Written by Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, COCAS, CORCM, OHCC, ICDCT-CM/PCS
The information provided is for educational purposes only and is not all-inclusive. Reference the 2023 CPT® book and download the online 2023 E/M guidelines w/code descriptors from the AMA. Please retain a professional consultant or attorney for coding or legal advice as it pertains to your specialty and remember, also follow payer guidelines. Learn more about 2023 and Capturing & Coding Social Determinants of Health (SDoH) for Physicians and Hospitals – a short online course.
Starting January 1, 2023
Prior to the 2023 code changes, hospital observation services, observation care discharge services and hospital inpatient serves were all separate, distinct subsections within the CPT® book.
As of January 2023, there is a deletion of three separate subsections and the establishment of one comprehensive, new subsection. This means codes for Observation Initial, Subsequent and Discharge Services are gone (deleted): 99217-99220 and 99224-99226 for dates of service starting January 1, 2023.
Now Use Same Code for Hospital Inpatient or Observation Care Admission & Discharge Services
Code descriptors for 99221-99223, 99231-99236, 99238 and 99239 have been revised and are now in consolidated subsections. The new hospital inpatient and observation care services subsection now includes eleven revised codes together with new parenthetical notes and guidelines to direct appropriate use. Observation codes are now reported according to Medical Decision-Making (MDM) or total time.
Codes Deleted & Replaced
99217
Observation care discharge day management (This code is to be utilized to report all services provided to a patient on discharge from outpatient hospital "observation status" if the discharge is on other than the initial date of "observation status.
- Now report using 99238 (less than 30 min) or 99239 (more than 30 min)
99238
99239
Hospital inpatient or observation discharge day management; 30 minutes or less on the date of the encounter.
More than 30 minutes on the date of the encounter.
99218
Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components:
A detailed or comprehensive history;A detailed or comprehensive examination; andMedical decision making that is straightforward or of low complexity.
Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to outpatient hospital "observation status" are of low severity. Typically, 30 minutes
- Now report using 99211 (40 minutes)
99211
Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low-level medical decision-making. When using total time on the date of the encounter for code selection, 40 minutes must be met or exceeded.
99219
Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components:
A comprehensive history;A comprehensive examination; andMedical decision making of moderate complexity.
Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to outpatient hospital "observation status" are of moderate severity. Typically, 50 minutes
- Now report using 99222 (55 minutes)
99222
Initial hospital inpatient or observation care, per day, for the E/M of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision-making. When using total time on the date of the encounter for code selection, 55 minutes must be met or exceeded.
99220
Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components:
A comprehensive history;A comprehensive examination; andMedical decision making of high complexity.
Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to outpatient hospital "observation status" are of high severity. Typically, 70 minutes
- Now report using 99223 (75 minutes)
99223
Initial hospital inpatient or observation care, per day, for the E/M of a patient, which requires a medically appropriate history and/or examination and high level of medical decision-making. When using total time on the date of the encounter for code selection, 75 minutes must be met or exceeded.
99224
Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components:
Problem focused interval history;Problem focused examination;Medical decision making that is straightforward or of low complexity.
Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering, or improving. Typically, 15 minutes
- Now report using 99231 (25 minutes)
99231
Subsequent hospital inpatient or observation care, per day, for the E/M of a patient, which requires a medically appropriate history and/or examination and straightforward or low level of medical decision-making. When using total time on the date of the encounter for code selection, 25 minutes must be met or exceeded.
99225
Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components:
An expanded problem focused interval history;An expanded problem focused examination;Medical decision making of moderate complexity.
Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 25 minutes
- Now report using 99232 (35 minutes)
99232
Subsequent hospital inpatient or observation care, per day, for the E/M of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision-making. When using total time on the date of the encounter for code selection, 35 minutes must be met or exceeded.
99226
Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components:
A detailed interval history;A detailed examination;Medical decision making of high complexity.
Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Typically, 35 minutes
- Now report using 99233 (50 minutes)
99233
Subsequent hospital inpatient or observation care, per day, for the E/M of a patient, which requires a medically appropriate history and/or examination and high level of medical decision-making. When using total time on the date of the encounter for code selection, 50 minutes must be met or exceeded.
NOTE – When total time on the date of service spans the transition of two calendar dates, a single service is reported on the one calendar date. Most payers prefer billing on the date the service was completed, so check for payer policy to be compliant if audited.
