Insurance Circular Letter No. 1 (2023)

February 10, 2023

STATUTORY REFERENCES: N.Y. Insurance Law § 3224-b and Articles 48 and 49; N.Y. Public Health Law § 4408-a and Article 49

I. Purpose

The purpose of this Circular Letter is to remind insurers authorized to write accident and health insurance in this state, Article 43 corporations, health maintenance organizations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, and prepaid health services plans with respect to comprehensive health insurance coverage (collectively, “issuers”), that they must accept and initiate processing of all health care claims submitted by psychiatrists pursuant to, and consistent with, the current version of the American Medical Association (“AMA”) current procedural terminology (“CPT”) codes, reporting guidelines, and conventions, including Evaluation and Management (“E/M”) CPT codes.

II. Discussion

Recently, the Department of Financial Services (“DFS”) received information that some issuers may be reviewing office and other outpatient E/M codes submitted by psychiatrists in a manner that does not comport with the most recent version of the AMA CPT codes, reporting guidelines, and conventions.

Effective January 1, 2021, the AMA updated the CPT codes, reporting guidelines, and conventions related to office and other outpatient E/M codes so that E/M codes are based on either: (i) the level of the medical decision-making as defined in the CPT for each service provided; or (ii) the total time for the service performed on the date of the encounter. However, pursuant to the AMA’s CPT codes, if psychotherapy is reported as an add-on code when a patient receives an E/M service and a psychotherapy service on the same day from the same psychiatrist, then the E/M code is determined solely by the level of medical decision making. Per the AMA, although documentation of office or other outpatient services should include a medically appropriate history and a physical or mental examination, the extent of the history and the physical or mental examination is not an element in the selection of the level of office or other outpatient E/M codes. Prior to this change, E/M codes were generally based on history of present illness, physical examination, and medical decision-making.

Insurance Law § 3224-b(a)(2) requires an issuer to accept and initiate processing of all health care claims submitted by a physician pursuant to and consistent with the current version of the AMA’s CPT codes, reporting guidelines, and conventions and the Centers for Medicare and Medicaid Services Healthcare Common Procedure Coding System. Therefore, pursuant to the requirements of Insurance Law § 3224-b(a)(2), when processing office and other outpatient E/M codes, issuers must do so consistently with the criteria that became effective January 1, 2021.

For more information on the changes to the office and other outpatient E/M codes, issuers are encouraged to review the AMA website and any additional updates provided by the AMA.

III. Conclusion

In processing claims that involve office visit and other outpatient E/M codes, issuers must use the most recent version of the AMA’s CPT codes, reporting guidelines, and conventions. The most recent version of the AMA’s CPT codes permit psychiatrists to base their choice of E/M code on either the level of the medical decision-making as defined for each service provided or the total time for the E/M service performed on the date of the encounter. However, if psychotherapy is reported as an add-on code when a patient receives an E/M service and a psychotherapy service on the same day from the same psychiatrist, the E/M code is determined solely by the level of medical decision making.

Please direct any questions regarding this circular letter by email to [email protected].

Very truly yours,

Lisette Johnson
Chief, Health Bureau