CMS Pub. 100-04, ch. 4, § 61.1

Which They Report Specified Procedures

(Rev. 11305; Issued: 03-24-22; Effective: 04-01-22; Implementation: 04-04-22)

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 nonpass-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.

For procedure codes that require the use of devices that are not described by a specific

HCPCS code, hospitals should report HCPCS code C1889 (Implantable/insertable device,

not otherwise classified) and charges for all devices that are used to perform the

procedures. Such devices must:

• Have received FDA marketing authorization, have received an FDA

investigational device exemption (IDE) and have been classified as a

Category B device by FDA in accordance with 405.203 through 405.207

and 405.211 through 405.215, or meets another appropriate FDA

exemption from premarket review;

• Be an integral part of the service furnished;

• Be used for one patient only;

• Come in contact with human tissue;

• Be surgically implanted or inserted (either permanently or temporarily); and

• Not be either of the following:

(a) Equipment, an instrument, apparatus, implement, or item of the type for

which depreciation and financing expenses are recovered as depreciable assets as

defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub.

15-1); or

(b) A material or supply furnished to a service (for example, a suture,

customized surgical kit, scalpel, or clip, other than a radiological site marker).

Manufacturers frequently package a number of individual items used with a device in a

particular procedure. In cases of devices that are described by device category HCPCS

codes whose pass-through status has expired, or HCPCS codes that describe devices

without pass-through status, and that are packaged in kits with other items used in a

particular procedure, hospitals may consider all kit costs in their line-item charge for the

associated device/device category HCPCS code that is assigned status indicator “N” for

packaged payment. That is, hospitals may report the total charge for the whole kit with

the associated device/device category HCPCS code. Payment for device/device category

HCPCS codes without pass-through status is packaged into payment for the procedures in

which they are used, and these codes are assigned status indicator “N.” In the case of a

device kit, should a hospital choose to report the device charge alone under a

device/device category HCPCS code with SI=”N,” the hospital should report charges for

other items that may be included in the kit on a separate line on the claim. Hospitals may

use the same revenue code to report all components of the kit.