The AMA’s Current Procedural Terminology (CPT) codebook instructs, “Select the name of the procedure or service that accurately identifies the service performed. Do not select a CPT code that merely approximates the service provided. If no such specific code exists, then report the service using the appropriate unlisted procedure or service code.”1 Here’s an example from the October 2024 edition of CPT Assistant:
Question: Would it be appropriate to report code 66740 or 67255 for an ab interno cyclodialysis with allograft placement for scleral reinforcement?
Answer: Currently, there is no existing code to describe this type of procedure. It would not be appropriate to report only code 66740, Ciliary body destruction; cyclodialysis, because it would not capture all the work being performed. In addition, code 66740 is typically reported as a practice expense code. Code 67255, Scleral reinforcement (separate procedure); with graft, would not be appropriate because the allograft being implanted is already prepared. In addition, this code represents or describes a “separate procedure,” which means it may not be reported in addition to another procedure code at the same time. Therefore, for this scenario, it would be most appropriate to report an unlisted code (eg, 66999, Unlisted procedure, anterior segment of eye, or 67299, Unlisted procedure, posterior segment). When reporting an unlisted code to describe a procedure or service, it will be necessary to submit supporting documentation (eg, procedure report) with the claim to provide an adequate description of the nature, extent, and need for the procedure and the time, effort, and equipment necessary to provide the service.2
Likewise, CMS policy states, “A physician shall not report a CPT code for a specific procedure if it does not accurately describe the service performed. It is inappropriate to report the best fit HCPCS/CPT code unless it accurately describes the service performed, and all components of the HCPCS/CPT code were performed.”3 This policy mirrors the instructions in CPT as described above.
Medicare Coverage
Physicians can be reimbursed for unlisted procedure codes. Also, hospital outpatient departments are eligible for reimbursement within the Outpatient Prospective Payment System. Those providers submit claims with supporting documentation and the Medicare Administrative Contractor makes an individual determination.
Unlisted CPT codes require further documentation to be reimbursed.4 This includes:
- An amplified operative report that contains indications, description of the procedure and supplies used, identified risk factors, duration, intensity, and comparable procedures.
- A concise description of the procedure in 80 characters or less in Item 19 of the CMS-1500 claim form.5
- A rationale for your charge based on the work involved, skill required, supply costs, physician time, and methodical comparison to similar services.
According to the Code of Federal Regulations, 42 CFR 416.166(c)(7), ambulatory surgery centers (ASCs) are ineligible for reimbursement for unlisted procedures.6 In the 2017 final payment rule, CMS states that “all unlisted codes are noncovered in the ASC because we are unable to determine (due to the nondescript nature of unlisted procedure codes) if a procedure that would be reported with an unlisted code would not be expected to pose a significant risk to beneficiary safety when performed in an ASC, and would not be expected to require active medical monitoring and care of the beneficiary at midnight following the procedure.”7
Prior to this rulemaking, ASCs could not collect money from the beneficiary for these noncovered services. CMS changed the Medicare Claims Processing Manual (MCPM) in March 2023. It now says, “Covered ASC services are those surgical procedures that are identified by CMS on a listing that is updated at least annually. Some surgical procedures are covered by Medicare but are not on the list of covered ASC surgical procedures. For surgical procedures that are performed but not covered in ASCs, the related professional services may be billed by the rendering provider as Part B services, and the beneficiary is liable for the facility charges, which are noncovered by Medicare.”8 The MCPM goes on to say, “Facility services for surgical procedures are excluded from the ASC list. ASC bills beneficiaries for facility charges associated with the noncovered procedure.”
Financial Waivers
Although payment for noncovered services is the beneficiary’s responsibility, Medicare law (§1879) contains a provision that waives liability if the beneficiary is not likely to know, and did not have a reason to know, that the services would not be covered.9 For ordinary Medicare, or Part B Medicare, the beneficiary must be informed in writing via an advance beneficiary notice (ABN) of the noncovered items and services, the expected charge, and the reason for noncoverage then given the opportunity to decide. The ABN form is now the only approved financial waiver for Part B Medicare10; the old Notice of Exclusion has been retired.
