Coding for Time-Based Services - How Most Providers Leave Money on the Table

In the complex world of medical billing, time-based coding remains one of the most misunderstood—and consequently, one of the most underutilized—revenue opportunities for healthcare providers. 

As the healthcare industry constantly evolves, the guidelines for coding have become more intricate, requiring more precision from providers, especially when it comes to time-based services. With the significant E/M guideline changes implemented in 2021 and beyond, the situation has become even more nuanced, leaving many practices inadvertently shortchanging themselves by thousands of dollars annually.

The Hidden Revenue Drain in Your Practice

Time is literally money in healthcare, yet many providers fail to capture the full value of the services they provide. Despite the growing awareness of time-based coding, a shocking 60%+ of healthcare providers regularly underbill for time-based services, leaving significant amounts of money uncollected. This isn’t just about occasional coding errors; it’s a systematic problem often rooted in misunderstanding the current guidelines and documentation requirements.

The issue lies not only in knowing the codes but understanding how they apply to the time spent on various services. As practices struggle to adapt to the 2021+ E/M guideline changes, the financial impact of these errors can be substantial and immediate. This issue becomes even more urgent as healthcare reimbursements decline and the administrative burden increases.

What Makes Time-Based Coding So Challenging?

Time-based medical coding has always required precision, but the 2021+ E/M guideline changes have transformed the landscape in several key ways. Healthcare providers must adjust to these changes to ensure they accurately capture all billable time.

Shift from "Face-to-Face" to "Total Time"

In previous years, time-based billing relied primarily on "face-to-face" interaction between the healthcare provider and the patient. However, the 2021 guidelines shifted this to "total time" on the date of service, which includes both direct patient interaction and non-face-to-face activities such as:

• Reviewing medical records before the visit

• Coordinating care with other healthcare professionals

• Communicating with patients’ families outside of appointments

• Reviewing lab results or other diagnostics

This shift is significant because many providers previously underreported time spent on these essential administrative and coordination tasks, resulting in missed opportunities for billing.

Elimination of History and Exam as Determinants for E/M Code Selection

Prior to the guideline changes, the history and physical exam played a critical role in determining the level of E/M service to be billed. However, the new rules allow providers to select E/M codes based on either medical decision-making (MDM) or total time spent on the service. This change has opened up greater flexibility for providers but also introduces new challenges, as many are still accustomed to determining codes based on history and physical exam alone.

Medical Decision-Making (MDM) or Time Can Now Be Used Independently

The biggest change in 2021 was the ability to select E/M codes based on MDM or time—whichever results in a higher code. This offers practices the potential for increased revenue, particularly when complex cases or extensive time commitments are involved. However, adapting to this shift requires understanding the nuances of the rules surrounding both MDM and time-based coding.

Greater Specificity Requirements in Documentation

Perhaps the most critical and challenging aspect of time-based coding is documentation. Under the new guidelines, simply stating "spent 30 minutes with the patient" is no longer sufficient. Documentation must provide a detailed breakdown of how that time was spent, including:

• Reviewing records (e.g., "15 minutes reviewing lab results")

• Communicating with other providers (e.g., "10 minutes coordinating care with specialist")

• Non-face-to-face interactions (e.g., "5 minutes discussing with family member")

Without this level of detail, providers risk claims being denied or downcoded by payers.

Common Time-Based Coding Mistakes That Cost Providers Thousands

There are several common mistakes in time-based coding that result in substantial lost revenue for providers. Let’s explore some of the most prevalent errors and their impact on a practice’s bottom line:

1. Underdocumenting Time Spent

Many healthcare providers still only document the direct face-to-face time spent with patients. This can be detrimental because it ignores the significant amount of time spent on indirect care activities such as:

• Pre-visit chart reviews

• Post-visit documentation

• Care coordination with specialists

• Communication with patients and family members outside of the visit

Example: If a physician spends 40 minutes in total on a patient (10 minutes on chart review, 25 minutes with the patient, and 5 minutes on coordination), but only documents the 25 minutes spent with the patient, they may end up billing for a 99214 instead of a 99215, which results in lost revenue of about $40-60 per encounter.

