practice management

E&M 2021 Updates: Preparing Your Pediatric Practice

The changes in the 2021 Evaluation and Management guidelines will mean shifting the way you think about how you select the appropriate visit codes for your acute visits. In this post, we’ll cover what changes to expect, tips to prepare your practice, and resources for making this coding pivot a smooth adjustment for your practice.

What’s changing and why?

The American Medical Association has announced updates to the definitions of  Evaluation and Management codes which go into effect on January 1st, 2021. To clarify, the 2021 updates only affect the E&M outpatient codes. This means that if your practice’s physicians render inpatient care or Emergency Department services, these updates do not affect these procedures.

By streamlining documentation requirements for these visits, these changes are intended to simplify the way you level visits, reducing “note bloat” and increasing time with patients. These changes are a response to the widespread use of electronic health records (EHRs) and the associated complexities in working with them.

There are four major changes in the 2021 updates. If you’d like a quick video overview, PCC’s Jan Blanchard has you covered.


1. Medical Decision-Making Ousts Physical and History

Prior to 2021, physicians level their codes based on three key elements as defined by the AMA: history, physical, and medical decision-making. In 2021 and beyond, only medical decision-making factors into leveling. Code selection is no longer dependent upon whether a patient is new or established. Visit codes are selected based on medical decision-making, without any involvement of the history and physical. The history and physical will remain important parts of each visit, but only medical decision-making will count for leveling that visit. 

This method of leveling simplifies the way you choose codes for each sub-element, because the level will be the same for new and established patients. This is intended to more accurately represent the complexity of care required by the patient’s condition(s) and will save a little time every day by helping clinicians document to a level, then selecting the appropriate code.

2. Complexity Levels: The 2 of 3 Rule

The encounter will need to meet the 2 of 3 rule for any patient, whether new or established. Again, the focus is on making the process of documenting and leveling easier on clinicians. These changes align much more closely with the work that pediatricians do.

The elements required to level a visit (based on complexity) will no longer require the ‘3 of 3 rule’ applied to new patients and to the history sub-elements. Instead, just 2 of the 3 medical decision making sub-elements are required. 

The elements of medical decision-making include the nature and number of problems the patient reports, the data used to make decisions, and the risk posed to the patient by the chosen management of their problem(s). It’s important to note that each unique test, order, or document counts as a contribution to the data segment, as does each unique contributing historian.

For example: a patient presenting with a chronic sore throat might prompt a clinician to review a consult’s notes and suggest and discuss minor surgery. This visit level could be Moderate based on the AMA’s 2 of 3 rule, as outlined in this table.

3. The Definition of Time

When making a level choice based upon time, after January 1st, 2021, time spent doing all of the clinician’s activities on the date of the encounter will count. This update expands the number of clinical activities physicians do that are “billable” for the visit, without being strictly limited to the time spent in the exam room or with the patient. These activities include preparing for the visit by reviewing history, ordering tests or labs, and consulting with other healthcare professionals (when not billed separately).

This change is also very significant for more experienced clinicians, as it means that while with the benefit of their experience they may complete a visit more quickly than a less experienced clinician might, this time doesn’t count against the complexity of the decision-making, and therefore the leveling and documentation of the visit. 

“Just because you’re good at treating patients,” says PCC’s Chip Hart, “doesn’t mean you should be penalized for doing it quickly.”

Clinicians can prepare for this change by reviewing the way they currently arrange their notes, and setting up tools and opportunities for themselves so that when charting, they can best remember the billable elements of each patient’s case.

Pediatricians can prepare in more detail for these changes with the help of the AAP Coding Newsletter, which from January 2020 on has broken down elements of the 2021 updates for better understanding. Clients of PCC receive the Newsletter as part of their PCC Care Plan.

4. RVU Impacts

Another significant part of the 2021 updates is the impact of RVU changes. While work RVUs are set to increase, changes to the Medicare Conversion Factor mean that the 2021 updates will undergo a complex set of changes, meaning important changes to your practice’s revenue.

In Chip and Jan’s seminar, The Impact of 2021 E&M Changes on PediatriciansWhat You Need to Know, Hart explains the changes as follows: 

  • There will be approximately a 31% increase in work RVUs by weighted volume.
    • For example, a 2021 99213 visit will be worth about 86% of a 2021 99214, versus a 65% comparison in 2020. 
  • However, there is a predicted 12% decrease in Medicare Conversion Factor, which affects the actual money tied to all codes. 

Broadly, the changes are largely positive for pediatricians. At the time of this post’s writing, the official changes to wRVUs and the Conversion Factor are not published and importantly, it is not certain when private and public payors will begin to pay based on the 2021 wRVU values. What is more certain is that the changes will have significant effects on your practice’s revenue. Physicians and practices with wRVU or total RVU compensation models will need to check them over as the dust settles.

Final Thoughts

The major changes to consider as your practice reviews the updates for 2021 will include studying the new leveling elements and 2 of 3 rule, understanding time as a controlling factor in leveling any visit, and preparing yourself, your staff, and your EHR templates.

The changes to E&M leveling will -- and are intended to -- have important implications for your practice, making preparation crucial to your success in 2021 and beyond. The intention of the AMA for these changes, after all, is “patients over paperwork,” an ideal that many pediatricians and healthcare professionals strive to accomplish every day.

Preparing your practice for these sweeping changes will mean making sure you get the details right. We don't want you to miss anything, so here's our recommended reading list:

Remember: leveling accurately doesn't only keep you within AMA guidelines; it also helps you level to the highest appropriate code, which means earning the revenue you deserve. Let's get started!

The 2021 E&M Coding Worksheet For Pediatricians

Allie Squires

Allie Squires is PCC's Marketing Content Writer and editor of The Independent Pediatrician. She holds a master's in Professional Writing from NYU.