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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that the 'integrated' Outpatient Code Editor (I/OCE) program processes claims for all outpatient 
institutional providers including hospitals that are subject to the Outpatient Prospective Payment System 
(OPPS) as well as hospitals that are NOT (Non-OPPS). Claim will be identified as 'OPPS' or 'Non-OPPS' by 
passing a flag to the OCE in the claim record, 1=OPPS, 2=Non-OPPS; a blank, zero, or any other value 
is defaulted to 1. The OCE not only identifies individual errors but also indicates what actions should be taken 
and the reasons why these actions are necessary. In order to accommodate this functionality, the OCE is 
structured to return lists of edit numbers. This structure facilitates the linkage between the actions being taken, 
the reasons for the actions and the information on the claim (e.g., a specific diagnosis) that caused the action. 
You can find this information in the Medicare website, CMS.Gov, Outpatient Code Editor (OCE). 
 
The rules say that 6.1 Introduction to Edits - As specified in the introduction to the IOCE, one of the three 
major functions provided by the IOCE is the application of edit(s) to identify errors. Each edit is unique, as it 
directly links the reason the edit is returned, any related information at the line or claim level, and the action 
required indicated by the edit disposition. For example, an edit can cause a line item rejection or return 
the claim to the provider. It is possible for a claim to have one or more edits in all 6 dispositions. The 
table below lists and describes each edit disposition. 6.1.1 Edit Dispositions Table Disposition  Line Item 
Denial (LID), Description  There are one or more edits present that cause one or more individual line item to 
be rejected. A line item rejection means that the claim can be processed for payment with some line items 
rejected or Payment. The line item can be corrected and resubmitted but cannot be appealed. 6.2 Edit 
Descriptions and Reason for Edit Generation Table - Edit 49-Service on same day as inpatient procedure-As 
service is reported on the same day as a C status indicator. Edit 18-Inpatient procedure. Reason for Edit 
Generation- A line has a C status indicator and is not on the separate procedure list or A line has a C status 
indicator and is on the separate procedure list, but there are no type T lines on the same day. All other line 
items on the same day as the line with a C status indicator are denied (line item denial/rejection flag = 1, APC 
return buffer) and edit 49 is assigned on all line items. *This is the only edit that can cause one or more days of 
a multiple day claim to be denied, or single day claim with all lines denied. No other edits are performed on 
any lines with edits 18 or 49. Disposition  LID. 
7.1.2 APC Return Buffer Table Status Indicator (SI) N  Non-allowed item or service for OPPS, A-Service not 
paid under OPPS; paid under fee schedule or other payment system and C- Inpatient procedure. You can find 
this information in the CMS.Gov, Integrated OCE (IOCE) CMS Specifications V23.1, Effective April 01, 
2022. 
 
The rules say that HCPCS code 27487- Revise/replace knee joint- C 
HCPCS code 36415- Routine venipuncture- Q4 
HCPCS code 73560- X-ray exam of knee 1 or 2- Q1 
HCPCS code 80048- Metabolic panel total ca- Q4 
HCPCS code 82570- Assay of urine creatinine- Q4 
HCPCS code 84300- Assay of urine sodium - Q4 
HCPCS code 85027- Complete cbc automated- Q4 
HCPCS code 86850- Rbc antibody screen- Q1 
HCPCS code 86900- Blood typing serologic abo- Q1 
HCPCS code 86901- Blood typing serologic rh(d)- Q1 
HCPCS code 87070- Culture othr specimn aerobic- Q4 
HCPCS code 87075- Cultr bacteria except blood- Q4 
HCPCS code 87116- Mycobacteria culture- Q4 
HCPCS code 87206- Smear fluorescent/acid stai- Q4 
HCPCS code 88300- Surgical path gross- Q1 
HCPCS code 88305- Tissue exam by pathologist- Q1 
HCPCS code 88311- Decalcify tissue- N 
HCPCS code 89051- Body fluid cell count- Q4 
HCPCS code 97116- Gait training therapy- A 
HCPCS code 97161- Pt eval low complex 20 min- A 
HCPCS code C1713- Anchor/screw bn/bn,tis/bn- N 
HCPCS code C1776- Joint device (implantable)- N 
HCPCS code G0378- Hospital observation per hr- N 
HCPCS code J0131- Acetaminophen injection- N 
HCPCS code J0690- Cefazolin sodium injection- N 
HCPCS code J1100- Dexamethasone sodium phos- N 
HCPCS code J2704- Inj, propofol, 10 mg- N 
HCPCS code J7030- Normal saline solution infus- N 
HCPCS code J7050- Normal saline solution infus- N 
HCPCS code J7999- Compounded drug, noc- N 
 
You can find this information in Addendum B Final OPPS payment by HCPCS Code for CY 2022. 
 
