CPT Code 99304: Initial nursing facility care billing guide

Key takeaways

CPT Code 99304 covers initial nursing facility care for new or established patients requiring straightforward or low medical decision making (MDM)

Code selection is based on either MDM complexity or total time on the date of service (minimum 25 minutes for 99304)

The 2025-2026 national average Medicare rate for 99304 is approximately $72-85, varying by geographic location via GPCI adjustments

Pabau’s claims management software helps reduce 99304 claim denials by validating place of service codes, MDM documentation, and provider credentials before submission

CPT Code 99304 is the billable code for initial nursing facility care, per day, when a patient’s presenting problems require straightforward or low medical decision making (MDM). It applies to both new and established patients.

Coverage begins on the first day a physician or other qualified healthcare professional provides care in a skilled nursing facility (POS 31) or nursing facility (POS 32).

This reference guide covers the official descriptor, MDM and time-based selection criteria, and the 2025-2026 Medicare fee schedule and RVU data. It also covers documentation requirements, the full skilled nursing facility CPT code family (99304-99310 and 99315-99316), and the denial patterns billing teams hit often.

CPT Code 99304: Definition and official descriptor

According to the AMA’s CPT code set, CPT Code 99304 is used for initial nursing facility care when the presenting problems are of low complexity. The official descriptor reads: Initial nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low medical decision making.

This code applies to both new and established patients on the first day a physician or other qualified healthcare professional provides care in a nursing facility setting. It sits at the entry level of the three-code initial care group alongside 99305 (moderate MDM) and 99306 (high MDM).

Providers who split their week between office hours and nursing facility rounds, a common model for direct primary care practices, bill 99304 only for the facility side of that work.

Medical decision making (MDM) requirements

MDM-based code selection for CPT Code 99304 requires that the encounter meet the criteria for either straightforward or low complexity, based on three elements:

• The number and complexity of problems addressed
• The amount and complexity of data reviewed
• The risk of complications, morbidity, or mortality

For straightforward MDM, the encounter typically involves one self-limited or minor problem. Data review is minimal or none, and the risk of complications is also minimal.

For low MDM, the encounter involves two or more self-limited or minor problems, one stable chronic illness, or one acute uncomplicated illness. Data review is limited, such as ordering or reviewing tests, or interpreting results independently. Risk is low, such as OTC medications or minor elective procedures.

A standardized tool such as a falls efficacy scale can support the risk element of the MDM record for a newly admitted nursing facility patient.

The MDM level is determined by meeting criteria in at least two of the three elements. You need two out of three at the required level, not all three. This is a frequent misunderstanding that leads to undercoding or inconsistent documentation.

For structured MDM documentation support, digital clinical forms can help providers capture the required elements at the point of care.

Time-based billing rules

Since the 2023 E/M guideline revisions from CMS and the AMA, time-based billing uses total time on the date of service. This is not just face-to-face encounter time, which is a critical distinction. Activities that count toward total time include:

• Preparing to see the patient (reviewing prior records, test results, notes)
• Obtaining and reviewing a history
• Performing the physical examination
• Counseling the patient, family, or caregiver
• Ordering tests or medications
• Documenting the clinical note
• Independently interpreting test results

Travel time and time performing separately billed procedures do not count. The minimum total time threshold to support CPT Code 99304 via time-based billing is 25 minutes. For comparison, 99305 requires 35 minutes and 99306 requires 50 minutes.

When billing by time, the note must explicitly state the total time spent on the date of service. A note that documents only the face-to-face duration will not support time-based selection under current guidelines. Check CMS’s published time thresholds and payment details before submitting a claim.

Documentation requirements

Documentation must support the selected code level, whether MDM or time-based. The following elements are required in the medical record for a CPT Code 99304 encounter.

• Medically appropriate history and/or physical examination relevant to the presenting problems
• MDM documentation (problems addressed, data reviewed, risk assessment) or explicit total time statement
• Date of service and facility name confirming nursing facility or SNF setting
• Rendering provider name, credentials, and signature
• At least one ICD-10-CM diagnosis code supporting medical necessity
• Place of service code (POS 31 for SNF, POS 32 for nursing facility)
• Assessment and plan with clinical rationale for decisions made

Post-2023, you no longer need to document a specific number of history elements or exam bullet points. The note must demonstrate that a medically appropriate history and/or exam was performed, but the level of detail is driven by clinical judgment. What still matters is the MDM narrative or the time statement.

