Home By the Numbers How’s it going with the new E/M inpatient coding changes?

How’s it going with the new E/M inpatient coding changes?

After six months, groups say documentation is now easier

July 2023

LANDMARK REFORMS in inpatient evaluation and management (E/M) CPT codes took effect at the beginning of this year, the biggest changes in hospital coding in 25 years. Observation codes were tossed out, with clinicians now billing those services with the same inpatient codes they use for admitted patients.

Many of the old coding requirements were also scrapped. Instead of having to wade through an extensive history, physical exam and review of systems, doctors now base the service level they bill on either medical decision-making or time. The goal, according to the CMS, was to reduce note bloat, end copy and paste, reduce physicians’ documentation time, and make sure documentation more accurately reflects what doctors actually do each day.

Some groups initially had a hard time adjusting to the changes, reportedly seeing their first-quarter professional billing drop by as much a 20%. Now that six months have passed, how happy are doctors with the new coding order?

“The shift now is making sure providers get on the same page with billers and coders.”


Heather Miles, MHA, CPC
St. Dominic Jackson Memorial Hospital

For some, old habits die hard. “We’re learning that physicians who have been practicing a long time are still trying to build their documentation like it’s 2022.” That’s according to Jeffrey Sattler, DO, a hospitalist at Saint Luke’s Hospital in Kansas City, Mo., who has some of his FTE carved out for medical informatics.

“I think these changes are welcomed, but how you redesign documentation templates and collaborate with clinician users are crucial,” he adds. “Folks who have taken the time to do that will see the benefits faster than those who haven’t.”

Less administrative burden
Dr. Sattler notes that he and his partners haven’t seen their professional billing take a hit this year.

That’s also true for the hospitalist group at St. Dominic Jackson Memorial Hospital in Jackson, Miss., says Heather Miles, MHA, CPC, practice administrator for the hospital medicine department.

“After rolling out education, we watched and waited the first quarter” while clinicians became familiar with the new guidelines, Ms. Miles says. With 100% of the group’s charts audited for accuracy, billers and coders are now busy ensuring that doctors meet the criteria for medical decision-making or time. “The shift now is making sure providers get on the same page with billers and coders,” she explains. When coders need to reduce a service billed because the documented medical decision-making doesn’t support a higher charge, “that becomes a conversation with the physician.”

At the same time, Hardik Vora, MD, hospital medicine medical director at Riverside Regional Health System in Newport News, Va., points out that the changes have already lightened administrative burdens for both doctors and administrators.

“I can’t tell you how much getting rid of observation codes has helped us.”

Hardik Vora, MD,

Hardik Vora, MD
Riverside Regional Health System


For example, “I can’t tell you how much getting rid of observation codes has helped us,” Dr. Vora says. Many patients placed in observation status are later admitted and discharged as an inpatient, or vice versa. Even when they aren’t, “most physicians don’t know what status the patient has, so under the old coding system they’d often select the wrong code. We always had a lot of that clean-up to do.”

The fact that the old coding rules required so many history and exam components for high-level charges was also a hassle. “When doctors forgot to include that documentation, we had a process in place to see if they truly didn’t obtain the history or if they just forgot to add it and addend the chart if needed.” Now that the focus has shifted to medical decision-making, “that has simplified auditing and compliance.”

Revised templates
Another problem, says Dr. Vora: Physicians used to rely heavily on templated documentation to capture all the history, exam and review of systems information.

“I was concerned that physicians were unintentionally documenting something they hadn’t actually done just because it was part of a template,” he says. With patients able to read physician notes in real time, “they could clearly see in the document something that perhaps a physician didn’t do. So not having that potential dilemma anymore is a huge plus.”

In fact, changing templates has been a big push in groups to make transitioning to the new codes easier. At Saint Luke’s Hospital, Dr. Sattler and another hospitalist-informaticist have worked with the hospital’s template technology committee to better align their templates with this year’s coding changes. He and his colleagues have ushered in two rounds of revised templates this year.

We’ve been able to make the templates shorter with fewer clicks and less redundant information.”


Jeffrey Sattler, DO
Saint Luke’s Hospital

“We streamlined them,” he says. “We’ve been able to make the templates shorter with fewer clicks and less redundant information that can be found in other places in the EHR.”

Ms. Miles says the hospitalists in her group worked with the hospital’s IT department to “alter our templates completely.” Instead of the older templates, which “were set up to capture a ton of unnecessary documentation, we’ve designed templates for problem-focused charting.” That, Ms. Miles says, is what the new coding system seeks to capture.

