2023 E/M Coding Changes

Following a major update to office and outpatient evaluation and management (E/M) guidelines and reporting in 2021, the American Medical Association (AMA) and the Centers for Medicare & Medicaid Services (CMS) made similar changes to other E/M categories in 2023. Understanding these changes is important because E/M services are common for many healthcare organizations and therefore play a key role in financial health and compliance programs.

Why Did E/M Coding Change in 2023?

On Jan. 1, 2021, the AMA implemented revised guidelines and code descriptors for office and other outpatient services E/M codes 99202-99215. The coding guidelines were overhauled to change the code selection requirements to be based on medical decision making (MDM) or total time of the E/M service. The revisions eliminated the requirement to meet a certain level of history and exam, instead requiring a medically appropriate history and/or physical exam.

The goals for these changes were to reduce administrative burden and better align coding with how patient care is delivered today. Patient care should be driven by the need to treat patients, not the need to satisfy a coding requirement.

The AMA revised the 2023 E/M guidelines to be consistent with the changes implemented in 2021 and to support all other E/M categories, including hospital or observation services, inpatient and outpatient consultations, emergency department services, nursing facility services, and home or residence services.

Overview of E/M 2023 Category Changes

Observation and inpatient services: CPT^® 2023 deleted observation services codes 99217-99220 and 99224-99226. To allow reporting of observation services, CPT^® revised the hospital services category to represent either hospital or observation services (99221-99239). The examples below of 2022 code 99224 (deleted for 2023) and 2023 code 99231 show how observation care is now represented by the same code as inpatient care. These codes also illustrate how E/M changed the requirements and wording related to history, exam, MDM, and time.

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 are spent at the bedside and on the patient’s hospital floor or unit.

99231 Subsequent 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 of medical decision making. When using total time on the date of the encounter for code selection, 25 minutes must be met or exceeded.

Consultations: CPT^® deleted consultation codes 99241 (office/outpatient) and 99251 (inpatient) in 2023 because both represented straightforward MDM, which is the same level of MDM assigned to office/outpatient code 99242 and inpatient code 99252. Under the new coding structure where code choice can be based on MDM, it does not make sense to have the same MDM level assigned to two different codes that apply to the same type of service. These deletions are in line with the 2021 deletion of 99201 for office and other outpatient services. Code 99201 required straightforward MDM, the same as 99202.

Nursing facility services: CPT^® 2023 deleted the annual nursing facility assessment code 99318, instructing you now to report that service using subsequent nursing facility services codes 99307-99310.

Home or residence services: CPT^® deleted the domiciliary, rest home (e.g., boarding home), or custodial care services codes (99324-99337), and CPT^® revised the home services codes to include home or residence services (99341-99350). In place of deleted home, domiciliary, or rest home care plan oversight codes 99339 and 99340, CPT^® points coders to chronic care management codes 99491 and +99437 or principal care management codes 99424 and +99425, although those codes are not specific to home or residence services.

Summary of Changes

2023 CPT® E/M Guideline Revisions

The AMA made many revisions to the E/M guidelines as part of the 2021 update for office and outpatient visit codes. The 2023 guidelines required additional updates to incorporate the latest code changes.

In some cases, the guidelines remained the same or changed to apply the 2021 guideline updates to additional E/M categories. For example, the 2023 E/M guidelines maintain the rule that a service must meet or exceed two of the three elements CPT^® lists for a given MDM level to qualify for that level.

The guidelines introduced in 2021 for determining total time also remain the same in 2023, but they now apply to additional codes. In short, total time includes face-to-face time and other time the provider personally spends on that E/M service on the date of the encounter.

In other cases, the guidelines needed to change to accommodate the code updates. Because the definitions and examples provided in the 2021 CPT^® E/M guidelines were specific to office and other outpatient services, CPT^® added new definitions to the 2023 guidelines to support the code changes for services performed in facility sites of service. Examples are provided below, but you should review the guidelines in their entirety, including checking errata and technical corrections posted by the AMA.

Acute, uncomplicated illness or injury requiring hospital inpatient or observation level care is defined by CPT^® as “a recent or new short-term problem with low risk of morbidity for which treatment is required. There is little to no risk of mortality with treatment, and full recovery without functional impairment is expected. The treatment required is delivered in a hospital inpatient or observation level setting.”

Stable, acute illness is defined as “a problem that is new or recent for which treatment has been initiated. The patient is improved and, while resolution may not be complete, is stable with respect to this condition.”

CPT^® revised the definition of independent historian(s) to clarify that an interpreter is not considered an independent historian and that the history doesn’t need to be obtained in person but must be obtained directly from the independent historian.

