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Observation and Inpatient E/M Coding in 2025: CPT® 99221–99239 Guide

Starting January 1, 2023, the AMA CPT® guidelines merged observation and inpatient E/M codes into one unified structure. As of 2025, physicians and qualified health professionals (QHPs) use the same CPT® code sets for both hospital inpatient and hospital observation services.

This simplification ensures consistent documentation, coding accuracy, and streamlined reimbursement for all hospital-based encounters.

📘 Current CPT® Codes for Observation & Inpatient E/M (2025)

Current CPT® Codes for Observation & Inpatient E/M (2025)
Service Type	CPT® Code Range	Description
Initial Hospital or Observation Care	99221–99223	First encounter (admission).
Subsequent Hospital or Observation Care	99231–99233	Ongoing care after admission.
Same-Day Admission & Discharge (≥8 hrs)	99234–99236	Admit and discharge on same date (≥8 hours total).
Discharge Day Management	99238–99239	Final day of care (time-based selection).

Note: CPT® codes 99218–99220, 99224–99226, and 99217 were deleted and replaced by the unified codes above.

🧠 Choosing the Right Code: MDM or Service Time

E/M level selection for observation and inpatient encounters can be based on either Medical Decision-Making (MDM) or the total service time personally documented by the provider on the date of service.

Medical Decision-Making (MDM)

Complexity of problems addressed
Data reviewed and analyzed
Risk of complications and morbidity or mortality

Service Time Documented by Provider

Includes all physician/QHP work performed on the same calendar date—chart review, counseling, test review, documentation, and care coordination.

⏱️ Time Reference for 2025 E/M Codes

Service Time Reference — 2025 E/M Codes
Code	Service Time	MDM Level	Use
99221	40 min	Straightforward / Low	Initial visit
99222	55 min	Moderate	Initial visit
99223	75 min	High	Initial visit
99231	25 min	Low	Subsequent care
99232	35 min	Moderate	Subsequent care
99233	50 min	High	Subsequent care
99234	45 min	Straightforward / Low	Same-day admit/discharge (≥8 hrs)
99235	70 min	Moderate	Same-day admit/discharge (≥8 hrs)
99236	85 min	High	Same-day admit/discharge (≥8 hrs)
99238	≤30 min	N/A	Discharge (≤30 min)
99239	>30 min	N/A	Discharge (>30 min)

🕗 The 8-Hour Rule Explained

When a patient is admitted and discharged on the same calendar date and the total stay is 8 hours or more, report 99234–99236 (based on MDM or time). If the stay is under 8 hours, use only the initial care code (99221–99223).

The 8-Hour Rule — Example Scenarios
Scenario	Total Time	Code(s)	Explanation
Admit 9 AM → Discharge 3 PM	6 hrs	99221–99223	<8 hrs – initial only
Admit 9 AM → Discharge 6 PM	9 hrs	99234–99236	≥8 hrs – same-day admit/discharge
Admit 11 PM → Discharge 8 AM next day	9 hrs	99221–99223 + 99238/99239	Spans 2 dates – initial + discharge

🧾 Documentation Best Practices

Document admission and discharge times clearly.
Specify total service time or supporting MDM level.
Summarize hospital course, results, and follow-up in the discharge note.
Use correct Place of Service: 21 (Inpatient) or 22 (Observation).
Align provider and facility documentation for consistent billing.

💬 Coding Example

Patient: 68-year-old admitted for CHF exacerbation.
MDM: Moderate (diuretics, diagnostics, risk management).
Duration: 10 AM → 8 PM (10 hours).
Total provider time: 70 minutes.

✅ Code: 99235 (same-day admit/discharge ≥8 hrs, moderate MDM or 70 min)
POS: 22 (Observation)
Diagnosis: I50.9 – Heart failure, unspecified

⚠️ Common Coding Errors

Using 99234–99236 for stays under 8 hours.
Missing or inconsistent admission/discharge times.
Incorrect POS (21 vs 22).
Reporting 99234–99236 and 99238–99239 on same date.
Failing to document total service time when coding by time.

✅ Quick Reference Summary

Quick Reference Summary
Encounter Type	CPT® Codes	Selection Method
Initial Hospital / Observation Care	99221–99223	MDM or Service Time
Subsequent Hospital / Observation Care	99231–99233	MDM or Service Time
Same-Day Admit & Discharge (≥8 hrs)	99234–99236	MDM or Service Time
Discharge Day Management	99238–99239	Service Time

💡 Best Practices for 2025 Compliance

Follow AMA CPT® 2025 E/M Documentation Guidelines.
Verify payer-specific rules (Medicare Advantage, etc.).
Record start/end times for all hospital stays.
Ensure provider and facility documentation match.
Perform internal E/M coding audits regularly.

