If you’re billing for a hospital outpatient department, C codes might look like a straightforward process at first. Most often, denials and delays already happen by the time you address something concerning is going around.
The problem is that C codes exist almost exclusively for hospital outpatient settings. Unlike physician offices or inpatient claims. The moment there is one misapplication. Or when you grab an outdated code because nobody updated the list. Maybe you keep billing C9399 for drugs that already have their own assigned codes. This makes the entire claim break. CMS added 19 new C codes in 2026 alone. And you are expected to miss none. If you skip any update, you risk your service going unpatched.
The following blog walks you through the navigation process to bill C codes, corresponding categories, and the recent updates in 2026.
What Are HCPCS C Codes?
CMS has classified certain diagnoses and procedures under their specific code type. C codes in medical billing are classified as temporary HCPCS Level II codes. These are used for drugs, devices, biologics, and often new technologies and procedures that have yet to be assigned a permanent code.
While assessing the billing at a practice, you might ask yourself, “How do I know if I should use a C code for this diagnosis?” This is important to address before you start resolving coding errors. When you actually use C code is determined by the following assessments of the situation:
- The FDA recently approved the medication, gadget, or biological that your hospital utilizes, but CMS hasn’t yet given it a permanent HCPCS or J code.
- Because the item is too expensive to be included in the APC rate, CMS has highlighted it for separate reimbursement and granted it pass-through status under OPPS.
- There is currently no CPT or J code in your chargemaster that precisely represents the item utilized, not simply a close match.
- You’re billing for a device-dependent outpatient procedure where the implant or device cost would otherwise be absorbed into a base APC that was never priced to cover it
- The process or technology utilized is identified as pass-through eligible and classified under the C code range in the most recent CMS HCPCS quarterly update.
Types of Services Covered by C Codes
Drugs and Biologicals
CMS assigns C codes to certain new drugs and biologicals qualifying for pass-through status. Payment equals ASP + 6% (or +6%/+8% for biosimilars). In January 2026, six new drug/biological codes received pass-through status.
Medical Devices and Implants
Most C codes cover implantable devices, catheters, neurostimulators, and prosthetics. January 2026 added new device pass-through codes C1607 and C1608.
New Technology Procedures and MRA
C codes also report emerging procedures and MRA services without permanent assignments.
How to Access and Use the Latest C Codes (2026 Updates)
CMS released the first of four Alpha-Numeric HCPCS files in January 2026. The rest will follow the pattern throughout the year. January, April, July, October. The recent January 2026 file has a list of active C codes setting a baseline for corresponding files later this year.
Once you’ve downloaded the file, the next steps are finding the error you’ve faced and revising the status accordingly. Here’s a step-by-step guide to revise your errors with the updated C codes in medical billing.
Step 1: Find what changed
The file includes an “Action Code” column. Filter for “A” (added), “D” (deleted), and “R” (revised). Anything marked D is dead. Now you have a keymap. If a dead code is in your chargemaster. Flag it. Anything marked R means the descriptor changed. A descriptor might change the application of your code.
Step 2: Cross-reference against your chargemaster
Pull every C code currently active in your chargemaster. Once you have a list, check it against the new file. Line by line. If a code your team is actively billing doesn’t appear in the January file, it’s no longer valid. Common gap: C9305 and C9306 were deleted in the 2026 update — any hospital still billing those is getting denied.
Step 3: Check pass-through status
Not all of the file’s C code can be passed through. Compare your matches to OPPS Addendum P, which is released by CMS in conjunction with the yearly OPPS final rule. Offset amounts reside there. Payment is now bundled with the APC rather than being separate if a code is active but its pass-through status has expired.
On January 1, 2026, two new device codes were granted pass-through status: C1607 (implantable rechargeable neurostimulator) and C1608 (complete dual mobility prosthesis, initial carpometacarpal joint). Both devices must be in your chargemaster right now if your hospital uses them.
Step-by-Step Billing Guidelines for C Codes
- Verify the exact descriptor in the current HCPCS file matches the item provided.
- Report the C code on the same claim line as the primary CPT procedure code.
- Include all charges; the Outpatient Code Editor (OCE) calculates pass-through payment automatically.
- Apply device offset: CMS subtracts the packaged device portion from the pass-through payment.s
- Use correct status indicators (e.g., “H” for pass-through devices).
- Document medical necessity and FDA clearance in the patient record.
Challenges and Best Practices in C Code Billing
Common errors include mismatched descriptors, missing offsets, and failure to update quarterly files. Best practices:
- Subscribe to CMS MLN Matters transmittals (e.g., MM14361 for January 2026).
- Run claims through the I/OCE before submission.
- Train staff on pass-through expiration dates.
- Use CMS Addendum B and P for current APC and offset values.
Conclusion
HCPCS C codes serve as temporary but critical tools for accurate hospital outpatient billing under Medicare OPPS. They deliver pass-through payments for innovative drugs, devices, and procedures while CMS transitions them to permanent codes. In 2026, 19 new C codes, including C1607 and C1608, plus updated descriptors and offsets, demand immediate attention. Master the official CMS definitions, download the quarterly files, follow precise billing rules, and avoid common pitfalls to prevent denials and secure full reimbursement.
Are you prepared to get rid of C code flaws and increase your outpatient income? For professional coding, compliance, and revenue cycle management that complies with 2026 CMS regulations, get in touch with Delaware Medical Billing right now. You may concentrate on patient care by leaving the complexity to our experts.
Frequently Asked Questions
What are C codes in medical billing?
C-Codes. The C series of HCPCS (“C codes”) reports drug, biological, and device codes that must be used by Outpatient Prospective Payment System (OPPS) hospitals for reporting facility (technical) services.
What is the ICD-10 code for D and C?
The ICD-10 code for non-obstetrical dilation and curettage is 58120, while 59840 is used for first-trimester abortion procedures.
What is medical coding C?
Medical coding is the process of taking a patient’s health care information, such as medical procedures, diagnosis, necessary medical equipment, and medical services information, from the physician’s notes.