2023 CPT^® MDM Table Revisions

In 2021, CPT^® introduced an expanded MDM table to apply to office or other outpatient E/M services. A smaller, separate table applied to other E/M categories. In 2023, CPT^® eliminated the smaller table and revised the expanded MDM table to support all E/M categories.

One of the revisions was to delete the office and other outpatient codes from the MDM table to allow the table to apply to additional codes. Other significant changes to the MDM table for 2023 were to the low and high MDM levels’ rows. Straightforward and moderate MDM did not change.

Revisions to low MDM: One of the three elements used to determine MDM is Number and Complexity of Problems Addressed at the Encounter. The 2023 MDM table’s column for this element added two low MDM diagnosis examples:

• “1 stable, acute illness”

• “1” acute, uncomplicated illness or injury requiring hospital inpatient or observation level of care”

Revisions to high MDM: A second MDM element is Risk of Complications and/or Morbidity or Mortality of Patient Management. For high MDM, the 2023 table revised the bullet in this column for “Decision regarding hospitalization” to add “or escalation of hospital level care.” The table also added “Parenteral controlled substance” as an example for high risk.

The 2023 table did not make changes to the final MDM element, which is Amount and/or Complexity of Data to Be Reviewed and Analyzed.

2023 Hospital or Observation E/M Codes

The major differences between the 2022 and 2023 E/M guidelines for hospital or observation services include the following:

• In 2023, code descriptors include a total time that the service must meet or exceed. In 2022, the hospital inpatient or observation codes instead included a typical time. This change is in line with 2021 revisions to the code descriptors for office and other outpatient services.

• The 2023 guidelines allow physicians and qualified healthcare professionals to use the initial care codes (99221-99223), even if they aren’t the admitting provider. The guidelines define an initial service as one where the patient has not received professional services from the qualified provider (or another qualified provider of the same specialty and subspecialty in the same group) during the stay. In 2022, the guidelines instead stated the codes were appropriate for “the first hospital inpatient encounter with the patient by the admitting physician” and pointed other providers to the inpatient consultation and subsequent hospital care codes.

• In 2023, providers may report services performed in other sites of service in addition to the initial care codes on the same date of service. The guidelines state to add 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 to the other E/M code. In 2022, CPT^® considered all E/M services by a provider to be part of the initial hospital care when the services were related to and performed on the same date as the inpatient admission. The guidelines similarly restricted the reporting of other E/M services on the same date as admission to observation status.

2023 Consultation E/M Codes

The revisions to CPT^®’s 2023 guidelines for consultation codes did not change the intent of the services. To qualify as a consultation, a service requires a request from another physician, other qualified healthcare professional, or appropriate source to recommend care for a specific condition or problem. The consulting provider also must provide a written report to the requesting source.

Although Medicare does not accept consultation codes, many private payers do. That is why it was important for CPT^® to retain the consultation code family except for 99241 and 99251, as mentioned previously.

2023 Emergency Department E/M Codes

A big change in 2023 for emergency department (ED) E/M coding is the revision of 99281 to specify that the service does not require the presence of a physician or QHP:

99281 Emergency department visit for the evaluation and management of a patient that may not require the presence of a physician or other qualified health care professional

This is a new concept for ED coding, but it brings 99281 in line with 99211 Office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician or other qualified health care professional.

Historically, supervision in the ED has not been consistent with the supervision in the office or other outpatient setting. This is because the ED clinical staff members being supervised are not the employees of the supervising physician, and the work performed by clinical staff is used to determine the appropriate E/M level reported by the facility.

Another area to note is that the ED E/M level is determined only by MDM. Total time is not used for code selection in the ED. This is a major difference from all other E/M categories. The rule continues CPT^®’s existing policy for time in relation to ED services, which often involve multiple encounters with several patients over time.

2023 Nursing Facility E/M Codes

There are several major differences between the 2022 and 2023 E/M guidelines for nursing facility services. Many of them are similar to the inpatient hospital and observation changes:

• The 2023 nursing facility code descriptors include a total time that needs to be met or exceeded, in contrast to the typical time included in the 2022 codes.

• Physicians and qualified healthcare professionals can use the initial care codes (99304-99306) once per admission, even if they aren’t the admitting (principal) provider. The 2023 guidelines state that providers may use the initial care codes (99304-99306) or inpatient consultation codes (99252-99255) when the initial service is a consultation (the next bullet explains an exception). Providers overseeing medical care who conduct medically necessary assessments before the principal provider’s initial comprehensive visit should report those services using the subsequent nursing facility care codes (99307-99310).

