Navigating E&M Code Changes


It is expected that the Centers for Medicare & Medicaid Services (CMS) will release a completely revamped version of the evaluation and management (E&M) codes by 2021, particularly for the office visit codes (999201-99205 and 99211-99215).

In addition to the changes to the office visit codes, there were significant changes to the 2023 guidelines. These changes did not match the changes in the 1997 guidelines.

“The purpose of the update is to improve the accuracy of medical billing and coding for E&M visits in order to make them more reflective of current medical practice, to make them less administratively complex, and to reduce practitioner burnout,” said CMS, adding that “this work is critical to reducing practitioner burnout, especially given the COVID-19 outbreak.”

In 2021, a major shift occurred in how we classify office visits, specifically by reevaluating the significance of history and exam as key factors.

Code levels were instead based on medical decision-making (MDM), which was divided into three Categories:

Category 1: includes reviewing and ordering various tests, laboratory studies, and assessments. This requires an independent historian.

Category 2:  independent interpretation; and

Category 3: An external provider is being discussed.

Specifically, the time rules were more flexible now. In particular, the provider did not need to document the time spent on counseling and coordination of care. As long as the time was spent on the same calendar day before and after the patient encounter, it counted towards supporting an E&M code. Code 99210 was also deleted.

Summary of 2023 Changes

Our E&M codes for 2023 were impacted by many of the same rules as for 2021. All consultation services, including hospital inpatient stays (99221-99223 and 99231-99233), emergency department visits (99281-99285), and nursing facility visits (99307-99210), were included in this category.

A Number of Code Sets Were Also More Robustly Consolidated:

  • Inpatient hospital observation codes 99217-99220 were removed, and subsequent hospital care codes 99231-992233 were used in place of hospital observation codes 99217-99220.
  • 99238 and 99239 are hospital discharge management codes used for observation discharges.
  • In 2023, CPT® codes for domiciliary, rest home, and custodial care services (99324-99328, 99334-99337, 99339, and 99340) will be removed. The lowest level nursing facility visit code is 99318 while the home or residence services codes (99341-99345) are used to bill these visits.

As of 2023, level 1 codes (99241 and 99251) will be deleted from Medicare’s database, even though Medicare no longer pays for outpatient consultation services.

Further, the codes “prolonged service with direct patient contact, except for office or outpatient services,” have been eliminated. As a result of the elimination of CPT 99354 and 99355, extended services are now billed with existing add-on codes +99417 when they occur at home or residence. Codes 99356 and 99357 were removed from inpatient, observation, and nursing facility settings, and you now use the new code 99418 to report prolonged services.

The new code 99418 refers to extended inpatient or observation stay with or without direct patient contact beyond primary care requirements.


It appeared that hospital utilization distributions changed more randomly than systematically. For instance, IHV’s shift was higher for 99221 than 99223, resulting in 99222 being used more frequently.

In SHV, the lowest-level code (99231) increased while the highest-level code decreased (99233). There was also an apparent shift from lower two codes to higher two codes for ED services. The error rate for both hospital visits and audits was close to 25 percent, with about three-quarters of audits being properly coded. There was, however, a noticeable rate of under-coding within that error rate, which would suggest a possible financial opportunity. There were 93 percent passes for ED services, which suggest the changes were less impactful or that the medical coding team was more knowledgeable about the changes. As a result of these results, the compliance department should be able to benchmark its performance in the future.