OPPS payment status indicator · CMS Addendum D1
Status indicator K: drugs and biologicals paid separately.
Status indicator K is CMS's label for non-pass-through drugs and non-implantable biologicals, including radiopharmaceuticals, that are paid under OPPS with a separate APC payment. Pass-through drugs use indicator G instead. K1 is a narrower code for non-opioid post-surgical pain drugs.
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What CMS says status indicator K means
Nonpass-Through Drugs and Nonimplantable Biologicals, Including Radiopharmaceuticals
CMS's OPPS payment status for K is "Paid under OPPS; separate APC payment." (CY 2026 Addendum D1). The wording differs from a common search phrase: CMS does not call K "separately paid drugs". It describes drugs, biologicals and radiopharmaceuticals that do not have pass-through status, which are paid separately.
K versus G versus K1
| Indicator | CMS item/code/service | OPPS payment status |
|---|---|---|
| K | Nonpass-Through Drugs and Nonimplantable Biologicals, Including Radiopharmaceuticals | Paid under OPPS; separate APC payment. |
| K1 | Non-Opioid Drugs and Biologicals For Post-Surgical Pain Relief | Paid under OPPS; separate APC payment. Subject to criteria and payment limitation under Section 4135 of the CAA, 2023. |
| G | Pass-Through Drugs and Biologicals | Paid under OPPS; separate APC payment. |
Where K shows up in the Medicare manual
Chapter 4 of the Medicare Claims Processing Manual refers to OPPS separately payable drugs reported with status indicator K in its 340B discussion. It says that from CY 2018 through CY 2022, rural sole community hospitals, children's hospitals and PPS-exempt cancer hospitals exempt from the 340B drug payment adjustment reported informational modifier TB on K-indicator drugs purchased through the 340B program. It says the modifier did not trigger a payment adjustment.
What to check
- Confirm the HCPCS code is K, not G or K1, in the Addendum B for the date of service. Indicators are assigned code by code, so a drug can move between G, K and N across files.
- Check the units billed against the code descriptor; a unit error changes the payment amount, not the indicator.
- If the drug is billed with a comprehensive APC procedure (J1), see the exclusions in the most recent Addendum J before assuming it is packaged.
Worked example (hypothetical)
A clinic bills an infusion and a drug code. Addendum B shows K for the drug code, so the remittance carries a separate APC payment for it next to the administration line. If a later year's file moved the drug to N, the same claim would show no separate drug payment.
Other codes in this set
Indicators Q1-Q4, Indicator A, Indicator N, Indicator G, Indicator J1, Indicator T, Indicator S, Indicators E1 and E2, 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
Is K the same as a pass-through drug?
No. CMS uses G for pass-through drugs and biologicals. K is for non-pass-through drugs and non-implantable biologicals, including radiopharmaceuticals.
Are K drugs paid separately?
Yes. CMS lists K as paid under OPPS with a separate APC payment.
What is K1?
K1 is for non-opioid drugs and biologicals for post-surgical pain relief, paid separately subject to the criteria and payment limitation in Section 4135 of the CAA, 2023.
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.