Medicare Advantage Organizations (MAOs), or Part C Medicare, has been instructed by CMS not to use an ABN. In a memo from May 2014, CMS reminded MAOs that they are obliged to make preservice determinations of benefits at the request of the physician or the patient. Without notice of noncoverage prior to a noncovered service, the Medicare beneficiary is not financially responsible. A refund may be due if the beneficiary makes a payment without following this process.11 There is no single form or process for all MAOs; each one does this a little differently. Check with the MAO plan for instructions.
For non-Medicare beneficiaries, there is more latitude. A Notice of Exclusion from Health Plan Benefits (NEHB) is a customizable form that identifies items and services that are not covered under the beneficiary’s plan. This is a useful tool to clearly inform beneficiaries about coverage policies and financial responsibility to avoid misunderstandings later.
Problems From Miscoding
In cases where a mistaken Medicare claim is filed using a CPT code that is “close enough” and an unlisted CPT code should have been used, then the following problems may result:
- The Medicare reimbursement for the ASC facility fee is in error. Medicare should not have paid; the financial responsibility belongs to the patient. A refund is due.
- The coverage of the procedure is in question; it might not be covered. The Medicare Administrative Contractor will make a determination.
- The Medicare reimbursement for the surgeon is in error. Medicare needs to reprocess the claim with an unlisted procedure code and reassess the payment amount.
- Under the provisions of the compliance plans for the ASC and clinical practice, all personnel need to be educated on unlisted procedure codes to avoid future errors.
Conclusion
Some ophthalmic procedures are not specifically described in CPT, so an unlisted procedure code must be used on claims for reimbursement. Although surgeons and hospital outpatient departments can be reimbursed for unlisted procedures with sufficient justification and documentation, ASCs cannot. This disjointed policy has created some confusion. Even more troubling, an ASC could not seek payment from the beneficiary for a noncovered service. New CMS regulations resolved this conundrum so that unlisted procedures are explicitly noncovered and the financial responsibility of the beneficiary if proper notice is given prior to the procedure. GP
References
1. American Medical Association. CPT 2026 Professional Edition. American Medical Association; 2025.
2. American Medical Association. Questions and answers. CPT Assistant. October 2024;34(10).
3. Centers for Medicare and Medicaid Services. National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services, Chapter 1: General Correct Coding Policies. Section I-28. November 2023. Accessed March 26, 2026. https://www.cms.gov/files/document/chapter1generalcorrectcodingpoliciesfinal11.pdf
4. American College of Surgeons. Unlisted procedures: strategies for successful reimbursement. Bull Am Coll Surg. August 2, 2017. Accessed March 26, 2026. https://bulletin.facs.org/2017/08/unlisted-procedures-strategies-for-successful-reimbursement/
5. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual, Chapter 26, §10.4 Item 24D. August 9, 2024. Accessed March 26, 2026. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c26pdf.pdf
6. Code of Federal Regulations 42 CFR § 416.166(c)(7). Covered surgical procedures. Accessed March 26, 2026. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-416
7. Centers for Medicare and Medicaid Services. Medicare program: hospital outpatient prospective payment and ambulatory surgical center payment systems and quality reporting programs; final rule with comment period. Fed Regist. 2016;81(219):79743. November 14, 2016. Accessed March 26, 2026. https://www.govinfo.gov/content/pkg/FR-2016-11-14/pdf/2016-26515.pdf
8. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual Chapter 14: Ambulatory Surgical Centers, §10.2. March 24, 2023. Accessed March 26, 2026. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c14.pdf
9. Social Security Administration. Limitation on liability of beneficiary where Medicare claims are disallowed. Social Security Act §1879. Accessed March 26, 2026. https://www.ssa.gov/OP_Home/ssact/title18/1879.htm
10. Centers for Medicare and Medicaid Services. Fee-for-service advance beneficiary notice (FFS ABN). April 2023. Accessed March 26, 2026. https://www.cms.gov/medicare/forms-notices/beneficiary-notices-initiative/ffs-abn
11. US Department of Health and Human Services. Centers for Medicare and Medicaid Services memo to Medicare Advantage plans: improper use of advance notices of noncoverage. May 2014.