Level 3 vs Level 4 E&M Billing: The $200/Visit Difference Most Practices Miss

The Rate Differential: CPT 99213, 99214, and 99215

The 2025 Medicare Physician Fee Schedule sets total non-facility allowed amounts (work RVU + practice expense RVU + malpractice RVU, times the $32.35 conversion factor) at approximately:

The gap between 99213 and 99214 is roughly $54 per claim under Medicare. Against a commercial payer at 120% of Medicare, that differential widens to approximately $65. Against a payer at 150% of Medicare — common in commercial contracts — the per-visit difference reaches $81. Over the course of a year, across a full patient panel, those numbers compound rapidly.

The 2021 AMA Revisions: What Changed

Effective January 1, 2021, CMS adopted the American Medical Association's revised E&M guidelines for outpatient office visits (CPT codes 99202–99215). The previous framework had required satisfying thresholds across three axes simultaneously: history, physical examination, and medical decision making. The 2021 framework eliminated history and exam as determinants of E&M level entirely.

Under current rules, an outpatient established patient visit qualifies for a given E&M level based on either — not both — of:

• Medical Decision Making (MDM) alone, evaluated against a standardized table with three elements
• Total time on the date of the encounter, defined as physician or QHP time including pre-visit preparation, face-to-face time, and post-visit documentation and coordination

This change was broadly favorable for providers. Visits that previously didn't qualify for Level 4 due to a brief physical exam now easily qualify based on MDM if the clinical complexity is there. Many practices, however, did not update their documentation templates or educate providers on the new criteria — and continue coding as if the old rules apply.

MDM Criteria in Detail: What Makes a 99214

The MDM table is a 3×3 grid. Each of the three MDM elements (problems, data, risk) is assessed independently. The overall MDM level is determined by the two-of-three rule: at least two of the three elements must meet the threshold for the level.

For Moderate Complexity MDM (required for 99214), the element thresholds are:

The practical implication: any established patient visit that involves (1) managing two or more stable chronic conditions, such as hypertension and type 2 diabetes, AND (2) prescription drug management — adjusting a dose, renewing a controlled substance, or managing a medication side effect — satisfies two of three moderate MDM elements and qualifies for 99214. This describes a substantial fraction of every primary care and internal medicine schedule.

Time-Based Coding: The Overlooked Alternative Pathway

The time-based coding pathway is underused even in practices that are aware of it. Under the 2021 rules, total time on the date of service — not just face-to-face time — counts. This includes:

• Preparing to see the patient (reviewing prior records, labs, imaging)
• Obtaining and reviewing a history from the patient or caregiver
• Performing a medically necessary examination
• Counseling and educating the patient or caregiver
• Ordering medications, tests, or referrals
• Documenting the encounter in the EHR
• Coordinating care with other providers or staff

For 99214, total time must be 30–39 minutes. For 99215, 40–54 minutes. A provider who spends 12 minutes in-room with a complex patient but 20 minutes total when pre-visit chart review and post-visit documentation are included qualifies for 99214 on time alone — if the time is documented. The note needs one line: "Total time spent on date of encounter including pre-visit preparation, face-to-face encounter, and post-visit documentation: 35 minutes." Most providers never write it.

Documentation Requirements: Specific and Auditable

CMS and commercial payers conduct post-payment audits by pulling a random sample of claims for a target code and comparing the submitted code to what the documentation supports. The single most common audit finding in E&M audits is not upcoding — it is documentation that is ambiguous, generic, or fails to explicitly tie the clinical work to the MDM elements.

Common documentation failures that result in downcoded audit determinations:

• "Follow up chronic conditions" in the assessment — does not name the conditions, does not indicate whether stable or exacerbating, does not satisfy the problems element explicitly
• Labs accessed in the EHR but not referenced in the note — a reviewer cannot confirm the data element was used in MDM
• A new prescription in the plan without a sentence of reasoning — satisfies risk on the face of it, but payers increasingly require documentation of the decision, not just the order
• Visit duration noted as a checkout time minus check-in time rather than physician-documented total time — not valid for time-based coding

Audit Risk: Undercoding vs. Upcoding

RAC (Recovery Audit Contractor) and MAC (Medicare Administrative Contractor) audits look in both directions. They examine whether codes billed are supported by documentation, and CMS publishes aberrant billing data through the Medicare Provider Utilization and Payment Database. A practice whose 99214/99215 ratio is dramatically below specialty peer benchmarks is not audit-protected — it may simply be leaving revenue uncollected.

The False Claims Act and the OIG Work Plan both focus on upcoding — billing codes not supported by documentation. Correcting undercoding through better documentation is compliant. A practice that has providers document accurately what they actually do clinically, then bills the code supported by that documentation, is in the correct compliance position. The documentation drives the code; the code does not drive the documentation.

Practices that are uncertain about their coding accuracy should conduct a prospective internal audit: pull 25–50 recent 99213 encounters per provider, apply the 2021 MDM criteria to each chart, and identify what percentage of those charts actually document moderate MDM. That number is your undercoding rate. If it is above 15%, the revenue opportunity from documentation improvement is material.

How Vizier Identifies Your Coding Gap

Vizier queries your billing data to compute your 99213/99214/99215 distribution by provider, compares it against CMS National Provider Utilization benchmarks for your specialty, and flags the providers whose coding distribution diverges most from peers. For practices with EHR access, Vizier can pull encounter-level data to identify visits where documented MDM elements appear to exceed the billed code — surfacing the specific charts most worth reviewing with a compliance-trained coder.

The output is a provider-level report showing estimated annual revenue at risk, a distribution chart against specialty norms, and a sample of flagged encounters. For most practices, this analysis takes under two hours to run and produces an immediate action list.