CMS concurred with our recommendations to (1) continue to educate physicians on 
proper billing for E/M services and (2) encourage its contractor to review physicians 
billing for E/M services.  CMS partially concurred with our third recommendation, to 
review physicians who bill higher level E/M codes for appropriate action. 
   
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................6 
Findings........................................................................................................8 
From 2001 to 2010, physicians increased their billing of  
higher level E/M codes in all visit types ..........................................8 
In 2010, approximately 1,700 physicians consistently billed 
higher level E/M codes ..................................................................10 
Conclusion and Recommendations ............................................................13 
Agency Comments and Office of Inspector General Response .....15 
Appendixes ................................................................................................16 
A:  Three Key Components Used To Determine the Appropriate 
Complexity Level for an Evaluation and Management Service ....16 
B:  Visit Types, Evaluation and Management Codes, Complexity 
Levels, and Medicare Payment Rate in 2010.................................19 
C:  Coding Trends for Evaluation and Management Codes in All 
Visit Types from 2001 to 2010 .......................................................21 
D:  Percentage of Physicians by State and Evaluation and 
Management Coding Group ...........................................................26 
E:  Percentage of Physicians by Specialty and Evaluation and 
Management Coding Group ...........................................................28 
F:  Percentage of Most Common Diagnoses by Evaluation and 
Management Coding Group in 2010..............................................31 
G:  Agency Comments ...................................................................32 
Acknowledgments......................................................................................35 
 
   
 
   
OBJECTIVES 
1.  To determine coding trends of Medicare evaluation and management 
(E/M) services from 2001 to 2010. 
2.  To identify and describe physicians who consistently billed higher 
level E/M codes in 2010. 
BACKGROUND 
E/M services are visits with beneficiaries by physicians and nonphysician 
practitioners, hereinafter referred to as physicians, to assess and manage 
patients health.1  Between 2001 and 2010, Medicare payments for Part B 
goods and services increased by 43 percent, from $77 billion to  
$110 billion.  During this same time, Medicare payments for E/M services 
increased by 48 percent, from $22.7 billion to $33.5 billion.2, 3  The 
number of E/M services billed also increased by 13 percent, from 
346 million to 392 million.4  Additionally, the average Medicare payment 
amount per E/M service increased by 31 percent, from approximately $65 
to $85.5 
E/M services have been vulnerable to fraud and abuse.  In 2009, two 
health care entities paid over $10 million to settle allegations that they 
fraudulently billed Medicare for E/M services.  One health care entity 
allegedly billed Medicare for higher levels of E/M services than were 
actually delivered to patients.6  In a separate case, a health care entity 
allegedly submitted false claims to Medicare, which included E/M 
services as well as unnecessary home visits, tests, and procedures.7  In 
2008, the Centers for Medicare & Medicaid Services (CMS) found that 
 
1 American Medical Association (AMA), Current Procedural Terminology (CPT), 2010.    
2
 Office of Inspector General (OIG) analysis of 2001 and 2010 Part B Analytic Reports 
(PBAR) National Procedure Summary File. 
3 Medicare payment refers to total Medicare-allowed amounts, which are 100 percent of the 
payment made to a physician by both Medicare and the beneficiary.  Medicare pays 
80 percent of allowed charges, and the beneficiary is responsible for the remaining 20 percent.   
4 
OIG analysis of 2001 and 2010 PBAR National Procedure Summary File. 
5 Ibid. 
6 United States ex rel. Wendy Buterakos v. Ascension Health and Genesys Health System, 
Civil Action No. 06-10550 (E.D. Mich. 2009). 
7 United States and State of Michigan v. Visiting Physicians Association, Civil Action 
No. 09-1377 (E.D. Mich. 2009). 
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180)   1 
 
   
certain E/M visit types had the most improper payments of all Medicare 
Part B services.8    
E/M services are grouped into visit types, such as office visits, hospital 
visits, and consultations.  Each visit type reflects the type of service, the 
place of service, and the patients status.  For example, there are two types 
of office visits (new patient and established patient) and two types of 
hospital visits (initial and subsequent).   
Most E/M services are billed using CPT codes that define the complexity 
level of the service.9  Hereinafter, we refer to CPT codes that correspond 
to E/M services as E/M codes.  Each visit type has three to five E/M 
codes.  Higher level codes represent more complex visits.  For example, 
an office visit with a new patient can be billed using one of five E/M 
codes, from 99201 (the lowest complexity level code) to 99205 (the 
highest complexity level code).  Medicare payment depends on the 
complexity of the visit.  To illustrate, Medicare pays approximately $37 
for 99201 and $191 for 99205.10  Overall, payment rates for all E/M 
services ranged from $19 to $213 in 2010. 
The level of an E/M service corresponds to the amount of skill, effort, 
time, responsibility, and medical knowledge required for the physician to 
deliver the service to the patient.  To accurately determine the appropriate 
complexity level of an E/M service, physicians must use the following 
three key components:  patient history, physical examination, and medical 
decisionmaking.  See Appendix A for a description and an example of the 
three key components used in determining the appropriate complexity 
level for an E/M service. 
Medicare Requirements for E/M Services 
General provisions of the Social Security Act (the Act) govern Medicare 
reimbursement for all services, including E/M services.  Section 
1862(a)(1)(A) of the Act states that Medicare will cover only services that 
are considered to be reasonable and necessary for the diagnosis or 
treatment of illness or to improve functioning.11 
 
8 
CMS, Improper Medicare Fee-For-Service Payments Report - May 2008 Long Report.  
Table 9a:  Top 20 Service Types with Highest Improper Payments:  Carriers and Medicare 
Administrative Contractors (MAC).   
9 AMA, CPT, 2010.  Three visit types do not have complexity levels; these are hospital 
observation discharge services (99217), standby services (99360), and other E/M services 
(99499).  
10 OIG analysis of 2010 PBAR National Procedure Summary file. 
11 Social Security Act  1862(a)(1)(A), 42 U.S.C.  1395y(a)(1)(A).    
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   2 
   
In 1983, CMS adopted the CPT coding system as part of the Healthcare 
Common Procedure Coding System (HCPCS) and mandated that 
physicians use this system to bill E/M services.  Physicians are responsible 
for billing the appropriate E/M code to Medicare.  It is inappropriate for a 
physician to bill a higher level, more expensive code when a lower level, 
less expensive code is warranted.12   
Physicians must also accurately and thoroughly document that the E/M 
service was reasonable and necessary.  Section 1833(e) of the Act 
prohibits payment for a claim that is missing necessary information.13  For 
E/M services, physicians must use either the 1995 or 1997 Documentation 
Guidelines for Evaluation and Management Services to document the 
medical record with the appropriate clinical information.14 
CMS routinely updates its coverage requirements for E/M services.  In 
2006, CMS implemented new E/M codes for visits in rest homes and 
nursing facilities based on AMA coding changes.15  In 2010, CMS also 
discontinued payment of E/M codes for inpatient and outpatient 
consultations and required that physicians bill for these consultations 
using one of the remaining E/M codes that accurately represents the place 
of service and the complexity of the visit. 16, 17, 18 
 
12 CMS, Medicare Claims Processing Manual, Pub. No. 100-04, ch. 12,  30.6.1.  Accessed 
at https://www.cms.gov/manuals/downloads/clm104c12.pdf on May 16, 2011.  See also 
Appendix A.  
13Social Security Act  1833(e), 42 U.S.C.  1395l(e). 
 
