The 2023 AMA CPT code set brought us many revisions to the E/M guidelines. The good news is that we get to use the same set of guidelines for all E/M services!  One of the more significant changes was to the inpatient and observation services codes.  The observation services codes (99217-99226) were deleted and the code descriptors for inpatient services (99221-99233) were revised to include observation services. This caused us to question what reporting observation services would look like for Medicare. Until recently we had not seen any updates from Medicare on how to process observation services, however, they have now offered some guidance:

  • Observation care codes are billed only by the admitting physician
  • All other practitioners providing care to patients receiving observation services bill office and other outpatient visits, codes 99202-99205 or 99211-99215
  • New vs. established patient rules apply
  • Modifier AI is not appending to initial observation care services
  • All observation services claims should be reported with place of service code 22 (POS 22)


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