New or Established Patient (CPT code 99221-99223)

We have separate list of CPT code for Inpatient hospital care depending on new or established patient. Also the medical coders have to select code based on the initial consultation or subsequent hospital care codes for inpatient setting. The following codes CPT code 99221, 99222, 99223 are used to report the first hospital inpatient encounter with the patient by the admitting physician.

Initial Hospital Care codes are used to report the initial service of admission to the hospital by the admitting physician. Only the admitting physician can report the Initial Hospital Care codes. These codes reflect services in any setting (office, emergency department, nursing home) that are provided in conjunction with the admission to the hospital. For example, if the patient is seen in the office and subsequently is admitted to the hospital the same day, the office visit is bundled into the initial hospital care service.

All services provided in the office may be taken into account when selecting the appropriate level of hospital admission. This means that if the physician performed a comprehensive examination in the office, that level of examination is considered when determining the level of the hospital admission service.

The inpatient care level of service reported by the admitting physician should include the services related to the admission he/she provided in the other sites of service as well as in the inpatient setting.

An initial service may be reported when 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 of the exact same specialty and subspecialty who belongs to the same group practice during the stay. When advanced practice nurses and physician assistants are working with physicians, they are considered as working in the exact same specialty and subspecialty as the physician.

When the patient is admitted to the hospital as an inpatient or to observation status in the course of an encounter in another site of service (eg, hospital emergency department, office, nursing facility), the services in the initial site may be separately reported. Modifier 25 may be added to the other evaluation and management service to indicate a significant, separately identifiable service by the same physician or other qualified health care professional was performed on the same date.

If a consultation is performed in anticipation of, or related to, an admission by another physician or other qualified health care professional, and then the same consultant performs an encounter once the patient is admitted by the other physician or other qualified health care professional, report the consultant’s inpatient encounter with the appropriate subsequent care code (99231, 99232, 99233). This instruction applies whether the consultation occurred on the date of the admission or a date previous to the admission. It also applies for consultations reported with any appropriate code (eg, office or other outpatient visit or office or other outpatient consultation)

Read also: What are POA indicators in Inpatient coding

Prior to the 2023 changes, there were three sections and additional subsections:

• Hospital Observation Services
  • Initial Observation Care
  • Subsequent Observation Care
  • Observation Discharge
• Hospital Inpatient Services
  • Initial Hospital Inpatient Care
  • Subsequent Inpatient Care
  • Hospital Inpatient Discharge Services
• Observation or Inpatient Care Services (including admission and discharge)

The Initial Observation Care subsection codes (99218-99220) and Subsequent Observation Care subsection codes (99224-99226), which are used to report initial and subsequent hospital observation care, respectively, were deleted for 2023.

To report observation care services, CPT codes 99221-99223 and codes 99231-99233 were revised to add observation care services to the code descriptors.

Revisions were made to the descriptors for CPT codes 99221-99223 and 99231-99233 to be consistent with revisions to other sections of E/M services, in which selecting the appropriate level of service will no longer require documentation of the three key components (history, physical examination, and MDM), but instead MDM or total time on the date of the encounter may be used to select the appropriate level of code. 

Difference between First “Initial” and “Subsequent” Encounter

In “Initial” encounter, the patient has not received any services from another physician or QHCP of the same exact specialty/subspecialty who belong to the same group practice during the stay. Even the advanced practitioners working with physicians are considered the exact same specialty/ subspecialty.

In “Subsequent” encounter the patient has been seen by another physician/QHCP of the same exact specialty/subspecialty who belongs the same group practice during the stay.

This applies to the Inpatient/observation and Nursing facility services.

Initial and Subsequent Hospital Inpatient/Observation Care Services: Total Time Revisions in 2023

*Time spent at the bedside and on the patient’s hospital floor or unit

** Total time related to patient care on the date of the encounter

Note that total time on the date of the encounter is by calendar date. When using MDM or total time for code selection, a continuous service that spans the transition of two calendar dates is considered as a single service and is reported on one calendar date. If the service is continuous before and through midnight, all of the time spent may be applied to the reported date of the service.    

Same-day admit and discharge services codes 99234-99236 were revised by replacing the three key-component requirements with MDM or total time on the date of the encounter. In addition, the total time required when time is the element used for reporting was adjusted for all three codes. For example, code 99234 requires 45 minutes of total time instead of 40 minutes spent with the patient, and code 99235 requires 70 minutes of total time spent instead of 50 minutes of time with the patient previously, while code 99236 requires a total time of 85 minutes instead of 55 minutes.

It is important to note that the reporting of these three codes requires at least two encounters on the same date, one of which is the initial admission and another is the discharge. For time spent beyond 100 minutes, users are instructed to report new prolonged services add-on code 99418. For complete information regarding the total time revisions that were made to codes 99234-99236.

