Association of Time-Based Billing With Evaluation and Management Revenue for Outpatient Visits

Time-based billing options for physicians have expanded, enabling many physicians to bill according to time spent instead of medical decision-making (MDM) level for fee-for-service outpatient visits. However, no study to date has estimated the revenue changes associated with time-based billing.

To compare evaluation and management (E/M) reimbursement for physicians using time-based billing vs MDM-based billing for outpatient visits of varying lengths.

This economic evaluation used 2019 billing data for outpatient E/M codes and 2021 reimbursement rates from the Centers for Medicare & Medicaid Services. Modeling of generic clinic templates was performed to estimate expected yearly E/M revenues for a single full-time physician working in an outpatient clinic using fee-for-service billing.

Yearly E/M revenues for different patient visit templates were modeled. The standardized length of return patient visits was 10 to 45 minutes, and new patient visits were twice as long in duration.

Under MDM-based billing, increased visit length was associated with decreased E/M revenue ($564 188 for 30-minute new patient visit/15-minute return patient visit vs $423 137 for 40-minute new patient visit/20-minute return patient visit). Under time-based billing, yearly E/M revenue remained similar across increasing visit lengths ($400 432 for 30-minute new patient visit/15-minute return patient visit vs $458 718 for 40-minute new patient visit/20-minute return patient visit). Compared with time-based billing, MDM-based billing was associated with higher E/M revenue for 10- to 15-minute return patient visits ($400 432 vs $564 188). Time-based billing was associated with higher E/M revenue for return patient visits lasting 20 minutes or longer. The highest modeled E/M revenue of $846 273 occurred for 10-minute return patient visits under MDM-based billing.

Results of this study showed that the relative economic benefits of MDM-based billing and time-based billing differed and were associated with the length of patient visits. Physicians with longer patient visits were more likely to experience revenue increases from using time-based billing than physicians with shorter patient visits.