What is revenue code - 760, 761, 450, 360 , 271 - 279

Revenue Code

Revenue codes are 3-digit numbers that are used on hospital bills to tell the insurance companies either where the patient was when they received treatment, or what type of item a patient might have received as a patient. A medical claim will not be paid if this is missing from a bill.

Revenue codes go along with procedure codes. When putting them in a charge master, you would add the correct revenue code to the CPT code you were going to use for a particular department. It's the use of revenue codes which allows hospitals to use the same CPT code in multiple departments because it will show which department the services were provided in.

An easy example to use here would be to match up CPT code 99282, which is for an emergency room visit of low to moderate severity, and revenue code 450, which stands for emergency room. In this case, revenue code 450 is the only code that could be used for this CPT code, thus making this one easy to code.

A more complex example to use would be something like CPT 12001, which is a simple laceration repair of a wound on the scalp, trunk of the body, or the extremities such as hands and feet. This procedure could be done in multiple places. It could be done in the OR as part of another procedure; that would be revenue code 360. It could be done in the emergency room; revenue code 450. It could be done in a treatment room; that would be revenue code 761. It could be done in a clinic; that would be revenue code 510. There are at least 3 other revenue codes where this procedure could be performed.

Within most revenue code categories there are subcategories that better define what's going on or what was being used. For instance, revenue code 270 is the general code for supplies. But within that category are nine subcategories:



271 - Nonsterile Supply

272 - Sterile Supply

273 - Take-Home Supply

274 - Prosthetic/Orthotic Devices

275 - Pacemaker

276 - Intraocular Lens

277 - Oxygen Take-Home

278 - Other Implants

279 - Other Supplies/Devices

Every revenue code category has a subcategory that ends in "9" to denote items that don't fit a specific revenue code.


revenue code 761 treatment room

Hospital Owned Clinics:

In late June, a notice was published to hospitals addressing the appropriate use of Revenue Code 761 and claims related to the issues identified in the notice were systematically voided. Since that notice, we have received inquiries from several hospitals concerning services provided at hospital ‘satellite’ locations and the use of HR761. The information below is being provided to assist providers with understanding Medicaid policy for hospital satellite locations/clinics and provider based billing.

DHH is aware that an increasing number of physician clinics are being acquired by hospitals and/or hospitals are opening ‘satellite locations’ as extensions of the hospital outpatient setting. Because of different cost reimbursement systems, billing Medicaid is not handled in the same manner as billing Medicare. The following is a summary of the specific arrangements that may be in place and the policy that should be followed for billing Medicaid for services.

There are two distinct types of arrangements that may occur related to hospital owned clinics:

• Satellite Sites as Outpatient Hospital Extensions

Hospitals may have satellite ‘clinic’ locations that are extensions of the outpatient hospital. The hospital must have an approval letter from Health Standards listing the exact name and practice location along with the effective date the location was approved to provide services under the license of the hospital. Additionally, the provider must have a letter from CMS designating provider based status for the satellite location.

The hospital may bill a clinic visit revenue code (HR510, HR514, HR515, HR517, or HR519) accompanied by appropriate CPT code (99201, 99202, 99203, 99204, 99205, 99211, 99212, 99213, 99214, or 99215) for the use of the space, nursing/ancillary staff, and all ancillary supplies, including but not limited to general medical supplies; gloves; syringes; etc. The hospital may also  bill for any lab, radiology, etc., provided at that site. All of these services would be billed under the hospital provider number as outpatient hospital services.

The professional services providers (physician/physician extenders) may bill for services using the professional provider number for the clinic location and must use Place of Service 22 (Outpatient Hospital).

Vaccines provided through Vaccines for Children (VFC) and immunization administrations are not payable. Reimbursement for immunization administration performed by the hospital nursing staff is included in the hospital clinic visit revenue code as outlined above. If administration of a nonVFC vaccine is required, the cost of the vaccine may be billed under the appropriate drug revenue code (HR250 or HR636) with the appropriate NDC data included.

• Hospital Owned Free Standing Clinics (Not licensed under and not considered an Extension of the Outpatient Hospital) Hospitals may have purchased and operate clinics located away from the hospital that are NOT licensed through or considered an extension of the outpatient hospital. These clinics must have their own separate and distinct group provider number. All services provided at this location must be billed using this provider number as the billing provider.

The hospital may not bill for any part of the services provided at these clinics. These clinics operate just as a physician’s office/clinic operates.

If the equipment used (lab, radiology, etc.) is located at the clinic, the full service may be billed using the clinic provider number (and the appropriate attending physician provider number), but only if a properly completed OFS Form 24 is included in the Medicaid enrollment file. Providers are not to bill Louisiana Medicaid for the full service of radiological/laboratory services that are not performed in their own offices. Tests which are sent to other facilities for processing are not to be billed to Louisiana Medicaid.

All professional (physician/physician extender) claims for services provided at the clinic setting should be billed with the clinic provider number as the billing provider and the individual physician/physician extender as the attending provider. Place of Service 11 (Office) is used in this setting

If it is necessary to send the patient to the outpatient hospital for some services that cannot be provided at the hospital owned free-standing clinic, then the hospital bills the services provided at the outpatient hospital under the hospital provider number, and the services provided at the free-standing clinic are billed under the clinic provider number.