14
 CMS, Evaluation and Management Services Guide 2010.  December 2010.  Accessed at 
https://www.cms.gov/MLNProducts/downloads/eval_mgmt_serv_guide-ICN006764.pdf on 
June 14, 2011. 
15
 CMS, Change Request 4212, Transmittal 775, Home Care and Domiciliary Visits (Dec. 2, 
2005), which revised CMS, Medicare Claims Processing Manual, Pub. No. 100-04, ch. 12,    
 30.6.14.  Accessed at http://www.cms.gov/manuals/downloads/clm104c12.pdf on June 10, 
2011. 
16 
Consultations reflect a type of E/M service that involves a specific request for help with a 
diagnosis or course of treatment on a limited basis.   
17
 CMS, National Correct Coding Initiative Policy Manual for Medicare Services.  Ch. XI, 
version 16.3, p. 28, 2011.   
18 CY 2010 Physician Fee Schedule Final Rule.  74 Fed. Reg. 61738, 6176778 (Nov. 5, 
2009); CMS, Change Request 6740, Transmittal 1875, Revisions to Consultation Services 
Payment Policy (Dec. 14, 2009).  Accessed at 
http://www.cms.gov/Transmittals/Downloads/R2282CP.pdf on September 6, 2011.  
Telehealth consultations are the only type of consultation not eliminated by CMS for 
Medicare payment.  As of January 2010, physicians bill for these consultations using HCPCS 
codes G0425G0427 (initial inpatient telehealth consultations) or G0406G0408 (followup 
inpatient telehealth consultations). 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   3 
   
Medicare Payments for E/M Services 
The Omnibus Budget Reconciliation Act of 1989 mandated the 
establishment of the Medicare physician fee schedule, which sets payment 
rates for all physician services, including E/M services.19, 20  See Appendix 
B for a list of visit types, E/M codes, complexity levels, and Medicare 
payment rates in 2010.   
Payment rates for the Medicare physician fee schedule are updated each 
year using the sustainable growth rate (SGR) system, which is designed to 
control Medicare spending on physician services.21  Medicare physician 
payment rates are adjusted to reflect differences between actual and target 
spending for certain types of Part B goods and services.22  If actual 
spending for these goods and services exceeds target spending, physician 
payment rates are reduced.  If actual spending for these goods and services 
is lower than target spending, physician payment rates are increased.23   
Since the payment reduction in 2002, Congress has overridden SGR fee 
schedule reductions and has instead either maintained or moderately 
increased payment rates.24  As a result of the legislative overrides, the 
SGR system requires that payment rates be reduced by about 30 percent in 
2012.25    
 
19 
Omnibus Budget Reconciliation Act of 1989, P. L. No. 101-239  6102.  Social Security 
Act  1848, 42 U.S.C. 1395w-4.  The Medicare physician fee schedule is derived using a 
resource-based relative value scale, which includes three resource components:  (1) total 
physician work, (2) practice expenses, and (3) malpractice expenses.  Each component is 
measured in terms of relative value units (RVUs).  The Medicare physician fee schedule 
payment rates are based on RVUs, adjusted for geography, and multiplied by a national 
conversion factor to derive dollar amounts. 
20 Section 1848(a)(1) of the Act established the Medicare physician fee schedule as the basis 
for Medicare reimbursement for all physician services beginning in January 1992. 
21 Social Security Act  1848(f), 42 U.S.C. 1395w-4(f). 
22
 Annual spending targets are updated each year by applying a growth rate known as the 
sustainable growth rate (SGR).  The SGR formula incorporates four factors:  (1) inflation,    
(2) changes in enrollment in Medicares fee-for-service program, (3) the estimated 10-year 
average annual growth rate of real gross domestic product per capita, and (4) the impact of 
changes in law or regulation.  These factors are multiplied to yield an overall rate of growth.  
To determine the next years spending target, the previous years target is increased by the 
overall rate of growth estimated for the next year. 
23 Congressional Budget Office (CBO), The Sustainable Growth Rate Formula for Setting 
Medicares Physician Payment Rates, September 2006, p. 5.  Accessed at  
http://www.cbo.gov/ftpdocs/75xx/doc7542/09-07-SGR-brief.pdf on June 20, 2011.  
24 CMS, Letter to the Medicare Payment Advisory Commission (MedPAC) regarding the 
CY 2012 Physician Fee Schedule, March 2011.  Accessed at 
http://www.cms.gov/SustainableGRatesConFact/ on June 20, 2011. 
25 CBO, Medicares Payments to Physicians:  The Budgetary Impact of Alternative Policies, 
June 2011.  Accessed at http://www.cbo.gov/ftpdocs/122xx/doc12240/SGR_Menu_2011.pdf 
on August 12, 2011.    
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   4 
   
Medicare Claims Processing and Program Safeguards 
CMS uses several contractors to prevent and reduce Medicare fraud, 
waste, and abuse.  Specifically, CMS contracts with MACs to process and 
pay Medicare claims.  MACs are responsible for conducting medical 
reviews and developing provider education on identified areas of 
  
vulnerability.26 They also create local coverage determinations, 
implement electronic edits, or use proactive data analysis to monitor areas 
of vulnerability.27 
Additionally, CMS contracts with Recovery Audit Contractors (RAC) to 
identify improper payments.  RACs are responsible for conducting 
postpayment reviews to identify and correct improper payments.28  If an 
improper payment is identified, RACs notify MACs to take administrative 
action.   
CMS contracts with Zone Program Integrity Contractors (ZPIC) to 
identify and prevent fraud and abuse.29  ZPICs are responsible for 
conducting investigations, developing cases of suspected fraud, and 
referring cases to law enforcement, as appropriate.30   
CMS has one contractor that produces comparative billing reports, which  
show a physicians billing pattern for various procedures or services and 
compares that physicians billing pattern to those of his or her peers.31  
Comparative billing reports provide details about physicians coding and 
billing practices to prevent improper payments. 
   
 
26
 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch.1,  1.3.1.  Accessed at 
http://www.cms.gov/manuals/downloads/pim83c01.pdf on May 6, 2011.   
27 Proactive data analysis includes identifying patterns of potential billing errors concerning 
Medicare coverage and physician coding through data analysis and evaluation of other 
information.   
28 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch.1,  1.3.1.  Accessed at 
http://www.cms.gov/manuals/downloads/pim83c01.pdf on May 6, 2011.  Postpayment review 
includes both automated (medical record not needed) and complex (medical record needed) 
reviews. 
29 The Medicare Prescription Drug, Improvement and Modernization Act of 2003, 
P.L. No. 108-173  911, required CMS to replace its current claims processing contractors 
(fiscal intermediaries and carriers) with MACs.  Also, CMS is in the process of replacing the 
legacy benefit integrity contractors, known as Program Safeguard Contractors, with ZPICs.   
30 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 1,  1.7.B.  Accessed at 
http://www.cms.gov/manuals/downloads/pim83c01.pdf on May 6, 2011.   
31 Safeguard Services, LLC.  Comparative Billing Report Services Overview.  Accessed at 
http://www.safeguard-servicesllc.com/cbr/default.asp on November 1, 2011. 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   5 
   
Related OIG Work 
In 2006, OIG reported that 75 percent of consultations, one type of E/M 
service, did not meet Medicare coverage requirements, resulting in 
$1.1 billion in improper Medicare payments.32  The report also found that 
consultations billed at the highest level were miscoded 95 percent of the 
time.  As of 2010, CMS discontinued the payment of E/M consultation 
codes.33   
OIG is conducting a series of evaluations of E/M services provided to 
Medicare beneficiaries in 2010.  OIG plans to issue two others in addition 
to this report.  One will determine the appropriateness of Medicare 
payments for E/M services.34  The other will assess the extent of 
documentation vulnerabilities in E/M services using electronic health 
record systems.35 
METHODOLOGY 
To analyze coding trends from 2001 to 2010, we used the PBAR National 
Procedure Summary files.  To analyze physician billing patterns, we used 
the carrier file from the National Claims History (NCH) file in 2010.  We 
limited our analysis to E/M codes that correspond to visit types with three 
to five levels.36  We did not determine whether the services billed by 
physicians who consistently billed higher level E/M codes were 
inappropriate or fraudulent.   
Determining the Coding Trends of E/M Services From 2001 to 
2010 
Using PBAR data files, we determined the coding trends of E/M services 
from 2001 to 2010.  The PBAR data files include the total number of 
services and payments for each E/M code.  For each year, we calculated 
the frequency with which physicians billed E/M codes to Medicare.   
 
