When a chorus of complaints quickly followed the release of the last two versions of the federal government’s guidelines for physicians to use in documenting evaluation and management (E&M) services, the Health Care Financing Administration (HCFA) was forced to go back to the drawing board.

In late June HCFA, the agency that administers the Medicare program, held a town hall meeting in Washington, D.C., at which it revealed the draft of a new set of guidelines it hopes that physicians will find more palatable than the 1997 and 1999 versions.

The agency will begin requiring physicians to use the new E&M documentation guidelines in January 2002 if its schedule for refining and pilot testing the guidelines proceeds as planned.

HCFA set about reworking the guidelines after physicians complained that the two preceding versions were burdensome for them to use and for some services relied on a numerical procedure that many disparaged as a form of "bean counting." A substantial number of physicians complained to HCFA and to medical organizations that the counting exercise, which was especially problematic when coding for a patient physical examination, often gave HCFA an inaccurate picture of the services they were actually providing for their Medicare patients. The 1997 and 1999 revisions, for example, described a long list of elements that physicians could use in a physical examination. The number of elements cited was a key factor in how complex HCFA determined the physician’s effort was—and how much it would reimburse.

In the draft released in June, the extensive counting requirement is dropped, and the only counting physicians will have to do is the number of "organ systems" they evaluate in a Medicare patient.

HCFA Administrator Nancy-Ann DeParle acknowledged in an article in the June 21 Journal of the American Medical Association that the agency’s attempt with the 1997 and 1999 versions to "recognize specialists’ more narrowly focused clinical encounters" resulted in procedures that turned out to be "cumbersome and troubling. . .given the documentation’s importance in separating honest errors from the far fewer instances of fraud and abuse."

She pointed out, however, that a congressionally mandated audit of 1999 Medicare claims uncovered $5.5 billion that because of "inadequate or nonexistent" documentation were paid out in error, making it one of the largest problem areas in terms of improper Medicare payments.

The new guidelines were designed to satisfy three goals, said DeParle—simplification of the requirements, reduction of the burden on physicians, and ensuring a "consistent and fair medical review."

Among the most significant changes will be the inclusion of yet-to-be-developed "specialty-specific vignettes" that will, HCFA officials believe, assist physicians in including the most appropriate documentation to back up examination findings and treatment plans. They will also guide reviewers in determining whether the physician coded the service correctly.

"The vignettes will be a critical element in determining how useful the documentation guidelines turn out to be for physicians. We are geared up to provide input about the vignettes related to psychiatric treatment once HCFA’s contractor begins its work," said Sam Muszynski, director of the APA Office of Healthcare Systems and Financing.

He added that HCFA has indicated that medical specialty societies will be consulted about the vignettes, but the agency has not clarified the final approval process.

"APA has and will continue to work closely with the AMA as the E&M guideline development moves forward," Muszynski noted. HCFA has for several years turned to the AMA for its input into the development process.

The vignettes, which are to be developed by an independent contractor with input from medical specialty societies, are already accompanied by controversy even though they do not yet exist. The problem has arisen over HCFA’s intention to test the vignettes by recruiting physician volunteers who will offer up records and billings of Medicare patients for HCFA to review. The agency has not offered assurances that physicians who participate in the pilot testing will have immunity from penalty should HCFA decide that their reimbursement requests were incorrectly documented or coded after using the vignettes to guide them.

The vignettes will describe multisystem and single-system examinations and other elements of medical decision making.

In documenting their decision-making process, physicians will be expected to include—for the assessment and treatment plan for each problem evaluated during a patient visit—the data that helped them determine severity, deterioration and complication risk, complexity in arriving at a diagnosis, and tests or procedures ordered or planned.

The draft guidelines describe the following seven components that HCFA expects physicians to use in determining the level of E&M services they provide in treating a Medicare beneficiary: history, examination, medical decision making, counseling, coordination of care, nature of presenting problem, and time spent.

The draft documentation guidelines that HCFA released in June hark back to the simpler 1995 guidelines, which the agency realized helped lead physicians to more consistent assessments of what code was the most appropriate for a particular patient. HCFA developed that initial set of guidelines for documenting Medicare-reimbursable services in conjunction with the AMA, which also had considerable input into the latest version and reflected comments it received from APA and other medical specialty organizations.

Since April 1998, because of the complaints that the 1997 guidelines generated, physicians have been able to choose whether to submit documentation to their Medicare carrier in accordance with either the 1995 or 1997 guidelines, whichever benefited them most.