Introduction

Evaluation & Management (E/M) coding plays a critical role in healthcare reimbursement. These codes describe the level of care provided during patient encounters—whether in a clinic, emergency room, hospital, or telehealth setting.

Because E/M services make up a significant portion of medical billing, even small coding errors can lead to claim denials, underpayments, compliance risks, and revenue loss. With recent updates from CMS and AMA, mastering E/M coding is more important than ever.

This complete guide breaks down what E/M coding is, how it works, the 2024/2025 updates, documentation rules, and best practices to ensure clean claims and accurate reimbursement.

What Is Evaluation & Management (E/M) Coding?

Evaluation & Management (E/M) coding is the process of assigning CPT codes (99202–99499) to describe a provider’s evaluation and management of a patient. These codes reflect:

• The complexity of the encounter

• The level of medical decision-making (MDM)

• The time spent on the visit

• The nature of the patient’s condition

E/M codes are used across many settings, including:

• Office visits

• Hospital visits

• Emergency department services

• Telehealth visits

• Consultations

• Nursing home and home visits

Why E/M Coding Matters

•  Accurate Reimbursement

Correct E/M coding ensures providers are paid appropriately for their time and expertise.

•  Reduces Claim Denials

Payers often deny claims due to insufficient documentation or incorrect E/M levels.

 

•  Ensures Compliance

Precise coding protects organizations from audits, recoupments, and penalties.

•  Supports Quality Care

Proper documentation reflects the true complexity of patient care.

Key Components of E/M Coding

1. Medical Decision-Making (MDM)

MDM is now the primary factor for selecting an E/M level. It focuses on:

• Number & complexity of problems

• Amount & complexity of data reviewed

• Risk of complications, morbidity, or mortality

Levels of MDM:

• Straightforward

• Low

• Moderate

• High

   

2. Time-Based Coding

E/M codes may also be selected based on total time spent on the date of the encounter, including:

• Preparing to see the patient

• Reviewing tests

• Performing examinations

• Counseling and coordinating care

• Documenting in the EHR

• Ordering tests

• Communicating with other healthcare professionals

Time must be clearly documented.

3. Documentation Requirements

Documentation must demonstrate:

• Clinical relevance

• Complexity of care

• Medical necessity

• Provider involvement

• Supporting details for diagnosis and treatment

Complete, clear, and specific documentation ensures accurate coding.

2024–2025 E/M Coding Updates (CMS & AMA)

E/M guidelines have undergone major updates in recent years. Key changes include:

•  Documentation Simplification

History and physical exam are no longer used to select E/M levels—only MDM or time.

•  Revised Definitions for MDM Elements

Updated standards for data review, risk assessment, and problem complexity.

•  Telehealth E/M Updates

Many telehealth E/M codes remain covered and follow the same MDM/time rules.

•  Prolonged Service Code Updates

Specific codes for add-on prolonged time in office or hospital settings.

•  Deleted or Consolidated Codes

Consultation and observation codes updated or merged depending on payer.

These updates are designed to reduce administrative burden and align coding with real clinical practice.

Common E/M Coding Categories (CPT 99202–99499)

Office / Outpatient Visits

• New patient: 99202–99205

• Established patient: 99211–99215

Emergency Department Visits

• 99281–99285 (based solely on MDM)

Hospital Inpatient / Observation Services

• 99221–99223 (initial)

• 99231–99233 (subsequent)

Consultations, Home Visits, Nursing Facilities, Telehealth

Codes vary based on setting and payer rules.

Common E/M Coding Errors to Avoid

Many denials and underpayments occur due to documentation mistakes. Avoid these common issues: 

• Undercoding (selecting a lower level than warranted)

•  Overcoding (selecting a higher level without support)

•  Missing or vague documentation

•  Not supporting medical necessity

•  Incorrect use of time-based coding

•  Forgetting prolonged service code add-ons

•  Failing to update coding practices after CMS/AMA changes

How to Select the Correct E/M Code: Step-by-Step

1. Review the medical decision-making

Determine if the case is straightforward, low, moderate, or high complexity.

2. Evaluate time spent

If time-based coding is used, confirm proper documentation.

3. Confirm documentation supports medical necessity

The level must match the reason for the visit.

4. Choose the E/M code

Match the level (2–5) and patient type (new vs. established).

5. Add prolonged service codes if needed

Only when time requirements are met.

Benefits of Strong E/M Coding Practices

Higher reimbursement

Fewer claim denials

Stronger compliance with CMS/AMA guidelines

Reduced audit risk

Accurate representation of care complexity

Improved clinical documentation

Streamlined revenue cycle performance

Tips for Improving E/M Coding Accuracy

1. Train providers regularly

Coding rules change yearly—ongoing education is essential.

2. Use E/M audit tools

Audit charts frequently to monitor accuracy.

3. Document clearly & thoroughly

Include specifics, avoid vague terms, and support MDM.

4. Use technology & coding software

Tools help flag inconsistencies and reduce manual errors.

5. Stay updated with CMS & AMA rules

Follow annual CPT and Medicare updates.

6. Collaborate with CDI & coding teams

Clinical Documentation Improvement (CDI) enhances coding accuracy.