Providers using structured client records can build custom templates that prompt for each required documentation element before the note is finalized. This reduces the risk of incomplete records reaching the billing queue.

For patients recovering from a stroke, pairing the note with a structured plan such as a CVA nursing care plan keeps clinical goals and billing documentation aligned.

Medicare reimbursement and fee schedule, 2025-2026

CPT code 99304 reimbursement under the 2026 Medicare Physician Fee Schedule (MPFS) averages approximately $72-$85 nationally, depending on geographic location. CMS adjusts rates annually and varies them by locality through Geographic Practice Cost Index (GPCI) adjustments. The figures below reflect the 2025-2026 fee schedule. Verify current rates against the CMS fee schedule lookup before billing.

RVU breakdown

Medicare payment is calculated using the relative value unit (RVU) formula. Payment = (Work RVU x Work GPCI + PE RVU x PE GPCI + MP RVU x MP GPCI) x Conversion Factor. The 2026 conversion factor is set annually by CMS. Use the FastRVU 2026 lookup tool to retrieve current work, practice expense, and malpractice RVU values by locality.

Practices in high-cost urban localities (for example, San Francisco or New York City) typically receive higher payments than rural areas due to elevated GPCI values. A practice billing 99304 in a high-GPCI locality may receive $10-15 more per encounter than the national average.

Over the course of a month of nursing facility visits, that difference accumulates meaningfully. A sound medical practice billing strategy accounts for these geographic variations when projecting nursing facility revenue.

CPT Code 99304 vs 99305 vs 99306: Choosing the right initial care code

Selecting the correct initial nursing facility care code is one of the highest-audit-risk decisions in nursing facility billing. Upcoding to 99305 or 99306 without documentation to support the higher MDM level is a compliance risk under OIG guidance. The table below clarifies where each code sits.

Many billing teams default to CPT code 99305 for all new admissions because “it’s a new patient.” That logic is incorrect. New-patient status does not determine the code; MDM complexity or time does. A newly admitted patient with a single stable chronic condition and no acute issues supports 99304, not 99305.

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Subsequent nursing facility care codes: 99307-99310

After the initial CPT Code 99304 visit, subsequent encounters at the nursing facility are billed using codes 99307-99310. These are distinct from the initial care codes and should not be confused with them, particularly when a patient is transferred between facilities or re-admitted.

Medicare also sets a minimum visit frequency for subsequent nursing facility care. Practices need at least one visit every 30 days for the first 90 days after admission, then every 60 days after that. This is a federally mandated visit under the once-a-day billing rule in the Medicare Claims Processing Manual, Chapter 12, Section 30.6.13.

A common sequencing error is billing 99304 (initial) for a visit that actually qualifies as a subsequent encounter. The distinction is not about how long ago the patient was last seen. It is whether the visit is the first encounter of that nursing facility admission, generally within the first 30 days of admission.

A patient readmitted after a hospital stay starts a new admission, and the first visit of that new stay is billed as initial care again. Review the admission date and visit history before using an initial care code.

For background on how CPT code categories and structure work more broadly, see the CPT code guide.

Nursing facility discharge management codes (99315-99316)

The nursing facility code family concludes with discharge management codes 99315 and 99316. These cover the provider’s work on the day of discharge, including the final examination, discharge instructions, medication reconciliation, and post-discharge care coordination.

Providers can send patients home with practical resources, such as a healthy grocery list, to support nutrition during recovery.

Unlike the 99304-99310 series, discharge management codes are time-based only. The note must document the total time spent on discharge activities on that date. Billing teams should verify the AAPC’s current code descriptions via the AAPC Codify CPT lookup to confirm any annual descriptor updates before processing claims.

Place of service and modifiers

Submitting the correct place of service code is non-negotiable for CPT Code 99304. CMS confirms two applicable POS codes for nursing facility services:

• POS 31: Skilled Nursing Facility (SNF) – for facilities providing intensive nursing and rehabilitation services following a qualifying hospital stay
• POS 32: Nursing Facility – for intermediate care or long-term care facilities not meeting SNF criteria

Submitting 99304 with POS 11 (office) or POS 21 (inpatient hospital) will result in automatic denial. The POS code must reflect where the service was actually delivered, not where the provider is based.

