Evaluation and Management Coding: Complete 2025–2026 Guide

Introduction to Evaluation and Management Coding

Evaluation and Management (E/M) coding is a standardized system used to document and bill for healthcare services where the provider’s primary work involves diagnosing, managing, and evaluating a patient’s condition rather than performing a procedure. In 2025–2026, accurate evaluation and management coding carries higher stakes than ever. CMS increased reimbursement for E/M codes in recent years, but along with those increases came tighter documentation expectations, revised coding guidelines, and new add-on codes that demand sharper skills from anyone working in healthcare billing.

The distinction between evaluation and management services and procedure-based services is fundamental – and it’s worth reviewing the difference between medical billing and medical coding and core medical billing terminology before going deeper into E/M specifically, since the two functions and their vocabulary work together but aren’t the same thing. An office visit where a physician evaluates a patient’s symptoms, reviews lab results, and adjusts a treatment plan is an E/M service (e.g., CPT 99213). A laceration repair (e.g., CPT 12001) is a procedure-based service with its own billing rules. E/M codes range from 99202 to 99499 and apply across multiple settings, including office or other outpatient, hospital inpatient, emergency department, nursing facility, and home visits. E/M coding is essential for healthcare reimbursement and part of the coding step of the medical billing process, and understanding how these codes work is a core competency for anyone entering the field.

This article is written from MedicalBillingCourse.com’s perspective as a training provider that prepares beginners for real-world billing and coding work. Here is what it covers:

• Time-based coding versus medical decision-making as the two paths for selecting an E/M level

• Code families organized by care setting, from office visits to hospital inpatient encounters

• New patient versus established patient rules and the three-year rule

• 2024–2025 policy changes, including the G2211 add-on code and telehealth updates

• Common coding errors and how to prevent claim denials and audit exposure

What Are Evaluation and Management (E/M) Codes?

E/M codes are a subset of current procedural terminology codes that describe cognitive, non-procedural work. They capture the provider’s effort in evaluating symptoms, managing conditions, and making medical decisions rather than performing surgeries or interventions. E/M services include office visits and hospital consultations, along with services in observation, emergency department, and nursing facility settings. Each code also carries an RVU value that helps determine what the service actually pays, which is worth understanding alongside the coding rules themselves.

• E/M coding applies to services delivered by physicians and other qualified healthcare professional types, including nurse practitioners and physician assistants, who can independently report these codes.

• Office/other outpatient services use CPT codes 99202–99205 for new patients and 99211–99215 for established patients. Hospital inpatient and observation care codes include 99221–99223 (initial) and 99231–99233 (subsequent). Emergency department visits fall under 99281–99285. Nursing facility services use 99304–99310.

• E/M CPT codes are recognized by Medicare, Medicaid services, and most commercial health plans, making them central to practice revenue across nearly every clinical specialty.

• Providers and coders choose between total time on the date of the encounter or medical decision-making to select the appropriate code level, depending on which method more accurately represents the patient encounter.

Key E/M Terminology: QHP, Clinical Staff, New vs. Established Patient

Mastering core vocabulary is critical for correct evaluation and management coding. Misunderstanding a single term can lead to claim denials, incorrect reimbursement, or audit flags. Below are the definitions that matter most in daily billing work.

• Qualified Healthcare Professional (QHP): A provider authorized under state law to independently report E/M codes. Examples include physicians (MD/DO), nurse practitioners, physician assistants, and clinical nurse specialists. Only the time spent by the QHP counts toward code selection when using time-based coding.

• Clinical staff: Medical assistants, LPNs, RNs, and other technicians who support the encounter by gathering data, rooming patients, and preparing charts. Their work is important but does not count as professional services for E/M reporting purposes.

• Professional service: The direct patient contact or telehealth encounter where a QHP evaluates and manages the patient’s condition. This is the billable M service documented under E/M codes.

• New patient: New patients are those who have not received professional services from the provider or specialty group in the past three years. This three-year rule determines whether the office/outpatient code family 99202–99205 applies.

• Established patient: A patient who has been seen by a provider of the same specialty or subspecialty within the same group practice within the past three years. Established patient visits use codes 99211–99215.

• Example: A new patient presenting with chest pain may be coded 99204 based on moderate to high complexity. An established patient returning for the same issue would use 99214 with similar complexity, but a different code family and often different reimbursement.

