CPC Pathway Team · Coding · 2026-10-04
Medical Decision Making (MDM) scoring under the official AMA and CMS Evaluation and Management (E/M) guidelines is governed by a strict “2 of 3” rule: to qualify for a given level of MDM (Straightforward, Low, Moderate, or High), the clinical documentation must meet or exceed the requirements of only two of the three MDM elements. For AAPC CPC® exam candidates and outpatient medical coders, confusing this foundational rule is the single most common cause of undercoding errors—mistakenly assuming that a low data score pulls an entire encounter down from a Level 4 (99204/99214) to a Level 3 (99203/99213).
| MDM Level | New Patient CPT® | Established CPT® | Rule Required |
|---|---|---|---|
| Straightforward | 99202 | 99212 | 2 of 3 elements Minimal |
| Low MDM | 99203 | 99213 | 2 of 3 elements Low |
| Moderate MDM | 99204 | 99214 | 2 of 3 elements Moderate |
| High MDM | 99205 | 99215 | 2 of 3 elements High |
Prior to the landmark 2021 AMA/CMS outpatient E/M guidelines overhaul (and the subsequent 2023 inpatient alignment), coders were trained to balance three historical pillars: History, Physical Examination, and Medical Decision Making. For new patients under the old rules, all 3 of 3 components had to be satisfied.
In today’s medical coding landscape, history and physical examination no longer determine code selection. Office and outpatient visits (CPT codes 99202–99215) are coded exclusively based on either Medical Decision Making or Total Time on the date of the encounter. For a foundational walkthrough on office visit code families, see our complete guide to Mastering E/M Guidelines & Medical Decision Making. Within the MDM table itself, you never need all three columns checked. You only need two.
AAPC Exam Takeaway: If you find yourself hunting through an operative note or clinic chart trying to force a third element into a higher tier, stop. Once two columns hit the target level, your code is locked. You can practice this live on Medical Coding Quizzes inside our practice simulator.
Number and complexity of problems addressed measures the clinical severity and systemic nature of illnesses treated during the encounter. The problem must be evaluated or treated at this visit—simply listing a condition in the past medical history does not count.
Amount and complexity of data measures the cognitive burden of reviewing external records, ordering unique tests, obtaining history from independent historians, or independently interpreting diagnostic tests.
Risk of patient management measures the potential harm associated with treatment options selected, deferred, or discussed with the patient.
An established 58-year-old patient with Type 2 Diabetes presents with worsening morning blood sugars. The physician addresses the uncontrolled diabetes and adjusts the Metformin dosage. No outside records are reviewed, and no labs are ordered today.
A patient presents for evaluation of a single stable hypertension follow-up (Low Problem). The physician reviews external hospital records, orders a comprehensive metabolic panel, and reviews prior lipid results (Moderate Data). The physician initiates Lisinopril therapy (Moderate Risk).
A patient has acute pulmonary edema posing an immediate threat to life (High Problem). The physician reviews no outside data (Minimal Data) and initiates an oral antibiotic prescription rather than emergency hospitalization (Moderate Risk).
Explore our companion clinical coding and compliance guides to strengthen your documentation audit readiness:
The 2 of 3 rule means that to bill an E/M code at a specific Medical Decision Making level (Straightforward, Low, Moderate, or High), clinical documentation must satisfy or exceed the criteria of at least two out of the three MDM elements: Number and Complexity of Problems, Amount and Complexity of Data, and Risk of Complications. The third element does not affect the final code level.
Yes, you can bill CPT 99214 even if the Data element is Minimal, provided that both the Problems element and the Risk element meet or exceed Moderate. For example, treating an exacerbated chronic illness (Moderate Problems) with an adjusted prescription drug (Moderate Risk) qualifies for 99214 with zero lab or chart data.
Prescription drug management satisfies the Moderate tier for the Risk element only. To achieve an overall Moderate MDM level (99204 or 99214), you must also meet the Moderate threshold in either Problems (e.g., 1 chronic condition with progression or 2 stable chronic illnesses) or Data.
When MDM elements are split across three different tiers (e.g., High Problem, Moderate Risk, Low Data), the final code drops to the middle tier where at least two elements meet or exceed the requirement. In this example, both the High element and the Moderate element meet or exceed Moderate, resulting in a Moderate MDM code (99204 or 99214).
No, under current AMA and CMS outpatient guidelines, physical examination bullets do not count toward E/M code selection. The physician must perform a medically appropriate examination, but code leveling is determined strictly by Medical Decision Making or total encounter time.
An E/M visit should be coded by Time when total face-to-face and non-face-to-face provider time on the date of the encounter supports a higher code level than the MDM calculation. For example, extensive counseling or coordination of care lasting 30 minutes for an established patient qualifies for 99214 by time, even if clinical MDM was Low.