 
 
 
32 OIG, Consultations in Medicare:  Coding and Reimbursement, OEI-09-02-00030, March 
2006. 
33 74 Fed. Reg. 61738, 61768 (Nov. 25, 2009). 
34 OEI-04-10-00181, in progress. 
35 OEI-04-10-00182, in progress.  
36
 The excluded E/M codes represent 6 percent of Medicare payments for E/M services in 
2010.  These E/M codes are:  12 codes that represent the length of the visit as either more or 
less than a time threshold (9923899239, 9929199292, 9931599316, 9935499357, and 
9940699407), 2 stand-alone E/M codes (99217 and 99318), unlisted E/M service (99499), 
and codes with under $100,000 in Medicare payments in 2010.   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   6 
   
Identifying and Describing Physicians Who Consistently Billed 
Higher Level E/M Codes in 2010 
Using the 2010 NCH Carrier file, we identified all physicians who 
performed at least 100 Medicare E/M services in 2010.37  To identify 
physicians who consistently billed higher level E/M codes, we first 
identified physicians whose average E/M code level was in the top            
1 percent of their specialties.38, 39  From that subset of physicians, we 
identified those who billed the two highest codes within a visit type at 
least 95 percent of the time.  Physicians who met both criteria are 
hereinafter referred to as physicians who consistently billed the two 
highest level E/M codes.  The remaining physicians are referred to as other 
physicians.   
Using the 2010 NCH file, we identifed the State and specialty for each 
physician.40  We also used this file to analyze the ages and diagnoses of 
beneficiaries treated by each physician.    
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
 
37 We used the National Provider Identifier (NPI) field from the NCH Carrier file to 
determine the number of physicians, and we did not verify whether those NPIs were valid.  
Claims submitted by physicians who provided fewer than 100 E/M services represented less 
than 2 percent of Medicare payments and approximately 30 percent of all physicians who 
provided E/M services. 
38 
Physicians who provided E/M services in 2010 represented 66 specialties. 
39
 We calculated each physicians average percentile in his or her specialty across all visit 
types, weighted by volume, to account for differences in the frequency of billing E/M codes 
for each specialty. 
40 
We selected the physicians State listed on the claim.  This variable includes 50 States and 
the District of Columbia, as well as Puerto Rico, the Virgin Islands, U.S. possessions, and 
Guam. 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   7 
   
FINDINGS 
From 2001 to 2010, physicians increased their billing 
of higher level E/M codes in all visit types 
Based on the percentage of services billed for each E/M code within each 
visit type, physicians increased their billing of higher level (i.e., more 
complex and more expensive) E/M codes in all 15 visit types from 2001 to 
2010.41  Appendix C shows the percentage of services billed for each E/M 
code in all visit types from 2001 to 2010.        
To illustrate the shift in physicians billing of higher level E/M codes, we 
provide details on three visit types:  (1) established patient office visits, 
(2) subsequent inpatient hospital care, and (3) emergency department 
visits.  Large proportions of Medicare payments went for these three visit 
types in 2010, and different types of shifts in billing to higher level codes 
were made in each type.   
Established patient office visits   
This visit type represented the largest amount of Medicare payments for 
E/M services in 2010.  Figure 1 shows the percentage of these services 
billed for each E/M code from 2001 to 2010, with the percentage 
difference between 2001 and 2010 above each codes set of bars.  While 
the middle code (99213) was billed most often during the 10-year period 
of our review, there was a shift in billing from the three lower level E/M 
codes to the two higher level codes.  Combined, physicians increased their 
billing of the two highest level E/M codes (99214 and 99215) by 
17 percent from 2001 to 2010.   
 
 
 
 
 
 
 
   
 
41 From 2001 to 2009, there were 15 visit types for E/M services.  In 2010, inpatient and 
outpatient consultations were no longer permitted by CMS for payment, resulting in 13 visit 
types.  Therefore, the trends for consultations are from 2001 to 2009. 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   8 
   
Figure 1:  Percentage of E/M Codes Billed for Established Patient Office 
Visits From 2001 to 2010 
 
60% 
-8% 
 
50% 
 
40% 
15% 
  Proportion of  30% 
Services Billed 
  20% 
-7% 
-2%  2% 
10% 
 
0% 
  99211  99212  99213  99214  99215 
E/M Code 
 
2001  2002  2003  2004  2005  2006  2007  2008  2009  2010 
 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Subsequent inpatient hospital care  
This visit type represented the second-largest amount of Medicare 
payments for E/M services in 2010.  Figure 2 shows the percentage of 
these services billed for each E/M code from 2001 to 2010, with the 
percentage difference between 2001 and 2010 above each codes set of 
bars.  In 10 years, physicians billing shifted from lower level to higher 
level codes.  For example, the billing of the lowest level code (99231) 
decreased 16 percent, while the billing of the two higher level codes 
(99232 and 99233) increased 6 and 9 percent, respectively. 
 
Figure 2:  Percentage of E/M Codes Billed for Subsequent Inpatient 
Hospital Care From 2001 to 2010   
70% 
6% 
60% 
-16% 
50% 
40% 
Proportion of 
Services Billed 
30% 
-16%  9% 
20% 
10% 
0% 
99231  99232  99233 
E/M Code 
2001  2002  2003  2004  2005  2006  2007  2008  2009  2010 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   9 
   
Emergency department visits  
This visit type represented the fifth-largest amount of Medicare payments 
for E/M services in 2010.  Figure 3 shows the percentage of these services 
billed for each E/M code from 2001 to 2010, with the percentage 
difference between 2001 and 2010 above each codes set of bars.  In 
10 years, physicians billing of the highest level code (99285) rose 
21 percent, increasing from 27 to 48 percent.  During the same time, 
physicians billing of all other codes decreased.  Physicians billed the 
lowest level code (99281) less than 3 percent of the time.   
Figure 3:  Percentage of E/M Codes Billed for Emergency Department Visits 
From 2001 to 2010 
 
60% 
 
50% 
  21% 
40% 
  -11%  -3% 
Proportion of 
30% 
  Services Billed 
20% 
 
-6% 
10% 
  -2% 
  0% 
99281  99282  99283  99284  99285 
  E/M Code 
  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010 
  *Percentages do not sum to zero because of rounding. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
In 2010, approximately 1,700 physicians consistently 
billed higher level E/M codes 
In 2010, nearly 370 million E/M services were provided by approximately 
442,000 physicians nationwide.  Of that population, 3,008 had an average 
E/M code level in the top 1 percent of their specialties.  Among these 
physicians, 1,669 billed the 2 highest level E/M codes within a visit type 
at least 95 percent of the time.  These 1,669 physicians represented less 
than 1 percent of all physicians who performed E/M services in 2010.  
These physicians substantially differed from others in their billing of E/M 
codes. 
In total, Medicare paid almost $108 million for E/M services performed by 
physicians who consistently billed the two highest level E/M codes in 
2010.  On average, physicians who consistently billed the two highest 
level E/M codes did so 98 percent of the time in 2010, compared to others 
who billed these codes 53 percent of the time.   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   10 
   
As a result, Medicare paid on average $205 more per beneficiary and    
$43 more per E/M service to physicians who consistently billed higher 
level codes.  Of these physicians, 916 billed the two highest level codes 
100 percent of the time, corresponding to $54 million in Medicare 
payments.  Table 1 compares the E/M coding groups.   
Table 1:  Number of Physicians, Beneficiaries, E/M Services, and Average Medicare 
Payment per E/M Service and per Beneficiary by E/M Coding Group in 2010 
Average  Average 
Number of  Number of  Number of  Medicare  Medicare 
E/M Coding Group  Physicians  Beneficiaries  E/M Services  Payment per  Payment per 
E/M Service  Beneficiary 
Physicians Who Consistently 
Billed Higher Level E/M Codes  1,669  76,132  828,646  $131.24  $426.56 
Other Physicians  440,321  29,950,855  368,800,457  $88.25  $221.62 
   Total  441,990  30,026,987  369,629,103  --  -- 
Source:  OIG analysis of 2010 NCH Carrier file.  
Physicians who consistently billed higher level E/M codes 
practiced in nearly all States, represented similar specialties, 
and treated beneficiaries of similar ages and with similar 
diagnoses as those of other physicians 
Physicians who consistently billed higher level E/M codes practiced in 
most (47 of 50) States as well as the District of Columbia, the Virgin 
Islands, and Puerto Rico.42, 43  However, some States had a greater 
percentage of these physicians compared to their percentage of other 
physicians.  For example, California had 17 percent of physicians who 
consistently billed higher level E/M codes compared to 8 percent of other 
physicians.  See Appendix D for the percentage of physicians in each State 
by E/M coding group.  
Overall, physicians who billed for E/M services represented 66 specialties, 
with most specializing in internal medicine, family practice, and 
emergency medicine.  Physicians who consistently billed the two highest 
level E/M codes collectively represented 80 percent (53 of 66) of those 
specialties.  Of these physicians, the majority also specialized in internal 
medicine, family practice, and emergency medicine.  Table 2 shows the six 
specialties with the largest percentage of physicians by E/M coding group 
in 2010.   
 