Hospital Admission Codes – Now Also Used to Report Observation
Codes 99221, 99222 and 99233 have descriptors revised to be used for:
- Hospital inpatient admission
- Observation bed admission
- Partial hospitalization admission
According to new guidelines in CPT® when a patient is admitted as “observation status” in a hospital, it is not necessary that the patient be actually located in a designated observation area of the hospital.
Use modifier 25 when a patient is admitted to hospital or observation in the course of another encounter which is considered a separate service, such as the emergency department, office, nursing facility. However, follow payer bundling guidelines and not just coding guidelines alone.
Note: Transition from an observation hospital bed to inpatient does not constitute a new stay, per coding guidelines.
Patient Admitted and Discharged on the Same Date?
There are times when a hospital or observation admission happens, but the patient is transferred to another facility or expires. Use codes 99234, 99235 or 99236, these codes require 2 or more encounters on the same date, one being the admission, the other discharge.
Only one encounter recorded in the patient’s medical record? Guidelines state to use 99221, 99222 or 99223 ONLY – do not report 99238 or 99239 for discharge.
Inpatient/Observation Consultations
Code 99251 for problem-focused inpatient consultation is now deleted for 2023. The inpatient consultation codes 99252 – 99255 are revised to clearly be used to report either inpatient or observation consultation. The 3 key components of history, exam and MDM have been replaced with new working requiring medically appropriate history and/or examination, the level of medical decision making and, when time is used, the number of minutes that must be met or exceeded in the documentation. The revisions are reflected below:
99251
Inpatient consultation for a new or established patient, which requires these 3 key components: A problem focused history; A problem focused examination; and Straightforward medical decision making. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are self-limited or minor. Typically, 20 minutes
99252
Inpatient or observation consultation for a new or established patient which requires a medically appropriate history and/or examination and straightforward medical decision-making. 35 minutes must be met or exceeded.
99253
Inpatient or observation consultation for a new or established patient which requires a medically appropriate history and/or examination and low level of medical decision-making. 45 minutes must be met or exceeded.
99254
Inpatient or observation consultation for a new or established patient which requires a medically appropriate history and/or examination and moderate level medical decision-making. 60 minutes must be met or exceeded.
99255
Inpatient or observation consultation for a new or established patient which requires a medically appropriate history and/or examination and high level medical decision-making. 80 minutes must be met or exceeded.
Remember the Guidelines for 2023:
In brief summary, select the appropriate level of E/M services based on the following:
1. The level of the MDM as defined for each service, or
2. The total time for E/M services performed on the date of the encounter.
Within each category or subcategory of E/M service based on MDM or time, there are three to five levels of E/M services available for reporting purposes. Levels of E/M services are not interchangeable among the different categories or subcategories of service. For example, the first level of E/M services in the subcategory of office visit, new patient, does not have the same definition as the first level of E/M services in the subcategory of office visit, established patient. Each level of E/M services may be used by all physicians or other qualified health care professionals.
MDM - includes establishing diagnoses, assessing the status of a condition, and/or selecting a management option. MDM is defined by three elements. The elements are:
- The number and complexity of problem(s) that are addressed during the encounter.
- The amount and/or complexity of data to be reviewed and analyzed. These data include:
Time - When using time to determine the level of service, it is important to review the instructions for each category. For coding purposes, time for these services is the total time on the date of the encounter. It includes both the face-to-face time with the patient and/or family/caregiver and non-face-to-face time personally spent by the physician and/or other qualified health care professional(s) on the day of the encounter (includes time in activities that require the physician or other qualified health care professional and does not include time in activities normally performed by clinical staff).
A shared or split visit is defined as a visit in which a physician and other qualified health care professional(s) both provide the face-to-face and non-face-to-face work related to the visit.
- When time is being used to select the appropriate level of services for which time-based reporting of shared or split visits is allowed, the time personally spent by the physician and other qualified health care professional(s) assessing and managing the patient and/or counseling, educating, communicating results to the patient/family/caregiver on the date of the encounter is summed to define total time.
- Only distinct time should be summed for shared or split visits (i.e., when two or more individuals jointly meet with or discuss the patient, only the time of one individual should be counted).
Changes to observation services is only part of the revisions to E/M services for 2023. Many E/M codes have been deleted and even more revised, including descriptors for Emergency Department Services 99281-99285.
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Note: CPT® codes are copyright of the American Medical Association. The American Institute of Healthcare Compliance, Inc. (AIHC) is a 501(c)(3) Non-Profit training organization. AIHC provides the American Medical Association (AMA) Current Procedural Terminology (CPT®) codes copyrighted by the AMA for demonstration and educational purposes under Fair Use copyright law.
