Updates and proposed changes for Evaluation & Management (E/M) coding in 2026 — along with implications and preparatory tips. (Keep in mind: some are proposed and subject to change.)
What is Evaluation and Management (E/M) in Medical Coding
Key Themes & Guiding Principles
Before diving into specifics, a few overarching themes are emerging in the 2026 E/M / physician payment rules:
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A continued shift to emphasizing Medical Decision Making (MDM) and time over rigid history/physical/ROS checkboxes.
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Efforts to reduce documentation burden and make E/M codes more “clinically meaningful.” American Medical Association+1
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Changes in the Medicare Physician Fee Schedule (MPFS) affecting how E/M (and other) codes are valued, especially around “efficiency adjustments” and site-of-service differences.
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Interest in expanding “add-on” codes or modifiers to reflect complexity or care coordination, particularly for primary care or home-based services.
Proposed / Actual Changes in 2026 Impacting E/M
Here’s a breakdown of specific changes and proposals for 2026:
| Change or Proposal | What It Does | Impact / Considerations |
|---|---|---|
| Two Conversion Factors (QPs vs non-QPs) | Starting in 2026, Medicare proposes to use two separate conversion factors: one for those participating in qualifying Advanced Alternative Payment Models (QPs), and one for those who are not. | For E/M services, this means practices participating in eligible APMs could see a relatively higher reimbursement per RVU. Non-APM practices may receive a slightly lower factor. |
| Efficiency Adjustment (-2.5 %) | CMS is proposing a -2.5 % “efficiency adjustment” to work RVUs and intra-service time for many non-time-based services. However, time-based services (including E/M) are exempt from this cut. | This helps protect E/M codes from direct downward adjustment in valuation. But it increases pressure on procedural codes, potentially shifting relative value toward cognitive services. |
| Site-of-Service PE (Practice Expense) Redistribution | CMS proposes to reduce the portion of facility-based PE RVUs and shift more indirect cost (PE) payments to non-facility (office) settings. | E/M services rendered in office/non-facility settings may benefit from relatively higher payment, while the same E/M codes performed in hospital outpatient settings or facility settings may see downward pressure. |
| Expanded Use of G2211 (visit complexity add-on) | CMS proposes expanding the use of G2211, which is an add-on code to reflect additional complexity in E/M visits. They plan to allow it not only for office/outpatient E/M but also in-home / private residence E/M codes (e.g., 99341–99350). | If finalized, clinicians can better capture the incremental cognitive work or complexity beyond the base E/M level, especially in home-based visits. |
| Telemedicine / Telehealth E/M codes & recognition | The AMA has advocated to include the new CPT telemedicine E/M codes on Medicare’s telehealth list for 2026; however, CMS, in its proposed rule, did not include them for Medicare in 2026. | For payers beyond Medicare, adoption may vary. Practices should monitor whether Medicare finalizes inclusion, as that would influence remote E/M billing under Part B. |
| Urgent Care E/M — Separate payment consideration | CMS is seeking public comments on whether E/M visits furnished in urgent care settings should have distinct coding or payment (e.g., add-on codes or a separate set of visit codes). | If this is adopted, it could lead to differentiation (possibly higher payment) for E/M done in urgent care vs standard outpatient settings. |
| CPT 2026 Code Set Updates (contextual impact) | The 2026 CPT release includes NEW codes in many areas (digital health, AI augmentation, remote monitoring, etc.) that can indirectly affect E/M workflows, documentation burden, and coordination of care. | Even if not direct E/M codes, these may create complexity in patient care that must be documented in the E/M encounter. Also, bundling / NCCI edits may change. |
What Did Not Change
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E/M codes remain time-based services exempt from the efficiency adjustment (i.e., they are not being directly reduced under the proposed efficiency cut).
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The structural approach to E/M (i.e., leveling via MDM or time) remains.
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The elimination of rigid history/physical/ROS “checklist” requirements (which took effect in prior E/M reforms) continues to guide documentation flexibility.
Practical Implications & Tips for Preparedness
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Focus documentation on thought process, complexity, and rationale
With increased emphasis on MDM, coders and providers should ensure clear documentation of differential diagnoses, data reviewed (labs, imaging, outside records), and decision rationale (risks/benefits, management plans). -
Leverage add-on/complexity codes when applicable
If the G2211 expansion is finalized, practices should develop protocols to determine when to append it, and document sufficiently to support the additional complexity. -
Understand your site-of-service mix
Because of proposed PE redistribution, practices with a high volume of E/M in non-facility settings may see relatively better reimbursement; hospital outpatient E/M may be under pressure. Consider cost structure and revenue implications. -
Monitor the telehealth / remote E/M environment
Even though Medicare may not adopt telehealth E/M codes in 2026, many commercial payers may. Practices should be ready to adopt or deny based on payer policy. -
Advocate and comment in rulemaking
Some changes are still in the comment phase (e.g. urgent care differentiation, telehealth E/M adoption). Engaging via specialty societies may influence final decisions. -
Update internal policies, templates, and training
EHR templates may have checklists or prompts tied to old rules (e.g., requiring ROS or exam elements). Audit and revise templates. Train clinicians and coders on the 2026 changes in advance. -
Run scenario analyses
Compare revenue under 2025 vs projected 2026 reimbursement under different site-of-service, complexity, and payer mix scenarios. This helps assess risk and resource allocation. -
Watch for final rule changes
As of now, many proposals are not yet finalized. Always cross-check final CMS rules (likely released in late 2025) before full implementation.
