CMS Pub. 100-04, ch. 1, § 60.1.3

Condition code 21 can be employed to indicate no payment claims are being submitted

for other reasons in addition to those mentioned in section 60.1.2. above:

• At a beneficiary’s, or other insurer’s, request, to obtain a denial from Medicare to

facilitate payment by subsequent insurers (ex., statutory exclusions outside

Original Medicare benefits, such as most self-administered drugs). This is

payment condition 1. These claims are referred to as no-payment claims.

• With an HHABN in special cases (see Chapter 10, §60, of this manual). This is

payment condition 2.

General Billing Instructions for No Payment Claims with Condition Code 21 (Other

than HH PPS).

No payment claims are sometimes referred to as “billing for denial”. They are submitted

with condition code 21, which is defined by the National Uniform Billing Committee as

“billing for denial notice.”

The following instructions for use of condition code 21 are applicable to all bill types,

other than HH PPS claims.

• All charges must be submitted as non-covered;

• No modifiers signifying beneficiary or provider liability are necessary;

• Frequency code 0 (zero) must be used in the third position of TOB of the

claim, though the frequency codes 7 and 8 may be used when appropriate for

provider-submitted claim adjustments/cancellations;

• Total charges must equal the sum of non-covered charges;

• Basic required claim elements must be completed; and

• Statement dates should conform to simultaneous claims for payment, if any.

Non-covered charges billed on these claims, when not rejected, will be denied. Medicare

beneficiaries will always be liable for these claims. Such denials can only be overturned

on appeal.

If claims do not conform to these requirements, they will be returned to providers for

correction and resubmission. However, in the case of claims with statement dates that

overlap with other claims, the incoming overlapping claim using condition code 21 will

be processed to completion as a rejection, with a unique reason code explaining the

reason for the rejection. Providers can then correct and re-submit the claim assuming the

overlap in periods was a billing error.