Department of Health and Human Services

OFFICE OF

INSPECTOR GENERAL

CODING TRENDS OF 

MEDICARE

EVALUATION AND 

MANAGEMENT SERVICES 

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 
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180) 1

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) 2

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 patient’s 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

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.

 Overall, payment rates for all E/M 

services ranged from $19 to $213 in 2010. 

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) 3

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. 

13 Social 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, 61767–78 (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 G0425–G0427 (initial inpatient telehealth consultations) or G0406–G0408 (followup 

inpatient telehealth consultations).
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180) 4

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

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.

 See Appendix 

B for a list of visit types, E/M codes, complexity levels, and Medicare 

payment rates in 2010. 

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 Medicare’s 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 year’s spending target, the previous year’s 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 

Medicare’s 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, Medicare’s 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) 5

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 physician’s billing pattern for various procedures or services and 

compares that physician’s 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) 6

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 (99238–99239, 99291–99292, 99315–99316, 99354–99357, and

99406–99407), 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) 7

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

Using the 2010 NCH file, we identifed the State and specialty for each 

physician.

 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. 

40

Standards

 We also used this file to analyze the ages and diagnoses of 

beneficiaries treated by each physician. 

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 physician’s 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 physician’s 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) 8

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

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. 

 Appendix C shows the percentage of services billed for each E/M 

code in all visit types from 2001 to 2010. 

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 code’s 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) 9

Figure 1: Percentage of E/M Codes Billed for Established Patient Office 

Visits From 2001 to 2010

0%

10%

20%

30%

40%

50%

60%

99211 99212 99213 99214 99215

Proportion of 

Services Billed

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. 

-2%

-7% 

-8% 

15% 

2% 

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 code’s 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

0%

10%

20%

30%

40%

50%

60%

70%

99231 99232 99233

Proportion of 

Services Billed

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. 

-16% 

6% 

9% 
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180) 10

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 code’s 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

0%

10%

20%

30%

40%

50%

60%

99281 99282 99283 99284 99285

Proportion of 

Services Billed

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. 

-6%

-11% -3%

21%

-2%

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) 11

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

E/M Coding Group

Number of

Physicians

Number of 

Beneficiaries

Number of 

E/M Services

Average

Medicare 

Payment per 

E/M Service

Average 

Medicare 

Payment per 

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

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. 

 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. 

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) 12

Table 2: Specialties With the Largest Percentage of Physicians by E/M 

Coding Group in 2010

Specialty

Physicians Who 

Consistently Billed 

Higher Level E/M Codes

Other Physicians

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) 13

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) 14

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 physician’s 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) 15

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 CMS’s efforts to address these issues and encourage it to 

continue making progress. For the full text of CMS’s comments, see 

Appendix G. We did not make any changes to the report based on CMS’s

comments. 
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180) 16

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 patient’s 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 history—physicians use their clinical judgment and 

assess the nature of the patient’s 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 patient’s problems; complete 

past, family, and social history). 

2. Extent of physical examination—based 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) 17

• 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 physician’s medical decisionmaking

• 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

—based on 

factors needed to establish a diagnosis and/or select a management 

option: 

• 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) 18

Table A-1: Key Components Used To Determine the Appropriate E/M Code for a New 

Patient Office Visit

E/M 

Code Presenting Problem(s)

Key Components

Patient History 

Type

Examination 

Type

Medical 

Decisionmaking 

Type

99201 Self-limited or minor; the physician typically spends 10 

minutes face-to-face with the patient and/or family Problem focused Problem focused Straightforward

99202 Low to moderate severity; the physician typically spends 

20 minutes face-to-face with the patient and/or family

Expanded 

problem focused

Expanded 

problem focused Straightforward

99203 Moderate severity; the physician typically spends 30 

minutes face-to-face with the patient and/or family Detailed Detailed Low complexity

99204 Moderate to high severity; the physician typically spends 

45 minutes face-to-face with the patient and/or family Comprehensive Comprehensive Moderate complexity

