6.2 OPPS Status Indicators
Key Takeaways
- CMS assigns every HCPCS code an OPPS payment status indicator that states whether the line pays under OPPS, packages, pays under another fee schedule, or is not paid on an outpatient claim.
- Status indicator S means a significant procedure paid under OPPS without multiple-procedure discounting; T means a procedure paid under OPPS with multiple-procedure reduction; V means a clinic or emergency department visit.
- Status indicator N means packaged into other APC payments; Q1 is STV-packaged; Q2 is T-packaged; Q3 may pay through a composite APC; Q4 is conditionally packaged laboratory.
- J1 means hospital Part B services paid through a comprehensive APC; J2 means hospital Part B services that may pay through a comprehensive APC when CMS criteria are met (observation C-APC 8011 is the classic example).
- CY 2026 adds status indicator S1 for sheet-form skin substitute products paid separately under OPPS (CMS Table 18 / MM14361), assigned to APCs 6000–6002.
OPPS Status Indicators
Quick Answer: CMS assigns a payment status indicator (SI) to every HCPCS code under OPPS. The indicator answers three coder questions: Is this line paid under OPPS? Is it packaged? Does another Medicare payment system own it? CMS publishes the definitions in Addendum D1 to the OPPS/ASC final rule. MM14361 tells billing staff to use the CY 2026 Addendum D1 for current wording, including new indicator S1.
Why the letter on Addendum B is not optional trivia
AAPC's payment-methodologies domain expects a facility coder to know that two CPT codes with the same clinical story can pay differently because their status indicators differ. A diagnostic test assigned Q1 may pay separately on a claim that has no S, T, or V service and may package on a claim that includes an emergency department visit. Changing the CPT to "make it pay" is not coding. Reading the SI and reporting the service that was performed is coding.
CMS's MLN Medicare Payment Systems booklet states the OPPS assigns a payment status indicator to every HCPCS code to identify whether payment falls under OPPS or another payment system or fee schedule, and whether the service is paid separately or packaged.
How to use Addendum B and Addendum D1 together
Addendum B lists HCPCS codes with short descriptors, SI, APC, and relative weight or payment rate. Addendum D1 defines what each SI letter means. Quarterly Addendum A/B files on the CMS Hospital Outpatient PPS page are snapshots of what the OPPS Pricer is using that quarter. If a COC item gives you a code and an SI, believe the SI for payment logic even if you would have guessed a different letter from memory.
When this chapter quotes a letter, the definition comes from CMS Addendum D1 concepts as restated in the Medicare Claims Processing Manual, Chapter 4; I/OCE specifications; the CY 2026 OPPS/ASC final rule discussion of S1; and MM14361 Table 18 for S1. If a letter's exact 2026 sentence is not in those CMS materials, this chapter says so rather than inventing a gloss.
COC-relevant status indicator table (CY 2026)
| SI | CMS concept (Addendum D1 / I/OCE / MM14361) | What the facility coder does with it |
|---|---|---|
| S | Procedure or service, not discounted when multiple | Separate APC payment; a second S on the same day does not take the multiple-procedure haircut that T takes |
| T | Procedure or service, multiple-procedure reduction applies | Separate APC payment, but the I/OCE discounts additional T procedures on the same day |
| V | Clinic or emergency department visit | Separate APC payment for the visit (Medicare hospital clinic visits commonly use G0463) |
| N | Items and services packaged into APC rates | Report the code and charges; no separate APC payment |
| Q1 | STV-packaged codes | Separate payment only if no payable S, T, or V is on the same claim; otherwise packaged |
| Q2 | T-packaged codes | Separate payment only if no payable T is on the same claim; otherwise packaged |
| Q3 | Codes that may be paid through a composite APC | I/OCE pays a composite when composite criteria are met; otherwise the standard APC may apply |
| Q4 | Conditionally packaged laboratory services | Packaged on a claim with J1, J2, S, T, V, Q1, Q2, or Q3; if no such OPPS service, I/OCE changes the SI to A and the Clinical Laboratory Fee Schedule pays |
| J1 | Hospital Part B services paid through a comprehensive APC | Payment for adjunctive services on the same claim packages into the primary J1 service, with CMS-listed exclusions |
| J2 | Hospital Part B services that may be paid through a comprehensive APC | Classic use: comprehensive observation (APC 8011) when CMS criteria are met |
| G | Pass-through drugs and biologicals | Separate APC payment during pass-through; MM14361 shows codes moving G → K when pass-through ends |
| K | Separately payable non-pass-through drugs, biologicals, and therapeutic radiopharmaceuticals | Separate APC payment, generally ASP-based for many products |
| H | Pass-through device categories | Separate cost-based pass-through payment for the device category |
| C | Inpatient-only procedures | Not paid under OPPS. Admit and bill as inpatient if the procedure remains on the IPO list |
| A | Paid under a fee schedule or payment system other than OPPS | Examples CMS has long listed include ambulance, many clinical diagnostic laboratory tests, therapy, and screening/diagnostic mammography |
| S1 | Sheet-form skin substitute product paid separately | New for CY 2026. MM14361 Table 18: paid under OPPS; separate APC payment; payment follows FDA regulatory pathway; assigned to APCs 6000–6002 |
Letters candidates mix up with the table above
CMS no longer publishes a single Q without a digit for current OPPS claims; the live family is Q1–Q4. Older training that says "Q means packaged sometimes" is incomplete for 2026 items.
