Understanding Bundling and Unbundling in Medical Coding

  • Written by Ashley Mark
  • Wednesday 1st February 2023
Understanding Bundling and Unbundling in Medical Coding VLMS Healthcare

Medical coding is the process of assigning ICD-10, CPT, and HCPCS numbers to healthcare diagnostics, treatments, services, and devices. Medical codes that are suitable for the situation must be used by healthcare providers when submitting claims for services rendered to private insurers and government-funded programs. Making the right CPT code selection is essential for accurate invoicing. Medical billing and coding services assist doctors to establish proper billing claims by reviewing patient data and choosing the right code to reflect the treatment or treatment they provided.

When different treatments that have different codes are carried out simultaneously, assigning medical codes can become very difficult. The debate is on whether they should be billed together under a single code or individually. Rules for medical coding apply in this case. When distinct CPT or HCPCS Level II operations or services are invoiced under one code, bundling has taken place. When two or more codes that are typically a component of a single treatment may be invoiced individually, this is known as unbundling. The reliability of medical billing necessitates understanding what to bundle or unbundle. Billing problems can result from making the wrong decision.

The term bundling denotes the utilization of a unified CPT code to designate various operations that were carried out throughout a care episode that was provided over a certain length of time. A unified payment is made to healthcare professionals and/or facilities under the bundled payment system for all services rendered to treat a patient during a particular episode of treatment.

When a process is required to effectively finish the primary operation, bundling is applicable. For instance, an incision is not regarded as a distinct process because it is an essential component of surgical treatment. Similarly, the incision's closing once the procedure is finished is not a distinct step but rather a crucial one. Incision and sealing are often covered by surgical codes.

When numerous procedural codes are invoiced for a collection of treatments that are all covered by a single comprehensive code, this is known as unbundling. If the other operations need more time and talent to complete, unbundling may be applicable. For instance, if the surgical incision closure took a significant amount of effort and expertise, these extra services may be recorded using separate codes and the relevant modifier, or they may be unbundled.

Payers are concerned about unbundling and are searching for operations that have been unbundled incorrectly. Since improper unbundling can lead to substantial overpayments, it is seen as fraud. However, combining services that shouldn't be combined can reduce revenue.

Bundling Guidelines:

  • Additional payment is not permitted for services that are seen as mutually exclusive, ancillary, or fundamental to the original service delivered.
  • Bundling adjustments do not apply to all CPT or HCPCS Level II codes, but a single code that is vulnerable to bundling edits may bundle several other codes.
  • The rule does not always apply. If two operations are performed at different anatomic locations or during different patient visits, a code that is typically bundled may be reported (and paid) individually.
  • The appropriate modification must be added to the code that is typically packaged when the NCCI code pair edit is performed. Payers will automatically reject this code in the absence of a modifier, making it bundled and not independently payable.


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