99205 Moderate to high severity; the physician typically spends 

60 minutes face-to-face with the patient and/or family Comprehensive Comprehensive High complexity

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) 19

APPENDIX B

Visit Types, Evaluation and Management Codes, Complexity 

Levels, and Medicare Payment Rates in 2010

Visit Type E/M Code* Complexity Level

2010 Average 

Medicare Payment 

Rate

2010 Total Medicare 

Payments

Percentage of Total 

Medicare 

Payments

New Patient Office Visit

99201 Low $36.62 $15,623,525 

8.8%

99202 Medium-low $65.26 $198,932,791 

99203 Medium $96.60 $865,066,628 

99204 Medium-high $151.33 $1,266,274,265 

99205 High $190.56 $613,011,381 

Established Patient 

Office Visit

99211 Low $19.04 $158,096,550 

48.3%

99212 Medium-low $38.14 $720,721,085 

99213 Medium $64.80 $6,467,110,957 

99214 Medium-high $97.35 $7,580,662,763 

99215 High $132.14 $1,307,379,597 

Initial Observation Care

99218 Low $63.30 $7,081,475 

99219 Medium $105.67 $39,038,293 0.4%

99220 High $148.93 $83,259,376 

Initial Inpatient Hospital 

Care

99221 Low $95.98 $185,197,152 

99222 Medium $131.31 $969,495,783 10.0%

99223 High $193.55 $2,203,799,227 

Subsequent Inpatient 

Hospital Care

99231 Low $38.29 $494,267,314 

99232 Medium $70.01 $3,484,362,095 18.3%

99233 High $100.97 $2,162,757,831 

Observation or Inpatient 

Hospital Care

99234 Low $130.76 $8,893,024

99235 Medium $171.43 $25,926,468 0.2%

99236 High $213.60 $31,612,362

Office/Outpatient 

Consultation**

99241 Low $0.00 $0

0.0%

99242 Medium-low $0.00 $0

99243 Medium $33.25 $133

99244 Medium-high $0.00 $0 

99245 High $1.00 $3 

Inpatient Consultation**

99251 Low $0.00 $0

0.0%

99252 Medium-low $34.92 $70 

99253 Medium $51.95 $104 

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) 20

Visit Types, Evaluation and Management Codes, Complexity 

Levels, and Medicare Payment Rates in 2010 (Continued)

Visit Type E/M Code Complexity Level

2010 Average 

Medicare Payment 

Rate 

2010 Total Medicare 

Payments 

Percentage of Total 

Medicare Payments 

Emergency Department 

Visit

99281 Low $20.38 $1,635,403 

7.4%

99282 Medium-low $39.76 $20,976,556 

99283 Medium $60.58 $230,221,062 

99284 Medium-high $115.75 $638,227,691 

99285 High $172.91 $1,579,304,457 

Initial Nursing Facility 

Care

99304 Low $86.38 $24,933,368 

99305 Medium $121.58 $100,300,736 1.0%

99306 High $155.65 $194,595,076 

Subsequent Nursing 

Facility Care

99307 Low $40.67 $150,954,283 

4.2% 99308 Medium-low $62.28 $572,235,515 

99309 Medium-high $81.70 $538,574,010 

99310 High $119.48 $132,388,679 

New Patient 

Domiciliary/Rest Home 

Visit

99324 Low $54.82 $2,744,951 

0.1%

99325 Medium-low $80.49 $3,363,321 

99326 Medium $131.20 $4,760,505 

99327 Medium-high $169.94 $5,957,293 

99328 High $199.00 $4,700,288 

Established Patient 

Domiciliary/Rest Home 

Visit

99334 Low $57.32 $22,684,625 

0.6% 99335 Medium-low $87.86 $61,796,402 

99336 Medium-high $121.31 $85,457,177 

99337 High $172.64 $30,917,995 

New Patient Home Visit

99341 Low $56.51 $1,392,733 

0.1%

99342 Medium-low $82.67 $4,544,302 

99343 Medium $132.72 $6,150,275 

99344 Medium-high $172.14 $10,933,245 

99345 High $206.24 $14,233,439 

Established Patient 

Home Visit

99347 Low $56.02 $12,219,650 

0.8% 99348 Medium-low $84.21 $47,388,999 

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) 21

APPENDIX C

Coding Trends for Evaluation and Management Codes in All 

Visit Types from 2001 to 2010

Table C-4: New Patient Office Visit

E/M Code

Percentage of Services* Difference Between 

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.

