January 3, 2026
How Incorrect E/M Coding Quietly Erodes Practice Revenue and How the Right Consultant Can Fix It
- by Jordan Brinkman, JD, Senior Management Consultant
Important note: This blog is not intended to instruct physicians on how to code, nor does it provide coding or compliance advice. Coding guidance should always come from qualified auditors, certified coders, and compliance professionals. The purpose of this discussion is simply to highlight how incorrect E/M coding, particularly undercoding, can materially impact practice revenue and financial decision-making.
Rising labor costs, payer pressure, and increasing administrative burden mean that every dollar earned matters. Yet one of the most common, and overlooked, sources of lost revenue isn’t patient volume, marketing, or staffing.
It’s incorrect Evaluation & Management (E/M) coding.
As a practice consultant who works closely with practices to track revenue by service line, I see this issue repeatedly across primary care, specialty, and subspecialty practices. Providers are often delivering appropriate, high-value care but are not being reimbursed accurately because the E/M code submitted does not reflect the true complexity of the visit.
The result? Significant, recurring revenue leakage that compounds month after month.
Why E/M Coding Matters More Than Most Practices Realize
E/M visits typically represent a substantial portion of total practice revenue, particularly for office-based specialties. Even small coding inaccuracies can have an outsized financial impact.
Here’s a real-world example from my experience:
I recently completed a practice assessment for a multispecialty group with approximately 8 FTE providers. Based on our data analysis and benchmarking experience, the practice had collectively under coded roughly $800,000 worth of services over the review period about $100,000 per provider.
When applied to the practice’s actual fee schedule, this translated to approximately $300,000–$400,000 in unrealized revenue over 12-months.
This level of impact was material to the organization’s financial health. Importantly, it was not driven by provider productivity, patient volume, or payer mix but by coding patterns. Once identified, it represented a high impact yet relatively straightforward operational correction that did not require seeing more patients or expanding services.
Multiply that across multiple providers or locations, and the financial implications become impossible to ignore.
The Most Common E/M Coding Inefficiencies
Incorrect E/M coding is rarely intentional. In fact, most providers are erring on the side of caution. Some of the most common issues include:
- Chronic Undercoding
Providers frequently bill lower-level codes than documentation supports due to:
- Fear of audits
- Lack of education or incomplete understanding of current E/M guidelines
- Limited formal training after residency on coding and reimbursement
- Outdated understanding of E/M rules
- Habit-based coding carried over from prior years
Many physicians were never taught how coding impacts practice economics, and updates to E/M rules are often communicated inconsistently or not at all. As a result, providers may rely on conservative assumptions that no longer apply.
Ironically, modern E/M guidelines, particularly since the 2021 updates, often support higher-level coding when medical decision-making (MDM) is properly documented.
- Inconsistent Coding Across Providers
Within the same practice, it’s common to see wide variation in coding patterns:
- One provider bills mostly 99213s
- Another bills predominantly 99214s
- Both see similar patient complexity
This inconsistency creates distorted revenue reporting and makes service-line profitability analysis unreliable.
- Misalignment Between Documentation and Code Selection
Providers may perform complex care but fail to:
- Clearly document problem complexity
- Capture medication management appropriately
- Reflect time spent when time-based coding applies
When documentation and coding don’t align, reimbursement suffers.
- Lack of Feedback Loops
Most providers never receive structured feedback on their coding patterns unless there is a compliance issue. Without benchmarking or analysis, undercoding can persist for years.
How Incorrect E/M Coding Impacts Service-Line Revenue Tracking
For practices focused on understanding revenue by service line, incorrect E/M coding creates several downstream problems:
- Distorted revenue per visit metrics
- Inaccurate provider productivity comparisons
- Misleading contribution margin analysis
- Poor data for staffing and scheduling decisions
- Underestimated ROI for clinical programs or care models
In short, if the foundational coding data is flawed, every financial decision built on that data is compromised.
How DoctorsManagement Can Help Improve E/M Coding Accuracy and Revenue
Improving E/M coding accuracy is not about asking providers to “bill higher.” It’s about ensuring that coding accurately reflects the care already being delivered.
DoctorsManagement works with practices to analyze coding patterns through a financial and operational lens, partnering with compliance and coding professionals as appropriate. With the right tools and experience, DoctorsManagement can help in several key ways:
- Data-Driven Coding Pattern Analysis
Using claims and billing data, DoctorsManagement can:
- Analyze E/M distribution by provider, specialty, and location
- Identify outliers and undercoding trends
- Compare internal patterns to specialty-specific benchmarks
This removes emotion and guesswork from the conversation.
- Revenue Impact Modeling
Rather than abstract education, DoctorsManagement can quantify:
- Current revenue loss from undercoding
- Conservative upside scenarios
- Provider-specific and practice-wide financial impact
When providers and leadership see the numbers, engagement increases dramatically.
- Targeted Provider Education
Generic coding training rarely changes behavior. DoctorsManagement focuses on:
- Specialty-specific examples
- Real encounters from the practice
- Clear alignment with current E/M guidelines
This approach builds confidence, not feararound appropriate coding.
- Documentation Optimization (Not More Documentation)
The goal is not longer notes, but better-structured documentation that clearly supports MDM and time.
DoctorsManagement can help providers:
- Capture complexity efficiently
- Document risk and medication management appropriately
- Avoid unnecessary or redundant note bloat
- Ongoing Monitoring and Accountability
Sustainable improvement requires follow-through. With the right dashboards and periodic reviews, DoctorsManagement can:
- Track E/M distributions over time
- Monitor revenue per visit trends
- Flag regression early
This turns coding accuracy into a managed operational process, not a one-time project.
The Bottom Line
Incorrect E/M coding is one of the most pervasive, and fixable, sources of lost revenue in medical practices today. Unlike adding new services, extending hours, or increasing marketing spend, correcting undercoding allows practices to capture revenue they are already earning.
For practices serious about understanding service-line performance and maximizing financial health, partnering with a consultant who combines coding expertise, data analytics, and operational insight can unlock meaningful, sustainable gains.
In many cases, improving E/M coding accuracy doesn’t just pay for itself, it becomes one of the highest-ROI initiatives a practice can undertake.
*This blog was written with the assistance of AI, but edited and rewritten by the author.
