OPPS payment status indicator · CMS Addendum D1
Status indicators E1 and E2: not paid by Medicare.
E1 and E2 both mean the item or service is not paid by Medicare when submitted on any outpatient bill type. E1 covers items with no benefit category, a statutory exclusion, or not reasonable and necessary. E2 covers items for which pricing information and claims data are not available.
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What CMS says E1 and E2 mean
| Indicator | CMS item/code/service | OPPS payment status |
|---|---|---|
| E1 | Items, codes and services: not covered by any Medicare outpatient benefit category; statutorily excluded by Medicare; not reasonable and necessary | Not paid by Medicare when submitted on outpatient claims (any outpatient bill type). |
| E2 | Items, codes and services for which pricing information and claims data are not available | Not paid by Medicare when submitted on outpatient claims (any outpatient bill type). |
The difference between E1 and E2
Both lead to no Medicare payment. The reason differs. E1 is a coverage reason. E2 is a data reason: CMS does not have pricing information or claims data to set a rate. Because E2 rests on missing data, a code can change indicators in a later file once data exists; check Addendum B for the date of service.
How E differs from the other "not paid" indicators
| Indicator | CMS payment status |
|---|---|
| A | Not paid under OPPS. Paid by MACs under another fee schedule or payment system. |
| B | Not paid under OPPS; may be paid on a different bill type or an alternate code may exist. |
| C | Not paid under OPPS. Admit patient. Bill as inpatient. |
| D | Not paid under OPPS or any other Medicare payment system (discontinued codes). |
| E1, E2 | Not paid by Medicare when submitted on outpatient claims (any outpatient bill type). |
What to do with an E1 or E2 line
- Report the code when your billing rules require it, but do not expect Medicare payment.
- For E1, whether the patient can be billed depends on notices and rules outside Addendum D1, such as advance beneficiary notice rules. Ask your MAC or compliance contact.
- For E2, check whether a more specific or newer code exists.
Worked example (hypothetical)
A hospital outpatient department bills an item that appears in Addendum B with indicator E1. The claim is processed and the line is not paid. The remittance reason is a coverage reason, not a coding error, so correcting and resubmitting the claim will not change the result.
Other codes in this set
Indicators Q1-Q4, Indicator A, Indicator N, Indicator K, Indicator G, Indicator J1, Indicator T, Indicator S, Indicator V.
Sources
- CMS: CY 2026 OPPS/ASC final rule (CMS-1834-FC), Addendum D1, OPPS Payment Status Indicators for CY 2026 — status indicator definitions and payment status (addenda file dated 11.20.2025, retrieved 2026-11-02)
- CMS: Medicare Claims Processing Manual, Chapter 4 (Part B Hospital, including OPPS), Rev. 13799, issued 05-28-26 — read 2026-11-02
The Addendum D1 text and Medicare manual passages above were read on November 2, 2026. The Addendum D1 wording below is CMS's own text for the CY 2026 OPPS (file dated 11.20.2025). CMS republishes Addendum D1 every year, so the indicator on a claim for another year should be checked against that year's file. Causes, checks and examples are general billing practice written for this page, not CMS content. Payers and CMS revise code lists, contracts and policies, so confirm anything that affects a claim or a payment with your Medicare Administrative Contractor.
Frequently asked questions
What is the difference between E1 and E2?
E1 items are not covered, statutorily excluded or not reasonable and necessary. E2 items have no pricing information or claims data available. Neither is paid on outpatient claims.
Can a code move from E2 to a paid indicator?
CMS reviews indicator assignments each year in Addendum B, so a code can change once data is available. Check the file for the date of service.
Is E the same as B?
No. B means OPPS does not recognize the code on a hospital outpatient bill type and it may be paid on another bill type. E means Medicare does not pay on any outpatient bill type.
Not legal, billing or medical advice
This page explains published CMS code definitions and runs a lookup in your browser. It cannot see your claim, your contract or any payer's policy. Confirm with your Medicare Administrative Contractor before you resubmit, appeal or bill a patient.