What is the difference between inpatient and outpatient ICD-10?

June 14, 2023

Medical coding and billing are undoubtedly highly complex processes, given the precision and ongoing updates that the experts must follow. Every step in the billing and reimbursement process is done with great care because the precision of the procedure determines the kind of money that supports the practice of the entire organization. The professional must accurately assign each patient's numeric and alphanumeric codes to record their conditions in healthcare data.

Similar to how inpatient and outpatient is one of the critical factors that professionals must consider when coding and billing a patient's diagnosis procedure, as the codes vary depending on the specific condition or pre-condition that the patient faces. So accurate coding ensures proper patient treatment and generates income for the organization. Thousands of professionals in billing and coding ensure that each step is carefully planned out and that claims are submitted on time.

The article will define the words used in healthcare and explain the distinctions between the inpatient and outpatient coding systems.

Outpatient Coding

Although the CPT or HCPCS coding system reports treatments, outpatient coding is based on the ICD-10-CM diagnostic codes for billing and proper payment. The CPT and HCPCS codes for services heavily rely on documentation.

Who is Outpatient?

Healthcare organizations use the word "outpatient" to refer to individuals who receive hospital care but do not stay beyond the allotted 24-hour period or who sometimes receive admission even if they linger longer than 24 hours. Since the doctor does not record their admission as an inpatient who stays in the hospital longer than 24 hours, they are typically released within that time.

Inpatient Coding 

While ICD-10-PCS is used as the procedural coding system, billing and proper reimbursement include ICD-10-CM diagnostic codes. Medicare utilizes the Inpatient Prospective Payment System (IPPS) as its reimbursement method for hospital inpatient services.

Who is Inpatient? 

Patients formally admitted to hospitals for more than 24 hours are known as inpatients. These are typically recognized by a doctor's order and receive an inpatient record. The patients' stays in a hospital, nursing home, rehabilitation center, or long-term care facility are made possible by healthcare organizations. A patient isn't automatically labeled an inpatient merely because they spend the night in the hospital.

Key Differences Between Inpatient Coding and Outpatient Coding 


The variance in their reporting codes is one of the critical distinctions between the two phrases. For instance, the coding process experts use to describe the diagnosis and overall medical record for inpatients is known as "inpatient coding." For inpatients, the clinicians use both ICD-10-CM and ICD-10-PCS codes. The inpatient hospital context is specifically captured by ICD-10PCS, which leaves out several routine processes, including test findings and instructional sessions not exclusive to inpatient hospital stays.

On the other hand, outpatient utilizes CPT or HCPCS codes exclusively for the patient record and services provided to the outpatient, while inpatient uses ICD-10-CM codes for diagnosis.

Length of Stay

Since there is already been mentioned that inpatient and outpatient differ from each other based on their stay and duration time at the hospital, their length of stay also influences the variety of codes. Inpatient coding is more complex than outpatient since the patient's medical record requires the coding and documentation of comprehensive services provided by the hospital over an extended period.

Furthermore, the inpatient medical coding services include the present on admission (POA) which refers to the patient conditions that the patient held when the physician placed the order of entry. Similarly, the prime objective of the present admission term is to distinguish the needs of the inpatient when he gets the admission order and the changes and situations that occur during his stay at the hospital.

Signs and Symptoms 

Signs and symptoms are other critical components of the diagnosis process that should be kept from inpatient coding. However, inpatient coders may assign additional signs and symptoms or specific suspected illnesses when the doctor does not provide a clear-cut diagnosis. However, the condition should be categorized as established and existing if it still needs to be clarified at discharge time.

On the other hand, many outpatients lack a firm diagnosis. Outpatient coders cannot add conditions or code diagnoses that are not supported by the test or are confident, in contrast to inpatient coders. The terms listed below highlight some of the ambiguous diagnoses:

  • Probable
  • Suspected
  • Questionable
  • "Rule out"
  • Differential

Moreover, the outpatient setting includes the coders who can use the signs and symptoms of their visiting patients as the high degree of certainty of diagnosis, or their abnormal test results can also appear to them as the certainty of conditions to report. However, the coders must consult with the healthcare providers to make the definitive diagnosis to code based on their patient's current needs and new results.


The patients ' responsibility may be Medicare copayments and reimbursements, which are subject to numerous laws and regulations. Due to the distinction between inpatient and outpatient coding services, which Medicare pays, outpatient services are covered by Medicare Part B. In contrast, inpatient coding services are reimbursed by Medicare Part A or hospital insurance.

Medicare Severity-Diagnosis Related Groups (MS-DRGs) are frequently employed for coding inpatient treatments. Patients are categorized using DRGs according to their diagnosis, course of treatment, and length of hospital stay. The patient's age and sex, original diagnosis, secondary diagnosis, surgical procedures performed, comorbidities and sequelae, and discharge status are all considered when choosing a DRG. The price and duration of care sessions increase due to complications and comorbidities (CC). The right tools must be used based on ICD-10-CM and PCS codes and guidelines for practical MS-DRG assignments.


Medical coders must acquire a practical understanding of the various codes assigned to specific medical diseases in any circumstance, given the diversity and complexity of the medical coding and billing process. Additionally, they must educate themselves on the guidelines for correctly categorizing inpatient and outpatient medical conditions and the knowledge needed to do so.

Inpatient and outpatient coding require different amounts of time and focus on streamlining the process, which may be misunderstood given the differences in the complexity of their respective functions. Therefore, the organization may efficiently cut costs while enhancing the quality of care if the coders naturally comprehend the differences between inpatient and outpatient coding.

Carlos Diaz
I believe in making the impossible possible because there’s no fun in giving up. Travel, design, fashion and current trends in the field of industrial construction are topics that I enjoy writing about.

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