42
 Three States (Montana, Nebraska, and Wyoming), U.S. possessions, and Guam did not 
have physicians who consistently billed higher level codes in 2010. 
43
 Less than 1 percent of physicians (114 of 441,990) did not provide information in their 
claims data about their practice locations. 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   11 
   
 
Table 2:  Specialties With the Largest Percentage of Physicians by E/M 
Coding Group in 2010 
  Physicians Who 
Specialty  Consistently Billed  Other Physicians 
Higher Level E/M Codes 
 
Internal Medicine  19.8%  18.1% 
 
Family Practice  12.2%  14.7% 
  Emergency Medicine  9.9%  7.1% 
  Nurse Practitioner   4.4%  5.2% 
Obstetrics and Gynecology  4.3%  1.9% 
 
Cardiovascular Disease, Cardiology  4.0%  4.8% 
     Total*  54.6%  51.8% 
*The remaining specialties represented 45.4 percent of physicians who consistently billed higher level E/M codes 
 and 48.2 percent of other physicians.  
Source:  OIG analysis of 2010 NCH Carrier file. 
 
Further, 28 specialties (42 percent) had less than 1 percent of physicians 
who consistently billed higher level E/M codes.  See Appendix E for the 
percentage of physicians in each specialty by E/M coding group. 
Approximately 30 million beneficiaries received E/M services from 
physicians in 2010.  Overall, physicians who consistently billed the two 
highest level E/M codes and other physicians treated beneficiaries of 
similar ages.  Beneficiaries treated by physicians who consistently billed 
higher level E/M codes were on average 70 years old.  Beneficiaries 
treated by other physicians were on average 72 years old.  
Physicians who consistently billed higher level E/M codes had 
beneficiaries with diagnoses similar to those of beneficiaries treated by 
other physicians.  Appendix F lists the most common diagnoses in 2010 
and the percentage of services listing the diagnosis for each E/M coding 
group.  Approximately the same percentage of beneficiaries were 
diagnosed with the three most common diagnoses for each E/M coding 
group:  hypertension (6 percent), benign hypertension (6 percent), and 
type II diabetes (4 percent).       
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   12 
   
CONCLUSION AND RECOMMENDATIONS 
Between 2001 and 2010, Medicare payments for Part B goods and 
services increased by 43 percent, from $77 billion to $110 billion.  During 
this same time, Medicare payments for E/M services increased by 
48 percent, from $22.7 billion to $33.5 billion.  Several factors contributed 
to these overall increases, including increases in the number of services 
provided and in the average payment rate for E/M services.   
However, changes in physicians billing of E/M codes also contributed to 
this increase.  Based on the percentage of services billed for each E/M 
code within each visit type, we found that physicians increased their 
billing of higher level, more complex and expensive E/M codes and 
reduced their billing of lower level, less complex and expensive E/M 
codes in all 15 visit types from 2001 to 2010.  
In addition, approximately 1,700 physicians billed higher level, more 
complex and expensive E/M codes in 2010 at least 95 percent of the time.  
Although these physicians differed from others in their billing of E/M 
codes, they practiced in nearly all States, represented similar specialties, 
and treated beneficiaries of similar ages and with similar diagnoses.   
This report is the first in a series of evaluations of E/M services.  We did 
not determine whether physicians who billed higher level E/M codes in 
2010 billed inappropriately.  Subsequent evaluations will determine the 
appropriateness of Medicare payments for E/M services and the extent of 
documentation vulnerabilities in E/M services. 
Therefore, we recommend that CMS: 
Continue To Educate Physicians on Proper Billing for E/M 
Services 
CMS should continue to provide educational outreach on E/M services to 
physicians.  These efforts can focus on how to determine the appropriate 
E/M code for the service provided and the criteria used in making that 
determination, particularly for visit types that experienced shifts in billing.     
Educational outreach to physicians is a longstanding and widespread 
activity that CMS undertakes to inform physicians about the specific 
policies, rules, and regulations relevant to the services they provide.  
Outreach can include letters that describe inappropriate billing practices, 
face-to-face meetings, telephone conferences, seminars, and workshops.   
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   13 
   
Encourage Its Contractor To Review Physicians Billing for E/M 
Services  
CMS should encourage its contractor to review physicians billing for E/M 
services and produce comparative billing reports.  Such reports provide a 
documented analysis of a physicians billing pattern compared to those of 
his or her peers.  These reports provide helpful insights into physicians 
billing patterns to avoid improper Medicare payments.  CMS may also 
find these reports helpful for identifying and monitoring physicians who 
consistently bill higher level E/M codes.    
Review Physicians Who Bill Higher Level E/M Codes for 
Appropriate Action  
CMS should conduct additional reviews of physicians who consistently 
bill higher level E/M codes to ensure that their claims are appropriate.  If 
CMS determines that inappropriate claims have been paid, it should take 
steps to recover those overpayments.  To assist CMS, we have separately 
provided a list of the approximately 1,700 physicians we identified as 
consistently billing higher level E/M codes in 2010.  We will also consider 
these physicians for further review in our continuing series of evaluations 
of E/M services. 
 
     
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   14 
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with our first and second recommendations and partially 
concurred with our third recommendation.  With regard to our first 
recommendation, CMS recently updated E/M educational products and is 
seeking new ways of educating providers on proper billing for E/M 
services, such as exploring the use of Web-based learning tools. 
With regard to the second recommendation, CMS will issue a Technical 
Direction Letter to MACs with a link to our report.  CMS will also inform 
MACs that our findings are informational and shall be considered a source 
of data as MACs prioritize workloads.  CMS is also planning to develop 
and issue a comparative billing report aimed at 5,000 physicians across the 
country who have consistently billed for high level E/M codes.  The 
report, which will include the 1,700 physicians identified in our study, is 
not intended to be punitive or to be an indication of fraud, but is intended 
to be proactive and will provide information about the physicians coding 
and billing practices.  According to CMS, this should help providers 
identify potential errors in billing practices and make changes to help 
prevent improper billing and payment in the future.    
With regard to the third recommendation, CMS stated that it will take 
appropriate action and forward the names of the 1,700 physicians to 
MACs.  CMS will direct each MAC to focus on the top 10 high billers in 
its jurisdiction.  CMS stated that it and its contractors must weigh the cost 
and benefit of E/M reviews against reviews of more costly Part B services.   
We support CMSs efforts to address these issues and encourage it to 
continue making progress.  For the full text of CMSs comments, see 
Appendix G.  We did not make any changes to the report based on CMSs 
comments.       
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   15 
   
