OPPS payment status indicator · CMS Addendum D1
Q1, Q2, Q3: packaged only in some circumstances.
Q1, Q2, Q3 and Q4 mark codes whose payment depends on what else is on the claim. Q1 is packaged when an S, T or V service is billed, Q2 when a T service is billed, Q3 may be paid through a composite APC, and Q4 is a laboratory test that is packaged only alongside certain other paid services. Otherwise they are usually paid separately.
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What CMS says each Q indicator means
| Indicator | CMS item/code/service | When it is packaged (CMS Addendum D1) |
|---|---|---|
| Q1 | STV-Packaged Codes | Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator S, T or V. Composite APC payment if billed with specific combinations of services. In other circumstances, payment is made through a separate APC payment. |
| Q2 | T-Packaged Codes | Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator T. In other circumstances, payment is made through a separate APC payment. |
| Q3 | Codes That May Be Paid Through a Composite APC | Composite APC payment based on composite-specific payment criteria, packaged into a single payment for specific combinations of services. In other circumstances, a separate APC payment or packaged into payment for other services. |
| Q4 | Conditionally Packaged Laboratory Tests | Packaged APC payment if billed on the same claim as a code with published status indicator J1, J2, S, T, V, Q1, Q2 or Q3. In other circumstances, the test should have status indicator A and is paid under the clinical laboratory fee schedule. |
For all four, CMS adds that Addendum B shows the APC assignment when the service is separately payable, and that Addendum M shows composite APC assignments for Q3.
How the Medicare manual describes the packaging
Chapter 4, section 10.4 of the Medicare Claims Processing Manual calls Q1 services "STV-packaged" and Q2 services "T-packaged". It says an STV-packaged service is paid separately only if no S, T or V service is on the same claim. A T-packaged service is paid separately only if no T service is on the claim. Section 10.4 also says a Q3 service is a major component of a single episode of care, so the hospital receives one payment through a composite APC for multiple major, separately identifiable services.
On Q4, the manual says that when a Q4 service is not billed with another separately payable service, the Integrated OCE changes its status indicator to A and separate payment is made at the clinical laboratory fee schedule rate. The manual also says that when a claim carries several STV-packaged codes and no S, T or V procedure, separate payment is made for the STV-packaged code assigned to the highest-paid APC, and the others are packaged into it (section 10.4.1).
Worked example (hypothetical)
A hospital bills a clinic visit coded with status indicator V and, on the same claim, a code carrying Q1. Because a V service is present, the Q1 code is packaged and shows no separate payment. If the same Q1 code were billed alone on a claim, with no S, T or V service and no composite combination, CMS says payment is made through a separate APC payment. The code did not change; the claim around it did.
What to check when a Q code shows no payment
- Look at the other lines on the same claim and the same date. A single S, T or V line is enough to package a Q1 code.
- For a Q2 code, look only for a T line. An S or V line does not package it.
- For a Q3 code, check whether the other services form a composite combination in Addendum M.
- For a Q4 lab test, check whether the claim carries a J1, J2, S, T, V, Q1, Q2 or Q3 service. If not, the test belongs under indicator A.
The row wording versus CMS wording
Searches often say "conditionally packaged". In Addendum D1, only Q4 carries that label ("Conditionally Packaged Laboratory Tests"). Q1 and Q2 are STV-packaged and T-packaged codes, and Q3 is a composite-APC code. This page uses CMS's labels.
Other codes in this set
Indicator A, Indicator N, Indicator K, 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 a Q1 code ever paid on its own?
Yes. CMS says that when no S, T or V service is on the claim and no composite combination applies, a Q1 code is paid through a separate APC payment.
What is the difference between Q1 and Q2?
Q1 is packaged when an S, T or V service is on the claim. Q2 is packaged only when a T service is on the claim.
Does Q4 mean the test is never paid?
No. A Q4 lab test is packaged only with certain other paid services. Otherwise it should carry indicator A and is paid under the clinical laboratory fee schedule.
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.