Primary Care Coding Alert

Prepare for a change in MDM elements and new time parameters.

CPT^® updates are here again, complete with a revised set of inpatient/observation care service codes. Arriving on the coattails of the 2021 office/outpatient evaluation and management (E/M) service codes, these 2023 revisions present new ways to calculate the appropriate service levels for hospital inpatient and observation care services, including initial and subsequent encounters, discharges, and same-day admission and discharges.

If you think you could use a tutorial on what this will all look like in the new year, you’ve come to the right place.

Erase These Observation Care Codes

Effective Jan. 1, 2023, you will no longer be able to report the following codes because CPT^® 2023 deletes them from the code set:

• 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient …), which you currently use to report initial outpatient hospital observation services
• 99224-99226 (Subsequent observation care, per day, for the evaluation and management of a patient …), which you currently use to report subsequent outpatient hospital observation services
• 99217 (Observation care discharge day management …), which you currently use 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,’” per the descriptor to the soon-to-be-deleted code

Report Inpatient, Observation, Discharges, and Same-Day Discharges in 2023 Like This

Instead of using those deleted codes, you will use one of the following existing initial hospital care codes, which will receive extensive descriptor revisions in 2023 (new descriptors shown):

• 99221-99223 (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/moderate/high level medical decision making. When using total time on the date of the encounter for code selection, 40/55/75 minutes must be met or exceeded.)
• 99231-99233 (Subsequent hospital inpatient or observation care, per day … which requires a … straightforward or low/moderate/high level of medical decision making. When using total time … 25/35/50 minutes must be met or exceeded.)
• 99234-99236 (Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, … straightforward or low/moderate/high level of medical decision making … 45/70/85 minutes must be met or exceeded.)
• 99238-99239 (Hospital inpatient or observation discharge day management; 30 minutes or less/more than 30 minutes on the date of the encounter)

You’ll notice CPT^® has brought the code descriptors in line with the current office/ outpatient E/M service codes. This means you will be using essentially the same MDM elements as you are currently using for office/outpatient services to determine service level with one important exception: CPT^® has not included a separate code at the straightforward MDM inpatient or observation level. Instead, CPT^® has kept initial and subsequent inpatient or observation care to three levels and lumped straightforward and low-level MDM together in the lowest level. In other words, you’ll be able to use level 1 for these codes when the provider’s MDM for the inpatient or observation care is either a straightforward or low level.

Apply the Inpatient/Observation Codes Correctly From the Get-Go

In 2023, you’ll report initial service codes 99221-99223 for your provider’s first encounter with the patient in a hospital inpatient or observation status provided:

• “The patient has not received any professional services from the physician or other qualified health care professional or another physician or other qualified health care professional [QHP] of the exact same specialty and subspecialty who belongs to the same group practice [this includes advanced practice nurses and physician assistants working with the physician or QHP] during the stay”
• The patient’s admission and discharge do not occur on the same day

If the patient has already received services from your physician or QHP during the stay, or services from a physician or QHP of the exact same specialty and subspecialty and in the same practice, then you’ll use subsequent service codes 99231-99233.

For patient admission and discharge on the same day, you’ll use 99234-99236. And for discharges on a day other than the day of admission, you’ll use 99238 (Hospital inpatient or observation discharge day management; 30 minutes or less on the date of the encounter) and 99239 (… more than 30 minutes on the date of the encounter) if your physician or QHP provides those services.

And remember: If the patient transitions from observation to inpatient, the change is regarded as a single stay, according to code set guidelines. CPT^® 2023 also makes it clear that, for all these codes, “the problem addressed is the problem status on the date of the encounter, which may be significantly different than on admission,” and “may not be the cause of admission or continued stay.”

Pediatric coding alert: You will continue to report neonatal and pediatric inpatient initial and subsequent intensive and critical care services using the appropriate age- and service-specific code from 99468-99480. “Be sure to reference the combined lists of critical care as well as pediatric and neonatal critical care procedures that should not be reported separately with inpatient/observation care by physicians. These include but are not limited to vascular access procedures and airway management,” says Jan Blanchard, CPC, CPEDC, CPMA, pediatric solutions consultant at Vermont-based PCC.

Report 2 E/M Codes in Some Circumstances

Once the changes take effect, expect to be able to report two E/M codes if the provider performed an E/M service before hospital inpatient or observation admission then saw the same patient again after admission. Historically, physicians could only report one E/M and had to consolidate the work done in both sites into one code. But “starting in 2023, the services in the initial site may be separately reported, with modifier 25 (Significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service) added to the other E/M service,” said Kent Moore, senior strategist for physician payment at the American Academy of Family Physicians.

Example: Your physician sees a patient and performs work that warrants the use of 99215 (Office or other outpatient visit for the evaluation and management of an established patient, which requires a … high level of medical decision making… 40-54 minutes of total time…). Then, the physician decides to admit the patient to the hospital and documents initial care at the hospital at a level 2. In this situation, the physician will be allowed to report an E/M for both 99222 as well as 99215-25.

Tip: Check payer policies for 2023 to confirm whether they follow CPT^® guidelines or require a different approach.

Watch Out for Incoming Associated Prolonged Service Codes

As 99221-99223, 99231-99233, and 99234-99236 are time-based, CPT^® is planning to introduce a new prolonged service code, which you will use when the time associated with the highest level of service has been exceeded by 15 minutes. Thus, you will report the new code when initial inpatient or observation service exceeds 90 minutes, the subsequent inpatient or observation service exceeds 65 minutes, or the same-date admission and discharge services exceed 100 minutes. As with all things coding, you should be sure to check payer policy to see if it differs from CPT^® guidelines when reporting this new code.

CPT^® has yet to announce the code number, the descriptor for which will read as follows: Prolonged inpatient or observation evaluation and management service(s) time with or without direct patient contact beyond the required time of the primary service when the primary service level has been selected using total time, each 15 minutes of total time (List separately in addition to the code of the inpatient and observation Evaluation and Management service)

Note: For the full list of 2023 E/M code and guideline revisions, go to www.ama-assn.org/system/files/2023-e-m-descriptors-guidelines.pdf. This document is an early release, so you should confirm code numbers and descriptors in the final official 2023 code set