APPENDIX A 
Three Key Components Used To Determine the Appropriate 
Complexity Level for an Evaluation and Management Service 
As defined by the Current Procedural Terminology (CPT) manual, 
evaluation and management (E/M) codes, which correspond to three to 
five complexity levels within a visit type, include seven basic components:  
patient history, physical examination, medical decisionmaking, 
counseling, coordination of care, the nature of the patients presenting 
problem (i.e., the reason for the visit), and time.  The first three 
components are key to determining the correct E/M code.  The next three 
are contributory factors to selecting the correct code, meaning that these 
components are not required for every patient visit.  Time is the final 
component.  The physician must use the following three key components 
to determine the appropriate code:44 
1.  Extent of patient historyphysicians use their clinical judgment and 
assess the nature of the patients presenting problems to determine 
the depth of the history needed to complete the service.  A patient 
history can be classified into one of four types: 
  problem focused (brief history of present illness or problem); 
  expanded problem focused (brief history of present illness with 
problem-pertinent system review); 
  detailed (extended history of present illness with pertinent past, 
family, and social history directly related to the presenting 
problem; includes review of a limited number of additional 
systems); and 
  comprehensive (extended history of present illness with review of 
body systems directly related to the patients problems; complete 
past, family, and social history). 
2.  Extent of physical examinationbased on clinical judgment and the 
presenting medical problems, the physician can perform one of four 
types of examination: 
 
 
44 The requirements for each key component are summarized in this Appendix.  The full 
requirements for each key component are available in the 1995 and 1997 Documentation 
Guidelines for Evaluation and Management Services.  Accessed at 
https://www.cms.gov/MLNProducts/Downloads/1995dg.pdf and 
https://www.cms.gov/MLNProducts/Downloads/MASTER1.pdf on September 15, 2011. 
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   16 
   
  problem focused (limited examination of the affected body area or 
organ system), 
  expanded problem focused (limited examination of affected area 
or systems with other symptomatic or related organ systems), 
  detailed (extended examination of affected body area and other 
related systems), and 
  comprehensive (a general multisystem examination or a complete 
examination of a single organ system). 
3.  Complexity of the physicians medical decisionmakingbased on 
factors needed to establish a diagnosis and/or select a management 
option: 
  the number of possible diagnoses or the number of options that 
must be considered; the amount and/or complexity of medical 
records, diagnostic tests, and other information that physicians 
must obtain, review, and analyze; and the risk of significant 
complications, morbidity, and/or mortality; and 
  four types of medical decisionmaking are recognized: 
straightforward, low complexity, moderate complexity, and high 
complexity. 
Table A-1 illustrates the key components used to determine the appropriate 
E/M code for a new patient office visit.  There are five levels of complexity 
for this office visit.  Physicians must document the medical record with the 
appropriate information to support the E/M code billed to Medicare.    
 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   17 
   
Table A-1:  Key Components Used To Determine the Appropriate E/M Code for a New 
Patient Office Visit 
Key Components 
EC/oMd e  Presenting Problem(s)  Patient History  Examination  DecisionMmeadkiicnagl  
Type  Type 
Type 
Self-limited or minor; the physician typically spends 10 
99201  Problem focused  Problem focused  Straightforward 
minutes face-to-face with the patient and/or family 
Low to moderate severity; the physician typically spends  Expanded  Expanded 
99202  Straightforward 
20 minutes face-to-face with the patient and/or family  problem focused  problem focused 
Moderate severity; the physician typically spends 30 
99203  Detailed   Detailed  Low complexity 
minutes face-to-face with the patient and/or family 
Moderate to high severity; the physician typically spends  Moderate 
99204  Comprehensive  Comprehensive 
45 minutes face-to-face with the patient and/or family  complexity 
Moderate to high severity; the physician typically spends 
99205  Comprehensive  Comprehensive  High complexity 
60 minutes face-to-face with the patient and/or family 
Source:  The Centers for Medicare & Medicaid Services Evaluation & Management Services Guide 2010.  Available online at  
https://www.cms.gov/MLNProducts/downloads/eval_mgmt_serv_guide-ICN006764.pdf.  Accessed on September 14, 2011. 
 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   18 
   
APPENDIX B 
Visit Types, Evaluation and Management Codes, Complexity 
Levels, and Medicare Payment Rates in 2010 
2010 Average  Percentage of Total 
2010 Total Medicare 
Visit Type  E/M Code*  Complexity Level  Medicare Payment  Medicare 
Payments 
Rate  Payments 
99201  Low  $36.62   $15,623,525  
99202  Medium-low  $65.26   $198,932,791  
New Patient Office Visit  99203  Medium  $96.60   $865,066,628   8.8% 
99204  Medium-high  $151.33   $1,266,274,265  
99205  High  $190.56   $613,011,381  
99211  Low  $19.04   $158,096,550  
99212  Medium-low  $38.14   $720,721,085  
Established Patient 
99213  Medium  $64.80   $6,467,110,957   48.3% 
Office Visit 
99214  Medium-high  $97.35   $7,580,662,763  
99215  High  $132.14   $1,307,379,597  
99218  Low  $63.30   $7,081,475  
Initial Observation Care  99219  Medium  $105.67   $39,038,293   0.4% 
99220  High  $148.93   $83,259,376  
99221  Low  $95.98   $185,197,152  
Initial Inpatient Hospital 
99222  Medium  $131.31   $969,495,783   10.0% 
Care 
99223  High  $193.55   $2,203,799,227  
99231  Low  $38.29   $494,267,314  
Subsequent Inpatient 
99232  Medium  $70.01   $3,484,362,095   18.3% 
Hospital Care 
99233  High  $100.97   $2,162,757,831  
99234  Low  $130.76   $8,893,024 
Observation or Inpatient 
99235  Medium  $171.43   $25,926,468   0.2% 
Hospital Care 
99236  High  $213.60   $31,612,362 
99241  Low  $0.00   $0 
99242  Medium-low  $0.00   $0 
Office/Outpatient 
99243  Medium  $33.25   $133  0.0% 
Consultation** 
99244  Medium-high  $0.00   $0  
99245  High  $1.00   $3  
99251  Low  $0.00   $0 
99252  Medium-low  $34.92   $70  
Inpatient Consultation**  99253  Medium  $51.95   $104   0.0% 
99254  Medium-high  $2.69   $527  
99255  High  $41.14   $123  
*E/M codes are evaluation and management codes. 
**Effective January 1, 2010, the consultation codes were no longer recognized by the Centers for Medicare & Medicaid Services for Medicare Part B payment.  The 
average Medicare payment amount and total Medicare payments for consultation codes in 2010 are from claims in our data that were paid improperly. 
   continued on next page 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   19 
   
 
Visit Types, Evaluation and Management Codes, Complexity 
Levels, and Medicare Payment Rates in 2010 (Continued) 
 
2010 Average 
2010 Total Medicare  Percentage of Total 
Visit Type  E/M Code  Complexity Level  Medicare Payment 
Payments   Medicare Payments  
Rate  
99281  Low  $20.38   $1,635,403  
99282  Medium-low  $39.76   $20,976,556  
Emergency Department 
99283  Medium  $60.58   $230,221,062   7.4% 
Visit 
99284  Medium-high  $115.75   $638,227,691  
99285  High  $172.91   $1,579,304,457  
99304  Low  $86.38   $24,933,368  
Initial Nursing Facility 
99305  Medium  $121.58   $100,300,736   1.0% 
Care 
99306  High  $155.65   $194,595,076  
99307  Low  $40.67   $150,954,283  
Subsequent Nursing  99308  Medium-low  $62.28   $572,235,515  
4.2% 
Facility Care  99309  Medium-high  $81.70   $538,574,010  
99310  High  $119.48   $132,388,679  
99324  Low  $54.82   $2,744,951  
New Patient  99325  Medium-low  $80.49   $3,363,321  
Domiciliary/Rest Home  99326  Medium  $131.20   $4,760,505   0.1% 
Visit  99327  Medium-high  $169.94   $5,957,293  
99328  High  $199.00   $4,700,288  
99334  Low  $57.32   $22,684,625  
Established Patient 
99335  Medium-low  $87.86   $61,796,402  
Domiciliary/Rest Home  0.6% 
Visit  99336  Medium-high  $121.31   $85,457,177  
99337  High  $172.64   $30,917,995  
99341  Low  $56.51   $1,392,733  
99342  Medium-low  $82.67   $4,544,302  
New Patient Home Visit  99343  Medium  $132.72   $6,150,275   0.1% 
99344  Medium-high  $172.14   $10,933,245  
99345  High  $206.24   $14,233,439  
99347  Low  $56.02   $12,219,650  
Established Patient  99348  Medium-low  $84.21   $47,388,999  
0.8% 
Home Visit  99349  Medium-high  $121.05   $116,579,054  
99350  High  $164.83   $78,267,681  
Total*            $33,587,009,674  100% 
*Total does not sum to 100 percent because of rounding. 
Source:  Office of Inspector General analysis of 2010 Part B Analytic Reports National Procedure Summary file. 
 