The rules say that section 1833(t) of the Social Security Act (the Act) as amended by Section 4533 of the 
Balanced Budget Act (BBA) of 1997, authorizes CMS to implement a Medicare PPS for: 
Hospital outpatient services, including partial hospitalization services; The Integrated Outpatient Code 
Editor (I/OCE) accepts all valid CPT and HCPCS modifiers on OPPS claims. Effective for claims with dates of 
service July 1, 2007, and after, the non-Outpatient Prospective Payment System (OPPS) Outpatient Code 
Editor (OCE) will be integrated into the OPPS OCE. This integration will result in the routing of all 
institutional outpatient claims, including non-OPPS hospital claims, through a single integrated OCE 
eliminating the need to update two separate OCE software packages on quarterly basis. Section 1833(t)(1)(B)(i) 
of the Act allows CMS to define the services for which payment under the OPPS is appropriate and the 
Secretary has determined that the services designated to be inpatient only services are not appropriate to be 
furnished in a hospital outpatient department. Inpatient only services are generally, but not always, surgical 
services that require inpatient care because of the nature of the procedure, the typical underlying physical 
condition of patients who require the service, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged. An example of an inpatient only service is CPT code 
33513, Coronary artery bypass, vein only; four coronary venous grafts. The designation of services to be 
inpatient-only is open to public comment each year as part of the annual rulemaking process. Procedures 
removed from the inpatient only list may be appropriately furnished in either the inpatient or outpatient 
settings and such procedures continue to be payable when furnished in the inpatient setting.  
 
There is no payment under the OPPS for services that CMS designates to be inpatientonly services. 
These services have an OPPS status indicator of C in the OPPS Addendum B and are listed together in 
Addendum E of each years OPPS/ASC final rule. For the most current Addendum B and for Addendum 
E published with the OPPS notices and regulations, see http://www.cms.gov/Medicare/Medicare-Fee- 
for-Service Payment/HospitalOutpatientPPS/index.html. 
 
Excluding the handful of exceptions discussed below, CMS does not pay for an inpatient-only service 
furnished to a person who is registered in the hospital as an outpatient and reports the service on the outpatient 
hospital bill type (TOB 13X). CMS also does not pay for all other services on the same day as the inpatient 
only procedure. There are two exceptions to the policy of not paying for outpatient services furnished on the 
same day with an inpatient-only service that would be paid under the OPPS if the inpatient service had not 
been furnished: 
Exception 1: If the inpatient-only service is defined in CPT to be a separate procedure and the other 
services billed with the inpatient-only service contain a procedure that can be paid under the OPPS and that 
has an OPPS SI=T on the same date as the inpatient-only procedure or OPPS SI = J1 on the same claim as 
the inpatientonly procedure, then the inpatient-only service is denied but CMS makes payment for the 
separate procedure and any remaining payable OPPS services. The list of separate procedures is available 
with the Integrated Outpatient Code Editor (I/OCE) documentation. See 
http://www.cms.gov/Medicare/Coding/OutpatientCodeEdit/. 
Exception 2: If an inpatient-only service is furnished but the patient expires before inpatient admission or 
transfer to another hospital and the hospital reports the inpatient only service with modifier CA, then CMS 
makes a single payment for all services reported on the claim, including the inpatient only procedure, 
through one unit of APC 5881, (Ancillary outpatient services when the patient dies.) Hospitals should report 
modifier CA on only one procedure. You can find this information in the Medicare Claims Processing Manual 
Chapter 4 - Part B Hospital (Including Inpatient Hospital Part B and OPPS), 10.1 - Background, 40.1 - 
Integrated OCE (July 2007 and Later), 120.1 - Bill Types Subject to OPPS and 180.7 - Inpatient-only Services. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.