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The American Journal of Managed Care November 2014
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The Correlation of Family Physician Work With Submitted Codes and Fees
Richard Young, MD, and Tiffany L. Overton, MPH
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The Correlation of Family Physician Work With Submitted Codes and Fees

Richard Young, MD, and Tiffany L. Overton, MPH
This observational study shows that clinical work performed by family physicians correlates poorly with common codes and fees under the existing coding and billing rules.

The income disparity between primary care and other physicians has been attributed in part to the evaluation and management (E/M) rules written by CMS. The purpose of this study was to examine the relationship between family physicians’ work and their actual coding practices and fees collected under these widely used rules.

Study Design
This was a direct observational time-motion study.

A diverse group of 15 family physicians were shadowed over consecutive patient visits at their ambulatory practices, usually for a half-day of clinic. Data about each visit were recorded, including time parameters; number of issues covered; number of labs, images, and chronic prescriptions ordered; the physician fee code from the Current Procedural Terminology (CPT) system that was submitted; the actual payer for each patient; and the actual fee collected. The primary outcome was the correlation between the time spent for each patient’s care and coding/financial measures.

The average total time a physician spent per patient including documentation time was 20.0 minutes. The average fee collected was $101.40, including patient co-pays. The correlation between the actual fee collected and the physician’s time spent working on each patient’s behalf was poor (R2 = 0.137, P <.001). There was a wide variation in times and fees for each CPT code category.

The existing E/M rules and CPT coding system have created office visit fees that correlate poorly with family physician work. These findings provide another justification for disruptive primary care payment reform.

Am J Manag Care. 2014;20(11):876-882

Take-Away Points

This observational study shows that clinical work performed by family physicians correlates poorly with common codes and fees under the existing coding and billing rules. Our findings suggest that:

  • The existing documentation, coding, and billing rules written by CMS in the mid-1990s poorly reflect the actual work performed by family physicians.
  • Under the existing rules, family physicians are disincentivized to care for complex patients with multiple comorbidities, who are the most costly to the healthcare system.
  • Extensive reform of the CMS rules is necessary to reduce the income disparity between primary care and other physicians and thereby increase primary care supply in the United States.
In 2008, Bruce Steinwald, director of healthcare for the Government Accountability Office, testifying before the Senate Health, Education, Labor, and Pensions Committee, stated “When I say primary care services are undervalued, that does not mean that just increasing the prices paid to primary care is the solution.”1 The chair of the Medicare Payment Advisory Commission in 2009 also recognized that the current fee structure “does not consider the value to patient or value to society or the shortage of various types of providers.”2

In the United States, all primary care services paid for by the Medicare and Medicaid programs, and the vast majority of services for privately insured patients, follow documentation, coding, and billing rules established by CMS based on codes created by the American Medical Association for its Current Procedural Terminology (CPT) manual.3 The most common CPT outpatient codes are 99212 through 99214.

The hours family physicians work per week is near the median of all physicians,4 although average annual personal income is approximately $175,000-$221,000,5,6 which is nearly 3 times less than the average income of the highest paid physicians and is a little more than half the average income of non–primary care physicians.6 An analysis of physician incomes concluded that the Medicare fee schedules that arise from CMS’s Evaluation and Management (E/M) rules, not inflated fees to non-primary care physicians in the private market, directly explain this income discrepancy.7

The income disparity is further explained by the way physician work is valued. The difference in the hourly payment rate between cognitive and procedural services can be quite dramatic. In Boston, for example, Medicare pays primary care $103 for a 30-minute visit but $449 for a diagnostic colonoscopy. The latter has been reported to take about 30 minutes,1 though other studies found that a screening colonoscopy actually only takes about 14 minutes to complete.2

Little research has been conducted to examine the effect of the existing E/M rules and associated physician fee payments on clinical practice since the rules were published in 1995 and 1998.8,9 The purpose of this study was to examine the relationship between observed family physicians’ workload and their actual coding practices and fees collected.


The lead author (RY) observed 127 patient clinic encounters of 15 family physicians. The physicians were chosen to represent a variety of practice locations, practice types, and payers. RY personally knew some of physicians prior to the observation. Others were suggested by mutual colleagues to represent a diversity of ages, medical school and residency education, and practice location. Each potential study physician was called to explain the rationale for the study, and their permission was sought to shadow a typical day of their practice for one-half to 1 day in clinic.