“We’re now truly living in a ‘what did you do for me today?’ system when it comes to documentation,” she says, “so how many problems are you addressing? What is your daily plan of action to correct and stabilize each problem, and what is the patient’s risk of morbidity and mortality?”

Billing by time
That raises another issue: According to the new coding rules, doctors can base the service level they bill on either medical decision-making or time. Which approach are groups opting for, or are they switching between the two?

According to Ms. Miles, her group members mainly rely on medical decision-making. “I think it’s a lot easier to prove and validate your work based on medical decision-making,” she says. As she points out, the new coding changes came with increased time thresholds, making time billing “a slippery slope.” “To bill a level 3 admission now by time, you have to spend 75 minutes in patient care,” says Ms. Miles.

“Once you get into the weeds of time, you also get into the weeds of patient census. If you’re using time to bill high levels for multiple admissions and a big census, we know people don’t work 24 hours a day.”

With studies showing that inpatients have longer lengths of stay as census grows, many programs are calling it a win if they can just keep length of stay stable.But Dr. Sattler says that he and his colleagues now use time to bill about 50% of their services. Read: Discharge rounds redesigned.

“Historically, people have been afraid to bill on time because they thought it would draw them into an audit process, but not anymore,” he says. “The CMS is now saying, ‘We’re allowing you to bill on time because we want this to be less onerous.’ Why not take advantage of that?”

A new learning curve
Part of the decision to bill based on time vs. medical decision-making, says Dr. Sattler, has to do with practice patterns. “Doctors who talk more with care teams may find that billing on time makes their life easier. Others who don’t spend that time—and there’s nothing wrong with that—may not find that to be true.”

In approaching billing by time, Dr. Sattler thinks of patients in terms of three buckets.

“With stable patients who have a discharge plan, you bill on medical decision-making because you’re really not spending that much time with them,” he says. For patients with intermediate-level acuity and illness, how he bills depends on how much time must go into talking to consultants and families.

But for high-intensity patients, “you talk to nurses more than once, consultants more than once, families. You may have an insurance denial with a peer-to-peer discussion with the insurer. All those minutes add up.” At Riverside Regional Medical Center, Dr. Vora and his colleagues also switch between the two.

“With patients who are clinically complex and acutely ill, we’re able to meet the medical decision-making components to bill a higher level of care,” he says. He uses time to bill for patients who “are not that sick in terms of their risk of deterioration and treatment intensity, but they need a lot of care coordination and discussions with their family. In that patient subset, it’s hard to use medical decision-making to capture the amount of care you’re providing.”

For Dr. Vora, the problem with regularly basing billing on time is that inpatient care is so dynamic. “I could be putting out fires at the same time on three different patients, and we have to constantly multitask,” he says. “It’s not like going from one patient in one exam room to the next. That makes it hard to accurately track time if you’re using it to bill for a lot of your patients.”

Dr. Sattler agrees. “You have to devise a system to help track your time, and that is the new challenge and learning curve.”

Saving time
As the third quarter begins, Dr. Vora says that he and his group plan to assess what they need to tweak templates and target more education.

In Ms. Miles’s program, “the No. 1 thing that needs to happen going forward is real-time conversations about successes and failures in documentation.”

Dr. Sattler’s group is also “learning from our coding and billing staff some coding pearls and pitfalls.” But even doctors who’ve been practicing a long time “are stepping back and realizing, ‘I don’t need this review section or all this exam stuff.’ Even if doing away with that saves each doctor only a few minutes a day, across an entire enterprise of thousands of patients, that’s a huge time savings overall.”

Phyllis Maguire is Executive Editor of Today’s Hospitalist.

Published in the July/August 2023 issue of Today’s Hospitalist

Notify of
oldest most voted
Inline Feedbacks
View all comments
DrPeonyMD (X)
October 2023 7:45 pm

You watch, CMS is going to try to eliminate complexity-based billing so they can threshold us & limit our reimbursement. Don’t let them.

Zoë Ann Lewis MD
Zoë Ann Lewis MD
July 2023 9:02 am

Unfortunately, as a key witness to the hospital-based changes since working in the field of hospital medicine for over 25 years, it’s gotten worse since the EMR requirements to documents have gone up and up. Add to that, hand in hand, the take over of the prior more-sensitive-to-your-own-needs private groups that turned into hospital-for-profit owned groups. This, over time, drove our census numbers up to the low 20’s from 14-15. Additionally, the hours we actually are contracted to be physically responsible for hospital rounding and charting, patient care and nurse access has risen to 12-14 hours a day. Night and… Read more »