CMS Should Adopt a Flat Rate for E&M Office Visits

November 12, 2015

Many physicians feel that useless chart documentation has grown to consume most of the patient visit, leaving little time for patient care.

In an effort to move from volume to value, I offer a modest proposal - one that I believe has the potential to save millions of healthcare dollars. It would be a solid first step toward payment reform (admittedly for which, I do not pretend to have all the answers). CMS should calculate the average payment for an office visit, add a shared cost-savings by eliminating regulatory oversight of physician documentation, and pay a single rate with an annual adjusted increase. This has the potential to do two things: improve quality of care through more effective documentation and greater time spent with patients, and lower administrative costs.

There are two erroneous assumptions perpetuated by CMS that currently drives the documentation/RVU payment system for patient office visits, and I believe it needs to be disabused of them. First, that physicians can document work effort in the patient's chart, which is reflected through billed RVUs. And second, that physicians are "upcoding" and bilking CMS out of millions of dollars. Leaving aside the entire absurdity of the idea that effort can be truly gleamed from counting bullets in a patient record, CMS reports regularly on returned payments due to upcoding by physicians ($145 million in September 2013). These returned payments come with threats of criminal prosecution, if physicians continue to fraudulently inflate coding.

This system has led to an arms race of auditors scrutinizing physician records by counting required bullets. CMS-contracted private auditors (RACs) are promised a percentage of the returned payments, and thus, are incentivized to find upcoded charts. As a result, healthcare organizations have fought back by hiring internal auditors to train their physicians on "correct coding" and conducting their own chart audits in order to avoid paying back any money. Not only has this system lead to a veritable cottage industry of auditors whose sole purpose is to shuffle dollars back and forth between physicians and CMS, at a cost to both parties, but also bloated medical records replete with superfluous, irrelevant details having no bearing on the quality of patient care.

Before CMS began exercising control over physician documentation, it had two purposes: to report and communicate what transpired with the patient, and to protect the physician from the threat of liability. Physicians were judged by colleagues solely on their ability to document thoroughly, yet concisely, what they did, and why they did it. While I will not dispute the fact that the quality of the notes was variable and that physicians will have to continue to demand quality from their colleagues, today documentation has become principally about meeting regulatory requirements at the expense of quality patient care.

If value is the true indicator of a successful healthcare system, then why should CMS care what is actually documented in patient records? Its real concern should be, "What are the resulting patient outcomes, and how much does that patient care cost?" In a capitated system where keeping patients healthy and out of the hospital is the goal, so-called "work effort" through RVUs would be irrelevant. Physicians may debate which quality measures should be monitored, but all of us would agree we need some quality measures, as all play a role in quality and cost of care.  And while physicians may debate how hard they work and what their compensation should be, none of them would agree that "x" number of bullets in the patient's record plays any role in either physician effort or quality of patient outcomes. Eliminating government oversight of documentation therefore makes sense from both a quality and cost perspective.

Charles Herrick, MD, is chair of psychiatry at Western Connecticut Health Network, and sits on the board of directors at Danbury, Conn.-based Western Connecticut Medical Group. He may be reached at