• Services performed in other sites of service can be reported in addition to the initial care codes on the same date of service by appending modifier 25. But if the same provider performs a separate site service and then an initial nursing facility care service that is a consultation on the same date, the consultant should report a subsequent nursing facility care code (99307-99310) rather than a consult or initial care code.

• For 2023, the guidelines added that nursing facility discharge services (99315-99316) “require a face-to-face encounter with the patient and/or family/caregiver that may be performed on a date prior to the date the patient leaves the facility.”

2023 Home or Residence E/M Codes

The E/M codes for home care services now include any patient residence, including assisted living facilities, which prior to 2023 had a separate code category (99324-99328, 99334-99337). Now all home or residence services are reported using codes 99341-99345 for new patients and 99347-99350 for established patients.

2023 CPT^® Changes for Prolonged Services

The major differences between the 2022 and 2023 E/M coding and guidelines for prolonged services include the following:

• CPT^® 2023 deleted 99354-+99355 for prolonged outpatient services (other than office or other outpatient services) and 99356-+99358 for prolonged inpatient or observation services.

• The code set revised outpatient prolonged service code +99417 to allow use with the highest-level codes for office or other outpatient consultation (99245), home or residence service (99345, 99350), or cognitive assessment and care planning (99483). Code +99417 also continues to be an add-on code for office or other outpatient visits (99205, 99215).

• CPT^® 2023 created prolonged service code +99418 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) to report prolonged services for the highest levels of inpatient and observation codes as well as nursing facility and inpatient or observation consultations

The 2023 guidelines state +99417 and +99418 represent “combined time with and without direct patient contact … provided by the physician or other qualified health care professional on the date” of the service. Per CPT^®, +99417 and +99418 are appropriate once the service reaches 15 minutes beyond the primary code’s required time. For instance, a minimum of 60 minutes is required for 99205 Office or other outpatient visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using time for code selection, 60-74 minutes of total time is spent on the date of the encounter. Once the service reaches 75 minutes, the provider also may report +99417. As in 2022, Medicare rules for reporting prolonged services differ from the rules in the CPT^® code set. These differences are described in more detail below.

Medicare Accepts Most CPT^® 2023 E/M Coding and Guideline Changes

The Medicare Physician Fee Schedule (MPFS) 2023 final rule adopted many of the CPT^®2023 E/M revisions with a few exceptions:

• CMS did not accept the guideline allowing E/M services performed in other sites of service with an inpatient or observation care code to be reported separately with modifier 25. When the provider sees the patient in another site of service (such as the office) and then admits the patient on the same day, Medicare requires the provider to combine the MDM or total time for both encounters and report one initial hospital or observation code.

• CMS did not accept the new prolonged service code +99418 and created new HCPCS Level II codes to use in its place (as explained in the next section).

• CMS clarified that the elimination of the observation category did not change the policies for observation services. For instance:

  • The place of service (POS) code used for observation care remains POS 22 for outpatient services.

  • Only the admitting provider can report observation care. All other providers will report office or other outpatient services.

  • Medicare still follows the 8-hour rule for reporting inpatient or observation services. Refer to the table below for the appropriate codes.

Medicare-Specific HCPCS Codes for Prolonged Services

CMS created three new HCPCS Level II codes for use in place of CPT^® code +99418 when billing Medicare for prolonged services. The codes differ based on site of service:

+G0316 Prolonged hospital inpatient or observation care evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using time on the date of the primary service); each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact (list separately in addition to CPT codes 99223, 99233, and 99236 for hospital inpatient or observation care evaluation and management services). (Do not report G0316 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 99418, 99415, 99416). (Do not report G0316 for any time unit less than 15 minutes).

+G0317 Prolonged nursing facility evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using time on the date of the primary service); each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact (list separately in addition to CPT codes 99306, 99310 for nursing facility evaluation and management services). (Do not report G0317 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 99418,). (Do not report G0317 for any time unit less than 15 minutes))

+G0318 Prolonged home or residence evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using time on the date of the primary service); each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact (list separately in addition to CPT codes 99345, 99350 for home or residence evaluation and management services). (Do not report G0318 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 99417). (Do not report G0318 for any time unit less than 15 minutes)

CMS created these codes because it disagrees with CPT^®’s rule that prolonged services are based on the primary service’s minimum required time. Medicare instead requires the prolonged time to extend past the total in their physician time file. The required times are available in the 2023 MPFS final rule, a correction to that rule, and Medicare Claims Processing Manual, Chapter 12, Section 30.6.15.3. The manual includes a version of this table:

Last reviewed on April 27, 2023, by the AAPC Thought Leadership Team