For Dates of Service beginning May 1, 2023, Cigna added revenue codes 270–279 to the list of codes that will be administratively denied if billed without a corresponding CPT or HCPCS code. These revenue codes are used to bill for generic medical and surgical supplies, such as bandages, dressings and other consumable items, as well as high-cost items like prosthetics, orthotics and implants. Failure to include the appropriate CPT or HCPCS codes on the claim will result in the denial of the line item. Providers may exercise administrative appeal rights in response to these denials.
Who is affected?
Any provider treating Cigna members may be impacted by this policy expansion. Providers operating under a Percent of Charges (POC) reimbursement model may be most at risk for revenue leakage as a result.
What’s the impact?
Cigna has estimated anywhere from less than $100 to more than $100,000 annual impact depending on the size of the healthcare organization.
This policy update will likely have minimal impact on high-cost items like pacemaker supplies since those revenue codes are typically always billed with corresponding CPT or HCPCS codes.
However, revenue codes 270–272 for generic supplies typically do not have corresponding CPT or HCPCS codes. While these codes aren’t usually separately reimbursable, they do contribute to the gross allowed charges on a claim. For providers reimbursed through POC payment models, denying these revenue codes and their associate charges means the total charges on the claim will be lower, resulting in lower reimbursement.
While significant revenue impact is unlikely, there are other administrative impacts to consider including skewed denials data, increased pre-bill edits, cost accounting inaccuracy and supply chain management implications.
How to minimize risk from Cigna’s policy change
Healthcare leaders can take several important steps to minimize the risk of denials and delays caused by Cigna’s recent policy change. These steps include:
- Review your Charge Description Master (CDM) to ensure it contains up-to-date and accurate hard-coded CPT and HCPCS codes where appropriate.
- Request revenue and usage reports for the previous year’s Cigna claims that lacked corresponding CPT or HCPCS codes for revenue codes 270-279 to determine the volume of revenue at risk.
- Keep track of denials related to this policy by checking the claim adjustment segment (CAS) code specified on remittance advice and promptly filing an appeal with the necessary CPT or HCPCS codes.
- Consider implementing claim edits to prevent claims with revenue codes 270-279 from being submitted without a corresponding procedure code.
- Review your Cigna contract to determine whether the policy update triggers any material change clause as you monitor real-time results in the coming weeks.
- Request your annual estimated financial impact from your Cigna representative.
By taking these proactive measures, healthcare providers can avoid unnecessary denials and delays in reimbursement, ensuring smooth revenue cycle management.
The recent decision by Cigna to administratively deny claims lacking corresponding CPT/HCPCS codes for revenue codes 270-279 is not expected to have a significant impact on revenue. However, this change does raise some administrative concerns, particularly for providers operating under percent-of-charge payment agreements with Cigna. We will closely monitor the impact of this change as claims processed from May 1 onwards are reviewed and evaluated.
These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.