 
 
 
 
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   20 
   
APPENDIX C 
Coding Trends for Evaluation and Management Codes in All 
Visit Types from 2001 to 2010 
Table C- 1:  Established Patient Office Visit   
    Percentage of Services**  Difference 
Between 2001 and 
E/M Code*  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010 
99211  6%  6%  6%  5%  5%  5%  4%  4%  4%  4%  (2%)  
99212  16%  15%  13%  12%  12%  11%  10%  10%  9%  9%  (7%)  
99213  54%  54%  53%  53%  52%  51%  50%  49%  48%  46%  (8%) 
99214  21%  22%  24%  26%  28%  30%  31%  33%  34%  36%  15%  
99215  3%  3%  3%  3%  3%  4%  4%  4%  4%  5%  2%  
*E/M codes are evaluation and management codes. 
**Percentages may not sum to 100 because of rounding. 
Source:  Office of Inspector General (OIG) analysis of Part B Analytics Reports (PBAR) National Procedure Summary files from 2001 to 2010. 
Table C-2:  Subsequent Inpatient Hospital Care   
Percentage of Services*  Difference 
Between 2001 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010 
99231  31%  28%  25%  23%  22%  20%  19%  17%  16%  15%  (16%)  
99232  53%  55%  56%  57%  58%  58%  59%  59%  59%  59%   6%  
99233  16%  17%  18%  20%  20%  21%  23%  24%  25%  25%   9% 
*Percentages may not sum to 100 because of rounding. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Table C-3:  Initial Inpatient Hospital Care   
Percentage of Services*  Difference Between 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2001 and 2010 
99221  7%  6%  6%  5%  5%  5%  5%  5%  5%  9%  2%  
99222  39%  38%  37%  36%  36%  35%  33%  32%  32%  36%   (3%)  
99223  54%  56%  57%  59%  59%  60%  62%  63%  64%  55%   1%  
*Percentages may not sum to 100 because of rounding. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Table C-4:  New Patient Office Visit   
Percentage of Services*  Difference Between 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2001 and 2010 
99201  5%  5%  4%  4%  3%  3%  3%  3%  3%  2%  (2%)  
99202  25%  24%  23%  22%  21%  21%  20%  19%  19%  13%  (12%)  
99203  37%  38%  39%  40%  41%  42%  42%  43%  43%  37%  0%  
99204  23%  24%  25%  26%  26%  26%  26%  27%  27%  35%  12%  
99205  9%  9%  9%  9%  9%  9%  8%  8%  8%  13%   4%  
   *Percentages may not sum to 100 because of rounding.    
   Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   21 
   
 
Table C-5:  Emergency Department Visit   
 
Percentage of Services*  Difference 
  Between 2001 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009+  2010+  2010 
99281  2%  1%  1%   1%  1%  1%  1%  1%  0%  0%  (2%)  
99282  9%  8%  7%  6%  5%  4%  4%  3%  3%  3%   (6%) 
 
99283  31%  30%  29%  28%  27%  25%  24%  22%  21%  20%   (11%)  
99284    32%  31%  30%  30 %  30%  29%  29%  29%  29%  29%   (3%)  
99285  27%  30%  33%  35%  38%  40%  42%  44%  46%  48%  21%   
*Percentages may not sum to 100 because of rounding. 
+The percentages for E/M code 99281 in 2009 and 2010 are nonzero values that round to 0 percent. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Table C-6:  Subsequent Nursing Facility Care     
Percentage of Services*  Difference Between 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2006 and 2010** 
99311  40%  36%  33%  30%  28%  --  --  --  --  --  -- 
99312  48%  49%  51%  52%  54%  --  --  --  --  --  -- 
99313  12%  14%  17%  18%  18%  --  --  --  --  --  -- 
99307  --  --  --  --  --  24%  21%  20%  19%  18%  (6%)  
99308  --  --  --  --  --  45%  45%  45%  45%  45%  0%  
99309  --  --  --  --  --  26%  28%  29%  30%  32%  6%  
99310  --  --  --  --  --  5%  6%  6%  6%  5%  0% 
*Percentages may not sum to 100 because of rounding. 
**As of 2006, the E/M codes 9931199313 were eliminated and replaced with E/M codes 9930799310.  For this reason, we determined the difference in the 
percentage of services between 2006 and 2010 rather than between 2001 and 2010.     
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Table C-7:  Initial Nursing Facility Care     
Percentage of Services*  Difference 
Between 2006 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010** 
99301  18%  16%  15%  14%  13%  --  --  --  --  --  -- 
99302  30%  30%  28%  28%  28%  --  --  --  --  --  -- 
99303  51%  54%  57%  58%  59%  --  --  --  --  --  -- 
99304  --  --  --  --  --  12%  10%  9%  9%  12%  0%  
99305  --  --  --  --  --  34%  32%  31%  32%  35%   1%  
99306  --  --  --  --  --  54%  58%  59%  59%  53%  (1%)  
*Percentages may not sum to 100 because of rounding. 
**As of 2006, the E/M codes 9930199303 were eliminated and replaced with E/M codes 9930499306.  For this reason, we determined the difference in the 
percentage of services between 2006 and 2010 rather than between 2001 and 2010.   
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   22 
   
 
Table C-8:  Established Patient Home Visit   
  Percentage of Services*  Difference Between 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2001 and 2010 
99347  23%  20%  19%  17%  16%  14%  12%  11%  11%  10%  (13%)  
 
99348  36%  35%  33%  31%  31%  29%  28%  27%  26%  25%   (11%)  
99349    29%  31%  34%  3 5%  37%  41%  42%  42%  42%  43%  14%  
99350  12%  13%  15%  16%  16%  16%  18%  20%  21%  21%  9%  
*Percentages may not sum to 100 because of rounding. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
      
 
Table C-9:  Established Patient Domiciliary/Rest Home Visit   
Percentage of Services*  Difference 
Between 2006 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010** 
99331  38%  34%  30%  28%  27%  --  --  --  --  --  -- 
99332  46%  48%  49%  50%  51%  --  --  --  --  --  -- 
99333  15%  18%  20%  22%  22%  --  --  --  --  --  -- 
99334  --  --  --  --  --  26%  23%  22%  21%  20%   (6%)  
99335  --  --  --  --  --  39%  38%  36%  36%  35%   (4%)  
99336  --  --  --  --  --  28%  33%  35%  35%  36%  8%  
99337  --  --  --  --  --  7%  7%  8%  9%  9%  2%  
*Percentages may not sum to 100 because of rounding. 
**As of 2006, the E/M codes 9933199333 were eliminated and replaced with E/M codes 9933499337.  For this reason, we determined the difference in the 
percentage of services between 2006 and 2010 rather than between 2001 and 2010. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
 
Table C-10:  Initial Observation Care   
Percentage of Services*  Difference 
Between 2001 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010 
99218  21%  18%  17%  15%  14%  13%  12%  12%  11%  11%  (10%)  
99219  43%  43%  42%  41%  41%  40%  39%  37%  36%  36%   (7%)  
99220  36%  39%  41%  44%  45%  47%  49%  51%  53%  54%   18%  
*Percentages may not sum to 100 because of rounding. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Table C-11:  Observation or Inpatient Hospital Care   
Percentage of Services*  Difference 
Between 2001 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010 
99234  30%  28%  26%  25%  24%  23%  22%  22%  20%  19%  (11%)  
99235  42%  42%  42%  42%  42%  42%  41%  41%  42%  41%   (1%)  
99236  28%  30%  31%  32%  34%  35%  37%  37%  38%  40%  12%   
*Percentages may not sum to 100 because of rounding. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   23 
   
   
Table C-12:  New Patient Home Visit   
Percentage of Services*  Difference 
Between 2001 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010 
99341  24%  21%  18%  16%  14%  13%  12%  11%  10%  10%  (14%)  
99342  28%  27%  26%  26%  24%  23%  23%  22%  22%  21%   (7%)  
99343  17%  18%  19%  19%  19%  19%  20%  18%  18%  18%   1%  
99344  14%  17%  19%  19%  21%  21%  21%  21%  23%  25%   11%  
99345  16%  17%  18%  20%  21%  23%  25%  27%  27%  27%   11%  
*Percentages may not sum to 100 because of rounding. 
 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010.
 
