The Need for Dedicated Evaluation Management Codes


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The Need for Dedicated Evaluation Management Codes

  1. 1. Avalere Health LLC | The intersection of business strategy and public policyThe Need for DedicatedEvaluation and ManagementCodesPrepared for AAFPMay 2013
  2. 2. © Avalere Health LLCPage 2Overview of Avalere Approach Propose and validate the hypothesis that a visit to primary carephysicians (PCPs) as described currently by an evaluation andmanagement (E/M) codes are more complex a deserve differentialpayment from E/M codes billed by specialists» Use of the same E/M code for both PCPs and specialistsshortchanges PCPs in economic terms because a single set ofrelative value units (RVUs) and payment level are assigned to it» This issue is of particular importance for PCPs given their relativelygreater use of the E/M codes than specialists to describe and bill fortheir workAvalere assessed current research on complexity of physician services toserve as the foundation of our analysis.
  3. 3. © Avalere Health LLCPage 3Resource Based Relative Value Scale (RBRVS) Is theFoundation for Physician PaymentMPFS Payment Is Based on Three Factors:Work RVU MP RVUPE RVURVU=Relative Value Unit Prior to 1992, physician payment in the U.S. was based upon theconcept of usual and customary reimbursement In 1992, Medicare implemented the Medicare Physician Fee Schedule(MPFS) based on the RBRVS system to pay for physician and otherhealthcare provider services and procedures» Original payment system was developed by the Harvard School ofPublic Health Time Intensity» Technical skill & physicaleffort» Mental effort & judgment» Stress due to potentialpatient risk Direct Inputs (non-physician)» Clinical labor» Medical supplies» Medical equipment Indirect Inputs» Overhead expenses Defined from professionalliability insurance premiumdata and allocated basedupon a risk-of-servicemethodology
  4. 4. © Avalere Health LLCPage 4Physician Work: Three Phases Work RVUs are calculated using three phases of physician work: Intra-service work is calculated using a magnitude estimation that ranks work inrelation to a reference code using a ratio scale» Intensity of work per unit of time (IWPUT) is a measurement used to compareintra-service time and an estimated Work RVU to similar reference codesPrePreparing to see the patient, reviewing records, and communicatingwith other healthcare professionals (all physician time prior to patientencounter)IntraWork provided while the physician is with the patient and/or family, or“face-to-face” timePostArranging for further services, reviewing study results, andcommunicating with the patient, their family, or other healthcareprofessionals
  5. 5. © Avalere Health LLCPage 5All Physicians Use The Same E/M Codes Report Patient Visits E/M codes are divided into broad categories based on place or type of service» E/M codes are further divided into two or more subcategories based onpatient status (e.g., new patient or established patient)» The subcategories are then separated based on level or complexity ofservice (Level 1 represents the least complex encounter; Level 5 representsthe most complex encounter) Seven elements may be used to determine level of E/M service; however, onlykey components are necessary for identifying the level E/MKey Components Contributory Factors History Examination Medical decision making Counseling Coordination of care Nature of presenting problem Time**Time may only be used to determine level of E/M service when more than 50 percent of a E/M encounter isspent counseling and/or coordinating careOffice-based E/M services represent 55% of total RVU-based Medicare paymentsto family physicians, but only 17% of Medicare payments to specialists.
  6. 6. © Avalere Health LLCPage 6All Physicians Use Same Key Criteria to Determine Level ofVisitHistory Exam Medical Decision MakingHistory should includereviews of: Chief complaint History of present illness Review of systems Past family, medical,and social historyThe extent of the history isdependent upon clinicaljudgment and nature ofpresenting problemFour levels ofexamination are detailedby CPT, these include: Problem focused Expanded problemfocused Detailed ComprehensiveThe extent of the exam isdependent upon clinicaljudgment and nature ofpresenting problemMedical decision making isbased on: Number of diagnoses ortreatment options Complexity of data to bereviewed Risk of complicationsand/or morbidity ormortalityFour levels of complexity areoutlined by CPT: Straightforward Low complexity Moderate complexity High complexity*For new patient visits, providers must complete all three key components. However, during establishedpatient visits, providers need only complete two of the three key components, typically medical decision makingand exam.
