CPT code 99217 was previously used to bill observation discharge services, but it has been deleted for 2025. This critical change, part of comprehensive 2023 E/M service revisions, means 99217 is no longer valid, and its use will result in claim denials.
Today, providers must use replacement codes like 99238, 99239, or 99234–99236. The correct code depends on how long the patient stayed and whether admission and discharge happened on the same day. These E/M updates affect not only observation discharge but all observation care CPTs.
This article explains how to code observation discharges correctly in 2025, detailing which codes to use, what payers expect, and how to prevent denials. Staying informed on these 2025 CMS guidelines is crucial for accurate claims.
What Was CPT Code 99217?
In the past, CPT 99217 described discharge management from observation care. It included the final exam, discharge instructions, and documentation. Physicians billed it on the CMS-1500 form for the day the patient left observation. But since 2023, the code is retired and not accepted by payers in 2025.
Understanding the 2023 E/M Revisions: Deletion of All Observation CPT Codes
In 2023, CPT and CMS enacted significant revisions to Evaluation and Management (E/M) services. This comprehensive overhaul led to the deletion of *all* initial, subsequent, and discharge observation CPT codes. Beyond 99217, this included the removal of 99218, 99219, 99220, 99224, 99225, and 99226. The goal was to streamline coding by merging observation services into existing standard inpatient E/M codes.
Detailed Descriptions of Formerly Used Observation Codes: 99218, 99219, 99220
Prior to their deletion, codes 99218, 99219, and 99220 were specifically designated for initial observation care:
- CPT 99218: This code represented initial observation care for patients requiring a low level of complexity, often involving a straightforward medical decision-making process.
- CPT 99219: Used for initial observation care of moderate complexity, indicating a more involved medical decision-making process, often with a broader range of diagnoses or management options.
- CPT 99220: This code was reserved for initial observation care of high complexity patients, reflecting extensive medical decision-making, high risk of morbidity/mortality, and/or complex diagnostic/management problems.
Similarly, CPT codes 99224-99226 described subsequent observation care services, each correlating to a different level of medical complexity. With their deletion, a new structure of E/M codes now applies to all observation care scenarios.
Mapping Deleted Observation CPT Codes to Their Replacements
To ensure accurate billing, it’s essential to understand which current codes replace the previously deleted observation CPTs:
| Deleted CPT Code | Description (Previously) | Replacement Codes (Current) |
|---|---|---|
| 99217 | Observation Care Discharge Services | 99238, 99239, 99234-99236 |
| 99218 | Initial Observation Care, Level 1 | 99221 |
| 99219 | Initial Observation Care, Level 2 | 99222 |
| 99220 | Initial Observation Care, Level 3 | 99223 |
| 99224 | Subsequent Observation Care, Level 1 | 99231 |
| 99225 | Subsequent Observation Care, Level 2 | 99232 |
| 99226 | Subsequent Observation Care, Level 3 | 99233 |
Observation Status vs. Inpatient Status: A Key Distinction
While the CPT codes for observation management now align with inpatient E/M codes (e.g., 99221-99223 for initial care), it is crucial to understand that the patient’s *status* (observation vs. inpatient) remains distinct for billing and coverage purposes.