Documenting Medical Necessity

If you do a google search regarding medical necessity for E/M coding, you will find many articles, many experts referencing CMS guidance to Medicare payers in CMS’ Medicare Claims Processing Manual. The often referenced section is summarized as follows:

30.6.1 – Selection of Level of Evaluation and Management Service
(Rev. 3315, Issued: 08-06-15, Effective: 01-01-16, Implementation: 01-04-16)

A. Use of CPT Codes
…. The service provided must be medically necessary and the service must be within the scope of practice for a non-physician practitioner in the State in which he/she practices. …

Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported. The service should be documented during, or as soon as practicable after it is provided in order to maintain an accurate medical record.

B. Selection of Level of Evaluation and Management Service
Instruct physicians to select the code for the service based upon the content of the service.

Here is the reference from the CMS’ Medicare Claims Processing Manual.



From 1995 to 2020, many coding educators trained providers to document the 3 Key Components of history, exam, and medical decision making. These components provided some context to document medical necessity when used appropriately.

With the activation of the 2021 EM Outpatient coding changes as of January 1, 2021, clearly documenting the medical necessity of an outpatient E/M visit is just as important. We have heard from clinicians that the 2021 EM coding guidelines will be more familiar and consistent with the way they practice.

However, many EMR records now carry ICD-10 codes for MIPS purposes and to “tell the story” of the health of the patient. Though a provider may not be managing all of the conditions, some conditions outside of their care may enter into the risk and complexity of the conditions the provider is managing.

The new 2021 E/M Guidelines focus on medical decision making as it relates to the care the provider is providing to the patient’s condition(s). Providers will need to document to support billing, as well as to be clear if reviewed by an outside reviewer in the future.

Here are some thoughts to consider.

How are you training your providers to clearly document what is to be billed and what conditions, though not billed, impact the risk and complexity of the provider’s care of the patient?

Does your encounter note clearly delineate between notes taken by MA for non-billed ICD-10s, and notes by the provider referring to conditions that impact the management of patient care?

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