  7. 7. © Avalere Health LLCPage 7Problems with RBRVS and E/M Systems New codes and mix of services are incorporated less into RVU changesfor primary care physicians than for physicians in aggregateGrowing intensity of physician care seen in increasing RVUs Same number of RVUs are assigned to a single E/M visit, regardless ofthe specialist rendering the serviceThe current system also does not account for the variation inintensity when E/M services are rendered by different specialistsThe limitations of both E/M and RBRVS systems yield an inherentdisadvantage to PCPs relative to specialists
  8. 8. © Avalere Health LLCPage 8Numerous Frameworks and Studies Have Been Developed toMeasure Physician Work ComplexitySource: Safford M, Allison J, Kiefe C. Patient Complexity: More Than Comorbidity. The Vector Model ofComplexity. J Gen Intern Med. 2007 December; 22(Suppl 3): 382–390.Boisot M, Child J. Organizations as Adaptive Systems in Complex Environments. Organ Sci. 1999;10(3):237-252.Non-Clinical FactorsBuilding on Systems Theory to MeasureMedical Care Complexity Some models have sought to look moreexplicitly at the following factors ascontributors to complexity of medicalcare» Socioeconomic,» Cultural,» Environmental, and» Behavioral The “Vector Model” of complexityconceptualizes these and other factorsas having formal relationships that exertinfluence on health that can lead to acomplex patient Complexity may include both:» Cognitive complexity: quantity and contentof information flows» Relational complexity: interactions by whichthe information flows between agents The following are needed to translate this to themedical setting of E/M services as a gauge ofcomplexity:» A count of how many elements in theuniverse of care are used to evaluate andmanage a patient,» The variability that is seen in thearrangement of the elements, and» The diversity of the relationships amongelements
  9. 9. KaterndahlComplexity/Density ModelThe intersection of businessstrategy and public policy
  10. 10. © Avalere Health LLCPage 10Katerndahl Complexity/Density Model Demonstrates a Methodfor Calculating the Relative Complexity of Patient Encounters The model’s five step approach:Katerndahl D, Wood R, Jaen C, Family medicine outpatient encounters are more complex than those of cardiologyand psychiatry, JABFM, January-February 2011, Vol 24. No. 1, 6-15.
  11. 11. © Avalere Health LLCPage 11The Basis of the Katerndahl Complexity/Density Model IsSpecific Inputs and Outputs The method uses count, variability across encounters, and the proportion of allpossible combinations these inputs and outputs comprise to measure“complexity”; density is computed when complexity is measured per time unitComponents Groups Individual Components of Encounter Possible Categories (n)Inputs Reasons for visit 355Diagnosis 491Body systems examined/tests ordered 96Patient characteristics (sex, race,ethnicity)16Total InputsOutputs Medications 113Procedures 37Other therapies 46Patient Disposition 5Total OutputsTotal Encounter Total Inputs + Total OutputsKaterndahl D, Wood R, Jaen C, Family medicine outpatient encounters are more complex than those of cardiologyand psychiatry, JABFM, January-February 2011, Vol 24. No. 1, 6-15.
  12. 12. © Avalere Health LLCPage 12Results of the Katerndahl Model Few differences exist in the unadjusted input and total encounter complexity offamily medicine and cardiology; psychiatry index is less» Cardiology encounters involved more input quantitatively but the diversity offamily medicine input eliminated the difference Difference do exist when time is a factor» Family medicine has a greater complexity/density per hour, than bothcardiologist and psychiatrist» Family physicians averaged 16 minutes per encounter less to care for 34patientsKaterndahl D, Wood R, Jaen C, Family medicine outpatient encounters are more complex than those of cardiologyand psychiatry, JABFM, January-February 2011, Vol 24. No. 1, 6-15.
  13. 13. © Avalere Health LLCPage 13The Katerndahl Model Has Three Key LimitationsKaterndahl et al only analyzedthree specialties:» family medicine,» cardiology, and» psychiatryUnknown what results would be for otherspecialtiesLimited fields in the NationalAmbulatory Medical Care Survey(NMCS) source data base alsobound the authors’ workLack of availability of data with more input andoutput fields reduces the relative difference inthe complexity/density of PCP versusspecialty careThe Katerndahl model reportsindices of relativity – not “real”numbersAdditional work is needed to translate theindices into a new E/M coding and paymentsystem that captures the relativecomplexity/density
  14. 14. © Avalere Health LLCPage 14Key RecommendationsCMS should further the work begun by Katerndahl et al to validatethe authors’ findings across different sub-specialtiesCMS should create interim E/M codes unique to PCPs in order tosupport family physicians rendering the majority of primary careservicesInterim codes will provide immediate relief to these providers while CMSconducts additional research regarding intensity and complexity, as wellas, awaiting results from various payment and delivery demonstrations