Understanding non-covered codes – help for denials management and pre-payment review edits

Rayellen Kishbach's picture

Wouldn't it be great if there was just ONE LIST of procedure codes published somewhere by Medicare to identify non-covered services? Unfortunately, there isn’t one, but a quick review of the information that is provided by Medicare can get you there. In this article, I will review key references for non-coverage research, and point out some handy ways your Coding Suite subscription can help you keep up with frequent changes to this data.

Before that, let’s start with a review of what is covered. Medicare provides coverage for items and services for over 55 million beneficiaries; that coverage is for items and services that are reasonable and medically necessary. Details about indications and limitations of medical necessity are available in the national and local coverage determinations.

Coverage Exclusions

Anything that isn’t reasonable and medically necessary is excluded from coverage, benefit and payment under Medicare. This is set forth by the Social Security Act, and there is an in depth discussion of what is NOT a Medicare benefit in the Medicare Benefit Policy Manual (Pub 100-02) Chapter 16 - General Exclusions From Coverage. The tricky part about these data sources is that they generally don’t include specific HCPCS or CPT® codes.

Non-Covered HCPCS list

In the HCPCS file published by Medicare, there is a designation of the “coverage code” associated with each HCPCS code. Two of these codes designate non-covered codes, and there is also a “special coverage instructions apply” and a not payable designation.

HCPCS Coverage Codes and Definitions.

Payable Codes

Not-Payable Codes

C = Carrier judgment

D = Special coverage instructions apply


I = Not payable by Medicare

M = Non-covered by Medicare

S = Non-covered by Medicare statute

How to access this in the Coding Suite:

Outpatient PPS List

In the Outpatient Prospective Payment System, the Addendum B file designates a Status Indicator which can be an informal indication of statutory or regulatory exclusion for codes that are not payable. Several indicators flag codes that may be payable under some other system or may be not-payable depending on the conditions of the claim; these are left out of the table to avoid confusion. The table below provides an abbreviated summary; read Addendum D for more detail.

OPPS Status Indicator

Payable Codes (partial list)

Not-Payable Codes (under OPPS)

G = Pass-Through Drugs and Biologicals

H = Pass-Through Devices

J1 = Hospital Part B services paid through a comprehensive APC

K = Non pass-Through Drugs and Biologicals

P = Partial Hospitalization

Q3 = Composite

R = Blood and Blood Products

S = Procedure or Service, Not Discounted When Multiple

T = Procedure or Service, Multiple Reduction Applies

U = Brachytherapy Sources

V = Clinic or Emergency Department Visit

A = Paid by MACs under a fee schedule or payment system other than OPPS

B = Codes that are not recognized by OPPS

C = Inpatient Only

D = Discontinued Code

E = Statutory Exclusion

M = Not Billable

Y = Non-Implantable Durable Medical Equipment (billed to DMERC)
















How to access this in the Coding Suite:

  • In the Download Center of the APC Electronic CodeBook, download the Addendum B File. Filter or sort by the status indicator of interest.

  • In the APC Electronic Codebook, there is a chapter with an Index of codes by Status Indicator that is updated quarterly. Reference these to skip having to work in excel.

  • The status indicator is automatically shown to you when you work in the APC Calculator or Code Explorer, or export files from Coding Comply.

Integrated Outpatient Code Editor (IOCE)

Similarly, in the IOCE, which provides insight into key Medicare payer edits, there is a HCPCS Map file that provides indicators for specific designations such as these:

  • Excluded by Statute
  • Non Covered for other than statutory exclusion reason 
  • Questionably Covered
  • Not Billable       
  • Not Recognized by Medicare      
  • Not Recognized by OPPS             
  • FQHC Non Covered Codes

How to access this in the Coding Suite:

  • In the Guidance for Coders library, reference the collection entitled CMS - Integrated Outpatient Code Editor (IOCE). In the Download Center page, you will find the quarterly HCPCS Files. Filter or sort by the column designation(s) of interest.

  • In the IOCE collection, there are also handy reference pages for each of the designations listed above. Reference these to skip having to work in excel.

Physician Fee Schedule List

Just like the OPPS system, the Medicare Physician Fee Schedule provides a Status Code for each HCPCS and CPT® code. It is important to note that these have very different definitions than the OPPS Status Indicators. This is a column in the PPRVU file that is available from CMS, and the status code definitions are provided in the “read me” file. Notice also that there are a few designations where the code is expected on the claim but not payable (such as Measurement codes and therapy functional information codes) or are payable, but just not under the physician fee schedule. There is also a designation of status code “R” for codes which have restricted coverage. Also Injection codes have special payment rules. Check with Medicare Administrative Contractor guidelines for details on payment conditions. Abbreviated definitions are below.

Physician Fee Schedule Status Code

Payable Codes (partial list)

Not-Payable Codes (under Physician Fee)

A = Active

C = Carrier-priced

R = Restricted Coverage

I = Injections


B = Bundled

E = Excluded from Physician Fee Schedule by regulation

I = Not valid for Medicare purposes

N = Non-covered Services

P = Bundled/Excluded Codes

X = Statutory Exclusion

R = Restricted Coverage

I = Injections













How to access this in the Coding Suite:

  • In the Download Center of the Physician Fee Schedule Electronic CodeBook, download the RVU File. Filter or sort by the status code of interest.

  • In the Physician Fee Schedule Electronic Codebook, there is a chapter with an Index of codes by Status Code that is updated quarterly. Reference these to skip having to work in excel.

  • The status code is shown to you automatically when you work in the RVU Calculator or Code Explorer, or when you download files from Coding Comply.


Medicare hasn’t made this simple, but it is possible to understand non-coverage edits with a careful examination of the AnWeb, OPPS Addendum B, IOCE HCPCS Map, and Physician Fee RVU Files. These code lists can be used to help payers and providers power and validate pre-payment edits, and as reference to help understand vague denial and return-to-provider messages. This article is part of a larger conversation around denials management research and strategy. If you’d like to talk more about how the Coding Suite can help your team, please let me know.