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Billing and Coding Review: All About Medical Decision-Making

Whether you’re a nurse practitioner student in your clinical rotations or a new real-deal NP, you’re documenting A LOT of patient encounters. And once you get into clinical practice, you’ll start submitting notes with detailed billing and coding information so that your clinical practice can get reimbursed for your services.

But how do you know if you’re doing it correctly?

In this post, we’re going to go over the most important part of billing and coding: the medical decision-making. We’ll start by defining some basic terms in order to lay the proper foundation for our discussion. Then, we’ll focus on the medical decision-making in primary care outpatient practice, since different sites of service like hospitals or telehealth visits use different criteria with their codes.

Let’s begin. 

Medical Decision-Making: A Billing and Coding Review for NPs

What Is “Medical Decision-Making?”

Medical decision-making (MDM) in billing and coding refers to how a clinician rates the difficulty in determining a patient’s diagnosis and management plan. And the level of service that a particular visit is coded and billed for is known as the E/M code, or “evaluation and management” code.

The key to accurate billing and coding is to give yourself credit for the care you provide! Oftentimes, clinicians undercode, or code at a lower reimbursement rate, because they don’t consider most visits to be as complex as they are. You need to make sure you’re giving yourself credit for that NP brain power!

Updates to Billing and Coding Standards

Before we get into the components of medical decision-making, it’s worth mentioning a big update.

Since 2021, the level of service (or E/M) code is based solely on the type of medical decision-making. Prior to 2021, it was a much more complicated process, with a number of other factors to consider. So for once, something has gotten easier!

The 3 Components of Medical Decision-Making

There are three main components to consider when doing medical-decision making: the number and complexity of the problems you addressed during the visit, the amount of data you reviewed, and what the risk of complications is for the patient.

At the end of this post is a chart outlining all of the components (that also provides some useful examples).

Let’s take each component one by one. 

1. Number and Complexity of Problems Addressed

This simply means the health issues you addressed during the visit that day. You’ll need to count how many problems the patient had, note whether they were acute or chronic, and if the chronic conditions are stable. A patient may have a significant past medical history with multiple comorbid issues, but you only need to include what you took into consideration during the visit.

To show you how this works, let’s take a look at an example:

Imagine a patient came in for a cough and you diagnosed them with bronchitis and prescribed a steroid. If that patient has no other health conditions, that medical decision-making will rank lower than one on a similar patient that also has a history of diabetes mellitus and hypertension. That’s because you need to consider how your treatment will affect their chronic illness, which raises the level of decision-making. 

2. Type and Amount of Data Reviewed and Analyzed

The data is everything you read and review when determining a diagnosis and management plan. 

For example, did you order a chest x-ray and a CBC? Even if you ordered them the same day, they’re considered two separate tests.

Are you seeing a patient for a follow-up appointment and reviewing your prior notes and the reports from a consult? That counts, too!

Do you work in an urgent care and have to interpret your own x-rays? That meets the requirement for at least a moderate level of data analysis.

Finally, if you have a complicated patient and need to talk things out with another clinician, that counts as well. I did that last week in my own practice when I consulted with a physician to talk about a patient with multiple comorbidities and complicated medication management. Just make sure to document in your note that you consulted another clinician or specialist!

3. Risk of Complications

And lastly, what’s the risk of complications? This means morbidity and mortality from additional testing or disease management.

For example, did you prescribe anything? Even if you consider it a relatively safe, benign medication, once you prescribe something, you’re practicing at a moderate level of decision-making.

Or did the patient present with a condition that required you to send them to the hospital? That would be the highest level of risk.

Selecting Your Code

Once you’ve identified what category of each component you’ve met, select your code based on the highest level for at least two out three of them.

To illustrate what I mean, let’s go back to our patient with bronchitis and code the visit.

A 45-year-old patient reports a worsening cough over the past 10 days that’s productive for white sputum. Past medical history is significant for diabetes mellitus type 2 and hypertension, which are controlled and stable. After a thorough physical exam, the nurse practitioner orders a chest x-ray to rule out pneumonia. The chest x-ray is completed and the result is reviewed. The nurse practitioner starts the patient on oral prednisone for a diagnosis of acute bronchitis.

Here’s the breakdown:

Number and complexity of conditions:

– 1 acute illness (low complexity)
– 2 chronic conditions (stable)

This is coded as moderate complexity.

Type and amount of data reviewed:

– 1 test ordered
– 1 test result reviewed

This is coded as low complexity.

Risk of complications:

– Prescription drug management completed

This is coded as moderate risk.

So we have two out of three wins, and this medical decision-making level is at moderate complexity, or a level 4. If the patient is a new patient, it would be coded 99204, or 99214 for an established patient. 

Additional Resources

Hopefully you found this post helpful in breaking down the complexities of medical decision-making.

Here are some links with additional resources from the American Academy of Professional Coders (AAPC), and be sure to sign up for our upcoming webinar in February to get a complete overview of billing and coding in primary care!

What is ICD-10?
What is CPT®?
Understanding the differences between medical billing and medical coding

And here is the chart I promised earlier!

Looking for more professional practice tips for NPs? Check out the other (free!) content waiting for you on the SMNP Reviews blog: