EV Healthcare: Navigating CMS Evaluation & Management Coding Updates

Evaluation and management (E/M) codes are among the most audited codes in the country—and a single 30-claim sample with an alleged 100% error rate can extrapolate into a $20 million overpayment demand across three years.

This session of The Ethicsverse webinar featured Knicole Emanuel, a partner at Nelson Mullins with 26 years of experience and a background prosecuting healthcare providers on behalf of the government, walking compliance professionals through the cascade of CMS and AMA evaluation and management (E/M) coding changes from 2021 through the reforms on the horizon. The conversation traced how the landmark 2021 overhaul shifted code selection away from history and physical exam documentation toward medical decision making (MDM) and total time, how the 2023 revisions extended those principles to hospitals, emergency departments, nursing facilities, and home visits, and how the 2024 updates refined split/shared billing rules and introduced the G2211 longitudinal care add-on code. Throughout, Emanuel emphasized that E/M coding is inherently subjective, that auditors frequently resolve that subjectivity against providers, and that the single most important defensive posture a provider can adopt is to be proactive—engaging legal counsel early, ensuring audit samples are statistically representative, and appealing virtually every overpayment allegation. The discussion repeatedly framed compliance as a game of imperfect information in which sound documentation, consistent methodology, and an understanding of provider-side legal protections meaningfully reduce organizational exposure.

Key Takeaways

The 2021 Overhaul Redefined How Office Visits Are Coded

On January 1, 2021, CMS and AMA implemented one of the most significant E/M coding changes in decades for office and outpatient visits, eliminating history and physical examination as scoring elements for code selection.
Providers may now select codes based on either the complexity of medical decision making (MDM) or the total physician time spent on the date of the encounter, including both face-to-face and non-face-to-face activities.
The change also deleted the level-one new patient visit code 99201 and was intended to reduce administrative burden and shift documentation focus toward clinically relevant information.

Documentation Now Emphasizes Cognitive Work Over Box-Checking

Before 2021, clinicians often documented exhaustive reviews of systems and comprehensive multisystem exams—frequently spanning several templated pages—primarily to satisfy coding requirements rather than to communicate patient care.
Under the revised framework, a physician managing a complex patient can instead document the actual drivers of the encounter, such as reviewing declining kidney function, assessing medication risks, and coordinating care with specialists.
The coding emphasis shifted from how many boxes were checked to how complex the physician's cognitive work was in managing the patient.

The 2023 Revisions Extended the New Logic Across All Care Settings

While the 2021 changes applied only to office and outpatient visits, the 2023 E/M revisions broadened the same MDM-and-time framework to hospital inpatient and observation services, emergency department visits, nursing facility services, and home or residence visits.
The primary objective was consistency, leveling a playing field that had previously varied depending on whether a patient was seen in an office or a hospital.
This expansion meant a single physician could now apply unified coding principles regardless of where the patient was treated.

The 2024 Updates Refined Rather Than Overhauled the Rules

The 2024 changes were designed to operationalize and clarify the prior reforms rather than introduce sweeping new requirements, ensuring physicians need not learn a different coding methodology simply by moving between an office, hospital, or skilled nursing facility.
The update answered lingering questions about how data review should be counted and what activities could be included when selecting a code based on time.
CMS and AMA also replaced time ranges with single minimum total times for office and outpatient codes, a relatively minor administrative adjustment.

Split/Shared Services Are a High-Risk Compliance Focus Area

A split/shared visit occurs when both a physician and a non-physician practitioner from the same group practice participate in a patient's E/M service in a facility setting such as a hospital, observation unit, or emergency department, and notably does not apply to office or non-facility services.
The central question is which practitioner performed the substantive portion, determined either by who spent more than 50% of the total time or who performed two of the three MDM elements.
Because this determination is itself subjective, several participants suggested that strictly limiting or declining split/shared billing altogether may reduce audit exposure.

The G2211 Add-On Recognizes Longitudinal Patient Care

Introduced as a major 2024 change, the G2211 add-on code was created to capture the additional resource utilization associated with managing patients over time, beyond what a single office visit reflects.
It recognizes the work of coordinating referrals, monitoring chronic conditions, and serving as the focal point for a patient's ongoing care, particularly in long-term primary care relationships or in managing serious conditions like cancer, neurology, or cardiology cases.
Critically, G2211 is not a standalone service and must be reported in addition to an eligible office or outpatient E/M code.

Audit Samples Are Extrapolated—and That Inflates Exposure Fast

When auditors allege overbilling, they typically review a sample of roughly 30 claims, assign an error rate, and extrapolate that rate across years of billing, meaning a sample judged to have a 100% error rate can balloon into a $20 million overpayment demand.
Providers must defend on two fronts: challenging the clinical determination that the sampled claims were erroneous, and challenging the statistical validity of the extrapolation itself.
Engaging a statistician to verify that the mathematical extrapolation rests on sound bases is a critical and often overlooked line of defense.

Subjectivity Is the Core Vulnerability—and the Core Defense

Because E/M coding involves significant professional judgment, two experienced professionals can review the same encounter and reach different conclusions, particularly when distinguishing between mid-level and higher-level services such as 99214 versus 99215.
Auditors tend to resolve this subjectivity against providers, flagging violations where reasonable disagreement exists and shifting the burden of proof onto the defense.
Yet this same interpretive latitude is precisely why providers can frequently argue their way out of allegations, especially given statutory treating-physician deference under the Social Security Act, which directs auditors to defer to the treating provider on questions of medical necessity.

Proactivity and Near-Universal Appeal Are the Strongest Defensive Postures

The roughly 90% of providers who are blindsided by audits typically self-audited, believed they were compliant, and often actually were—their exposure stems from overzealous auditors rather than genuine wrongdoing.
The proactive provider engages legal counsel immediately upon receiving a documentation request, submits records on attorney letterhead, and never waits until a deadline is imminent to retain representation.
Above all, providers should appeal virtually every overpayment allegation regardless of the dollar amount, because the determinations are arbitrary, the right to dispute is guaranteed, and missing an appeal deadline forfeits a defensible position.

Closing Summary

The throughline of this session is that evaluation and management coding has become a moving target and that the auditors reviewing provider claims are betting on organizations failing to keep pace. Yet the more durable theme is that the subjectivity at the heart of E/M coding cuts both ways: while it gives overzealous auditors room to flag violations and extrapolate them into staggering overpayment demands, it equally gives providers substantial room to defend their professional judgment, supported by statutory protections like treating-physician deference. For ethics, compliance, and HR professionals, the practical mandate is clear—document encounter-specific clinical reasoning rather than copy-pasted templates, choose one consistent methodology (MDM or time) and stick to it, ensure internal audit samples genuinely represent the broader population, engage counsel early, and appeal nearly everything. In a domain governed by imperfect information and professional interpretation, disciplined documentation and a proactive defensive posture are the surest ways to convert compliance effort into defensible outcomes.