The physicians were observed after consent was obtained from each patient. The patient received a 1-page explanation of the purpose of the project from a clinic staff member prior to the observation. Out of 128 patients who were asked, 127 consented to allow the clinical encounter to be observed.

While the physician cared for the patient, RY tried to be merely a “fly on the wall” and not influence the visit. The observed physician was specifically asked to not change any habits or decisions because of the observa- tion. While in the room, the observer moved to the most unobtrusive corner possible, making an effort to minimize eye contact with the physician and patient. The observer stepped out of the exam room for sensitive physical exams such as gynecological exams.

Times were recorded in minutes, which commenced from the moment the physician started working with the patient’s chart prior to entering the exam room to the time the documentation for the visit was complete. The number of issues that were covered were recorded, as were the numbers of labs, images, and chronic prescriptions that were ordered. The only time the observer interrupted the physician’s usual work flow was between patient encounters. For a patient just seen, the physician was asked which billing codes were submitted, who the payer was, and how many issues the physician had addressed. No patient-specific in- formation was obtained other than what was addressed in the encounter. Time devoted to office administrative issues or other patient care work that was not directly rela- ted to the observed patient encounters was not captured.

Approximately half of the physicians with electronic medical records (EMRs) said they would finish charting later that night from home. To estimate the total time required for each patient encounter, these physicians were asked to estimate the total amount of time they would spend charting for all incomplete medical records. A mean time-imputation method was conducted for each physician using EMR with delayed charting. The total amount of time reported by the physician was divided by the number of incomplete charts. The calculated value was then applied to each of these visits.

At the end of the clinic day, the lead investigator discussed with each physician aspects of that day’s patient care and further clarified the actual bills that were submitted. If possible, expected payment amounts were obtained for each claim at that time. Often the office manager was contacted at a later time to obtain information about the actual fees collected, including patient co-pays. The only adjustments made to the collected data were that all the collected fees were classified as coming from an indepen- dent practice. If the physician worked in a hospital-owned clinic or federally qualified health center, local Medicare rates were used for a participating physician, so as to exclude separate facility fees (so-called provider-based billing) from the revenue estimates. The fees recorded did not include the material costs for supplies such as vaccines and injectable medications, because the allowable fees are very near the practices’ acquisition costs.

Linear regression was used to assess for associations between the recorded times and collected fees. To correlate the CPT code categories, the following 4 categories were established: 99213, 99214, preventive visits (99391, 99395, etc), and combination codes, which were visits that met one of 2 criteria: the visit was billed as a preventive code plus an E/M code with a –25 modifier (the majority of these visits), or the visit consisted of an E/M service plus an additional fee for a common outpatient procedure. Diagnosis codes accounting for fewer than 5 visits were excluded from analysis of categories. Homogeneity of variance between E/M codes for time and fees was examined using Levene’s test. Statistical analysis was performed with SPSS (SPSS Inc, Chicago, Illinois). This project was approved by the John Peter Smith Health Network Institutional Review Board.


Characteristics of the observed physicians are shown in Table 1. They were predominantly mid-career physicians in private practice, though a diversity of locations, physician backgrounds, and practice types were represented. Descrip- tive statistics for some of the features of the actual clinic visits are shown in Table 2. The average visit length was 20 minutes and the mean actual fee collected was $101. No unusual or extreme documentation, coding, or billing practices were observed. A few visits that really dealt primarily with several chronic conditions were billed as preventive or well-person visits. This accounted for a small minority of observed visits.

The comparison and correlation of the physician time spent for each patient versus the actual fee collected in the observed clinic visits is shown in Figure 1 (R2 = .137, P <.001). The variance between the physician time and actual code used is shown in Figure 2. Variance between the 4 groups of E/M codes was significantly different for time (P <.01) and fee (P <.001), though each code category had a wide range of associated times (Table 3). However, variances were not sig- nificantly different between E/M codes 99213 and 99214 (P = .09) or preventive and combination codes (P = .58).

The average fees collected for 10-, 20-, and 40-minute visits were $84, $102, and $135, respectively, which translated to $504/ hour, $306/hour, and $203/hour, respectively.


We found a statistically significant but weak correlation between the actual fee collected and the physician’s time spent working on each patient’s behalf, and a wide range of times for each CPT code category. The net effect of these findings resulted in a payment rate per hour that decreased as the visit length increased.

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