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Q/A: Packaged vs. bundled services

APCs Weekly Monitor, October 29, 2010

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Q: People in our hospital use the terms “bundling” and “packaging” interchangeably. Are they the same thing?

A: No. Bundling is a coding concept and packaging is a payment concept. A bundled service is one that is considered to be an inclusive component of another service from a coding perspective. The National Correct Coding Initiative (NCCI) edits specify bundled codes, and under normal circumstances, coders should not separately report codes for these services. The charges for these services should be reported as part of the charge for the coded line to which they are bundled, or they may appear separately on an appropriate revenue code line without a HCPCS.

Packaging is a payment concept that indicates an item or service is not separately paid, but rather paid as part of another service. Unlike bundled items and services, packaged items and services may, and sometimes are required to, be reported separately on the claim with a HCPCS code. Packaged services are subdivided into status indicators N, Q1, Q2, and Q3.

• Status indicator N: Packaged codes. These codes are always packaged.
• Status indicator Q1: STVX-packaged codes. These codes are packaged when billed with another service with the same date of service and status indicator S, T, V, or X. Otherwise they are paid separately under the APC specified in Addendum B of the OPPS.
• Status indicator Q2: T-packaged codes. These codes are packaged when billed with another service with the same date of service and status indicator T. Otherwise, they are paid separately under the APC specified in Addendum B of the OPPS.
• Status indicator Q3: These codes may be paid through a composite APC. Addendum M of the OPPS final rule specifies both the individual APC for payment when the composite is not triggered, as well as the composite APC that will be paid if the service is billed under circumstances that trigger composite payment. See the Outpatient Code Editor, Appendix K for information on composite payment assignment.

If a code is bundled, it is improper to report it unless there is a clinical circumstance that justifies overriding the bundling rule. However, you can, and should, bill separately for packaged services in a manner that does not generate separate payment.

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