Telehealth Flexibilities Expire: What Changed on October 1, 2025 — and What’s Next for Providers

Introduction

The telehealth landscape in the United States entered a major turning point on October 1, 2025, as many of the pandemic-era Medicare telehealth flexibilities expired. These flexibilities, first granted during the COVID-19 public health emergency, expanded access to virtual care for millions of Americans and enabled providers to serve patients across geographic and technological boundaries.

Now, with those temporary provisions lapsing, Medicare telehealth rules have largely reverted to pre-COVID standards—but the situation remains fluid, with active congressional discussions about reinstating or extending key waivers.

Here’s a complete guide to what changed, what remains uncertain, and how providers can stay compliant in this new phase of telehealth regulation.

1. Geographic and Originating Site Restrictions Reinstated

As of October 1, 2025, Medicare once again requires that telehealth patients be located in eligible rural or underserved geographic areas at the time of their visit.

The patient’s home no longer automatically qualifies as an approved “originating site” for most non-behavioral telehealth services.
Covered telehealth visits must typically originate from a Medicare-approved facility, such as a physician’s office, hospital, or rural health clinic.

➡️ Impact: Patients in urban and suburban areas may lose access to Medicare-covered telehealth visits unless Congress acts to restore the home-based provisions.

2. Audio-Only Telehealth Narrowed to Behavioral Health

The broad audio-only telehealth allowances (telephone visits) that applied to most services during the pandemic have expired.

As of October 1, only behavioral and mental health telehealth visits can typically be delivered via audio-only communication, and even then, documentation must justify the lack of video capability.
Providers must continue using modifier 93 to designate audio-only encounters.

➡️ Impact: Non-behavioral audio-only visits (e.g., primary care check-ins) are no longer billable to Medicare.

3. Expanded Provider Eligibility Rolled Back

Between 2020 and September 2025, many non-physician practitioners—including physical therapists, occupational therapists, speech-language pathologists, and hospital-based outpatient therapists—were temporarily allowed to bill Medicare for telehealth.

That flexibility expired October 1, 2025.

➡️ Impact: Only core Medicare-recognized practitioners (physicians, NPs, PAs, CNMs, CRNAs, CNSs, clinical psychologists, and clinical social workers) may continue furnishing telehealth.

4. Behavioral Health Requirements Shifted

While behavioral health telehealth remains more flexible than other specialties, a key rule returned October 1:

Patients must have an in-person visit within six months before the first telehealth appointment and periodically thereafter, unless a qualifying exception applies.
Audio-only telehealth remains allowed when clinically appropriate and when patients cannot use video.

➡️ Impact: Mental health and substance-use providers should ensure documentation reflects compliance with in-person visit requirements.

5. Hospital-at-Home Waiver Expired

The Acute Hospital Care at Home (AHCAH) waiver—allowing hospitals to deliver inpatient-level care at home—also ended October 1, 2025.

Hospitals participating in this model had to either discharge home-hospital patients or transition them back to inpatient care unless Congress authorizes a new extension.

➡️ Impact: Health systems that invested in home-hospital programs are now facing operational and reimbursement uncertainty.

6. Medicare Payment and Claims on Hold

Because CMS’s authority to pay for many expanded telehealth services expired alongside the waivers, the agency issued guidance to temporarily hold telehealth claims for services furnished on or after October 1, 2025.

Medicare Administrative Contractors (MACs) are holding claims for approximately 10 business days pending congressional or CMS clarification.
Providers are urged to monitor official CMS communications before resubmitting held claims.

➡️ Impact: Expect short-term payment delays for telehealth visits billed after October 1.

7. What Remains in Place

Not every telehealth policy disappeared. The following remain active or partially protected:

✅ Behavioral and Mental Health Telehealth – Certain flexibilities made permanent by previous legislation continue.
✅ Telehealth for FQHCs and RHCs – These centers may continue billing telehealth visits through early 2026.
✅ POS and Modifier Use – Continue using POS 02 (non-home telehealth) and POS 10 (home telehealth) appropriately.
✅ Audio-Only Modifier 93 – Required for qualifying phone-based services.

8. The Termination Decision: Final or Ongoing?

While many flexibilities technically expired, the termination is not yet fully finalized—and active discussions continue:

Congressional Action Underway: Bills such as the Telehealth Modernization Act (H.R. 5081) propose extending many of the waivers through 2027.
Potential Retroactive Relief: Lawmakers may act to retroactively reinstate certain flexibilities if a budget agreement or healthcare funding bill passes.
CMS in a Holding Pattern: CMS is awaiting congressional direction and may issue further interim guidance to mitigate coverage gaps.

➡️ Bottom Line: The rollback took effect October 1, but the policy landscape remains fluid. Providers should monitor federal updates closely over the coming weeks.

