CurrentUnitedHealthcarePolicy 2026R9027A

Hospital observation and inpatient evaluation and management (E/M) coding and reimbursement

Defines UnitedHealthcare Medicare Advantage reimbursement rules for reporting and payment of hospital inpatient and outpatient observation evaluation and management (E/M) services on CMS 1500 and UB04 claim forms, affecting providers submitting claims to UnitedHealthcare Medicare Advantage plans.

Policy Summary

PayerUnitedHealthcare

PolicyHospital observation and inpatient evaluation and management (E/M) coding and reimbursement

Policy CodePolicy 2026R9027A

Change TypeNo material change

Effective Date

Next Review Date

Key ActionProviders must submit accurate claims using the appropriate hospital inpatient or observation E/M CPT codes (and facility G0378/G0379 on UB04 when applicable) and follow the policy's documentation and coding criteria.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

99221-99223initial codes discussed

99231-99233subsequent codes

99234-99236same-date admit/discharge

99238-99239discharge day codes

G0378/G0379

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Coverage Criteria for Hospital Inpatient and Observation E/M Services

Covered when ALL of the following apply:

ALL of the following

Initial hospital inpatient or observation care (CPT 99221-99223) may be reported only by the Admitting/Attending/Supervising Physician or Other Qualified Health Care Professional (QHP) who ordered the hospital outpatient observation services and was responsible for the patient during observation care.
Observation services billed with CPT 99221-99223 must include a Medical Observation Record that contains dated and timed physician orders for observation services, nursing notes, and physician progress notes in addition to any emergency department or outpatient clinic records.
Documentation for initial observation care must meet E/M requirements for history, examination, and medical decision making and must state the stay involves a minimum of 8 hours but less than 24 hours when applicable; identify that the billing physician was present and personally performed the services; and include admission and discharge notes written by the Admitting/Supervising Physician or Other QHP.
Applies when reporting admission-and-discharge codes (99234-99236) and when CMS documentation requirements are referenced.
For patients admitted to observation status for less than 8 hours on a calendar date, CPT 99221-99223 shall be reported only by the Attending/Admitting Physician or Other QHP.
Subsequent hospital inpatient or observation care (CPT 99231-99233) includes all care rendered by the Admitting/Supervising Physician or Other QHP on days other than the initial or discharge date; these codes should be used when a patient remains in observation status for more than two calendar dates.
Other physicians or QHPs who furnish consultations, additional evaluations, or services while the patient is receiving outpatient hospital observation services must bill the appropriate outpatient service codes (not the Admitting Physician’s observation codes).
Observation care discharge services (reported when discharge from observation status occurs on a date other than the date of initial observation) should not be reported if the observation stay is ≥8 hours and <24 hours and the patient is discharged on the same calendar date, per CMS guidance.
If the physician who ordered the initial outpatient observation services admits the patient to inpatient status on the same date the observation began, only the initial hospital visit (inpatient) is reimbursable; the physician may not bill an initial or subsequent observation care code for services on the date of inpatient admission.
For same-day admission and discharge from Observation Care (minimum 8 hours but <24 hours), report the hospital inpatient or observation admission and discharge CPT codes 99234-99236. Medical record documentation must meet E/M requirements, state the stay duration (≥8 and <24 hours), identify the Admitting/Supervising Physician or Other QHP as present and personally performing the services, and show admission and discharge notes authored by that provider.
Hospital inpatient or observation care codes are not separately reimbursable when performed within an assigned global surgical period; they are included in the global package unless appropriate modifiers (e.g., 24, 25, 57) are used and the surgeon meets all criteria for the hospital inpatient or observation code. Refer to UnitedHealthcare Medicare Advantage 'Global Days' Reimbursement Policy for details.
Hospital discharge day management services (CPT 99238, 99239) are face-to-face E/M services reported by the Admitting/Survising Physician or Other QHP for the date of the visit; only one discharge day management service is payable per patient per hospital stay. Other physicians/QHPs should use subsequent hospital care codes (99231-99233) when appropriate.
Facility observation HCPCS codes G0378 and G0379 follow CMS guidelines: G0378 reports units as hours spent in observation (rounded to the nearest hour) and must document observation begin time; observation services are outpatient services and should not be billed concurrently with diagnostic or therapeutic services that are part of a procedure. If observation spans more than one calendar day, all hours must be included on a single line with the date the observation began and reported with the appropriate 076x revenue code.
Report G0379 when observation services result from a direct referral for observation care without an associated ED visit, hospital outpatient clinic visit, critical care service, or hospital outpatient surgical procedure on the day observation services begin; facilities should only report G0379 for direct referrals after evaluation by a community Physician or Other QHP.

Hospital Observation and Inpatient E/M Codes and Billing Thresholds

Hospital observation and inpatient E/M codesmixedCovered

99221-99223	Initial hospital inpatient or observation care (first encounter; includes observation supervision and periodic reassessments).
99231-99233	Subsequent hospital inpatient or observation care (days after initial or discharge date).
99234-99236	Hospital inpatient or observation care including admission and discharge on same date (≥8 and <24 hours).
99238-99239	Hospital inpatient or observation discharge day management (final visit; one payable per stay).
G0378	Facility outpatient observation service — report units as hours (rounded to nearest hour).
G0379	Facility observation service for direct referrals to observation without associated ER or outpatient visit.

Observation duration thresholds

<8 hours (initial encounter)Report initial hospital inpatient or observation care CPT codes 99221-99223 for the first encounter when the stay is less than 8 hours; documentation must state the stay involves 8 hours but less than 24 when applicable and identify the billing Admitting/Supervising Physician or Other QHP as present and personally performing services.

8 to <24 hours (admit and discharge same date)Report CPT codes 99234-99236 when the patient is admitted to and discharged from observation/inpatient care on the same calendar date with a minimum of 8 hours but less than 24 hours; medical record must meet E/M documentation and include presence/personal performance and admission/discharge notes by the Admitting/Supervising Physician or Other QHP.

Discharge on a different dateReport discharge day management CPT codes 99238-99239 when discharge occurs on a date other than the initial date of admission; only one discharge-day management code is payable per hospital stay.

Facility observation hours (G0378)Facilities report HCPCS G0378 in units of hours (rounded to nearest hour) for outpatient observation; if observation spans multiple days, report all hours on a single line with the date the observation began.

Provider Responsibilities and Authorization

Prior Authorization

No prior authorization noted — provider responsibility for accurate claims

No prior authorization requirements are listed in this reimbursement policy; providers remain responsible for submission of accurate claims and should consult enrollee benefit documents for any enrollee‑specific requirements.

Policy does not include prior authorization notations; confirm enrollee benefits for specific requirements.
Providers are responsible for submitting accurate claims using the code(s) that correctly describe services provided.

Key Definitions

Admitting/Supervising Physician or Other Qualified Health Care Professional

Responsible clinicianThe Admitting/Supervising Physician or Other Qualified Health Care Professional who ordered the hospital inpatient or outpatient observation care and was responsible for the patient during the observation stay.

Billing requirementInitial observation care codes (99221-99223) shall be billed only by the Admitting/Supervising Physician or Other QHP who ordered the services and was responsible for the patient; a physician/QHP without admitting privileges but authorized to furnish outpatient observation services may bill these codes.

Documentation of responsibilityMedical record must identify that the admitting/supervising physician or other QHP was present and personally performed the services and that admission and discharge notes were written by that clinician.

Observation Care — E/M services (initiation, supervision, reassessments)

Definition of Observation CareEvaluation and management services provided to patients designated as 'observation status' in a hospital, including initiation of observation status, supervision of the observation care plan, and performance of periodic reassessments.