Handling of Claims Inappropriately Assigned Reason Code 32404

It has come to CMS' attention that institutional claims are inappropriately rejecting with reason code 32404 when a revenue code between 030x – 031x is submitted with a laboratory HCPCS that is not a clinical diagnostic lab code. A system fix is scheduled to be implemented on March 5, 2018. In the interim, CMS will hold all institutional claims with reason code 32404 assigned except FQHC and RHC claims. Held claims will be automatically released once the fix is implemented.

Until the fix is implemented, FQHC and RHC claims will be returned to provider (RTP). As a workaround, FQHC and RHC providers are advised to remove claim line(s) that have been assigned reason code 32404 and resubmit the claim. This action will not affect payment. Providers may discontinue this workaround after March 5, 2018.

Last Updated Feb 20, 2018