Coding question

Hospital Inpatient and Observation E/M Levels, by MDM or Time

Every hospital visit code, the decision making tier that supports it, the total time that supports it instead, and what each is worth.

Reviewed August 2026; reflects the 2026 Physician Fee Schedule.
Direct answer
A line such as "1st hosp IP/OBS high 75" on a hospital bill or an explanation of benefits is the hospital's label for CPT 99223, the first day of hospital care at the highest level; the number is the minutes, not the code. Initial hospital inpatient or observation care is 99221 (straightforward or low MDM, or 40 minutes), 99222 (moderate, or 55 minutes), and 99223 (high, or 75 minutes). Subsequent care is 99231 (straightforward or low, or 25 minutes), 99232 (moderate, or 35 minutes), and 99233 (high, or 50 minutes). Admission and discharge on the same date is 99234, 99235, and 99236 (45, 70, and 85 minutes), which Medicare pays only when the patient is in the hospital at least 8 hours that day. Either pathway alone sets the level: the MDM tier or the total time, whichever is higher.
EHR picker labelCodewRVU
1st hosp IP/OBS SF/low 40992211.63
1st hosp IP/OBS moderate 55992222.60
1st hosp IP/OBS high 75992233.50
sbsq IP/OBS SF/low 25992311.00
sbsq IP/OBS moderate 35992321.59
sbsq IP/OBS high 50992332.40

The number in the label is the minute threshold, not the code, and these are physician services billed to Medicare Part B whether the patient is inpatient or in observation.

The full table

Observation and inpatient care merged into one code family in 2023, which is why your picker says "IP/OBS" rather than naming one or the other. Each level is met by the medical decision making tier or by total time on the date of service, whichever gives the higher level.

ServiceCodeMDMTotal timewRVU
Initial care (1st)99221Straightforward or low40 min1.63
99222Moderate55 min2.60
99223High75 min3.50
Subsequent care (sbsq)99231Straightforward or low25 min1.00
99232Moderate35 min1.59
99233High50 min2.40
Admit and discharge, same date99234Straightforward or low45 min2.00
99235Moderate70 min3.24
99236High85 min4.30
Discharge day99238Not applicable30 minutes or less1.50
99239Not applicableMore than 30 minutes2.15

Reading your EHR picker

Quick translations: 1st hosp IP/OBS SF/low 40 is 99221; 1st hosp IP/OBS moderate 55 is 99222; 1st hosp IP/OBS high 75 is 99223; sbsq hosp IP/OBS SF/low 25 is 99231; sbsq moderate 35 is 99232; sbsq high 50 is 99233. Medicare Part A or B? These are physician services, billed to Part B, whether the patient is inpatient or in observation; Part A pays the hospital, not you.

The labels in most systems are compressed versions of the CPT descriptors, which is why they read strangely. "1st hospital IP/OBS care moderate MDM 55 minutes" is 99222. "Sbsq hospital IP/OBS care high MDM 50 minutes" is 99233. The label names both pathways because either one alone supports the code.

The same date admission and discharge trap

The 99234 to 99236 family applies when the patient is admitted and discharged on the same calendar date, and Medicare requires at least 8 hours in inpatient or observation status that day. Under 8 hours, report only the initial care code; there is no separate discharge code for that stay. Over 8 hours, the same date family replaces both the admission and the discharge code, which is why it pays more than either alone.

Time language that holds up: "Total time on the date of service devoted to this patient, including the admission history and physical, ordering and reviewing the workup, coordination of care, counseling, and discharge: 75 minutes."

Time counts more than most people write down

Total time on the date of service includes reviewing records and results before seeing the patient, the encounter itself, ordering, documenting in the record, and coordinating care, but never the time of a separately reported procedure. Hospital days routinely exceed the thresholds; the minutes are simply not written down, which makes them worth nothing.

Check it against your own note

Paste a de-identified hospital note into the Note Coding Assistant and it will apply the MDM tiers and the time thresholds for this family and show which pathway sets the level. The full chapter is Hospitalist Coding.

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