Services Excluded By Statute

Medicare will not pay for services excluded by statute, which often are services not recognized as part of a covered Medicare benefit. Examples of such services are given to beneficiaries in the "Medicare and You" handbook which can be found on the Medicare website and is updated on an annual basis, at the end of the "Part A/Part B Cost and Coverage" subsection under Section 4 on the "Original Medicare Plan". Such services cannot necessarily be recognized in the definition of a specific procedure or diagnosis code. For example, under some conditions, a given code may be covered as part of a given benefit, but under other cases when not benefit is applied, the same code would not be covered. For claims submitted to FI/AB MACs and RHHIs, these services may be: (1) Not submitted to Medicare at all, (2) Submitted as noncovered line items, or (3) Submitted on entirely noncovered claims xx0 Type of Bills (TOB).

  1. Medicare does not require procedures excluded by statute to be billed on institutional claims submitted to FI/AB MAC & RHHIs UNLESS: (1) Established policy requires either all services in a certain period, covered or noncovered, be billed together so that all such services can be bundled for payment consideration (i.e., procedures provided on the same day to beneficiaries under OPPS which are usually payment status indicator E or M), or billing is required for reasons other than payment (i.e., utilization chargeable in inpatient settings); or (2) A beneficiary requests Medicare be billed in a manner that the service in question will be reviewed by Medicare. For access to the payment status indicator providers may review the Federal Register for OPPS that usually is updated each November and available on the CMS OPPS website in Addendum B of the Federal Register.
  2. To submit a noncovered line item on a claim with other covered services (Payment Liability Conditions 1 and 3), use the modifier GY on all line items for statutory exclusions. Submit all charges for those item(s) as noncovered charges, and otherwise complete the claim as is appropriate for the covered charges. More information is given on the modifier GY. This option should only be used when providers are unable to split noncovered services onto a separate claim.
  3. To submit statutory exclusions on entirely noncovered claims (Payment Liability Condition 1 only), use condition code 21, a claim-level code, signifying ALL charges that are submitted on the claim are noncovered charges. Modifier GY is not needed to be appended to any of the procedure codes on such a claim, and all charges must be submitted as noncovered along with TOB xx0 for a totally noncovered claim.

Providers that are submitting totally noncovered claims (TOB xx0) must have all units and charges submitted as noncovered with the 21 condition code so the provider/beneficiary may receive a denial from Medicare on the noncovered claim to facilitate payment by subsequent insurers. These claims will be denied as beneficiary liable. If some of the codes are not recognized by Medicare (usually payment status indicator M) they will need to be left off the claim as they usually receive a front end edit that restricts them from being submitted to Medicare.


Last Updated Apr 23 , 2024