Evaluation/Management CPT codes ("E/M codes") measure the level of provider work by weighing all pertinent medical findings documented in the history and physical examination sections of medical records in combination with assessments for the complexities and risks of diagnoses and treatments.

All physicians and other health care providers as well as managed care companies, insurers, and third party administrators utilize E/M codes for billing of office visits, hospital visits and other cognitive services. This new coding system is relatively complicated and E/M codes cannot be quickly and easily completed by providers at the point of service or by payors during audits or reviews of medical records documentation.

Nonetheless, both providers and payors recognize that this new coding systems is an excellent measure of the value of clinical cognitive work, thus an important tool for cost base analysis of health care delivery. Sources estimate that up to 65% of all CPT codes submitted by providers for reimbursement are E/M codes, which corresponds to $17 billion for Medicare alone.

E/M CODING: WHAT IT’S BASED ON

The Resource Based Relative Value System ("RBRVS"), introduced in 1992, included a new method for assessing the value of cognitive services. This took the form of the Evaluation/Management Services section of the American Medical Association’s (AMA) Physician’s Current Procedural Terminology (CPT).

The 1995 introduction by the AMA and the Health Care Finance Administration (HFCA), of Documentation Guidelines increased E/M coding complexity by making the system more intricate in an attempt to reduce the subjectivity of E/M coding by providers. The 1997 release of Documentation Guidelines for Evaluation and Management Services further increased complexity to more accurately measure the cognitive service delivered.

The Health Care Finance Administration is now called the Centers for Medicare & Medicaid Services (CMS).