Get the FAQs on E/M Coding

Get the FAQs on E/M Coding

Understand where Medicare stands on CPT® 2023 guidelines for hospital inpatient and observation care.

We are still seeing a lot of questions about how to code evaluation and management (E/M) services in the hospital inpatient and observation settings using the CPT® 2023 guidelines. The following are questions we received after publishing the article “Coding Inpatient and Observation Visits in 2023” on our blog (and in the January issue of Healthcare Business Monthly).

Observation Coding

Q: If you have a hospitalist that admits a patient to observation on day 1 and he then asks a neurologist to consult, and the patient has Medicare for insurance (which doesn’t cover consults), what CPT® code would the neurologist use?

A: The neurologist is a different specialty and can bill separately as usual. Medicare will pay physicians from different groups and different specialties, or physicians of different specialties within the same group practice. Remember, though, only the admitting provider to observation can use the observation codes. All other providers reporting to Medicare should report the office and other outpatient codes (99202-99215), per Medicare Claims Processing Manual, Chapter 12, section 30.6.8.B.

Q: One of our patients was seen at the hospital under observation for 4 days. Day 1, the patient was seen by Dr. A, billing 99222 with place of service (POS) 22. Days 2 and 3, the patient was seen by Dr. B. On the last day, Dr. A discharged the patient, billing 99238 POS 22. I am confused which codes I need to use for days 2 and 3, and I am not sure if I am billing days 1 and 4 correctly.

A: Based on the limited information provided, Dr. A is the ordering practitioner and may bill for the initial service on day 1 and the discharge service on day 4. The services of other physicians or qualified healthcare professionals on days 2 and 3 may be reported with office and outpatient E/M codes, as appropriate.

Note: CMS considers more than 48 hours of observation rarely “reasonable and necessary.”

Q: In 2023, for nonadmitting providers to observation, do I use codes 99221-99223 and 99231-99233 or do I use 99202-99245 and 99212-99215? I cannot find any info on “other” providers in 2023 CPT®.

A: Medicare Claims Processing Manual, Chapter 12, section 30.6.8.B. states, “All other physicians [other than the admitting provider] who furnish consultations or additional evaluations or services while the patient is receiving hospital outpatient observation services must bill the appropriate outpatient service codes. For example, if an internist orders observation services and asks another physician to additionally evaluate the patient, only the internist may bill the initial and subsequent observation care codes. The other physician who evaluates the patient must bill the new or established office or other outpatient visit codes as appropriate.”

Emergency Department Coding

Q: In a situation where a patient is in the emergency department (ED) and a decision to admit (not for observation) is made, does the ED note become the admit note? Can both the ED note and the admit note still be coded?

A: It will depend on if the ED physician is also the admitting physician. Medicare Claims Processing Manual, Chapter 12, section states that Medicare Administrative Contractors do not pay for an ED visit by the same physician on the same date of service as an initial hospital care service “if a physician sees a patient in the emergency room and decides to admit the person to the hospital.” This policy applies to hospital inpatient and observation care billed under CPT® codes 99221-99223 and 99231-99236.

The CPT® 2023 guideline that says you can separately report the ED service with modifier 25 appended does not apply to Medicare.

If the scenario involves different providers — for example, the ED physician sees the patient in the ED and a hospitalist admits the patient — then each provider may bill their own service. The ED physician would report an ED E/M (99281-99285) and the hospitalist would report an initial hospital or observation code (99221-99223).


Novitas Solutions, Medicare Part B, E/M FAQs, retrieved Jan. 24, 2023 from

Evaluation and Management – CEMC

Rae Jimenez
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Raemarie Jimenez, CPC, CIC, CPB, CPMA, CPPM, CPC-I, CDEO, CANPC, CRHC, CCS, is senior vice president of products at AAPC and a member of the Salt Lake City, Utah, local chapter.

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