 
Table C-13:  New Patient Domiciliary/Rest Home Visit     
Percentage of Services*  Difference 
Between 2006 and 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2010** 
99321  36%  34%  32%  30%  29%  --  --  --  --  --  -- 
99322  37%  36%  37%  36%  37%  --  --  --  --  --  -- 
99323  27%  30%  32%  34%  34%  --  --  --  --  --  -- 
99324  --  --  --  --  --  29%  29%  28%  28%  27%  (2%)  
99325  --  --  --  --  --  28%  25%  25%  24%  22%   (6%)  
99326  --  --  --  --  --  20%  19%  18%  19%  19%   (1%)  
99327  --  --  --  --  --  14%  17%  17%  17%  19%   5%  
99328  --  --  --  --  --  10%  11%  12%  13%  13%   3%  
*Percentages may not sum to 100 because of rounding. 
**As of 2006, the E/M codes 9932199323 were eliminated and replaced with E/M codes 9932499328.  For this reason, we determined the difference in the 
percentage of services between 2006 and 2010 rather than between 2001 and 2010. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010. 
 
 
Table C-14:  Inpatient Consultation   
Percentage of Services*  Difference Between 
E/M Code  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2001 and 2009** 
99251  4%  4%  3%  3%  3%  2%  2%  2%  2%  --  (2%)  
99252  10%  10%  9%  9%  8%  8%  7%  7%  7%  --   (3%)  
99253  26%  26%  26%  25%  25%  25%  25%  24%  25%  --   (1%)  
99254  39%  40%  41%  42%  43%  43%  44%  44%  45%  --   6%  
99255  20%  20%  21%  21%  21%  21%  22%  22%  22%  --   2%  
*Percentages may not sum to 100 because of rounding. 
**As of January 2010, the Centers for Medicare & Medicaid Services (CMS) no longer recognizes for Medicare payment the E/M codes for consultations.  For this 
reason, we determined the difference in the percentage of services between 2001 and 2009 rather than between 2001 and 2010.  However, there were some 
inappropriately paid claims, which we do not include in this table. 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010.   
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   24 
   
 
 
Table C-15:  Office/Outpatient Consultation   
 
Percentage of Services*  Difference 
  Between 2001 and 
E/M Cod e  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2009** 
99241    5%  4%  3%  3%  3%  3%  2%  2%  2%  --  (3%)  
99242    14%  13%  13%  12%  11%  11%  10%  9%  9%  --  (5%)  
99243  33%  33%  33%  33%  33%  33%  33%  33%  33%  --  0%  
 
99244  35%  36%  36%  37%  38%  39%  40%  41%  42%  --  7% 
 
99245  14%  14%  14%  14%  14%  15%  15%  15%  15%  --  1%  
 
*Percentages may not sum to 100 because of rounding. 
**As of Janua ry 2010, CMS no longer recognizes for Medicare payment the E/M codes for consultations.  For this reason, we determined the difference in the 
percentage of services between 2001 and 2009 rather than between 2001 and 2010.  However, there were some inappropriately paid claims, which we do not include 
in this table.   
 
Source:  OIG analysis of PBAR National Procedure Summary files from 2001 to 2010.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   25 
   
APPENDIX D 
Percentage of Physicians by State and Evaluation and 
Management Coding Group 
 
Percentage of Physicians 
Percentage of Other 
State  Who Consistently Billed 
Physicians 
Higher Level E/M Codes* 
California  17.1%  8.2% 
New York  11.3%  7.3% 
Florida  9.6%  6.3% 
Texas  6.7%  6.2% 
Arizona  4.3%  1.9% 
Michigan  3.8%  3.7% 
Illinois  3.5%  4.3% 
Maryland  3.3%  2.1% 
New Jersey  3.2%  3.3% 
Pennsylvania  3.2%  5.0% 
Ohio  2.6%  4.1% 
Georgia  2.4%  2.6% 
Massachusetts  2.3%  3.2% 
North Carolina  2.2%  3.4% 
Tennessee  1.9%  2.3% 
Virginia  1.7%  2.5% 
Washington  1,6%  2.2% 
Colorado  1.5%  1.3% 
Louisiana  1.5%  1.4% 
Alabama  1.2%  1.4% 
Minnesota  1.1%  2.0% 
Wisconsin  1.1%  2.2% 
Nevada  1.0%  0.6% 
New Mexico  1.0%  0.6% 
Puerto Rico  1.0%  0.6% 
West Virginia  1.0%  0.7% 
Mississippi  0.8%  0.9% 
Oklahoma  0.7%  1.2% 
Oregon  0.7%  1.1% 
South Carolina  0.7%  1.4% 
Kentucky  0.7%  1.5% 
*E/M codes are evaluation and management codes.  continued on next page 
  
 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   26 
   
 
Percentage of Physicians by State and Evaluation and 
Management Coding Group (Continued) 
 
 
Percentage of Physicians 
Percentage of Other 
State  Who Consistently Billed 
Physicians 
Higher Level E/M Codes 
Indiana  0.6%  2.2% 
Arkansas  0.5%  0.8% 
Missouri  0.5%  2.0% 
Connecticut  0.4%  1.5% 
District of Columbia  0.4%  0.3% 
Kansas  0.4%  1.0% 
Utah  0.4%  0.6% 
Delaware  0.4%  0.4% 
Hawaii  0.3%  0.3% 
Iowa  0.2%  1.1% 
Maine  0.2%  0.6% 
New Hampshire  0.2%  0.6% 
Rhode Island  0.2%  0.4% 
South Dakota  0.1%  0.3% 
Virgin Islands  0.1%  0.0% 
Unknown  0.1%  0.0% 
Alaska  0.1%  0.2% 
Idaho  0.1%  0.5% 
North Dakota  0.1%  0.3% 
Vermont  0.1%  0.3% 
Montana  --  0.4% 
Nebraska  --  0.6% 
Wyoming  --  0.2% 
U.S. Possessions  --  0.0% 
Guam  --  0.0% 
Missing  --  0.0% 
   Total  100%  100% 
Source:  Office of Inspector General analysis of 2010 National Claims History Carrier File. 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   27 
   
APPENDIX E 
Percentage of Physicians by Specialty and Evaluation and 
Management Coding Group 
 
Physicians Who 
Specialty  Consistently Billed Higher  Other Physicians 
Level E/M Codes* 
Internal Medicine  19.8%  18.1% 
Family Practice  12.2%  14.7% 
Emergency Medicine  9.9%  7.1% 
Nurse Practitioner  4.4%  5.2% 
Obstetrics and Gynecology  4.3%  1.9% 
Cardiovascular Disease, Cardiology  4.0%  4.7% 
Orthopedic Surgery  3.9%  4.1% 
Psychiatry  3.8%  1.8% 
General Surgery  3.2%  3.5% 
Ophthalmology  3.2%  2.3% 
Anesthesiology  2.6%  0.6% 
Physician Assistant  2.3%  4.0% 
Optometry  2.2%  1.8% 
Otolaryngology  2.2%  1.7% 
Neurology  2.0%  2.3% 
Gastroenterology  1.9%  2.4% 
General Practice  1.4%  1.4% 
Pulmonary Disease  1.3%  1.8% 
Physical Medicine and Rehabilitation  1.2%  1.4% 
Urology  1.2%  1.9% 
Endocrinology  1.1%  0.9% 
Nephrology  1.1%  1.5% 
Podiatry  1.1%  2.9% 
*E/M codes are evaluation and management codes.  continued on next page 
 