026 E/M Quick-Reference Cheat Sheet (focused on outpatient/primary-care + home/urgent care/telehealth angles). Notes reflect the CY-2026 MPFS proposed rule (published July 2025); flag anything payer-specific before go-live on Jan 1, 2026. Centers for Medicare & Medicaid Services
2026 E/M at a Glance
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E/M valuation protected from new “efficiency adjustment.” CMS proposes a –2.5% efficiency cut to most non-time-based services; time-based services (incl. E/M) are exempt.
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Practice expense (PE) rebalance by site-of-service. Indirect PE would shift away from the facility and toward non-facility (office), changing relative payments by setting. Expect office E/M to fare better than facility E/M if finalized.
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G2211 (visit complexity add-on) expansion (proposal). CMS proposes allowing G2211 for home/residence E/M (99341–99350) in addition to office/outpatient. Build workflows now for documentation/edits.
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Telemedicine E/M (new CPT telemedicine visit codes). CMS did not add the new CPT telemedicine E/M series to Medicare’s 2026 Telehealth List in the proposal; commercial payers may differ. Track the final rule.
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Urgent care E/M—separate payment under consideration. CMS is seeking comments on whether urgent-care E/M should have distinct coding or add-on(s). Watch the final policy.
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CPT® 2026 context. New codes across digital health/AI/etc. Go live Jan 1, 2026, which can affect E/M documentation & bundling.
Leveling: Use MDM or Time
Pick the method that best supports the visit.
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MDM: Base level on Problems addressed, Data reviewed/ordered, and Risk of management. Keep the assessment & plan narrative strong.
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Time: Use total physician/QHP time on the date of the encounter (face-to-face + qualifying non-face time), when it exceeds the typical time for that level or when the time better reflects work. (Time rules unchanged in proposal.) Centers for Medicare & Medicaid Services
Documentation must make the method obvious (e.g., “Level chosen by MDM” or “Level chosen by total time XX minutes”). Keep ROS/exam medically appropriate—no check-box bloat.
Documentation Checklist (drop into your EHR template)
If coding by MDM:
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Problems: acute/chronic issues with status; instability/severity; differential diagnosis.
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Data: labs/imaging ordered or reviewed; independent historian use; external notes reviewed; independent interpretation; discussion with another clinician.
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Risk: management options considered, Rx changes/monitoring (e.g., high-risk meds), procedures ordered, shared decision-making, social determinants impacting care.
If coding by Time:
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Tally same-day qualifying activities: reviewing external records, obtaining history, exam, counseling, ordering, documentation, care coordination within the date of service.
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Do not include staff time or services billed separately.
Add-Ons & Common Adjacent Codes
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G2211 (Complexity add-on) — chronic, ongoing, patient-centered longitudinal relationship/complexity beyond base E/M. Proposal to allow in-home/residence E/M (99341–99350) starting 2026. Confirm final.
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Prolonged services — apply per current CPT/Medicare policy when time exceeds the highest level threshold; ensure payer-specific rules. (No new changes proposed here.)
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Care management/behavioral health — many are time-based and also exempt from the efficiency adjustment; consider when furnished on same patient.
Site-of-Service Strategy (2026)
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Expect office/non-facility E/M to gain relatively from PE shifts; facility E/M may trend lower. Model your payer mix and S-o-S volume.
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Refresh place-of-service mapping, cost reports, and charge capture to reflect any finalized RVU/PE changes.
Telehealth & Remote E/M
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For Medicare 2026, the proposed rule declines adding the new CPT telemedicine E/M codes to the Telehealth List; watch the final rule and your MAC/local policies. Commercial plans may adopt CPT’s codes independently.
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Maintain payer matrices (code-by-code) for audio-video vs. audio-only, POS/modifiers, and documentation attestations.
Urgent Care E/M (Watch Item)
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CMS is soliciting input on distinctive coding/payment (e.g., add-on or unique visits). If finalized, expect setting-specific edits and potential new documentation needs (triage/severity/throughput).
Action Plan (Do This Now)
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Flag E/M as efficiency-cut-exempt in your 2026 education (helps provider morale & planning).
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Prep a G2211 policy: inclusion criteria, documentation phrases, NCCI edits, payer coverage; extend to home/residence scenarios if finalized.
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Update S-o-S modeling: simulate revenue shift for office vs. facility E/M; adjust scheduling/throughput if needed.
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Refresh telehealth grids for 2026 (Medicare vs. commercial) and keep a spotlight on the final rule.
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Tune EHR templates to foreground MDM narrative and same-day time capture; reduce legacy ROS/exam clutter. Centers for Medicare & Medicaid Services
Final-Rule Watchlist (Nov/Dec 2025)
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Did CMS finalize G2211 expansion to home/residence?
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Exact details of PE redistribution and any transition policies.
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Telemedicine E/M status on the Medicare Telehealth List.
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Any urgent-care-specific E/M coding/payment decisions.