Understanding E/M Code Structure and Levels

Each E/M CPT code is a five-digit numeric code grouped into families by care setting and patient status. Within each family, there are typically three to five increasing levels that reflect growing complexity of medical decision-making and/or greater time spent on the encounter. The place of service, such as an office or hospital, influences the E/M code selection directly.

A key change under modern coding guidelines (post-2021 for office/outpatient, post-2023 for other settings) is that history and physical exam elements are no longer required for E/M coding level selection. History and physical examination must still be medically appropriate and documented, but they no longer drive the level. Instead, code selection is based on MDM or total time. These E/M coding changes aim to simplify documentation requirements while keeping the focus on medical necessity.

Key concepts for selecting the right level:

• Choose either MDM or total time as the basis for the encounter, whichever better represents the work performed

• MDM has four defined levels: straightforward, low, moderate complexity, and high

• Time thresholds are specific minimums that must be met or exceeded

• The setting (office, hospital, ED) and patient status (new or established) determine which code family applies

E/M Code Families by Setting (2025 Active Ranges)

The main E/M families active in 2025 are organized by care setting. Each setting has its own code range, rules, and documentation expectations.

• Office/other outpatient services: 99202–99205 for new patients; 99211–99215 for established patients. These are the most commonly billed E/M codes, used daily by primary care physicians, family physicians, and specialists in clinic settings.

• Hospital inpatient and observation care: Initial care uses 99221–99223. Subsequent hospital visits use 99231–99233. Same-day admit/discharge codes are 99234–99236. Discharge day management uses 99238 (30 minutes or less) and 99239 (more than 30 minutes). Observation care services were merged into the hospital inpatient code family starting in 2023.

• Emergency department services: 99281–99285. These codes do not distinguish between new and established patients because the ED treats all presenting patients regardless of prior relationship. Code selection for emergency department visits is based solely on MDM, not time.

• Nursing facility and residential care services: Initial care codes 99304–99310 and subsequent care codes 99307–99310 cover evaluations in skilled nursing and residential facilities.

• Home or residence services: Home visits and domiciliary care have their own code families. Prolonged services add-on codes include 99417 for prolonged office visits and 99418 for prolonged inpatient/observation encounters.

Time-Based E/M Coding

Time-based coding uses the total time the QHP spends on a patient’s care on the same date of the encounter. Total time can now include both face-to-face and non-face-to-face activities, not just the minutes spent in the exam room. This change, implemented through the 2021 and 2023 guideline revisions, expanded what counts toward the clock.

Activities that count toward total time include:

• Reviewing the patient’s history, chart notes, and lab results before or after the face-to-face portion of the visit

• Ordering and reviewing diagnostic tests

• Documenting in the EHR on the same date

• Counseling the patient and coordinating care with other clinicians

• Communicating results to the patient on the same date

Activities that do not count:

• Clinical staff time (unless payer-specific rules apply)

• Travel time to or from the encounter

• Time on services reported separately, such as separately billable procedures or diagnostic tests

• Work performed on a different date

When using time-based coding, only the time that meets the minimum threshold qualifies for a given level. CPT time thresholds are actual minimums with no rounding. For example, an established patient visit lasting 20 minutes meets the threshold for 99213 (minimum 20 minutes), while a 40-minute visit qualifies for 99215 (minimum 40 minutes). If the QHP spends 28 minutes, the visit qualifies for 99213 but not 99214 (which requires at least 30 minutes). Total time includes all activities performed on the encounter date, so accurate time tracking is essential.

Time can be used to select the level in office/other outpatient, hospital inpatient and observation, nursing facility, and home/residence settings. However, emergency department E/M codes (99281–99285) rely exclusively on MDM, and time is not a permitted basis for code selection in that setting.

Medical Decision Making (MDM) in E/M Coding

Medical decision making refers to the complexity of establishing diagnoses, assessing a patient’s condition, and selecting management options during the encounter. MDM determines E/M code levels in situations where the clinical complexity of the visit is a better reflection of the work than the clock time. MDM reflects complexity in diagnosis and treatment decisions, making it the preferred method for many providers whose encounters involve high-acuity problems addressed in relatively short visits.

Current coding guidelines define four MDM levels: straightforward, low, moderate, and high. Some payers and references describe a fifth minimal level for the simplest encounters. To select an MDM-based level, coders must confirm that at least two of the three elements meet the required threshold for that level.

• Element 1: Number and complexity of problems addressed during the encounter

• Element 2: Amount and/or complexity of data to be reviewed and analyzed

• Element 3: Risk of complications and/or morbidity or mortality of patient management

MDM can be used across all standard E/M settings, including office, hospital inpatient, emergency department, and nursing facilities. It is often the stronger basis for code selection when time spent is short, but complexity is high, such as a critical decision about hospital admission versus discharge made during a 15-minute encounter.

