May 29, 2025

A graphic titled Medical Coding Medical Decision Making with a woman doctor in lab coat and stethoscope around her neck pointing to a clipboard titled Coding

Medical Coding MDM

AAPC | Certification | Certified Medical Coder | CPC | Medical Coding

By Janine Mothershed

Medical Decision Making (MDM) is a core component of Evaluation and Management (E/M) services

It plays a significant role in determining the appropriate level of service to report for a patient encounter. As of the 2021 updates (and continuing into 2024-2025), the American Medical Association (AMA) and Centers for Medicare & Medicaid Services (CMS) simplified the E/M coding guidelines for office and outpatient services to focus more on Medical coding MDM or time.

Here’s a detailed guide to Medical Decision Making (MDM) for coding and billing:

Understanding MDM: Key Components

MDM is determined by three elements:

Number and Complexity of Problems Addressed
Amount and/or Complexity of Data to be Reviewed and Analyzed
Risk of Complications and/or Morbidity or Mortality of Patient Management

You must meet or exceed two out of three elements to support a particular MDM level.

Levels of MDM

There are four levels of MDM:

MDM Level	Problems Addressed	Data Reviewed	Risk
Straightforward	1 self-limited or minor problem	Minimal or none	Minimal risk of complications or morbidity
Low	2+ self-limited/minor problems, or 1 stable chronic illness	Limited (e.g., 1 test or external note)	Low risk (e.g., OTC meds, minor procedures)
Moderate	1+ chronic illness with exacerbation or 2+ stable chronic illnesses	Moderate (multiple tests, external notes, etc.)	Moderate (e.g., prescription drugs, minor surgery with risk)
High	1+ chronic illnesses with severe exacerbation or acute illness posing threat to life/function	Extensive (e.g., independent interpretation, discussions with other professionals)	High (e.g., drug therapy requiring monitoring, decision to hospitalize)

Element Details

Problems Addressed

A problem is “addressed” when it is actively evaluated, treated, or managed at the encounter.

Stable chronic illness is considered less complex than an exacerbated chronic illness or an acute problem with systemic symptoms.

Data Reviewed and Analyzed

Three types:

Category 1: Review/order of tests, notes, images, documents
Category 2: Independent interpretation of tests not separately reported
Category 3: Discussion with external healthcare professionals or family
Use of decision aids, shared decision-making, and lab/imaging interpretation can support a higher MDM level.

Risk of Complications and/or Morbidity/Mortality

Includes:

Management decisions made (e.g., prescription, procedures)
Risk of the condition if untreated
Nature of diagnostic/therapeutic interventions (e.g., elective surgery with identified risk factors)

Tips for Accurate MDM Coding

Document Clearly

- Avoid ambiguous language. Be specific: “acute exacerbation” is stronger than “symptoms today.”
- Note decision-making rationale even if no new tests or treatment is ordered.
  
  Support Risk Appropriately
  - If prescribing meds, justify risk level (e.g., “start on anticoagulant due to atrial fibrillation”).
  - If recommending follow-up only, explain why that’s medically appropriate.

Avoid Overcoding or Undercoding

- Don’t automatically assign higher MDM due to comorbidities unless they are addressed during the encounter.
- A thorough history and exam do not affect MDM level under 2021+ guidelines — MDM or time determines code.

Use AMA MDM Grid

- Use the official AMA grid for documentation and audit support.
- Available in the CPT 2024 Professional Edition and AMA website.

Billing and Auditing Considerations

Time-based Coding (if used instead of MDM): Total time spent by provider on the date of service (face-to-face + non-face-to-face).
EHR Templates: Customize templates to prompt detailed documentation of MDM elements.
Audit Trail: Keep documentation that reflects your decision-making, particularly for high-risk situations.