Table C-1: Established Patient Office Visit

E/M Code*

Percentage of Services** Difference 

Between 2001 and 

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-3: Initial Inpatient Hospital Care

E/M Code

Percentage of Services* Difference Between 

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-2: Subsequent Inpatient Hospital Care

E/M Code

Percentage of Services* Difference 

Between 2001 and 

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.
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180) 22

Table C-5: Emergency Department Visit

E/M Code

Percentage of Services* Difference 

Between 2001 and 

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

E/M Code

Percentage of Services* Difference Between 

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 99311–99313 were eliminated and replaced with E/M codes 99307–99310. 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

E/M Code

Percentage of Services* Difference 

Between 2006 and 

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 99301–99303 were eliminated and replaced with E/M codes 99304–99306. 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) 23

Table C-10: Initial Observation Care

E/M Code

Percentage of Services* Difference 

Between 2001 and 

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-8: Established Patient Home Visit

E/M Code

Percentage of Services* Difference Between 

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% 35% 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

E/M Code

Percentage of Services* Difference 

Between 2006 and 

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 99331–99333 were eliminated and replaced with E/M codes 99334–99337. 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-11: Observation or Inpatient Hospital Care

E/M Code

Percentage of Services* Difference 

Between 2001 and 

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) 24

Table C-12: New Patient Home Visit

E/M Code

Percentage of Services* Difference 

Between 2001 and 

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

E/M Code

Percentage of Services* Difference 

Between 2006 and 

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 99321–99323 were eliminated and replaced with E/M codes 99324–99328. 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

E/M Code

Percentage of Services* Difference Between 

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) 25

Table C-15: Office/Outpatient Consultation

E/M Code

Percentage of Services* Difference 

Between 2001 and 

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 January 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) 26

APPENDIX D

Percentage of Physicians by State and Evaluation and 

Management Coding Group

State

Percentage of Physicians 

Who Consistently Billed 

Higher Level E/M Codes*

Percentage of Other 

Physicians

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) 27

Percentage of Physicians by State and Evaluation and 

Management Coding Group (Continued)

State

Percentage of Physicians 

Who Consistently Billed 

Higher Level E/M Codes

Percentage of Other 

Physicians

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) 28

APPENDIX E

Percentage of Physicians by Specialty and Evaluation and 

Management Coding Group

Specialty

Physicians Who 

Consistently Billed Higher 

Level E/M Codes*

Other Physicians

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) 29

Percentage of Physicians by Specialty and Evaluation and 

Management Coding Group (Continued)

Specialty

Physicians Who

Consistently Billed HigherLevel E/M CodesOther Physicians

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) 30

Percentage of Physicians by Specialty and Evaluation and 

Management Coding Group (Continued) 

Specialty

Physicians Who 

Consistently Billed Higher 

Level E/M Codes

Other Physicians

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) 31

APPENDIX F 

Percentage of Most Common Diagnoses by Evaluation and 

Management Coding Group in 2010

Diagnosis

International 

Classification of 

Diseases-Ninth 

Revision 

Diagnosis Code

Beneficiaries Treated by 

Physicians Who Billed Higher 

Level Codes

Beneficiaries Treated 

by Other Physicians

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.
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-·04·10-00180). 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 cNt 15t ntly bill higher level H·M 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 
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

Agency Comments (Continued)
Coding Trends of Medicare Evaluation and Management Services (OEI-04-10-00180) 35

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. 
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 OIG’s 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.