Breaking Down the Three MDM Elements

Each of the three elements in MDM has its own criteria and requires specific documentation to support the billed level.

• Number and complexity of problems addressed: A single severe problem, such as acute stroke symptoms, can support higher complexity than multiple minor issues like a rash and seasonal allergies. Only problems actually evaluated or managed during the same encounter count. Chronic illnesses with exacerbation, new undiagnosed symptoms with uncertain prognosis, and conditions requiring significant risk management all increase this element.

• Amount and/or complexity of data to be reviewed and analyzed: This element measures the work involved in reviewing labs, imaging, prior records, and external data. A single CBC review is lower complexity than an independent interpretation of an EKG combined with review of an outside MRI and a discussion with another specialist. Test panels count as a single data point for MDM purposes, not as multiple individual tests.

• Risk of complications and/or morbidity or mortality: Prescribing new high-risk medications, considering hospitalization, making decisions about major surgery, or managing patients with significant risk of comorbidities all raise the risk level. Low-risk decisions, such as continuing a stable medication, are on the opposite end of the spectrum.

Applied example: An established patient with diabetes and hypertension returns for medication adjustment. Lab results show worsening A1c, and the patient reports new shortness of breath. The provider reviews labs, adjusts two medications, and discusses social determinants affecting adherence. Even in a 20-minute visit, this encounter may support moderate MDM based on the number of problems addressed, data reviewed, and risk associated with the medication changes. The final diagnosis and documented assessment drive the level, not just the visit length.

New vs. Established Patient E/M Codes

The three-year rule is the standard for determining whether a patient is new or established in outpatient settings. This distinction directly impacts code selection because new patient codes (99202–99205) and established patient codes (99212–99215) are separate families with different time thresholds, reimbursement rates, and documentation expectations.

• A 45-year-old presenting to a new internist with chest pain and no prior visits to that practice would be a new patient, possibly coded 99203–99205 depending on complexity or time.

• The same patient returning six months later for follow-up visits related to the same issue would be an established patient, using 99213–99215.

• In a group practice, if two providers share the same specialty or subspecialty under the same group practice tax ID, a patient seen by either one is established for both. But if the patient previously saw a dermatologist in the practice and now sees a cardiologist, the patient is new to the cardiologist’s specialty.

• Emergency department, hospital inpatient, and observation codes do not distinguish new versus established patient status in the same way as office visits.

• Front office and billing staff play a critical role in verifying whether a patient is new or established before the visit. Errors in this classification lead to claims submitted under the wrong code family and result in denials.

E/M Coding in Key Settings: Office, Hospital Inpatient, Emergency Department

Each care setting has its own rules for evaluation and management coding. Understanding the differences prevents costly billing mistakes.

• Office/other outpatient evaluation and management: Codes 99202–99215 are used daily in primary care and specialty clinics. Providers choose between time and MDM. These codes make up the bulk of outpatient evaluation coding volume for family medicine, internal medicine, and most specialties.

• Hospital inpatient and observation: Initial hospital visits use 99221–99223; subsequent care uses 99231–99233. Same-day admit/discharge uses 99234–99236. Documentation must clearly distinguish admission status and whether the service occurred on the same date as discharge. Hospital visits require careful coordination, especially during handoffs between providers.

• Emergency department: Codes 99281–99285 are selected based solely on MDM. The ED handles undifferentiated, acute complaints where the patient’s health may be at significant risk. Higher-level codes (99284–99285) require documentation of high-acuity problems addressed and management decisions carrying significant risk.

• In all settings, coders must confirm whether the encounter was split or shared between a physician and an advanced practice provider. Payer-specific rules govern who reports the E/M code in shared visit scenarios.

What Is Included and Excluded in E/M Codes?

• E/M codes include: taking a medically appropriate history, performing a physical examination when appropriate, counseling, care coordination, ordering and reviewing diagnostic tests, interpreting certain data as part of MDM, and documenting the encounter.

• Diagnostic tests (lab work, imaging, EKGs) and procedures (skin biopsies, wound repairs, injections) are reported separately with their own CPT codes. These are not included in the E/M code and should not be double-counted toward E/M time or MDM. Billing a distinct E/M service and a bundled procedure separately without proper support is a form of unbundling – a coding-accuracy risk covered in its own guide.

