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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 providers/suppliers must report services correctly. Procedures should be reported with the 
Current Procedural Terminology (CPT) code that describes the services performed. You can find this rule in 
the Centers for Medicare and Medicaid Services, Medicare National Correct Coding Initiative Policy Manual 
for Medicare Services, Chapter I(A). 
 
The rules say that most medical and surgical procedures include pre-procedure, intra-procedure, and post-
procedure work. When multiple procedures are performed at the same patient encounter, there is often overlap 
of the pre- procedure and post-procedure work. Payment methodologies for surgical procedures account for the 
overlap of the pre-procedure and post-procedure work. The component elements of the pre-procedure and post-
procedure work for each procedure are included component services of that procedure as a standard of 
medical/surgical practice. Some general guidelines follow: 
7. If a definitive surgical procedure requires access through diseased tissue (e.g., necrotic skin, abscess, 
hematoma, seroma), a separate service for this access (e.g., debridement, incision and drainage) is not 
separately reportable. Types of procedures to which this principle applies include, but are not limited to, 
-ectomy, -otomy, excision, resection, -plasty, insertion, revision, replacement, relocation, removal or closure. 
For example, debridement of skin and subcutaneous tissue at the site of an abdominal incision made to perform 
an intra-abdominal procedure is not separately reportable. (See Chapter IV, Section H (General Policy 
Statements), Subsection #11 for guidance on reporting debridement with open fractures and dislocations.) 
Outpatient Code Editor (OCE): 
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. 
Integrated OCE (IOCE) CMS Specifications V232.R0 Effective July 01, 2022: 
5.6- Comprehensive APC Processing: 
Effective 1/1/2015 (v16.0), certain high-cost procedures which have an SI=J1 are paid an all-inclusive rate to 
include all services submitted on the claim, except, for services excluded by statute. All allowed, adjunctive 
services submitted on the claim are packaged into the comprehensive APC payment rate (i.e., the status 
indicator is changed to N). Multiple comprehensive procedures, if present on the claim in specified 
combinations, may be assigned to a higher-paying comprehensive APC representing a complexity adjustment. 
Services that are excluded from the all-inclusive payment retain their standard APC and SI for standard 
processing. 
5.7 Device-Intensive Procedure Editing and Processing: 
Effective January 01, 2015 (V16.0), the submission of a device-intensive procedure also requires that a device 
be submitted on the same claim/day. If any device-intensive procedure is submitted without a code for a device 
on the same claim with the same date of service, the claim is returned to the provider (edit 92). Discontinued 
procedures (indicated by the presence of modifier 52, 73 or 74 on the line) are not edited for a missing device 
code. Effective 1/1/2019 (v20.3), certain device-intensive procedures codes are applicable for bypassing edit 92 
if an insertion of a device is not completed (e.g., revision only). For the edit to be bypassed a device procedure 
on the BYPASS_E92_MODIFIER list is reported with modifier CG. For a list of applicable device 
procedures, reference the corresponding bypass column in the DATA_HCPCS table in the quarterly data files. 
Effective January 01, 2016 (V17.0), if there is a terminated device-intensive procedure from a specified list 
reported with modifier 73, the device portion cost of the procedure APC is output by the IOCE with a Payer 
Value Code of QQ. The device portion amount is used by the OPPS pricer program to reduce the APC payment 
rate prior to application of the terminated procedure discount. A unique payment adjustment flag value of 16 
identifies the device-intensive procedure reported with modifier 73. In the event there are multiple terminated 
device-intensive procedures present with modifier 73, the device portion amounts are summed, and the total 
device portion is provided; the payment adjustment flag of 16 is assigned for each terminated procedure. 
Terminated procedure lines present with modifier 73 that may be packaged (SI = N) do not contribute to the 
device portion amount, and a payment adjustment flag is not returned. 
Note: Effective January 01, 2017 (V18.0), the device portion cost for the terminated procedure offset is 
determined at the individual HCPCS code level, regardless of the APC assignment. Some implanted devices 
and some administered substances (SI = H, U), require an implantation or other associated procedure (SI = S, T 
or J1) to be billed on the same claim. If an associated procedure is not present, the claim is returned to the 
provider (edit 38). 
6 Edit Application within the IOCE: 
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  Claim Return to Provider (RTP) 
Description  There are one or more edits present that cause the whole claim to be returned to the provider. A 
claim returned to the provider means that the provider can resubmit the claim once the problems are corrected. 
 
