ISSUE 09 · WEEK 9 · MONTH 3
Coding, Compliance & Audit Defense
Medical coding and documentation

The coding changes destroying your E&M revenue in 2026

(what to fix before your next audit)

The 2021 E&M guidelines are three years old and most practices still have documentation gaps.

THIS WEEK IN PRACTICE

Month three — and this month we’re going deep on coding, compliance, and audit defense. These topics make some practice managers uncomfortable, but they’re where some of the most recoverable revenue lives: in codes being consistently underbilled because documentation templates haven’t been updated, and in audit risks being created by patterns nobody has audited internally.

This week: the 2021 E&M guideline changes, how they affect your revenue three years in, and the documentation patterns most commonly causing problems.

 

DEEP DIVE

The 2021 E&M Guidelines — What Most Practices Got Right, What They’re Still Getting Wrong

The 2021 AMA E&M guideline changes were the most significant revision to outpatient coding in decades. The core change: code level is now determined by Medical Decision Making (MDM) or Total Time — not by documentation elements like history, exam, and review of systems.

Here is what this looks like in practice. A 5-provider internal medicine group ran a 10-claim spot check on their highest-volume physician and found that 7 out of 10 claims coded at 99213 had documentation supporting 99214 — the physician was managing 2+ chronic conditions with medication changes, which qualifies as moderate MDM. At $48 difference per claim and roughly 80 visits per week, that single provider was undercoding by approximately $200,000 per year. The fix: a 10-minute conversation with the provider plus an updated note template that prompts MDM documentation. Revenue impact appeared within the first billing cycle.

$25,000/yr

lost from undercoding 10 claims per week at the 99213/99214 level.
Most undercoding is a documentation problem, not a clinical problem.

Code MDM Level Problems Data Risk
99211 N/A Minimal (nurse visit) None Minimal
99212 Straightforward 1 self-limited problem Minimal or none Minimal risk
99213 Low 2+ self-limited OR 1 stable chronic Order/review tests Low risk (OTC drug, minor surgery)
99214 Moderate 1 chronic w/ exacerbation OR 2 stable chronic OR 1 undiagnosed new problem Independent interpretation of test, discussion with external physician Moderate risk (Rx drug management, minor surgery w/ risk factors)
99215 High 1 chronic w/ severe exacerbation OR 1 acute illness posing threat to life Independent interpretation of test + discussion with external physician High risk (drug requiring intensive monitoring, major surgery, hospitalization)

MDM requires meeting criteria in 2 of 3 columns (Problems, Data, Risk). The highest 2 of 3 determine the code level. Print this and post it in every provider’s workspace.

This was genuinely good news for most practices. Documentation requirements were simplified. Providers no longer needed to check boxes for physical exam elements to justify a higher-level code — they needed to document the actual clinical complexity of the encounter.

Three years in, here is what most practices got right: they updated their superbills and charge masters to reflect the new code set. They communicated the changes to providers. They stopped requiring lengthy exam documentation for higher-level codes.

Here is what most practices are still getting wrong:

Under-documentation of MDM complexity. The 2021 guidelines require that the note reflect the actual medical decision making — the complexity of the problems addressed, the data reviewed and analyzed, and the risk of complications or morbidity. Many providers document a diagnosis and a plan but not the specific MDM elements that justify a higher-level code. A 99215 that isn’t documented to reflect high-complexity MDM is a 99215 that won’t survive an audit.

Not using Total Time appropriately. When a visit involves extensive counseling, care coordination, or complex documentation, Total Time — all time personally spent by the physician on the encounter that calendar day, including pre- and post-service work — often justifies a higher-level code than MDM alone. Many practices never use this pathway because their documentation templates don’t prompt providers to record time.

Coding 99213 by default for established patients. In many practices, 99213 is the default established patient code for non-complex visits. But established patients with two or more chronic conditions — even if stable — often meet the criteria for 99213 at minimum and may qualify for 99214 when the management of those conditions requires moderate complexity decision making. Default low coding is leaving money on the table on every stable chronic disease visit.

 

THREE ACTION STEPS THIS WEEK

Complete each step before next Tuesday.

