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Medical Decision-Making


Effective January 1, 2021, there are new guidelines for new and established office visits. The material on this page covers only the 1995 and 1997 E/M guidelines and pertains to all encounters EXCEPT new and established office visits. For information on the 2021 guidelines, click here.


Quantifying Your Cognitive Labor

This is arguably the most important of the three key components because the Medical Decision-Making ( MDM ) reflects the intensity of the cognitive labor performed by the physician.  The official rules for interpreting the MDM are identical for both the 1995 and 1997 E/M guidelines. There are four levels of MDM of incrementally increasing complexity:

Physicians must stratify the MDM into one of the above levels of complexity based on:


  • The nature and number of clinical problems
  • The amount and complexity of the data reviewed by the physician
  • The risk of morbidity and mortality to the patient.
The overall level of Medical Decision-Making is determined by referring to the following table:
Number of diagnoses or management options Amount and/or complexity of data to be reviewed Risk of complications and/or morbidity or mortality Level of Complexity
of Medical Decision-Making
Minimal Minimal or None Minimal STRAIGHTFORWARD
Limited Limited Low LOW COMPLEXITY
Multiple Moderate Moderate MODERATE COMPLEXITY
Extensive Extensive High HIGH COMPLEXITY
Risk is determined by referring to the table of risk which describes four levels of medical jeopardy:        


When referring to the table, the level of risk is determined by examining three separate dimensions of the encounter:


E/M University Coding Tip: The E/M guidelines explicitly state that the highest level of risk present in any one of the above categories determines the overall risk of the encounter.  Physicians often underestimate the level of risk as defined by the E/M guidelines.

Decision-Making Point System


A casual review of the official rules for interpreting the key component of Medical Decision-Making shows that the criteria for quantifying physician cognitive labor are quite ambiguous.   Medicare discovered that auditors were having a hard time nailing down the level of Medical Decision-Making during the medical review process.  In response to this problem, a more objective Medical Decision-Making Point System was developed by CMS .  Although not part of the official E/M guidelines, this MDM Point System was distributed to all Medicare carriers to be used on a "voluntary" basis.  In point of fact, this is the way your Medical Decision-Making will be graded in the event of an audit.


This approach uses a matrix of weighted points to answer most of the questions left open by the official E/M guidelines regarding the MDM .  Instead of vague words like “extensive” the MDM Point System uses a numeric scale to describe the number and nature of the diagnoses being addressed.  These issues are quantified using “Problem Points”.  Similarly, the extent of the data reviewed is quantified by using “Data Points” which reflect the volume and complexity of the information processed by the physician.  Risk is determined by referring to the identical table of risk used by the official E/M guidelines. 

  Problem Points

The “nature and number of clinical problems” are quantified into Problem Points by referring to the following table:
Problems Points
Self-limited or minor (maximum of 2) 1
Established problem, stable or improving 1
Established problem, worsening 2
New problem, with no additional work-up planned (maximum of 1) 3
New problem, with additional work-up planned 4
The above table is fairly self explanatory.  An example of a “self-limited or minor” problem may be a common cold or an insect bite.  An “established problem” refers to a diagnosis which is already known to the examiner, such as hypertension, osteoarthritis or diabetes.  An example of a “new problem with no additional work-up planned” may be a new diagnosis of essential hypertension.  Examples of “new problem, with additional work-up planned” may include any new clinical issue which requires further investigation such as chest pain, proteinuria, anemia, shortness of breath, etc

E/M University Coding Tip: Problems which are not being addressed specifically by the physician during the encounter may still be counted if they significantly increase the complexity of the cognitive labor required.  For example, consider a patient with diabetes who is being evaluated by a vascular surgeon for a lower extremity revascularization procedure.  It would be appropriate for the surgeon to include diabetes as an “established problem, stable” when calculating the problem points.  This is because the comorbidity of diabetes does significantly influence the risk of the procedure and the complexity of the post operative management.

 E/M University Coding Tip: Problems are defined relative to the examiner, not the patient.  Even if the problem was previously known to other physicians or to the patient, it is still considered new to you if you are seeing the patient for the first time. This situation arises often in the case on consultations.

Data Points

The “amount and complexity of the data reviewed” are quantified by referring to the following table:
Data Reviewed Points
Review or order clinical lab tests 1
Review or order radiology test (except heart catheterization or echo) 1
Review or order medicine test (PFTs, EKG, cardiac echo or catheterization) 1
Discuss test with performing physician 1
Independent review of image, tracing, or specimen 2
Decision to obtain old records 1
Review and summation of old records 2
The physician should be aware that no “double dipping” is allowed.  For example, if you review lab results and order labs during the same visit, you only get one point (not one point for ordering and one point for reviewing).  This same rules applies to imaging  studies or other medicine tests such as EKGs or PFTs.  Commonly overlooked points are those garnered for obtaining or reviewing old records.  If you do review old records, you must summarize your findings in the chart.  It is not acceptable to just say, “Old records were reviewed.” 

E/M University Coding Tip: Notice that points can accumulate quickly if you personally review an image, tracing or specimen.  You can still claim these points, even if the image, tracing or specimen has been reviewed by another physician (as when a radiologist provides an official interpretation for an X-ray).  However, you must include your own interpretation in the chart in order to claim these points. 

Adding it All Up: How to Calculate Your Cognitive Labor

After calculating the Problem Points and the Data Points and stratifying the level of risk, the overall complexity of MDM is determined by referring to the yet another table:

MDM Points Table
(Two out of threemust be present to qualify for a given level of MDM)
Overall MDM Problem Points Data Points Risk
Straightforward Complexity



Low complexity



Moderate Complexity



High Complexity



Suppose you see a patient in the office with stable diabetes and sub-optimally controlled hypertension.  After checking routine labs, you decide to increase the patient’s lisinopril from 10 to 20 mg po qd.  If you calculate the individual points and assign a level of risk, the MDM table for this encounter would look like this:
Overall MDM Problem Points Data Points Risk
Straightforward Complexity 1 1 Minimal
Low complexity 2 2 Low
Moderate Complexity 3 3 Moderate
High Complexity 4 4 High
Since it only takes two out of three elements to qualify for any level of MDM , it is clear that this encounter qualifies for “Moderate Complexity” medical decision-making because of:


·        Three Problem Points  (one point for diabetes-- established problem, two points for hypertension—established problem,        worsening)
·        One  Data Point for reviewing labs
·        Moderate Risk due to the management option selected of “prescription drug management”
E/M University Coding Tip: The MDM point system provides a repeatable and objective way for the physician to measure the cognitive labor required to address the clinical issues of any encounter.  Many physicians systematically underestimate the value of their medical decision-making.  This occurs because there is a tendency to equate “routine” thought processes with “straightforward” medical decision-making which is simply not true.  Utilizing the objective MDM point system can help you avoid this self-deprecating pattern of behavior. 
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