Medical necessity should be considered foremost when determining the appropriate level of documentation of the history, physical examination and complexity of medical decision making, usually contained within the assessment and plan of an encounter note.
If a patient presents with a fairly straightforward problem (e.g., tension headache) and after a reasonably detailed history and examination there is no indication of more sinister pathology, the level of E/M service should in most cases be relatively moderate (e.g., 99203). However, if there is some aspect of the history (worse on awakening with nausea and vomiting) or an observation (e.g., nystagmus) that leads the provider to perform a more detailed history and/or physical examination to exclude more serious conditions, then a higher level of service would in most cases be justified. However, it is important that the reasons for why a more detailed history and/or examination were performed be documented (e.g., “unusual presentation somewhat suggestive of increased intracranial pressure, but no evidence on exam).
It is entirely appropriate to perform a highly detailed history and physical even when the patient presents with a simple problem and no workup is planned. However, in these cases it is best to base the final E/M code on the level of medical necessity, even if a coding tool (such as those found within many EHRs) suggests a higher level of service based on what is documented.
The following definition of medical necessity provided by Medicare may be helpful:
Per the Internet Only Manual (IOM) Medicare Claims Processing Manual, Publication 100-04, Chapter 12, Section 30.6.1 states:
“Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported.”