Answers to Your Questions


Fam Pract Manag. 2003 May;10(5):17-18.

Documenting observation and admission


If I admit a patient to the hospital for observation on day one and as an inpatient on day two, do I have to do another history and physical on day two so that I can submit initial hospital care codes for that visit?


To submit one of the initial hospital care codes (99221–99223) for the services you provide to the patient on day two, you must meet the requirements of those codes. The documentation used to support the level of initial observation care cannot also be used to support the level of initial hospital care, since you provided the services on different dates and are coding them separately. Therefore, the fact that you saw the patient in observation on day one may practically preclude you from coding initial hospital care on day two, since it may obviate the need to repeat certain parts of the history and physical exam that would contribute to the minimum necessary for initial hospital care. For example, to code 99221 you must provide and document a detailed or comprehensive history, a detailed or comprehensive examination, and medical decision making that is straightforward or of low complexity on that date of service.

Note that some hospitals retroactively change the “observation bed” classification to acute care and bill the entire hospitalization as acute care. If your hospital does this, it may cause your claim for initial observation care to be denied.

Defining an E/M service


What exactly is an E/M service? Can you give me some examples?


An E/M, or evaluation and management, service is typically a face-to-face encounter with a patient for the purpose of diagnosing and/or treating one or more acute or chronic problems that the patient has (though there are also codes for preventive E/M services). E/M services typically involve taking a patient’s history, doing a physical exam and exercising medical decision making. These services may also involve counseling and coordination of care. Some examples of E/M services include visits with patients in the home, office, hospital, nursing facility, and emergency department.

NDC numbers on claims


Some insurance companies are requiring that the National Drug Code (NDC) numbers be added to claims to ensure reimbursement or, in some cases, higher reimbursement. Why are they doing this?


In August 2000, the Department of Health and Human Services (HHS) published a final rule on “Standards for Electronic Transactions” that established NDC numbers as the standard medical data code set for reporting drugs and biologics in all standard transactions under the Health Insurance Portability and Accountability Act (HIPAA). To comply with those standards, some insurers may have started requiring NDC numbers on their claims. However, in February 2003, HHS repealed the NDC as the standard medical data code set for drugs and biologics in all but retail pharmacy transactions. At this time, no standard code set for drugs and biologics has been adopted for non-retail-pharmacy transactions. Until a new standard code set for drugs and biologics is adopted for non-retail-pharmacy transactions, insurance companies may continue to require NDC numbers or a combination of HCPCS (level two) codes and CPT vaccine codes for reporting drugs or biologics.

Pharmacologic management


Can you explain the appropriate use of CPT code 90862, “Pharmacologic management, including prescription, use, and review of medication with no more than minimal medical psychotherapy”? Should we use this code when we provide psychiatric counseling with management of medication? Is a psychiatric diagnosis code necessary?


CPT code 90862 should be submitted when you provide any of the following services:

  • Medication management for a patient who is in psychotherapy with a nonphysician colleague (e.g. a psychologist),

  • Effective treatment of a patient’s condition with psychotropic drugs alone,

  • Management of a patient who has an organic type of disorder (e.g., Alzheimer’s) primarily with the use of medication.

To submit 90862, the above services should include evaluating how the medication is affecting the patient, determining the proper dosage level, prescribing medication for the patient for the period of time before the patient is seen again, and noting any drug interactions or adverse drug effects. You would typically submit a mental disorders diagnosis code with this service, since it is commonly used in conjunction with treatment of such disorders. However, this code may also be used in conjunction with other diagnoses, such as Alzheimer’s disease (331.0) or encounter for therapeutic drug monitoring (V58.83).

Note that if you provide more than minimal psychotherapy at this visit, you should report a code for psychotherapy with E/M services instead, such as 90805. You should not code 90862 in addition to an E/M service, since pharmacologic management is included in the E/M service.

Mini Mental Status Exam


Is there a CPT code for performing a Mini Mental Status Exam (MMSE) during an office visit for the purpose of assessing a patient who has memory problems?


No. The physician administration, interpretation and written report associated with the MMSE is included in the E/M service code for the patient encounter. It is not separately codeable. The 1997 documentation guidelines for E/M services reference “brief assessment of mental status including: orientation to time, place and person; recent and remote memory; mood and affect (e.g., depression, anxiety, agitation)” as part of the exam elements for a general multi-system exam.

Kent Moore is the AAFP’s manager for health care financing and delivery systems and is a contributing editor to Family Practice Management. These questions and answers were reviewed by members of the FPM Coding & Documentation Review Panel, which includes: Robert H. Bosl, MD, FAAFP; Marie Felger, CPC; Thomas A. Felger, MD, DABFP, CMCM; David Filipi, MD, MBA, and the Coding and Compliance Department of Physicians Clinic; Lynn Handy, CPC, LPN; Emily Hill, PA-C; Joy Newby, LPN, CPC; P. Lynn Sallings, CPC; and Susan Welsh, CPC.

Conflicts of interest: none reported.

Editor’s note: While this department represents our best efforts to provide accurate information and useful advice, we cannot guarantee that third-party payers will accept the coding and documentation recommended. Because CPT and ICD-9 codes change annually, you should refer to the current CPT and ICD-9 manuals and the “Documentation Guidelines for Evaluation and Management Services” for the most detailed and up-to-date information.



Send questions and comments to, or add your comments below. While this department attempts to provide accurate information, some payers may not accept the advice given. Refer to the current CPT and ICD-10 coding manuals and payer policies.


Copyright © 2003 by the American Academy of Family Physicians.
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