Correct Coding Guidelines

Policy ID: Adm 129

Effective Date: January 01, 2027

Last Reviewed: June 26, 2026

Applies To: Migrated Commercial

This policy applies to all physicians, dental providers, other health care professionals, hospitals, and other facilities.

Definitions

Code/Term

Code Description/Term Definition

Current Dental Terminology (CDT^®)

A dental code set maintained by the American Dental Association (ADA) that is used to report dental procedures and services by dental providers.

Current Procedural Terminology (CPT^®)

A medical code set maintained by the American Medical Association (AMA) that is used to report medical, surgical, and diagnostic procedures and services to entities such as physicians, health insurance companies and accreditation organizations. CPT is included in Level I Healthcare Common Procedure Coding System (HCPCS).

HCPCS Level II

A standardized coding system that is used primarily to identify medical supplies, durable medical equipment, non-physician services, and services not represented in the Level I code set CPT.

National Correct Coding Initiative (NCCI or CCI)

The Centers for Medicare & Medicaid Services (CMS) developed these edits to promote consistent, correct coding and appropriate payment. These coding edits are developed based on the AMA CPT code set and the HCPCS code set, as well as analysis of standard medical and surgical practice and input from various groups, including specialty societies, other national healthcare organizations, Medicare contractors, providers, and consultants.

The National Uniform Billing Committee (NUBC) and the state uniform billing committees (SUBC)

Committees responsible for the revenue code definitions and requirements for use.

Uniform Billing Editor (UBE)

A reference tool utilized by facilities to manage the constant changes to Medicare billing and reimbursement processes. The UBE provides detailed, accurate, and timely information about Medicare and UB-04 billing rules and requirements.

International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM)

A morbidity classification system for classifying diagnoses and reason for visits in all health care settings for the purpose of coding and reporting.

Revenue Codes (Rev Codes)

Revenue codes are 4-digit numbers that are used on hospital bills to identify where a member was located in a facility when they received treatment or services, or what service a member received as a patient.

Application of Local Coverage Determination Articles to Commercial Claims

The term "article" is used to describe any bulletin article, website article, educational handout or any other non-LCD document intended for public release that contains coverage/coding statements or medical review related billing or claims considerations. Our Health Plan applies certain Local Coverage Articles (LCAs) published by Noridian Healthcare Solutions as coding and billing standards for commercial claims to ensure services are billed with appropriate diagnosis codes that support the procedure performed. This application is limited to diagnosis-procedure consistency requirements defined by Noridian Healthcare and does not restrict coverage beyond what is already defined in benefit documents. Claims submitted without appropriate diagnosis codes as specified in the applicable LCA will be denied for incorrect coding, though providers may resubmit with corrected diagnosis codes or appeal denials with supporting clinical documentation.

Policy Statement

Providers are required to submit accurate and complete claims for all medical and surgical services, supplies and items rendered to members using industry standard coding guidelines. Coding guidelines include, but are not limited to, AMA, CPT, HCPCS, CMS Coding Initiatives, UBE, and ICD-10.

Any medical or surgical service, supply, or item, either inpatient or outpatient, reported by any code, must be clearly documented in an appropriate medical record. Our health plan will not allow reimbursement for undocumented professional, inpatient or outpatient medical and surgical services, supplies and items.

This includes but is not limited to reimbursement of multiple intravenous (IV) bags for the same product, when only an IV drip rate change or drip rate check has occurred. Charges for bag changes that conflict with the drip rate for the drug administered will be considered as a drip rate change. Documentation indicating a new bag scanned and/or administered will not be sufficient to indicate a new bag, if in conflict with the drip rate for the drug administered.

Professionals, Hospitals and facilities must report all services, supplies and items using accurate billing and revenue codes including but not limited to:

HCPCS (Healthcare Common Procedure Coding System).
CPT (Current Procedural Terminology) codes.
Place of Service (POS) codes.
Others relevant billing codes as applicable
Codes billed in 15-minute increments based on documented direct treatment time (e.g., Anesthesia and/or Therapy codes).

Our health plan will not allow reimbursement for incorrectly reported codes and modifiers, including revenue codes, for medical and surgical services and supplies and items, for professional, inpatient or outpatient facility claims. This includes using the correct code for the setting of service (e.g., inpatient only codes).

Our health plan will not allow reimbursement for correctly coded claims using appropriate modifiers when the implication, in the definition of the modifier, is that the service shouldn’t be reimbursed (e.g. modifier SL).

Additionally, if an initial hospital care service (CPT® 99221–99223) has been billed within the prior three (3) calendar days for the same diagnosis by the same Tax Identification Number (Tax ID) and subspecialty, including hospital readmissions, the service is considered subsequent hospital care and reimbursed under CPT® 99231–99233.

References

Cross References

Fac 111 – Facility DRG Validation

Disclaimer

Your use of this Reimbursement Policy constitutes your agreement to be bound by and comply with the terms and conditions of the Reimbursement Policy Disclaimer.

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