• Modifier 25: When a significant, separately identifiable E/M service is provided on the same date as a procedure, the E/M code is appended with modifier 25. The documentation must clearly support that the evaluation was distinct from the usual service associated with the primary procedure.

• Preventive services such as annual wellness visits and immunizations use different CPT or HCPCS codes. If additional problems are evaluated beyond the scope of the preventive visit, an E/M code may also be billed, depending on payer rules.

• During a global surgical package period, E/M visits related to the primary service are bundled. Only unrelated visits can be billed separately, typically with modifier 24 to indicate the visit was unrelated to the original procedure.

2024–2025 E/M Coding Updates and Policy Changes

The evaluation and management coding landscape has shifted significantly in recent years. Here is a chronological summary of the most important changes.

• 2021: Office/outpatient E/M codes (99202–99215) were revised by the American Medical Association to eliminate rigid history and physical exam scoring. Code selection shifted to MDM or total time. This was the most significant structural change in decades.

• 2023: Major E/M coding updates occurred in January 2023, extending the same framework to all other E/M settings: hospital inpatient, observation, emergency department, nursing facility, and home/residence. Observation care codes were merged into the hospital inpatient family. Telehealth limitations for Medicare patients were reinstated in 2023, ending some pandemic-era flexibilities.

• 2024: The G2211 code was introduced for complex primary care visits in 2024. This HCPCS add-on code provides additional payment for complex primary care visits involving longitudinal relationships and cognitive complexity beyond standard outpatient E/M levels. G2211 applies to certain office/outpatient E/M codes billed to Medicare.

• 2025: In its 2025 Medicare Physician Fee Schedule final rule, CMS reversed course and now allows G2211 to be paid when the base E/M code is reported with modifier 25 – but only when the same practitioner also furnishes an Annual Wellness Visit or other Medicare Part B preventive service on the same day; modifier 25 alone doesn’t justify G2211. Separately, CMS did not adopt the new AMA telehealth E/M codes (98000–98015) for Medicare billing in its 2025 fee schedule, treating them as duplicative of existing E/M codes billed with a telehealth modifier. Medicare providers should continue billing standard E/M codes (99202–99215) with modifier 95 or 93 for telehealth encounters. The one exception is CPT 98016, a brief communication code that directly replaced the former G2012 check-in code and is reimbursed by Medicare.

MedicalBillingCourse.com’s 2026 Edition curriculum reflects these updates, so students practice with current rules rather than outdated pre-2021 documentation models.

Unlisted E/M Services and Special Reporting

• When an evaluation and management service does not fit into any existing CPT code, unlisted codes may apply. CPT 99499 covers unlisted E/M services, and 99429 covers unlisted preventive services. These are rare and subject to heavy scrutiny.

• A special report is required and must include: a description of what was performed, why existing codes are insufficient, comparison to similar coded healthcare services, clinical justification with supporting documentation, and time or MDM details.

• Health plans may require prior authorization or additional documentation for unlisted E/M services. Practices should verify payer policies before submitting claims with these codes.

• The diagnosis codes reported must accurately reflect the conditions addressed during the encounter, which is especially important when using unlisted codes since payers will review medical necessity closely.

Common E/M Coding Errors and How to Avoid Them

Misapplying codes can lead to significant reimbursement losses, audit exposure, and compliance risk. Below are the most frequent errors and practical ways to prevent them – and several of them are the exact errors that trigger denial codes like CO-11 (diagnosis doesn’t support the service) or CO-97 (service considered part of another billed procedure), covered in more depth in a dedicated guide to denial codes.

• Misusing time vs. MDM: Counting clinical staff time or non-qualifying administrative work toward total time inflates the level without documentation support. Not meeting time or complexity thresholds results in incorrect billing. Only the time spent by the QHP on qualifying activities counts.

• Double-counting data: Double-counting data in MDM billing is a common error. For example, counting a lab panel as multiple individual tests overstates the data element. Panels count as a single data point.

• Incorrect patient status: Confusing new patient and established patient classifications leads to claims under the wrong code family. This is especially common in group practices with multiple providers in the same specialty.

• Vague documentation: Lack of documentation can raise red flags for auditors. Phrases like “stable, continue meds” without clinical detail fail to support the billed level and trigger downcoding. Accurate documentation must describe the problems addressed, data reviewed, and risk assessed.

• Telehealth code confusion: Billing new AMA telehealth codes to Medicare when CMS has not adopted them results in denials. Coders must maintain payer-specific reference sheets and confirm which codes each payer accepts.

