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New Evaluation & Management (E/M) Code Updates for 2023

Medical Billing

Disclaimer: This blog article was written by an AdvancedMD partner. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of AdvancedMD.
New Evaluation and Management

AMA has published updates to Evaluation & Management (E/M) codes for 2023 and this time the focus is primarily on inpatient services. As a recap of changes in recent years, in 2021 we saw a significant change in the way records for office visits are coded. Until 2021, all office visit codes required the providers to document the level of history and the level of physical examination for proper selection of the E/M code. The major change that we saw in 2021 was documentation of history, and the physical exam was changed to only a medically necessary requirement. AMA also expanded the concept of time based coding where the level of E/M can now be selected either based on the level of medical decision making or the total time spent with the patient. Another addition was the introduction of the add-on code +99417 for prolonged services which can be billed with either 99205 or 99215 if the total time spent exceeds the time requirement for these two codes.

Fast forward to 2023, and now similar changes have been made to the CPT codes for inpatient services including initial hospital care (H&P), observation care, and subsequent hospital care (Progress Notes). The primary objective of these changes is to bring consistency in leveling the code not just for the office visits but also for other similar services such as inpatient admissions, subsequent hospital visits, observation care services, and a few other areas such as skilled nursing care and home care services.

These services now do not have the history and physical examination as the key components for code selection. Rather, it is the Medical Decision Making alone that drives the level of code to be billed. Additionally, time can also be used for coding these services.  A new code +99418 has been introduced which can be used for capturing the additional time spent by the provider and this code can be billed along with CPT codes 99223, 99233 and 99236 if the overall time spent exceeds the requirements for these codes.

2023 Code Updates

The following are the most important updates to CPT codes for inpatient services:

  • CPT 99217 which was used for patients that were discharged from observation status on other than the initial observation day is now deleted. The alternative codes to be used are CPT 99238 or 99239 which are currently used for the regular discharge services from inpatient care.
  • In a similar context, initial observation care CPT codes 99218, 99219, and 99220 have been deleted and the alternative codes would be the initial hospital care codes which are 99221, 99222 or 99223.
  • The third set of codes for subsequent observation care CPTs 99224, 99225, and 99226 have been deleted and these would be now reported using the subsequent hospital care codes 99231, 99232 or 99233.

Guideline Updates for Inpatient Services

As far as guidelines are concerned, these changes are related to initial service versus subsequent. This update essentially means that only one provider from the same specialty or subspecialty can report the initial service. However, if there are more than one provider caring for the patient and each of these providers is from a different specialty, they can both report the initial service code during this hospital stay. This applies to both observation as well as inpatient services.

The next important guideline to talk about is the documentation of history and physical examinations. These two components were an essential part of code selection until 2022.  However, from Jan. 2023, documentation of history and physical exams are not a required component for leveling the E&M code. It is left to the provider’s discretion on how much to document and what to document as long as it is deemed medically necessary. This is a similar update to what happened to the office visit codes in 2021.

The 8-Hour Rule for Observation Services

Even though the CPT codes for observation have been deleted and merged with inpatient codes, CMS has retained the 8-hour rule without any changes.

  • For a patient who stays for less than eight hours, we would report the CPT codes for inpatient services only: 99221, 99222 or 99223.
  • If the patient stays for more than eight hours but is discharged on the same calendar date, we would need to report the same day admit and discharge codes: 99234, 99235 or 99236.
  • If the patient ends up staying more than eight hours but the discharge spans to the next calendar date, we would report the initial hospital services codes on the first day when the patient was brought in and additionally 99238 or 99239 on the second calendar date for the discharge services. Documentation of both the services is separately required in such cases.

E&M Updates to Other Categories

Apart from inpatient services, there are other areas where AMA has introduced certain changes to codes and provided the updates for 2023.  Listed below is a brief summary of these changes.