Outpatient Observation Guidelines for NEtwork BLUE and BluePreferred

The following charts outline the differences between the NEtwork BLUE and BluePreferred guidelines for outpatient observation. Additional information is also included regarding NEtwork BLUE and BluePreferred inpatient admissions as they are related to outpatient admissions.

NEtwork BLue BluePreferred Observation definition:

Observation Services are outpatient services where the patient is being held to determine if he or she should be admitted, discharged home or sent to another provider A physician must justify and provide the order on the patient. Medical record documentation must prove that the patient was admitted to observation. For all networks, BCBSNE will follow the Medicare definition,

which requires the use of a bed and nursing services. Observation is NOT:

• A substitute for an inpatient admission
• For continuous monitoring
• For medically stable patients who need diagnostic testing or outpatient procedures
• For patients who routinely need therapeutic procedures provided in an outpatient setting
• For patients waiting for nursing home placement
• To be used as a convenience to the patient, his or her family, the hospital or the attending physician
• For routine prep or recovery prior to or following diagnostic or surgical services

Also note the following:

• Observation services will only be defined under revenue code 762.
• Revenue code 761 is for a treatment room and should not be used in place of an observation room.

Observation services will be paid as an outpatient service type under the outpatient provider contract provisions. Observation claim billing elements:

a. Outpatient bill type (i.e.131)
b. FL 42 must be revenue code 762
c. FL 44 must include a valid CPT or HCPC code
d. Each observation day must be billed as a separate line item with the actual date of service in FL 45
e. FL 46 must equal 1 for each 762 line item

There are no limits or parameters around the number of hours of observation or a requirement to roll into an inpatient claim if the patient is admitted and BCBSNE is the primary payer.

For each 24-hour increment or day of an observation stay in the outpatient setting, a separate line item must be billed under revenue code 762 with the service date on each line. Revenue code 762 for observation requires a CPT or HCPCS code on the line. Claims will be returned if the code is not provided on

In relation to inpatient admissions 

If an observation stay results in an inpatient admission, you must file the observation stay claim separate from the inpatient claim. Revenue Code 769 is not valid for reporting observation services and will be returned for proper coding. Observation definition:

Observation services refers to the period of treatment when the physician is evaluating the patient’s medical condition to determine whether the patient can be released from the outpatient department or admitted to the facility as an inpatient; the period of treatment following an outpatient procedure when the physician is evaluating the patient’s medical condition to determine whether the patient can be released from the outpatient department.

The observation period is not to be used as a preoperative day or for diagnostic work-ups, and any facility charges for such use are subject to denial.

The maximum reimbursement amount for an observation period is up to one day’s accommodation charge. For the convenience of the facility or the convenience of the patient, the facility may allow the patient to remain longer than 24 hours without further reimbursement.

In relation to inpatient admissions Observation is employed when the necessity of admission is unclear at the time the patient enters the facility. The observation period prior to an impending inpatient admission normally should not exceed one patient day.

If an observation stay results in an inpatient admission, the observation and inpatient stays must be billed together as an inpatient claim in the following manner:

a. Bill the first day as an observation room charge in Revenue  Code 762.

b. Bill subsequent days as inpatient room charges.

c. The billing period in FL 6 reflects the “From” date as the date  of inpatient admission, and the “Through” date as the  discharge date.

In relation to outpatient admissions When additional observation is necessary for outpatient surgery patients following the post-operative recovery period, the observation charges should be billed in Revenue Code 762. If it is necessary to admit the patient to acute care, follow the billing instructions above.

Occasionally, circumstances may warrant an observation period in excess of one day to determine whether to admit a patient. All hospitals must bill each day of observation as a separate line item under Revenue Code 762.The maximum reimbursement amount for an observation period is up to one day’s accommodation charge. For the convenience of the facility or the convenience of the patient, the facility may allow the patient to remain longer than 24 hours without further reimbursement.


In relation to inpatient admissions

• Revenue Code 760 is not allowed because it fails to specify the nature of the services.

• Revenue Code 761 is acceptable when an exam or relatively minor treatment or procedure is performed. If Revenue Code 761 is used for an outpatient bill type, a CPT code describing the treatment or procedure must be also present. The amount of charges for the treatment room that will be considered in the calculation of the reimbursement amount is limited to the contracted rate for the service.

• Revenue Code 762 is acceptable when an outpatient is being observed and treated in a non-ICU/CCU setting for a period of time or when a direct inpatient admission is not clear until the results of tests or procedures are confirmed and clinical care meets the inpatient admission criteria.

• Revenue Code 762 may also be used when a surgical outpatient requires an extended treatment period following an outpatient surgical or major diagnostic procedure. The amount of charges for an observation period as noted in the preceding paragraph that will be considered in the calculation of the reimbursement is limited to the amount of the filed semi-private room rate in effect at the time of service.

• Revenue Code 769 is only to be used when a highly intensive outpatient procedure is performed (i.e., cardiac catheterization, pacemaker procedures, etc.) and an ICU/CCU level of post procedure treatment and observation is necessary and appropriate. The diagnosis code should indicate the need for this level of care. The amount of charges for an observation period as noted in the preceding paragraph that will be considered in the calculation of the reimbursement amount is limited to the amount of the filed ICU or CCU room rate in effect at the time of service.