Follow 5 Tips to Solidify Your Inpatient Care Coding
Learn how to accurately report inpatient care, same-day admission and discharge, subsequent services, and discharge codes with CPT® guidelines for proper documentation.

OB/GYN Medical Billing & Coding Alert
Over the past year, you’ve used an updated set of codes to document hospital admission, observation care, and same-day observation and discharge evaluation and management (E/M) services.
These revisions allow you to continue using the same medical decision-making (MDM) elements, with a few additional elements included in the table from 2021 to 2023. These updates, introduced by CPT® for office/outpatient E/M services, help determine the appropriate service levels. You’ve also been applying revised time parameters to determine service levels when applicable.
Now is a great time to review the codes and ensure you’ve applied them correctly. Here are five key steps to follow whenever your ob-gyn admits a patient for inpatient care and provides services throughout their stay.
Understand These Key Definitions Before Reporting Initial Services
At the close of 2022, CPT® eliminated the initial, subsequent, and discharge observation service codes (99218-99220, 99224-99226, and 99217, respectively) and integrated observation services into the new initial and subsequent inpatient care service codes. The updated initial service codes are as follows:
- 99221: Initial hospital inpatient or observation care per day, requiring a medically appropriate history and/or examination and straightforward or low-level medical decision-making. If using total time to select the code, 40 minutes or more must be met.
- 99222: Moderate level of medical decision-making. A minimum of 55 minutes must be met.
- 99223: High level of medical decision-making. At least 75 minutes must be met.
Before selecting one of these codes, it’s important to understand the following definitions:
- Per Day: According to CPT®, “per day” refers to the time spent on the encounter date, as defined by the calendar date. Even if a visit spans two calendar dates, it is considered one service and reported on a single date. The 2024 CPT® guidelines clarify that a single code should be reported for multiple visits on the same calendar date and in the same setting. When using MDM for code selection, aggregate the MDM across the entire calendar date. If using time for selection, sum the time for the entire day using the time reporting guidelines.
- Observation: This refers to “ongoing short-term treatment, assessment, and reassessment” to determine whether the patient will require inpatient treatment or can be discharged. According to Novitas, observation generally does not exceed 24 hours, and services typically do not extend beyond 48 hours unless in rare, exceptional cases.
- Place of Service (POS): The POS code should reflect the patient’s location. The Centers for Medicare & Medicaid Services (CMS) classifies observation services as outpatient, so for Medicare claims, POS code 22 (Campus—outpatient hospital) should be used for outpatient services. If observation services transition into inpatient admission, POS code 21 (Inpatient hospital) should be used.
When to Report Subsequent Services
After a patient has received any professional services from the physician, another qualified healthcare professional (QHP), or another physician or QHP of the same specialty and subspecialty within the same group practice during the inpatient or observation stay, you can report one of the following codes for subsequent inpatient care per day, according to CPT® guidelines:
- 99231: Subsequent hospital inpatient or observation care, per day, requiring straightforward or low-level medical decision-making. If using total time for code selection, at least 25 minutes must be met.
- 99232: Moderate level of medical decision-making. A minimum of 35 minutes must be met.
- 99233: High level of medical decision-making. At least 50 minutes must be met.
CPT® guidelines also recognize advanced practice nurses (APNs) and physician assistants (PAs) working in the same specialty and subspecialty as the physician when collaborating in the same group practice.
How to Report Same-Day Admission and Discharges
For inpatient care services when a patient is admitted and discharged on the same day, the following codes should be used:
- 99234: Hospital inpatient or observation care, including admission and discharge on the same date, requiring straightforward or low-level medical decision-making. At least 45 minutes must be met.
- 99235: Moderate level of medical decision-making. A minimum of 70 minutes must be met.
- 99236: High level of medical decision-making. At least 85 minutes must be met.
For Medicare or those following Centers for Medicare & Medicaid Services (CMS) rules, a key requirement for assigning these codes is documenting the patient’s stay duration. To bill 99234-99236, you must show that the patient’s observation or inpatient stay was more than eight hours but less than 24 hours. If the stay exceeds 24 hours, use 99221-99223 for the initial day of inpatient care instead.
How to Report Discharges
To document discharge services provided by your physician or QHP, use the following time-based codes:
- 99238: Hospital inpatient or observation discharge day management, 30 minutes or less on the encounter date.
- 99239: More than 30 minutes on the date of the encounter.
Before reporting these codes, ensure you follow these CPT® guidelines:
- Document all services provided on the discharge day, including the provider’s final examination of the patient, discussion of the hospital stay, instructions for continuing care to caregivers, and preparation of discharge records, prescriptions, and referral forms.
- Do not report discharge services with initial inpatient or observation care service codes (99221, 99222, 99223). Instead, use 99234, 99235, or 99236 for discharges on the same day as admission.
- Only report services provided by the physician or QHP responsible for discharge. If other providers provide services on the discharge day, they should report the appropriate code from the subsequent category.
How to Count Time Correctly
When using time-based codes, remember the following advice: Time is often underreported for inpatient E/M services. Providers may overlook documenting time spent on the unit/floor outside face-to-face interactions with the patient and family. Ensure that all time spent, including non-face-to-face activities, is accurately recorded to reflect the total time for service selection.
Expert E/M Coding and Claim Management at BillingFreedom
At BillingFreedom, we leverage expert knowledge of E/M codes to ensure precise documentation and accurate claim submissions. Our team stays updated on CPT guidelines for inpatient and observation care, ensuring the correct use of codes such as 99221-99223 for initial services, 99231-99233 for subsequent care, and 99234-99236 for same-day admission and discharge.
We carefully document all aspects of patient care, including medical decision-making and time-based requirements, to maximize reimbursement and minimize denials.
Our expertise in navigating complex coding rules, including those for discharge services and time reporting, ensures smooth claim approval.
With a deep understanding of medical billing protocols, BillingFreedom consistently achieves fast and accurate reimbursements, ensuring optimal financial outcomes for healthcare providers.
For more details about our exceptional ob/gyn medical billing services, please don't hesitate to email us at info@billingfreedom.com or call us at +1 (855) 415-3472.
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