Nursing Facility Services

  • Time requirement for CPT 99309 has been changed from 25 minutes to 30 minutes.
  • Time requirement for CPT 99310 has been changed from 35 minutes to 45 minutes or more.
  • Prolonged care codes +99418 for commercials OR G0317 for Medicare can be used when the time exceeds 85 minutes or more.
  • The annual nursing facility assessment code 99318 is deleted. You should instead use the subsequent nursing facility care codes (99307-99310) for this service if performed.
  • Medical Decision Making: A new term “Multiple morbidities requiring intensive management” has been added for a high level of MDM type. Please see the snapshot below for the complete description of this.

Emergency Department Services

  • CPT code 99281 (level 1 ED visit) is revised to describe an ED visit for the E/M of a patient that may not require the presence of a physician.‍
  • CPT 99282 MDM requirement changed from “low” to “straightforward” complexity.
  • CPT 99283 MDM requirement changed from “moderate” to “low” complexity.
  • CPT Code 99284 is for “moderate” MDM.
  • CPT Code 99285 is for “high” MDM.
  • There is no distinction between new and established patients for ED services.
  • Time may not be used to select level of E/M for ED services – only MDM may be used.
  • Physician convenience – if a patient is seen in the ED for the convenience of the physician, the office or other outpatient service codes 99202-99215 would be reported – not the ED codes.


  • The E/M codes 99241 and 99251 have been deleted.

Domiciliary, Rest Home, or Custodial Care Services

  • CPT Codes 99324, 99325, 99326, 99327, 99328 for New patient assisted living facility have been deleted. Alternate codes would be home or residence services codes 99341, 99342, 99344, 99345.
  • CPT Codes 99334, 99335, 99336, 99337 for Established patient assisted living facility have been deleted. Alternate codes would be home or residence services codes 99347, 99348, 99349, 99350.

‍Prolonged Care Services

  • The E&M codes 99354-99357 have been deleted for outpatient prolonged services. Alternate code for outpatient prolonged services now would be code + 99417.
  • The E&M codes 99358-99359 have been deleted for inpatient prolonged services. Alternate code for inpatient prolonged services now would be code + 99418.

Home and Residence Services

  • The E&M code 99343 has been deleted.
  • Home visit CPT codes can be used for patients from an assisted living facility, group home, custodial care, or residential substance abuse treatment facility.

In a Nutshell

  • Starting 2023, E&M code selection is now primarily based on Medical Decision Making or total time spent with the patient.
  • The E&M code modifications may interfere with the existing workflow, but they actually help healthcare practitioners by reducing the documentation burden on a day to day basis.
  • The focus has shifted more towards medical necessity instead of the history and physical examination as elements of code selection.

About AdvancedMD and Practolytics

AdvancedMD is a technology company that offers practice management systems and electronic health records (EHR) to healthcare facilities and clinicians, enabling them to prosper in their everyday operations.

A company with over 20 years of experience, Practolytics offers comprehensive RCM services to its clients in 26 different states of the United States of America, spanning numerous locations. We assist healthcare professionals in increasing their practice’s revenue while keeping up with the constantly shifting rules pertaining to compliance and insurance-related adjustments. We provide a variety of solutions to assist healthcare businesses with data analysis and interpretation so they can make wise decisions.

AdvancedMD and Practolytics partnered to bring about the best use of state-of-the-art technology and deliver our clients efficient services, while also not compromising on updating the existing regulations. Practolytics has a team of professional billers and coders who strive to deliver the best services by staying on top of the current updates and revisions. They employ proper codes in order to get practices and physicians get reimbursed for their services.

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Practolytics partnered with AdvancedMD in 2013 to create a one-stop solution for all the medical billing, practice management, patient management, and revenue cycle management activities a healthcare practice need to carry out. A Platinum partner amongst 850+ billing companies, Practolytics is a 20+ year-old healthcare technology and revenue cycle management services company providing medical billing service solutions to 180+ practices of all sizes spreading across 31 states and serving more than 28 critical specialties. Practolytics with support from AdvancedMD billing software processes more than 2.5M claims annually, collecting more than $500M for its clients. End-to-end services include medical billing, medical coding, chart audit, credentialing, eligibility, benefits verification, and preauthorization services. The company’s diverse background in every aspect of healthcare allows it to maximize revenue and consistently deliver optimum results.

Topic: Medical Billing, Revenue Cycle Management

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