• Prevention tip: Use checklists or EHR prompts aligned with the AMA MDM tables to ensure two of three elements are clearly documented and appropriately documented for each encounter.

E/M Coding, Compliance, and Payer Differences

Compliance risk in E/M coding stems from the fact that Medicare (CMS) and commercial health plans sometimes adopt CPT changes on different timelines or interpret coding guidelines differently. Confusion between CMS and commercial payer codes can cause denials, making payer-specific knowledge essential.

• Medicare’s partial adoption of AMA telehealth E/M updates for 2025 is a clear example. Some private insurers may accept the new 98000–98015 codes directly, while Medicare requires standard E/M codes with modifier 93 for telehealth. Coders handling Medicare patients and commercially insured patients in the same practice need separate workflows.

• Local coverage determinations (LCDs) issued by Medicare Administrative Contractors can vary by region, affecting what counts as sufficient data complexity or risk documentation. These determinations influence which E/M levels are accepted without challenge.

• Medical necessity must be documented to justify the services billed under E/M coding. Simply checking boxes for time or MDM elements is not enough for higher-level codes. Proper documentation supports compliance with payer requirements and reduces audit exposure, especially for codes like 99215 and 99205 that attract scrutiny.

• E/M coding guidelines emphasize detailed medical records for justification. Practices should maintain payer-specific cheat sheets and conduct regular internal audits to catch patterns before external auditors do.

How E/M Coding Impacts Revenue Cycle and Practice Operations

Accurate E/M coding ensures proper reimbursement for healthcare services and is directly tied to the financial health of any practice or facility. Accurate E/M coding prevents underbilling and overbilling, both of which carry costs.

• Undercoding example: A provider who routinely bills 99213 for visits that support moderate MDM (qualifying for 99214) leaves revenue on the table with every claim. Across hundreds of visits per month, this adds up to substantial lost income.

• Overcoding risk: Billing 99215 without sufficient documentation triggers payer audits, repayment demands, and potential penalties. Inaccurate E/M coding can lead to lost revenue or audits depending on the direction of the error.

• Workflow coordination: Providers document the encounter. Clinical staff collect supporting information. Billing specialists review documentation and select codes. Front desk staff verify the patient’s history and new versus established status. In hospital settings, coordination during admission, observation, and discharge is especially critical for reimbursement accuracy.

• Health plans increasingly use analytics and AI to flag outlier E/M coding patterns by specialty. A provider billing 99215 at twice the rate of peers in the same specialty will be flagged. Accuracy in E/M coding is critical to avoid audit penalties and ensure appropriate reimbursement.

Building E/M Coding Skills with MedicalBillingCourse.com

Mastering E/M codes, MDM, and time-based rules is one of the most practical skills a new medical biller or coder can develop entering the field in 2025–2026. These codes appear on the majority of claims across primary care, family medicine, internal medicine, and most specialty practices, making them unavoidable in daily billing work. E/M coding is Step 4 of the medical billing process covered in MedicalBillingCourse.com’s step-by-step process guide.

MedicalBillingCourse.com’s Medical Billing & Coding Certification tracks teach evaluation and management coding through real-world scenarios, not abstract theory. The 2026 Edition curriculum covers:

• Updated CPT and CMS guidelines reflecting all changes through 2025, including G2211, telehealth rules, and revised MDM tables

• Sample CMS-1500 claims using common E/M CPT codes across office, hospital inpatient, emergency department, and nursing facility settings

• Practice exercises that distinguish management services from procedures, apply modifier 25 correctly, and select the appropriate code level based on documented MDM or time

• Scenarios covering the patient’s care across multiple settings, from initial office evaluation through hospital admission and follow-up

The platform’s self-paced structure is designed for adults switching careers, seeking remote work, or starting a home-based billing business that will frequently handle E/M-heavy specialties. MedicalBillingCourse.com’s Medical Billing & Coding Certification programs cover evaluation and management coding as a core part of the curriculum.

Tri Smith, Instructor

Tri Smith is a Managing Partner and Instructor at MedicalBillingCourse.com, where he helps guide the program’s direction, curriculum, and student experience. With more than six years of experience, he focuses on practical medical billing skills, including claims, payer communication, compliance, and the full billing lifecycle.

Tri also helped lead the development of the 2026 course edition, including the Medical Billing and Coding certification track. His approach emphasizes clear instruction, practical application, and preparing students to apply what they learn in real-world billing environments.