1

Conduct a 10-claim coding audit for your highest-volume provider. Pull 10 claims coded at 99213 and 10 at 99214 from the past 30 days. For each 99213: review the note and ask whether the patient had two or more stable chronic conditions, or a condition requiring low-complexity decision making. If yes, 99214 may be supportable. For each 99214: confirm that the note documents either moderate-complexity MDM or a total time that supports that code level. Document your findings.
2

Update your documentation templates to prompt MDM documentation. For each major encounter type in your practice, ensure the template includes: (1) explicit documentation of the number and complexity of problems addressed; (2) explicit documentation of data reviewed, ordered, or analyzed; and (3) for high-complexity visits, explicit documentation of the risk of complications or morbidity. Templates that don’t prompt this documentation produce notes that don’t support higher-level codes.
3

Brief your providers on Total Time coding. In a 10-minute provider meeting: explain that Total Time for any given encounter includes all time personally spent on that patient that calendar day — the visit, documentation, reviewing records, ordering tests, care coordination phone calls, and prescription management. Ask providers to document time explicitly (’Total time spent on this patient today: [X] minutes’) for any visit where the total is at or above the threshold for a higher-level code.
 

FIVE THINGS WORTH KNOWING

1

An analysis of Medicare claims data from 2022 and 2023 found that the distribution of 99214 and 99215 codes increased significantly after the 2021 guideline changes — suggesting that more practices are coding appropriately, but also that OIG audit attention to these codes has intensified in parallel.
2

The 2021 E&M guidelines eliminated the documentation checklist as the basis for code level — but they did not eliminate the requirement that Medical Decision Making be documented in enough specificity to be auditable. The change removed the checklist. It did not remove the requirement to support the code.
3

Under the 2021 guidelines, time-based coding for office visits includes all time personally spent by the physician on the encounter that day — not just face-to-face time. For a patient with a complex situation requiring 20 minutes of pre-visit record review, a 30-minute visit, and 10 minutes of post-visit documentation, the total qualifying time is 60 minutes — which supports a 99215 for an established patient.
4

The most common E&M coding error identified in physician practice audits is not overcoding — it is undercoding, where the documented clinical complexity would support a higher code level but the practice codes conservatively to avoid audit attention. Conservative coding is not a compliance strategy. It is a revenue strategy that trades recoverable income for imagined safety.
5

A practice with 3 physicians each seeing 20 established patients per day where 30% of 99213 visits are actually codeable at 99214 — a conservative estimate in most practices — is leaving approximately $45,000–$65,000 in annual revenue on the table from undercoding alone.
 

BILLING CORNER

The MDM Framework — A Quick Reference for

Medical Decision Making is evaluated across three elements. Code level is determined by meeting two of the three elements at a given level.

Your providers and coding staff needs this.

FORWARD TO YOUR TEAM →

Element 1 — Number and Complexity of Problems: Minimal (self-limited/minor) = 99202/99212. Low (2+ self-limited, or 1 stable chronic) = 99203/99213. Moderate (1+ chronic with exacerbation, 1 new undiagnosed problem, or 1 acute illness with systemic symptoms) = 99204/99214. High (1+ chronic with severe exacerbation, or threat to life or limb) = 99205/99215.

Element 2 — Amount and Complexity of Data: Minimal/none = Level 2. Limited (1 of 3 data categories) = Level 3. Moderate (meets 2 of 3 data categories) = Level 4. Extensive (meets all 3 data categories, including independent interpretation of a test) = Level 5. The 3 data categories are: tests/documents/orders reviewed; independent interpretation of test; and discussion of management with external physician.

Element 3 — Risk of Complications or Morbidity: Minimal = OTC medications or minor procedures. Low = prescription drug management or minor surgical procedures. Moderate = prescription drug management requiring intensive monitoring, or minor surgery with identified risk factors. High = drug therapy requiring intensive monitoring for toxicity, or decision regarding hospitalization.

Practical tip: The most common path to a 99214 for an established patient is two stable chronic conditions (Element 1: Moderate) plus prescription drug management (Element 3: Moderate). The documentation must reflect that the provider actively managed both conditions — not just noted them as part of a problem list review.