6.2 Edit Descriptions and Reason for Edit Generation Table: 
Edit  92 
Edit Description  Device-intensive procedure reported without device code 
Reason for Edit Generation  A device-intensive procedure is reported without a device code. See Device-
Intensive Procedure Editing and Processing for more information. 
Disposition  RTP 7.1.2 APC Return Buffer Table: 
Status Indicator (SI)  Q2; T-Packaged codes 
Status Indicator (SI)  Q4; Conditionally packaged laboratory services 
Status Indicator (SI)  N; Items and Services packaged into APC rates 
Addendum B.- OPPS Payment by HCPCS Code for CY 2022: 
HCPCS Code  33233; Short Descriptor  Removal of pm generator; SI  Q2 
HCPCS Code  33235; Short Descriptor  Removal pacemaker electrode; SI  Q2 
HCPCS Code  80048; Short Descriptor  Metabolic panel total ca; SI  Q4 
HCPCS Code  85027; Short Descriptor  Complete cbc automated; SI  Q4 
HCPCS Code  85610; Short Descriptor  Prothrombin time; SI  Q4 
HCPCS Code  87070; Short Descriptor  Culture othr specimn aerobic; SI  Q4 
HCPCS Code  87102; Short Descriptor  Fungus isolation culture; SI  Q4 
HCPCS Code  87205; Short Descriptor  Smear gram stain; SI  Q4 
HCPCS Code  87210; Short Descriptor  SSmear wet mount saline/ink; SI  Q4 
HCPCS Code  J0690; Short Descriptor  Cefazolin sodium injection; SI  N 
HCPCS Code  J2001; Short Descriptor  Lidocaine injection; SI  N 
HCPCS Code  J2250; Short Descriptor  Inj midazolam hydrochloride; SI  N 
HCPCS Code  J3010; Short Descriptor  Fentanyl citrate injection; SI  N 
OCE Quarterly Release Files IOCE Quarterly Data Files V232.R0: 
Data_HCPCS: 
0 = Not Applicable 
1 = Applicable 
HCPCS/CPT  33233; Description  Removal of pm generator; Device_Procedure  1 
HCPCS/CPT  33235; Description  Removal pacemaker electrode; Device_Procedure  1 
HCPCS/CPT  80048; Description  Metabolic panel total ca; Device  0 
HCPCS/CPT  85027; Description  Complete cbc automated; Device  0 
HCPCS/CPT  85610; Description  Prothrombin time; Device  0 
HCPCS/CPT  87070; Description  Culture othr specimn aerobic; Device  0 
HCPCS/CPT  87102; Description  Fungus isolation culture; Device  0 
HCPCS/CPT  87205; Description  Smear gram stain; Device  0 
HCPCS/CPT  87210; Description  Smear wet mount saline/ink; Device  0 
HCPCS/CPT  J0690; Description  Cefazolin sodium injection; Device  0 
HCPCS/CPT  J2001; Description  Lidocaine injection; Device  0 
HCPCS/CPT  J2250; Description  Inj midazolam hydrochloride; Device  0 
 
