Hospital Inpatient & Observation Care Services: Changes for 2023

June 21, 2023

There were significant changes made to the “Evaluation and Management Services” section of the CPT 2023 code set. The AMA/Specialty Society Relative Value Scale (RVS) Update Committee (RUC) E/M Workgroup made changes to simplify the work of physicians and other qualified health care professionals (QHP) to improve patient care.

Among these changes is the addition of a new section combining hospital inpatient and observation care services for both new and established patients. The combining of these services into one section required the deletion of seven codes and the revision of 11 codes. These change include a change of working in the subsection title to Hospital Inpatient and Observation Care Services, along with the use of or in the code descriptors in all the codes in this subsection. There are also new parenthetical notes and guidelines to help with code selection.

The E/M guidelines had significant revisions for 2023. The revised guidelines for this section resulted in the clarification of concepts such as “Observation” status, not requiring that the patient be in a designated observation area, and appropriate reporting of total time if a service is continuous before and through midnight.

These new rules permit the reporting of a separate E/M service when the patient is admitted to the hospital as an inpatient or observation status subsequent to an encounter in another site of service with Modifier-25 appended. Only one consultation may be reported by a consultant per admission. Any subsequent consultation services during the same admission are reported with subsequent inpatient/observation hospital care codes (99231-99233) or subsequent nursing facility care codes (99307-99310).

Initial Observation Care and Subsequent Observation Care codes (99218-99220 and 99224-99226) were deleted.

Instead, codes 99221-99223 (Initial Hospital or Observation Care) and 99231-99233 (Subsequent Hospital or Observation Care) were revised and added to the new Hospital Inpatient and Observation Care Services subsection.

This change eliminates the mistakes in reporting codes based on varying documentation of a patient being admitted to a certain status. Terminology referring to the “admitting” of a patient is often interpreted as inpatient status. Instead, the instructions for this section refer to the first hospital inpatient or observation status encounter with the patient.

The Observation Discharge code, 99217, was deleted. Instead, Hospital Inpatient or Observation Discharge Services (99238, 99239) are used for either inpatient or observation discharges services.

These codes are to report all services provided to a patient on the date of discharge other than the initial date of inpatient or observation status. These codes (99238 or 99239) should be used by the physician or other qualified healthcare professional providing the discharge services.

In summary, CPT codes 99217-99220 (Initial and Discharge Observation Care) and 99224-99226 (Subsequent Observation Care) were deleted.

CPT codes 99221-99223 (Initial Hospital Inpatient or Observation Care), 99231-99233 (Subsequent Hospital Inpatient or Observation Care), 99234-99236 (Hospital Inpatient or Observation Care Services (Including Admission and Discharge Services), 99238-99239 (Hospital Inpatient or Observation Discharge Services) were substantially revised and placed in consolidated subsections.



Anne Mettler-Huebner, MT(ASCP), CCS, CCS-P, CPC, CPC-I

Auditor | Excite Health Partners



  • AMA CPT 2023 Professional Edition
  • AMA CPT E/M Companion 2023