Billing for Time: Determining the Level of Evaluation and Management Codes

2013 - 4 August - Managing Post-Intensive Care Syndrome in the ICU
David Carpenter, MPAS, PA-C
Inpatient and outpatient services are billed under a complex matrix that uses the patient history, physical exam and medical decision making to determine the appropriate evaluation and management (E/M) codes.(1)

Inpatient and outpatient services are billed under a complex matrix that uses the patient history, physical exam and medical decision making to determine the appropriate evaluation and management (E/M) codes.(1) What many providers fail to recognize is that, in the case of a patient who needs extensive counseling and coordination of care, the E/M code can be billed solely based on the time. While time-based billing can be used in both the inpatient and outpatient environment, this article solely deals with inpatient time-based billing. 

Medicare describes time-based billing in the Medicare Claims Processing Manual(2) as follows:

Selection of Level of Evaluation and Management Service Based on Duration of Coordination of Care and/or Counseling

Advise physicians that when counseling and/or coordination of care dominates (more than 50 percent) of the face-to-face physician/patient encounter or the floor time (in the case of inpatient services), time is the key or controlling factor in selecting the level of service. In general, to bill an E/M code, the physician must complete at least 2 out of 3 criteria applicable to the type/level of service provided. However, the physician may document time spent with the patient in conjunction with the medical decision-making involved and a description of the coordination of care or counseling provided. Documentation must be in sufficient detail to support the claim.

Time-Based Billing for the Inpatient

Some differences are seen between inpatient and outpatient billing. The key difference is that time for counseling or coordination of care does not have to be face-to-face time. Time spent coordinating care counts if it is spent either in face-to-face contact or while on the patient’s floor or unit.

Example 1: A patient has been admitted to the intensive care unit (ICU) with pneumonia and develops renal failure requiring dialysis. The patient recovers and is now ready to transfer to a floor bed. In this case, unlike the outpatient situation, time spent coordinating care with other providers counts even if it is not face-to-face time. The provider examines the patient and discusses the progress seen, for a total time of 20 minutes. If the provider, while on the floor, spent 25 minutes coordinating care (e.g., discussing the transfer with nephrology and calling hospital medicine to transfer the patient to that service), then it would reach the level of 99233 based on time (99233 is allotted 35 minutes of time, of which more than 50% was spent in counseling or coordination of care).

Documentation of Time-Based Billing

The Medicare Claims Processing Manual, Chapter 12, states(2):

The duration of counseling or coordination of care that is provided face-to-face or on the floor may be estimated but that estimate, along with the total duration of the visit, must be recorded when time is used for the selection of the level of a service that involves predominantly coordination of care or counseling.

Example 2: A patient is admitted with a Vicks Nyquil® (combination of acetaminophen, dextromethorphan, doxylamine) overdose; he has no other medical problems. The patient has been seen and cleared by psychiatry and is medically stable for transfer to the floor. The provider spends 15 minutes examining the patient, reviewing labs and preparing the daily note. An additional 25 minutes are spent preparing a transfer summary and coordinating care with hospital medicine. Normally this would be coded as 99232 based on complexity, but because the total time (40 minutes) exceeds the time allotted for 99233 and more than 50% of the time was spent coordinating care, this would be billed as a 99233. 

Generally the statement must specify the time spent and that 50% or more was spent on counseling and coordination of care. For example: if you spend 45 minutes with a patient, of which 25 minutes was spent consulting the nephrology and hospital medicine service and coordinating care, then time spent was on the patient’s unit. Careful documentation at this stage is the key to avoiding a Medicare audit.

Billing for time is a highly complex issue. However, for specialties that routinely provide counseling and coordination for the patient beyond the time allotted in the Current Procedural Terminology codes, it can provide valuable revenue to help justify the time spent with the patient. Care must be taken to make sure the documentation justifies the level of service selected and the amount of counseling and coordination provided.


  1. E&M coding based on time. University of Michigan Physicians – Coding and Billing Guideline. Accessed February 20, 2013.
  2. Medicare Claims Processing Manual. Chapter 12: Physicians/nonphysician practitioners. Accessed February 20, 2013.