9. Action Steps for Providers

Step	Why It Matters
Verify patient eligibility and originating site status	Avoid denials by confirming compliance with geographic restrictions.
Stay alert for new congressional or CMS updates	Telehealth rules may change again retroactively.
Review payer policies individually	Commercial insurers may maintain broader telehealth coverage.
Educate staff and patients	Communicate which visit types remain covered via telehealth.
Document all telehealth encounters thoroughly	Especially for behavioral health or audio-only cases.

10. Looking Ahead

Telehealth is not going away—but it is entering a new regulatory phase.
The lapse of federal flexibilities highlights the need for permanent telehealth legislation that reflects modern care delivery realities.

Healthcare leaders should continue to:

Engage in advocacy for long-term telehealth reform.
Maintain hybrid models blending virtual and in-person care.
Keep billing and compliance teams updated as policies evolve.

ICD-10 2026 Updates: Chapter-Wise New, Revised, and Deleted Codes

The ICD-10-CM 2026 updates are here, bringing significant changes for healthcare providers, coders, and medical billing professionals. Effective October 1, 2025, these updates include 487 new diagnosis codes, 38 revised codes, and 28 deleted codes, improving clinical specificity and documentation accuracy. In this blog post, we break down the updates chapter-wise for easy reference.

📌 Why ICD-10 Updates Matter

Accurate patient diagnosis coding
Proper billing and reimbursement
Reflecting the latest medical knowledge
Capturing social determinants of health (SDOH)

Staying updated ensures compliance with CMS guidelines and reduces claim denials.

📑 Table of Contents

Chapter 1: Certain Infectious and Parasitic Diseases
Chapter 2: Neoplasms
Chapter 3: Diseases of the Blood and Blood-Forming Organs
Chapter 4: Endocrine, Nutritional, and Metabolic Diseases
Chapter 6: Diseases of the Nervous System
Chapter 7: Diseases of the Eye and Adnexa
Chapter 12: Diseases of the Skin and Subcutaneous Tissue
Chapter 19: Injury, Poisoning, and Certain Other Consequences of External Causes
Chapter 21: Factors Influencing Health Status and Contact with Health Services
Summary of ICD-10 2026 Updates
How Healthcare Providers Can Prepare

🔹 Chapter 1: Certain Infectious and Parasitic Diseases

New Codes: Infestation by Demodex mites, other acariasis
Updated Guidelines: Clarifications on coding HIV disease

🔹 Chapter 2: Neoplasms

New Codes: Malignant inflammatory neoplasm of the breast
Guideline Updates: Minor changes for chemotherapy and other treatments

🔹 Chapter 3: Diseases of the Blood and Blood-Forming Organs

New Codes: Leukocyte adhesion deficiency, functional disorders of neutrophils

🔹 Chapter 4: Endocrine, Nutritional, and Metabolic Diseases

New Codes:
Type 2 diabetes in remission
Primary and secondary hyperoxaluria
Familial hypercholesterolemia
Lipodystrophy and mitochondrial metabolism disorders

🔹 Chapter 6: Diseases of the Nervous System

New Codes:
Primary progressive apraxia of speech
Relapsing-remitting multiple sclerosis
Limb girdle muscular dystrophies

🔹 Chapter 7: Diseases of the Eye and Adnexa

New Codes:
Inflammations of the eyelid
Other orbit disorders
Neovascular secondary angle closure glaucoma

🔹 Chapter 12: Diseases of the Skin and Subcutaneous Tissue

New Codes:
Cutaneous abscess of the flank
Furuncle and cellulitis of the flank
Acute lymphangitis of the flank
Non-pressure chronic ulcers at various sites

🔹 Chapter 19: Injury, Poisoning, and Certain Other Consequences of External Causes

New Codes: 213 codes covering injuries of the flank, contusions, bites, lacerations, and puncture wounds

🔹 Chapter 21: Factors Influencing Health Status and Contact with Health Services

New Codes:
Genetic susceptibility
Family history
Social determinants of health, including utility insecurity

📊 Summary of ICD-10 2026 Updates

Key Highlights:

Chapter 19: Largest updates with 213 new codes for injuries
Chapter 12: 116 new skin and subcutaneous tissue codes
Social Determinants of Health: New codes reflect growing importance in healthcare

💡 How Healthcare Providers Can Prepare

Review chapter-wise updates and identify codes relevant to your specialty
Update EHR systems with new, revised, and deleted codes
Educate staff and coders on changes to reduce errors and claim denials
Monitor billing and reimbursement trends for compliance

✅ Conclusion

The ICD-10 2026 updates introduce significant changes across multiple chapters, improving diagnostic specificity and documentation. Staying current ensures compliance, accurate coding, and smoother medical billing processes.

For the complete list of ICD-10 2026 updates, visit the CMS ICD-10 page.

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