CMS split historic E into E1 and E2 in current I/OCE/Addendum D1 files:
- E1: not paid by Medicare when submitted on outpatient claims (any outpatient bill type)
- E2: items and services for which pricing information and claims data are not available
MM14361 adds a CY 2026 invoice-pricing path using value code 92 for some E2 drugs when listed revenue categories and other requirements are met. Do not treat every E2 as "forever nonpayable" without checking the current CR.
B (from Addendum D1 / I/OCE) means the code is not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12X/13X); another code that OPPS does recognize may be available. F covers certain services paid at reasonable cost (CMS lists corneal tissue acquisition, certain CRNA services, and hepatitis B vaccines). L covers influenza, pneumococcal, and COVID-19 vaccines paid at reasonable cost, not under OPPS. U is brachytherapy sources (separate OPPS payment). R is blood and blood products (separate OPPS payment). P is partial hospitalization / intensive outpatient per-diem APC payment. Those letters appear on real Addendum B files; the table above is the COC-priority set.
If a COC option invents an SI letter that is not in Addendum D1, it is wrong even if the English sentence sounds plausible.
S versus T: the multiple-procedure fork
Both S and T receive separate APC payment. The difference is discounting. CMS's I/OCE applies a multiple-procedure reduction to additional T procedures on the same day. S procedures are not discounted when multiple. A nuclear medicine study assigned S and a same-day endoscopic procedure assigned T are not "double surgery, so discount both." Discounting follows the letter.
Facility modifier 51 is not the OPPS multiple-procedure engine. The I/OCE reads status indicators. Reporting modifier 51 on a hospital OPPS line because a professional coder would have used it is a common imported habit, not an OPPS requirement.
G, K, and H: drugs and devices that pay on their own line
G is temporary pass-through for drugs and biologicals. K is separately payable after pass-through ends, or for non-pass-through drugs that exceed packaging policy. MM14361 is explicit: four codes moved from G to K on January 1, 2026 when pass-through ended. H is the device-category cousin: pass-through devices, with a device offset deducted from the pass-through so CMS does not pay the device twice (once in the procedure APC and again as pass-through). Section 6.3 covers the $140 drug packaging threshold that decides many K versus N assignments; the SI on Addendum B is still the claim-day instruction.
C and A: not an OPPS APC check
C means inpatient-only. Until CMS removes the procedure from the IPO list, the HOPD claim does not receive OPPS payment for that line. Section 6.4 covers the CY 2026 IPO phase-out. A means another Medicare payment system owns the line. A therapy code or a screening mammogram on a 13X claim is not a failed APC assignment; it is SI A working as designed.
S1: the CY 2026 skin-substitute letter
CMS created S1 so sheet-form skin substitute products can pay separately from application CPT 15271–15278. MM14361 Table 18's descriptor is: skin substitute product paid separately; OPPS payment status: paid under OPPS; separate APC payment; subject to payment based on FDA regulatory pathway. CMS assigns S1 to products in APCs 6000 (PMA), 6001 (510(k)), and 6002 (361 HCT/P). For CY 2026 CMS uses one rate of $127.14 per cm² across those three APCs. Unlisted product codes Q4431–Q4433 use the same APC split. Do not confuse S1 (the product) with S (a procedure not discounted when multiple).
Candidate scenario: two T procedures and a packaged supply
Elena codes a Medicare HOPD arthroscopy (SI T) and a same-day related surgical procedure also assigned T, plus a surgical supply assigned N. She reports all three HCPCS with charges. The I/OCE will pay the T procedures under OPPS with multiple-procedure reduction on the additional T, and it will package the N supply into the surgical APC payment. Elena's coworker wants to delete the supply code "because it does not pay." CMS still wants the HCPCS and the charge: packaged cost data feed future APC weights.
If Elena instead had a Q1 diagnostic test on a claim whose only other payable service was a V clinic visit, that Q1 packages. If she billed the same Q1 test on a claim with no S, T, or V, the Q1 can pay separately. The CPT did not change. The claim context did.
Recheck before you freeze a letter in memory
A hospital outpatient claim has two separately payable surgical HCPCS codes on the same date of service. Both codes are assigned OPPS status indicator T. Which payment result should the coder expect from CMS's OPPS logic?
What did CMS create status indicator S1 to describe for CY 2026?
A CPT procedure still on CMS's inpatient-only list is submitted on a hospital outpatient 13X claim. Which status indicator describes that payment result?