Hospital Inpatient or Observation Care Services (Including Admission and Discharge Services): Total Time Revisions in 2023

* Time spent at the bedside and on the patient’s hospital floor or unit

** Total time related to patient care on the date of the encounter

Observation Care Discharge Services subsection and observation care discharge code 99217 were deleted. For 2023, the time-based discharge services codes 99238 and 99239 were revised to report either hospital inpatient discharge or observation discharge management services. The codes are now located in the revised Hospital Inpatient or Observation Discharge Services subsection. These codes should be used to report total time for all discharge-day management services provided to a patient on the date of discharge, if performed on other than the initial date of inpatient or observation care services. The physician or other QHP who is responsible for discharge services may report codes 99238 or 99239.

Discharge-day management services for a patient in observation or inpatient status that require 30 minutes or less on the date of the encounter are reported with code 99238. For services of more than 30 minutes, report code 99239. If a patient in observation status is admitted as an inpatient to another service, use codes 99231-99233 to report observation services provided to the patient prior to the admission to another service. Note that services by additional physicians or other QHPs that may include providing instructions to the patient and/or the patient’s family or caregiver and coordination of post-discharge services may be reported with codes 99231-99233.

Codes 99238 and 99239 may only be reported if the initial services for admission to the hospital as an inpatient or under observation care are performed on a different calendar date. If a patient is admitted and discharged during the same encounter, report codes 99221-99223, as appropriate. If a patient is admitted and discharged on the same calendar date with two encounters, codes 99234-99236 may be reported, as appropriate. It is important to note that codes 99238 and 99239 may not be reported with codes 99221-99223 for admission and discharge services on the same calendar date. In addition, if a neonate or newborn is admitted and discharged on the same date, code 99463, Initial hospital or birthing center care, per day, for evaluation and management of normal newborn infant admitted and discharged on the same date, should be reported.

In the E/M guidelines subsection, a new heading titled “Initial and Subsequent Services” was created, which details the rules applicable to the code families that use initial and subsequent services as compared to new or established patients.

Description of CPT code 99221, 99222 and 99223

Initial hospital inpatient or observation service codes describe the first encounter with the patient by a physician or qualified clinician. CPT guidelines indicate these services may be reported for the first encounter by the provider of the same specialty/subspecialty of the same group practice. Transition from observation to inpatient status does not qualify as an initial hospital encounter. Codes are reported per day and do not differentiate between new or established patients. Under the initial inpatient or observation care category, there are three levels represented by CPT code 99221, 99222, and 99223.

All services require a medically appropriate history and/or examination. Code selection is based on the level of medical decision making (MDM) or total time personally spent by the physician and/or other qualified health care professional(s) on the date of the encounter. Factors to be considered in MDM include the number and complexity of problems addressed during the encounter, amount and complexity of data requiring review and analysis, and the risk of complications and/or morbidity or mortality associated with patient management.

Report CPT code 99221 for a visit that entails straightforward or low MDM. If time is used for code selection, a total time of 40 minutes must be met or exceeded on the day of encounter. Report CPT code 99222 for a visit requiring a moderate level of MDM or meeting or exceeding 55 minutes of total time. Report CPT code 99223 for a high level of MDM or meeting or exceeding 75 minutes of total time. Note that these codes include services provided to patients in a “partial hospital” setting.

CPT code 99221

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.

CPT code 99222

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 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.

CPT code 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 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.

Code selection for hospital inpatient or observation care (99221–99236) is based on total time for E/M services OR level of medical decision making (MDM). When using time, the total time on the date of the encounter is applied and includes face-to-face and non-face-to-face time personally spent by the physician.

The levels of MDM are defined based on three elements: number and complexity of problems addressed at the encounter; amount and or complexity of data to be reviewed and analyzed; and risk of complications and/or morbidity or mortality of patient management. To qualify for a particular level of MDM, two of the three elements for that level of MDM must be met or exceeded.

For patients designated/admitted as “observation status” in a hospital, it is not necessary that the patient be located in an observation area designated by the hospital. If such an area does exist in a hospital (as a separate unit in the hospital, in the emergency department, etc), these codes may be utilized if the patient is placed in such an area

Revenue Codes

Code     Description

0760     Specialty Services – General Classification
0761      Specialty Services – Treatment Room
0762     Specialty Services – Observation Hours
0769     Specialty Services – Other Specialty Services

Bill Type Codes

Code        Description
011x         Hospital Inpatient (Including Medicare Part A)
012x        Hospital Inpatient (Medicare Part B only)
013x        Hospital Outpatient
083x       Ambulatory Surgery Center
085x       Critical Access Hospital