New: Some Welcome Evaluation and Management Code Changes Starting January 1, 2023

Betsy Nicoletti, MS


October 27, 2022

Medical professionals aren't always thrilled by Current Procedural Terminology (CPT) code revisions, but the changes the American Medical Association is making for 2023 will result in less work for physicians.

The application of a revised evaluation and management (E/M) office visit framework from 2021 to E/M services defined by history, exam, medical decision-making, and time is good news. These changes, which physicians with office-based practices have already implemented, will soon extend to hospital services, nursing facility services, and home and domiciliary visits. Hospitalists and medical and surgical specialists will use the ht_221017_betsy_nicoletti_120x156.pngnew guidelines for hospital care.

What's New, and What Are the Advantages?

In addition to benefiting physicians who care for patients in hospitals, nursing facilities, and at home, extensive history and exam requirements from the 1995 and 1997 Documentation Guidelines are gone. CPT states that E/M services include a "medically appropriate" history and exam, but neither history nor exams are key components in visit selection. Instead, the nature and extent of history and exams will be determined by the practitioner.

Starting January 1, no physician will have to hear, "It would have been a level 3 admission, but you only had nine systems in the review of systems and it requires 10. It audits as a level 1 admission without that tenth system." Or, "You can't bill that code without an eight-organ-system exam." The new regulations allow physicians to document a more clinically relevant history and exam.

Although American Medical Association (AMA) administrators have said that most code selections should be based on medical decision-making, there are instances in which using time to select a code level is beneficial.

Say, for example, you were with a patient for 20 minutes, but it took you another 45 minutes to arrange for the needed follow-up. Beginning in 2023, counseling and coordination of care no longer need to dominate the visit. Instead, practitioners can select a code based on the total time devoted to a patient on the day of service — including time when the patient wasn't present. This includes pre-visit time, time spent reviewing history obtained by a staff member; time with the patient; and time spent doing documentation, care coordination, and review that is not separately billed.

CPT specifically says the practitioner can include time spent "reviewing separately obtained history." This lets a staff member obtain and document the history of the present illness, which was not allowed under the old guidelines.

Medical groups can use these changes to significantly revise templates. The 1995 and 1997 guidelines spawned templates that supported a high-level code. For high-level visits, family history was required, whether relevant or not. Groups and electronic health record vendors built templates that included a review of systems and a comprehensive exam. For some specialties, the comprehensive exam was difficult to do or justify. Now, these templates can be updated for clinical relevance.

One Set of Codes for Inpatient and Observation Services

You will need to use the same codes for patients who are admitted to the hospital and patients receiving observation-level care (when the patient's condition is changing quickly, but it's not yet clear whether hospitalization is required). Use codes 99221-99223 for the initial service, 99231-99233 for subsequent visits, and 99238-99239 for discharge care.

These will now be "inpatient or observation care" codes, not "hospital care" codes. The claim will still need to be submitted with the correct place of service code. Use place of service 21 for inpatient claims. Observation is considered an outpatient service, so use place of service 22.

Definitions for Initial and Subsequent Services

The AMA has added definitions for initial and subsequent services provided in hospitals and nursing facilities. For the admitting physician within a group and specialty, one initial service is allowed per admission. A covering physician or nonphysician practitioner within that same group and specialty can bill for follow-up services.

Consulting services provided by a different specialty physician are defined as initial services. For Medicare and other payers that do not recognize consultations, the initial consultation service is billed with codes 99221-99223. If the payer recognizes consultation codes, use codes 99252-99255. Follow-up services for both the admitting and the consulting physician are billed with codes 99231-99233.

Admission in the Course of Another Encounter

One of the more surprising guideline changes is this one: "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 of 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."

That is, if a physician sees a patient in the emergency department or office and admits the patient to the hospital on the same day, both E/M services can be billed. It is doubtful that Medicare or other payers will agree with this change from the current guidelines.

What Else Do You Need to Know?

  • Observation codes 99218-99220 for initial services and 99217 for discharge will be deleted in 2023. Use initial hospital care codes 99221-99223, subsequent hospital care codes 99231-99233, and discharge visit codes 99238 and 99239 for both observation-level care and inpatient encounters.

  • Patient admissions and discharges on the same date will still be reported with codes 99234-99236.

  • Emergency department services may be based on medical decision-making only, not time.

  • Home visit codes are redefined as home and residence services and will be used for patients seen at home or in domiciliary or boarding care.

  • The section on consultations was edited for the 2023 CPT book. Codes 99241 and 99251 have been deleted. Consultations are defined as services provided at the request of another physician, other qualified healthcare professional, or a source who is qualified to recommend care for a condition or problem. The consultant may initiate diagnostic or therapeutic services. The consultant's opinion must be communicated in writing to the professional requesting the consult.

The hope is that these changes will be able to reduce some of the burden that physicians wrestle with and will be considered a positive development for the task of coding.


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