Billing

Billing Medicare for a Denial - Condition Code 21

Medicare will not pay for services excluded by statute. For claims submitted to Medicare, these excluded services that are not a Medicare benefit may be:

  • Not submitted to Medicare at all
  • Submitted as a noncovered line item, or
  • Submitted on an entirely noncovered claim

To submit statutory exclusions as noncovered line items on claims with other covered services, modifier GY- can be appended on the noncovered line items. To submit statutory exclusions on entirely noncovered claims, use the condition code 21, a claim-level code, signifying that all charges that are submitted on the claim are noncovered charges.

Condition code 21 can also be used to indicate a no payment claim is being submitted at a beneficiary’s request, or other insurer’s request, to obtain a denial from Medicare in order to receive payment from another insurer. These no-payment claims are referred to as “billing for denial” when they are submitted with the condition code 21 (billing for denial notice).

Submit the condition code 21 claim as follows:

  • All charges must be submitted as noncovered
  • No modifiers that signify beneficiary/provider liability are necessary
  • The 3rd position of the type of bill must be zero
  • Total charges must be noncovered
  • All basic required claim elements must be completed

Nocovered charges on these claims will be denied. The Medicare beneficiary will be liable for these claims.

Note that the no-payment bill that is submitted using the condition code 21 is only used for services that are not in dispute, as opposed to noncovered charges that are submitted on a demand bill (condition code 20).

Providers may reference the CMS IOM Publication 100-04, Medicare Claims Processing Manual, Chapter 1, Section 60.1.3 for more information.