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Coming Soon in 2023: New Changes to Hospital Inpatient and Observation Coding

Hospital codes are getting big revisions in 2023. Jump start your understanding of these changes.

October 2022

By Rupal Trivedi Senior Manager, Physician Services

Significant changes to Evaluation and Management (E/M) codes will be starting Jan 1, 2023 and will include emergency departments, nursing facilities, home visits, and hospital inpatient and observation care services for both new and established patients.

The hospital and observation care subsection has been revised and renamed, with updated guidelines. The new subsection is titled “Hospital Inpatient and Observation Care Services” to indicate the combination of both inpatient and observation services. The definitions of the codes are modified to match the office/outpatient codes by noting a medically appropriate history and/or exam and medical decision making. If the time is an element for the code, the total time must be met or exceeded.


Please see below consolidation, revision and/or deletion of observation codes:

2023 Comparison Chart-3.jpg

Brief important notes to keep in mind

The AMA states for the purpose of reporting an initial hospital inpatient or observation care service, a transition from observation level to inpatient does not constitute a new stay.

There have been slight changes in the guideline language. Though the new subsection title uses the word “and,” bear in mind that the use of the word “or” will be used in the code descriptors in all the codes of the subsections to indicate that they may be reported for either patient status, inpatient or observation.

These changes have also clarified the term “observation status.” New guideline language: “Patients are no longer required to be in a designated observation area. Appropriate reporting of total time if service is continuous before and through midnight.” CPT E/M Companion 2023.

Reach out to a CBIZ professional today at [email protected] or 609-918-0990 if you have any questions regarding your coding process and how we can provide the clinical coding support you need.


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