CMS found that 10.1% of Medicare fee-for-service evaluation and management (E/M) payments were improper in fiscal year 2025. That equals $3.27 billion, and incorrect coding caused 50.0% of it.
The figures come from the CMS 2025 Medicare Fee-for-Service Supplemental Improper Payment Data, which covers claims submitted from July 1, 2023 through June 30, 2024. CMS sampled 11,920 Part B claims and reviewed 11,600 of them. It measured an 8.4% Part B improper payment rate on $114.1 billion in payments, which is $9.6 billion. The data covers Medicare fee-for-service only, so the rates say nothing about commercial payers.
How large the E/M error is
CMS puts the overall E/M improper payment rate at 10.1%, with a 95% confidence interval of 9.0% to 11.1%. Projected improper payments in E/M codes total $3,265,045,695. In the CMS table, that is 11.0% of all improper payments across the program.
CMS also splits the E/M errors by cause. Incorrect coding makes up 50.0% of improper E/M dollars. Insufficient documentation makes up 31.1%, no documentation 12.6%, and other errors 6.3%. Medical necessity errors account for 0.0%. Adding the two documentation categories gives 43.7%, so more than four of every ten improper E/M dollars trace to records that were thin or missing.
The mix differs from the program as a whole. Across all Medicare fee-for-service claim types, CMS attributes 53.0% of improper payments to insufficient documentation and only 11.1% to incorrect coding. Within E/M, coding is the largest cause.
The E/M codes with the most improper dollars
CMS ranks E/M codes by projected improper dollars. Subsequent hospital care at the high level, code 99233, leads with $502,418,067 and a 22.7% rate. The established office visit code 99214 follows with $459,838,842. Its rate is only 5.0%, but a low rate on a large payment base still produces a large dollar total.
| E/M code | Projected improper payments | Improper payment rate | Share caused by incorrect coding |
|---|---|---|---|
| 99233, subsequent hospital care, high | $502,418,067 | 22.7% | 57.7% |
| 99214, established office visit, moderate | $459,838,842 | 5.0% | 62.5% |
| 99215, established office visit, high | $245,231,199 | 14.8% | 72.5% |
| 99223, initial hospital care, high | $182,122,220 | 13.1% | 53.1% |
| 99285, emergency department visit, high | $164,273,212 | 14.3% | 87.5% |
| 99213, established office visit, low | $101,291,185 | 2.1% | 88.4% |
| 99204, new office visit, moderate | $86,479,262 | 5.4% | 94.9% |
Source: CMS, 2025 Medicare Fee-for-Service Supplemental Improper Payment Data, Table K1.
Among office visits, the high-level code 99215 has a 14.8% improper rate. That is about three times the 5.0% rate for 99214 and well above the 2.1% rate for 99213. New patient visits show the same pattern at a smaller scale. Code 99204 has a 5.4% rate, and code 99205 has an 11.1% rate. CMS attributes 100.0% of the 99205 errors, and 100.0% of the errors on the low-level new visit code 99203, to incorrect coding.
Care management codes: documentation drives the errors
Chronic care management codes show a different error profile from visit codes. Code 99490, for the first 20 minutes of clinical staff time, has a 65.2% improper rate and $205,392,699 in improper payments. CMS traces 87.7% of that to insufficient documentation and 0.0% to incorrect coding.
Code 99491, the physician-delivered version for the first 30 minutes, has a 75.4% improper rate. Of its $11,676,724 in improper payments, 92.5% is insufficient documentation. Advance care planning code 99497 sits at 29.8%, with 90.1% insufficient documentation and $46,654,452 in improper payments.
Telephone E/M codes also lean on documentation. Code 99443, for 21 to 30 minutes, has a 29.0% improper rate, and 57.0% of its errors are insufficient documentation. Code 99442, for 11 to 20 minutes, has a 16.9% rate with 51.9% insufficient documentation. For these services, the record must show the required time and content.
Upcoding and downcoding in Part B
CMS defines upcoding as billing a higher level than the record supports, and downcoding as billing a lower level than the record supports. Upcoding errors in Part B total $1,545,650,842, a 1.4% rate. The largest upcoding categories are established office visits at $489,704,435 (3.1%), subsequent hospital visits at $327,624,133 (6.4%), and new office visits at $155,379,761 (5.1%). Emergency room visits carry a 9.2% upcoding rate on $143,764,029.
Downcoding is much smaller. For established office visits, CMS lists $66,796,275 in downcoding errors at a 0.4% rate. For new office visits, the figure is $22,997,994 at 0.8%. The root cause table for established office visits shows the same gap in claim counts. In 120 sampled claims, the documentation supported a lower level than the one billed. In 7 sampled claims, it supported a higher level.
CMS also isolates claims that missed by exactly one E/M level. That group totals $1,368,796,694. Code 99214 accounts for $238,758,920 of it, a 2.6% rate, and code 99215 for $144,385,324, an 8.7% rate. Both downcoding and upcoding change payment, and CMS counts both as improper.
Established office visit errors by provider type
CMS reviewed 1,026 established office visit claims and measured a 5.3% improper rate, or $853,651,814, with a 95% confidence interval of 4.1% to 6.6%. It then broke the result out by provider type. Sample sizes are small, so most differences sit inside the margin of error.
- Internal medicine: 173 claims reviewed, 5.7% rate, $156,222,924.
- Family practice: 149 claims, 2.0% rate, $47,813,645.
- Nurse practitioner: 126 claims, 4.1% rate, $66,790,734.
- Physician assistant: 57 claims, 6.0% rate, $47,555,081.
- Cardiology: 67 claims, 4.8% rate, $47,779,629.
- Orthopedic surgery: 32 claims, 14.1% rate, with an interval of 1.1% to 27.1%.
Family practice has the lowest rate in the table, at 2.0%, with an interval of 0.8% to 3.2%. Orthopedic surgery has the highest, at 14.1%, but only 32 claims support it. Neurology (7.7%) and dermatology (6.3%) each rest on 31 claims.
Using the CMS rates in a practice review
The CMS tables give a practice reference points for its own audit. A practice can count its share of 99214 and 99215 visits, then sample charts from each code and check whether the note supports the level billed. A mismatch in either direction counts as an error under the CMS method. CMS measured 5.0% for 99214 and 14.8% for 99215, and a practice can compare its own sample against those two rates. Downcoded visits cost the practice revenue directly.
For care management and telephone codes, the check is different. A practice can confirm that each billed month or call has the time, consent, and care plan content the code requires. CMS traced 87.7% of the improper dollars on 99490 to insufficient documentation.
Because the rates come from Medicare fee-for-service claims, a practice cannot apply them to a commercial payer mix. They do show which E/M codes drew the most CMS review findings in the 12 months ending June 30, 2024.
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