For modifiers, the most relevant with CPT Code 99304 are:

• AI: Principal Physician of Record. Per the Medicare Claims Processing Manual, Chapter 12, Section 30.6.13.A, the principal physician of record must append modifier AI to the initial nursing facility care code. This is a national Medicare Part B requirement, not a MAC-specific option.
• 25: Significant, separately identifiable E/M service on the same day as a procedure. Append it when a separately billable procedure is performed during the same visit.
• 95: Synchronous telemedicine service, appended when nursing facility care is delivered by real-time audio-video technology. Bill with POS 02 (telehealth, patient not in their home) or POS 10 (telehealth, patient in their home) instead of POS 31/32. Modifiers GT and GQ are largely obsolete here. GT now applies only to Critical Access Hospital Method II institutional claims. GQ is limited to the Alaska/Hawaii asynchronous telehealth demonstration project.

Modifier AI is a national Medicare Part B requirement. Modifiers 25 and 95 can carry additional documentation rules that vary by Medicare Administrative Contractor (MAC) jurisdiction. Coders should confirm current requirements with their MAC before routinely appending discretionary modifiers.

Pabau’s compliance management software can flag modifier requirements during the billing workflow, so claims are not submitted with missing or incorrect modifiers.

Common billing errors and claim denial reasons

Denials for CPT Code 99304 cluster around a small number of recurring errors. Recognizing them before submission is far cheaper than working appeals.

• Upcoding MDM level: Billing 99305 or 99306 when documentation only supports straightforward or low MDM. High-frequency audit target under OIG work plans for nursing facility physicians.
• Incorrect or missing POS code: Submitting POS 11 or POS 21 instead of POS 31 or 32. Results in automatic edit-level denial.
• Incomplete documentation: Notes that describe a plan without documenting the problems addressed, data reviewed, or risk level. MDM documentation must cover at least two of the three elements.
• Initial vs subsequent mismatch: Using 99304 for a visit that should be coded as 99307-99310. This happens when the encounter is not actually the first visit of that nursing facility admission. Initial care codes apply to the first encounter of a stay, generally within the first 30 days of admission. Later visits during the same stay are subsequent care.
• Duplicate billing with hospital codes: Billing 99304 on the same date as an inpatient hospital code (99221-99233). This applies only when the patient was not actually discharged and re-admitted to a nursing facility on that date.
• Provider credentialing gaps: Submitting claims under an NPI that is not enrolled with the payer or lacks facility-specific credentialing. The claim may pay initially and then be recouped on post-payment audit.

For practices managing high volumes of nursing facility billing, a HIPAA compliance checklist provides a useful audit baseline. It covers the broader documentation standards that underpin E/M claim integrity. Maintaining HIPAA-compliant medical record documentation also ensures that records are retrievable in the format payers require during audits.

How practice management software supports nursing facility billing?

Most denials for CPT Code 99304 are preventable. The checks that catch them happen too late when teams rely on manual processes:

• POS validation
• MDM documentation review
• Provider enrollment verification

This is especially true for general practice teams splitting documentation between office visits and nursing facility rounds. Manual re-entry is the most common source of mismatched codes there.

Pabau’s claims management software integrates billing validation into the documentation workflow, so potential errors surface before a claim leaves the practice. The system can:

• Surface mismatches between the documented MDM level and the selected code
• Flag incorrect POS entries
• Generate reports on nursing facility code mix (99304 vs 99305 vs 99306) for audit readiness

Where providers use Pabau’s practice management software, clinical notes and billing data stay connected in one record. This avoids the manual re-entry step where most coding errors originate.

Connect nursing facility documentation and billing in one system

Pabau's practice management software links clinical notes directly to claims, so MDM documentation, POS codes, and provider credentials are validated automatically before a nursing facility claim goes out the door.

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Conclusion

CPT Code 99304 is straightforward in principle but consistently under-documented in practice. The combination of MDM complexity selection, total-time documentation, POS accuracy, and provider credentialing creates multiple points where a claim can fail.

Pabau’s claims management tools connect clinical documentation directly to billing validation, catching the most common 99304 denial triggers before submission. To see how Pabau handles nursing facility E/M coding workflows in practice, book a demo with the team.

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Frequently asked questions