2. Misunderstanding Prolonged Service Codes

Many providers fail to fully utilize prolonged service codes, such as CPT 99417, CPT 99354, and CPT 99355, which are specifically designed for cases where additional time is required beyond the typical visit. These codes are often underused because providers either:

• Misunderstand the time thresholds that trigger these codes

• Apply incorrect time increments

• Fail to document the medical necessity for extended services

Example: A cardiologist sees a patient who requires extensive counseling and additional time for treatment decisions. If they fail to use CPT 99417, they miss an opportunity to bill for the additional time, which can be a $50-100 loss per patient.

3. Overlooking Time-Based Coding for E/M Services

Although the 2021+ E/M guidelines allow providers to choose visit levels based on either MDM or time, many practices still default to MDM because they are more accustomed to it. However, time-based coding often yields higher reimbursement.

Example: Studies show that for about 35% of established patient visits, using time-based coding could increase per-visit revenue by $15-30.

4. Inadequate Time Documentation Specificity

Simply documenting "spent 45 minutes with the patient" does not meet payer requirements. Claims are often denied or downcoded if the documentation lacks the necessary breakdown of how the time was spent.

Impact: Denial rates for time-based claims can be 15-20% higher than for standard E/M services when documentation isn’t specific enough, leading to potential revenue loss.

How to Bill Based on Time: A Step-by-Step Approach

Successfully implementing a time-based coding strategy involves several critical steps to ensure compliance and accuracy:

Step 1: Understand the Current Guidelines

Ensure all providers and billing staff are familiar with the 2021+ E/M guidelines. This includes training on:

• Changes to coding based on time vs. MDM

• Specific time thresholds for prolonged services

• The importance of documenting all billable time, both face-to-face and non-face-to-face

Step 2: Implement Comprehensive Time Tracking

Incorporate systems that ensure comprehensive time tracking. This can include:

• EHR templates with time-tracking prompts

• Digital timers or time-logging tools that help providers track time accurately during and after patient visits

Step 3: Document with Precision

Documentation must be more than a general statement of time spent. Providers should break down their time as follows:

• Total time spent on the date of service

• Specific tasks performed during that time (e.g., "15 minutes reviewing records, 30 minutes with patient, 10 minutes coordinating care")

• The medical necessity for any extended services

Step 4: Regular Audit and Optimization

Implement a routine review process to identify:

• Potential underbilling patterns

• Denied claims related to time-based services

• Opportunities to optimize coding to ensure full reimbursement for services provided

Calculating Your Revenue Leakage

It’s crucial to understand how much potential revenue your practice is leaving on the table. For example:

• Identify the number of visits where the time threshold for billing higher-level codes is exceeded.

• Calculate the difference in reimbursement between your current billing method and optimal time-based coding.

• Project this differential across all providers in your practice annually.

For a five-provider primary care practice, simply recapturing three undercoded time-based services per provider weekly could result in $40,000+ in additional revenue annually—without seeing a single extra patient.

Coding Compliance Considerations for Time-Based Services

While optimizing billing is important, compliance remains paramount. To avoid costly audits and penalties:

• Ensure contemporaneous documentation—don’t reconstruct time after the fact.

• Document the medical necessity for all time spent.

• Be prepared to demonstrate reasonableness during audits and support your claims with proper documentation.

Conclusion

Maximizing reimbursement for time-based services is one of the most effective ways to enhance the financial health of your practice. By implementing the correct documentation practices and staying updated with coding guidelines, healthcare providers can capture all billable time, transforming time from a hidden cost into a significant revenue driver.

To help your practice navigate the complexities of time-based medical coding, consider leveraging HMS Medical Coding Services. Our team of expert coders can assist with training, audits, and optimization of your time-based coding processes, ensuring that your practice is reimbursed accurately for the full scope of care provided to your patients.

Don’t let revenue leakage continue—contact HMS today and let us help you maximize your coding revenue with precision, compliance, and accuracy.