OPPS payment status indicator · CMS Addendum D1

Status indicator N: always packaged into other payments.

Status indicator N means the service is paid under OPPS only as part of the payment for other services. There is never a separate APC payment, so a zero on that line is expected. Still report the code and the line item date of service.

Sources: CMS · retrieved November 2026Runs in your browser · nothing is sent or stored

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Letters such as A or Q3 are OPPS status indicators; numbers such as 30 are patient status codes.

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What CMS says status indicator N means

Items and Services Packaged into APC Rates

CMS's OPPS payment status for N is "Paid under OPPS; payment is packaged into payment for other services. Therefore, there is no separate APC payment." (CY 2026 Addendum D1).

Why N is called unconditional packaging

Chapter 4, section 10.4 of the Medicare Claims Processing Manual defines unconditionally packaged services as services for which separate payment is never made because the payment is always packaged into the payment for other services. It says they are identified in OPPS Addendum B with status indicator N. It adds that, in general, the charges for unconditionally packaged services are used to calculate outlier and TOPs payments when they appear on a claim with a separately paid service. Compare Q1 and Q2, which are packaged only on some claims.

Devices and kits

Section 10.4 also says payment for device or device category HCPCS codes without pass-through status is packaged into the payment for the procedures in which they are used, and these codes are assigned status indicator N. For devices packaged in kits, hospitals may consider all kit costs in the line-item charge for the associated device code assigned indicator N.

What to do with an N line

  1. Report it anyway. The manual's background on OPPS says packaged services are excluded from payment but not from reporting HCPCS codes and line item dates of service.
  2. Do not rebill an N line expecting payment. Check the procedure it supports instead.
  3. If the procedure line is denied or reduced, the N line moves with it, since its payment lives inside that payment.

Worked example (hypothetical)

An outpatient surgery claim carries one separately paid procedure and a supply code with indicator N. The remittance shows payment on the procedure line and zero on the supply line. The zero is not a denial: the supply's payment is inside the procedure's APC rate.

Other codes in this set

Indicators Q1-Q4, Indicator A, Indicator K, Indicator G, Indicator J1, Indicator T, Indicator S, Indicators E1 and E2, Indicator V.

Sources

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 a zero payment on an N line a denial?

Not by itself. CMS says N services are paid only as part of other services, so there is no separate APC payment.

Should I still report N codes?

Yes. The Medicare manual says packaged services are excluded from payment but not from reporting HCPCS codes and line item dates of service.

How is N different from Q1 or Q2?

N is always packaged. Q1 and Q2 are packaged only when certain other services are on the claim.

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.

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