 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   28 
   
Percentage of Physicians by Specialty and Evaluation and 
Management Coding Group (Continued) 
 
Physicians Who 
Specialty  Consistently Billed Higher- Other Physicians 
Level E/M Codes 
Dermatology  1.0%  2.1% 
Neurosurgery  1.0%  0.8% 
Hematology-Oncology  0.8%  1.5% 
Infectious Disease  0.8%  0.9% 
Interventional Pain Management  0.8%  0.4% 
Rheumatology  0.8%  0.8% 
Radiation Oncology  0.6%  0.6% 
Medical Oncology  0.5%  0.5% 
Allergy Immunology  0.4%  0.5% 
Vascular Surgery  0.4%  0.5% 
Geriatric Medicine  0.3%  0.3% 
Hand Surgery  0.3%  0.2% 
Plastic and Reconstructive Surgery  0.3%  0.5% 
Critical Care, Intensivists  0.2%  0.3% 
Osteopathic Manipulative Treatment  0.2%  0.1% 
Pain Management  0.2%  0.1% 
Surgical Oncology  0.2%  0.1% 
Thoracic Surgery  0.2%  0.3% 
Cardiac Surgery  0.1%  0.2% 
Certified Registered Nurse Anesthetist  0.1%  0.0% 
Clinic or Group Practice  0.1%  0.0% 
Colorectal Surgery, Proctology  0.1%  0.2% 
Gynecological Oncology  0.1%  0.2% 
Hematology  0.1%  0.1% 
   continued on next page 
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   29 
   
Percentage of Physicians by Specialty and Evaluation and 
Management Coding Group (Continued)  
 
  Physicians Who 
Specialty  Consistently Billed Higher  Other Physicians 
Level E/M Codes 
Maxillofacial Surgery  0.1%  0.0% 
Neuropsychiatry  0.1%  0.0% 
Nuclear Medicine   0.1%  0.0% 
Oral Surgery, Dentist Only  0.1%  0.0% 
Peripheral Vascular Disease  0.1%  0.0% 
Preventative Medicine  0.1%  0.0% 
Addiction Medicine  --  0.0% 
Certified Clinical Nurse Specialist  --  0.1% 
Diagnostic Radiology  --  0.1% 
Interventional Radiology  --  0.0% 
Pediatric Medicine  --  0.2% 
Pathology  --  0.0% 
Undefined Type  --  0.0% 
No Specialty Listed  --  0.0% 
Certified Nurse Midwife  --  0.0% 
Audiologist  --  0.0% 
Radiation Therapy Center  --  0.0% 
Licensed Clinical Social Worker  --  0.0% 
Public Health or Welfare Agency  --  0.0% 
   Total  100.0%  100.0% 
Source:  Office of Inspector General analysis of 2010 National Claims History Carrier File. 
 
 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   30 
   
APPENDIX F  
 
Percentage of Most Common Diagnoses by Evaluation and 
Management Coding Group in 2010 
 
 
International 
Beneficiaries Treated by 
Classification of  Beneficiaries Treated 
Diagnosis  Physicians Who Billed Higher 
Diseases-Ninth  by Other Physicians 
Level Codes 
Revision  
Diagnosis Code 
Hypertension (no other symptom)  4019  6.0%  5.8% 
Benign Hypertension  4011  5.9%  6.3% 
Type II Diabetes  25000  4.4%  4.4% 
Back Problem (lumbago)  7242  2.2%  1.1% 
High Cholesterol  (hyperlipidemia)  2724  1.7%  1.6% 
Heart Disease (coronary atherosclerosis)  41401  1.2%  1.8% 
Abnormal Heart Rhythm (atrial fibrillation)  42731  1.1%  2.6% 
Source:  Office of Inspector General analysis of 2010 National Claims History Carrier File. 
 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   31 
  APPENDIXG 
Agency Comments 
(~
DEPAIl1MtNT OF HEALTH & lHJMAN SERVlCES_______C_"""'''' to< M'l>d1Canl1l M'l>di<:llld Sr:Mo\l< 
Ad",ilU'strafor 
WSshir'qltm. DC :>0201 
MAR 282012
l),\TE: 
TO: 	 Daniel R. Levinson 

In~pect(Vr 04;llent[ 

FROM; 	 l\1arilyn TaYCIlIlCf 

Actillt< Admini:;trlllor 

SUBJECT: 	 Office of In$pt:cim General (0TG) Drofi Re]Xlrt Coding Trends of Medicare 
Evaluation and Mamagemelll Services, OEl-04-1 0-00 l gO 
Thank Y01J for tbe oppoltlmlty to review and comment onlile, OIG Draft Report enLitled, "('oding 
Trends of Medicare Evaluation and Management"-(01-0410-00180). The Cemers for 
Medicare & Medic::aid Services (eMS) appn:c.:i~s the time lind reti4,}urces OlG lJ~d to review 
this iss,uc. O[G applied tile use offlile l'alt B }\naiytics Re]Xllting System to analyze Evaluation 
Illid Manag!:men\ (FI'vl) services provided ttl hcn;;ticiaries to dctennine coding trends from 200 1 
to 20] O.  OIO's audit also focused on l'w B ~1edic:are claims dam to d.eretmiile physicians' El.!\l 
claim paltt."T1lS In i.dentify phY$icians who consistentiy billed at higher levels offjM codes in 
2010. 
'I he OI(rs study reports a growing trend of billing at the higher levels for F./M codes in all types 
Hf I'Jr..,1 scrvi(;4;s,  DIG tlrsl n::commends th.at eMS corulnuc to educate physkians on proper 
bi 11 ins ttl! F)M services. The second recommendation in thl:! report lldvises eMS ttl t;llcour'.lge 
contractors to rtview physicians' billing for Ei~l services. The last recommendation requests 
e MS to review ph)'si~i:a.n~ who cNts15t~ntly bill higher level HM CI.-wies for I!ppmpti<lle HetiI,m. 
eMS has reviewed the /'\:.'JXll'1 and our rcs']Xluses to tbe 010 recommendaliot,s are below. 
OlG R.eeolnttHfl1d'fltion 1 
'outinue To Educate PltysJcia:ns on I'roper BiUin2 for EJM Sen'i~es 
0 ..18 should continue to provide educatio!1.al outreach on ElM services to physicians. These 
em.l!U can IOclls on how to determine 1he appropriaw FiM 1;;odc for the service provided and the 
criteria used in making that determination, partic.ularly tbr vi sit types that experienced shins in  ~. 
billing, 
Edu.cational outreach to physicians is II longstanding and widespread activtty eMS uttdertakcs to 
inform physicians on the specitk policies, rules, and rCl;ulaliotl!i relevUlit to c'hcservices they 
pwvidc_  OutrcllCn can ["elude letters that describe inappropriate bHling p.racttces, faee.to.face 
meetings. telephone oonferer,\ces, seminars, u:lcl wnrks.hops. 
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180)  32   
Agency Comments (Continued) 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   33 
   
Agency Comments (Continued) 
   
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   34 
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Dwayne Grant, Regional 
Inspector General for Evaluation and Inspections in the Atlanta regional 
office, and Jaime Durley, Deputy Regional Inspector General.   
Michelle Verges served as the lead analyst.  Other principal Office of 
Evaluation and Inspections staff from the Atlanta regional office who 
contributed to the report include Rachel Daiber; other central office staff 
who contributed include Kevin Farber, Althea Hosein, and Sandy Khoury.  
Coding Trends of Medicare Evaluation and Management Services  (OEI-04-10-00180)   35 
   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.