The New Billing System: The Greatest Gift Doctors Have Ever Received

In January 2021, doctors in the United States seeing ambulatory patients were given the gift of a lifetime. Is now Almost August and some doctors I know have decided not to open the gift, leaving it sitting in the garage or attic — why?!!

For those of us who have been enjoying this most precious present from day one, it is still hard to believe we were handed such a treat.

Before 2021, our clinical notes were long and 90% filled with unnecessary and usually inaccurate information. An 11-organ review of systems — which was clinically unnecessary for most patients — had to be documented, usually by having the nurses or patients check dozens of boxes on a piece of paper which was later scanned into the medical record. Physical exams had to include at least 7 organ systems, even if the medical visit was only concerned with one area of the body. Family history of diabetes in the grandparents was routinely documented even though its only purpose was to be able to bill higher, with absolutely no effect on patient care for most patients.

I always felt somewhat dishonest writing these long notes, documenting a 7-system physical exam in patients that I didn’t even touch. The only reason I kept doing it was because everyone else in medicine was doing the exact same thing.

As doctors, we grow to be very cynical of the system and always joke that if something makes sense then it will never happen. That is why the new billing system which makes 100% sense has been blowing my mind for the past 7 months.


The new billing system

In a nutshell, the new billing system allows you to document only what is clinically necessary. I don’t know why it took decades to come to this most common-sense approach, but it did.


The details

The new billing system is only good for outpatient visits: follow-ups and new patients. It does not apply for outpatient consults (which pay slightly more but seem to be more frequently denied by payers) or for inpatient notes.

Following is the documentation requirements for the new billing system per section of the note:


Just enter whatever is medically appropriate.


Just enter whatever is medically appropriate

Bill for time or by medical decision making

I am not going to discuss billing by time because is not relevant to pediatric urology. I am only going to discuss how to bill by medical decision-making (MDK).


To bill via MDK, you chose the highest 2/3 of the elements of data, diagnosis, and risk.


Some examples of diagnosis levels include (according to my own personal interpretation of the guidelines):

Level 2

  • Soft penile adhesions
  • Small hydrocele

Level 3

  • Soft penile adhesions and a small hydrocele
  • Acute cystitis
  • Stable neurogenic bladder
  • Retractile testis
  • Congenital hydronephrosis follow up
  • Nocturnal enuresis
  • Incontinence
  • Scrotal laceration

Level 4

  • Renal laceration
  • Acute pyelonephritis
  • Worsening neurogenic bladder
  • Worsening congenital hydronephrosis
  • Retractile testis and stable neurogenic bladder (2 chronic problems)
  • Patient with hydronephrosis of uncertain prognosis (new congenital hydronephrosis patient)
  • Undescended testis new visit (one undiagnosed new problem)
  • Testicular pain (new)

Level 5

  • Septic stone
  • Neurogenic bladder with worse creatinine and hydronephrosis



Level 3

  • Obtaining the history from the parents will get you a level 3 automatically. Even if the patient tells you some of the history, if the parents supplement it then it counts as level 3.
  • There are other ways to hit a level 3 which pertain more to the adult world. For pediatrics, we almost always have a parent so we can get to level 3 this way.

Level 4: one of these 3 will get you a level 4:

  • Get history from parents plus 2 of these:
    • Review external notes
    • Order a unique test (UA, ultrasound)
    • Review results of a test
  • Review radiologic images: we pediatric urologists always look at the ultrasound images of our patients, so this is an easy way to hit a level 4 in Data.
  • Discuss the management or x-rays with another doc outside your field (call radiology to discuss x-rays).

Level 5 is 2 of the 3 level 4 categories

  • For example, getting history from parents, reviewing the UA, reviewing PCP notes, and looking at ultrasound images.



Includes possible management options selected and those considered but not selected: phimosis treated with steroids or circumcision. In other words, if you offered surgery and the patient declined, the risk is billed to the level of surgery.

Level 3

  • Minor procedures like circumcision, penile skin bridges, stones.

Level 4

  • Minor procedures with patient risk factors
  • Elective major surgery (without risk factors)
  • Addition, deletions, or change in dosage of prescription drugs

Level 5

  • Elective major surgery with risk factors
  • Inpatient hospitalization
  • Emergency major surgery



If you are a doctor that sees ambulatory patients, the new billing system will reduce the time it takes to see patients and will make your notes more clinically useful. The only reason not to use the system is if you would like to continue to bill for consults (CPT codes 99242-99245) instead of new patients (CPT codes 99202-99205) because consults are paid a little higher. For me, having a truthful note that is more clinically relevant plus the gains in efficiency, more than compensate for the decrease in pay.


Leave a Comment