Knowing When to Bundle or Unbundle Can Be a Tricky Proposition

by  Find-A-Code™
Oct 6th, 2023

Medical coding and billing are detail-oriented jobs that offer plenty of room for mistakes. For example, it is not uncommon for a coder to employ an older ICD-10 code when a newer ICD-11 code is more appropriate. Here is another one: improperly bundling or unbundling medical procedures and services.

Bundling and unbundling are fairly common within the medical billing ecosystem. Of the two, bundling occurs more frequently. But it should be noted that both practices are governed by clear guidelines designed to prevent either one being utilized improperly. It is important that medical coders and billers are well-versed in when to apply either practice.

Combining Two or More Services

Bundling in a medical billing scenario involves combining two or more services or procedures that are normally performed together, under a single code. It is done to streamline coding and reduce costs. Bundling can save payers and patients quite a bit.

The perfect example to illustrate bundling involves surgery. Although making an initial surgical incision is a separate action unto itself, it is considered part of the surgical procedure as a whole. Likewise for the work done during the surgery and then closing up afterwards. Even though different actions that could have been billed separately are performed, they are performed together to make up the entire surgical process. Therefore, they are all billed under a single code.

Another good example would be treating a broken arm. Setting the bone and then stabilizing it with a cast are technically separate procedures, but they are utilized together for a complete treatment. Therefore, they can be bundled under a single code just as with the previously described surgical procedure.

Separating an Otherwise Bundled Procedure

Unbundling in a medical billing scenario is the opposite of bundling. It involves separating services or procedures that would otherwise be bundled for the purposes of billing them separately. Going back to the surgical example, closing up a surgical site is considered an integral and inseparable part of surgery. But there may be cause for unbundling it if complications require special skills or procedures.

Let's say that certain complications arise during an otherwise typical mastectomy. Closing up requires the services of a plastic surgeon. Closing up would then be a separate service under a separate billing code. It would be unbundled from the rest of the procedure.

Open to Interpretation

Common sense suggests that both bundling and unbundling are open to interpretation. Payers might insist on bundling in order to reduce payment. On the other hand, clinicians might insist on unbundling in order to bill higher amounts. It goes without saying that there is plenty of opportunity for providers and payers to argue over bundling and unbundling.

In order to minimize mistakes and disagreements, the Centers for Medicare & Medicaid Services (CMS) developed the National Correct Coding Initiative (NCCI). The initiative is considered the authority in bundling matters relating to Medicare and Medicaid. Given that private insurance carriers tend to follow what the CMS does, most of them have adopted the NCCI as well.

Something Else to Master

If you already work as a medical coder or biller, you know that the combined practices of bundling and unbundling represent just something else you must master. It is part and parcel with the job. But you take it in stride because that is what you do.

For the rest of us, bundling and unbundling offer a clear illustration of just how complicated medical billing is. Coding and billing jobs are not for the faint of heart. They require an impressive amount of knowledge, skill, experience, and attention to detail.