10-Claim Coding Spot Check — Do This Monthly

Pull: 10 claims coded at 99213 and 10 claims coded at 99214 from your highest-volume provider.

For each claim, verify: (1) Does the documentation support the MDM level billed? (2) Are all 3 MDM elements addressed in the note? (3) If Total Time was used, is the time documented with a description of activities?

Common finding #1: 99213s that should be 99214s (undercoding). Look for notes with 2+ chronic conditions managed or prescription changes — these are 99214 by MDM.

Common finding #2: 99214s missing Data documentation. The note says “reviewed labs” but doesn’t specify independent interpretation. Add “I personally reviewed and interpreted the [specific test] results, which showed [finding].”

Revenue impact: Each 99213 that should be a 99214 costs your practice ~$48 in lost reimbursement. At 10 undercoded claims per week, that’s $25,000/year.

 

COMPLIANCE WATCH

ICD-10-CM Updates — October 1, 2026 Effective Date. The annual ICD-10-CM code update takes effect October 1, 2026. For practices billing dates of service on or after October 1, claims must use the new code set — including any codes that are new, revised, or deleted. Claims submitted with deleted codes for October 1 or later dates of service will be rejected by your clearinghouse or denied by payers. Action required before October 1: update your EHR diagnosis code tables, update your superbill or charge capture forms, and review the CMS list of new and deleted codes for any that affect your specialty’s frequently billed diagnoses. The CMS list is available at cms.gov/medicare/coding-billing/icd-10-codes.

 

PEOPLE & PRACTICE

Giving Providers Coding Feedback Without

In most independent practices, the practice manager does not have authority over physician coding decisions. This creates a real problem: coding errors — both over and under — are often systematic and provider-specific, but the person who spots them doesn’t have a natural authority relationship to raise them.

The approach that works: frame coding feedback as a revenue protection conversation, not a compliance correction. ’I ran a coding audit and found that our 99213 volume for Dr. [Name] is significantly higher than the benchmark for our specialty. I want to make sure we’re capturing the clinical complexity in the documentation — can we spend 15 minutes reviewing a few examples together?’ That framing treats the provider as a partner in revenue optimization, not as a compliance problem.

The approach that doesn’t work: sending a memo, making a general announcement at a staff meeting, or adding a coding policy to a procedures manual without a direct conversation. Coding behavior changes through individual conversations with specific examples, not through policy communication.

If you have a physician who consistently undercodes or overcodes and is not responsive to direct feedback, this is a conversation for the physician-owner or medical director — not a battle to fight alone.

 

ASK THE PULSE

From a reader managing a 3-provider family medicine practice: ’Our billing service told us we should be using the G0444 depression screening code for all our patients who get a PHQ-2 or PHQ-9. We’ve been coding those as part of the E&M visit. Are we doing this wrong?’

Our answer: You may be leaving money on the table, depending on your payer mix.

G0444 is the Medicare annual depression screening code — a separately billable preventive service that can be billed in addition to the E&M visit when a depression screening is performed during a separate preventive visit. For Medicare patients receiving a G0438/G0439 Annual Wellness Visit or an IPPE (G0402), G0444 can be billed on the same date without a modifier.

For commercial payers, it depends on the specific plan. Some commercial payers follow Medicare’s approach and reimburse G0444 separately; others bundle it into the E&M. Check your remits: if your commercial payers are paying G0444 separately, you should be billing it.

The key documentation requirement: the screening must be documented with the score, the result (positive or negative), and a documented follow-up plan if the result is positive. A note that says ’PHQ-9 administered’ without the score and result doesn’t support the G0444 billing.

Hit reply with your question.

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ONE MORE THING

Conservative coding — deliberately billing lower-level E&M codes to avoid audit attention — is one of the most durable myths in independent practice management. It persists because it feels prudent and because its cost is invisible: you never see the revenue you didn’t bill.

The correct approach to audit risk is not to bill lower than the documented complexity supports. It is to ensure the documentation actually supports what you bill. Those are different problems with different solutions.

The Practice Pulse · Issue 09 · Every Tuesday at 7 AM
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