HCPCS/CPT  J3010; Description  Fentanyl citrate injection; Device  0 
 
0.1.1  Payment Status Indicators: 
An OPPS payment status indicator is assigned to every HCPCS code. The status indicator identifies whether 
the service described by the HCPCS code is paid under the OPPS and if so, whether payment is made 
separately or packaged. The status indicator may also provide additional information about how the code is 
paid under the OPPS or under another payment system or fee schedule. For example, services with status 
indicator A are paid under a fee schedule or payment system other than the OPPS. Services with status 
indicator N are paid under the OPPS, but their payment is packaged into payment for a separately paid service. 
Services with status indicator T are paid separately under OPPS but a multiple procedure payment reduction 
applies when two or more services with a status indicator of T are billed on the same date of service. 
The full list of status indicators and their definitions is published in Addendum D1 of the OPPS/ASC proposed 
and final rules each year. The status indicator for each HCPCS code is shown in OPPS Addendum B. 
10.2  APC Payment Groups: 
Each HCPCS code for which separate payment is made under the OPPS is assigned to an ambulatory payment 
classification (APC) group. The payment rate and coinsurance amount calculated for an APC apply to all of the 
services assigned to the APC. A hospital may receive a number of APC payments for the services furnished to a patient on a single day; however, multiple surgical procedures furnished on the same day are subject to 
discounting. (See section 10.5 for discussion of multiple procedure discounting under the OPPS). 
10.2.3  Comprehensive APCs: 
Comprehensive APCs provide a single payment for a primary service, and payment for all adjunctive services 
reported on the same claim is packaged into payment for the primary service. With few exceptions, all other 
services reported on a hospital outpatient claim in combination with the primary service are considered to be 
9related to the delivery of the primary service and packaged into the single payment for the primary service. 
The single payment for a comprehensive claim is based on the rate associated with either the J1 service or the 
specific combination of J2 services. When multiple J1 services are reported on the same claim, the single 
payment is based on the rate associated with the highest ranking J1 service. When certain pairs of J1 services 
(or in certain cases a J1 service and an add-on code) are reported on the same claim, the claim is eligible for a 
complexity adjustment, which provides a single payment for the claim based on the rate of the next higher 
comprehensive APC within the same clinical family. When a J1 service and a J2 service are reported on the 
same claim, the single payment is based on the rate associated with the J1 service, and the combination of the 
J1 and J2 services on the claim does not make the claim eligible for a complexity adjustment. Note that 
complexity adjustments will not be applied to discontinued services (reported with mod -73 or -74. 
10.4  Packaging: 
Under the OPPS, packaged services are items and services that are considered to be an integral part of another 
service that is paid under the OPPS. No separate payment is made for packaged services, because the cost of 
these items and services is included in the APC payment for the service of which they are an integral part. For 
example, routine supplies, anesthesia, recovery room use, and most drugs are considered to be an integral part 
of a surgical procedure so payment for these items is packaged into the APC payment for the surgical 
procedure. 
C. Packaging Types Under the OPPS 
3. T-packaged services are services for which separate payment is made only if there is no service with status 
indicator T reported on the same claim. When there is a claim that includes a service that is assigned status 
indicator T reported on the same claim as the T-packaged service, the payment for the T-packaged service is 
packaged into the payment for the service(s) with status indicator T and no separate payment is made for the T-
packaged service. T-packaged services are assigned status indicator Q2. See the OPPS Web site at 
http://www.cms.hhs.gov/HospitalOutpatientPPS/ for identification of T-packaged codes. 
61.1  Requirement that Hospitals Report Device Codes on Claims on Which They Report Specified 
Procedures: 
Effective January 1, 2005, hospitals paid under the OPPS (bill types 12X and 13X) that report procedure codes 
that require the use of devices must also report the applicable HCPCS codes and charges for all devices that are 
used to perform the procedures where such codes exist and are designated with a status indicator of N (for 
packaged payment) or H (for pass-through device payment) in the OPPS Addendum B that applies to the 
date of service. If there are device HCPCS codes with status indicators other than N or H that describe 
devices that are used to perform the procedure or that are furnished because they are necessary for the function 
of an implanted device, hospitals should report the charges for those other devices on an uncoded revenue code 
line but should not report the HCPCS codes for those items. Typically, payment for the costs of all internal and 
external components required for the function of a non-pass-through device is packaged into the APC payment 
for the associated procedure in which the device is used. Accurate reporting of HCPCS codes and charges for 
these internal and external device components is necessary so that the OPPS payment for the associated 
procedures will be correct in future years in which the claims are used to set the APC payment rates. 
 
You can find this information in the Medicare Claims Processing Manual Chapter 4  Part B Hospital  
Including Inpatient Hospital Part B and OPPS): 10  Hospital Outpatient Prospective Payment System (OPPS): 
10.1  Background 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. 
 
 If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.