Claim Rejections: Required ICD-10 Diagnosis Code Indicator Not Included on CMS 1500 Form

Are you receiving paper claim rejections with one of the following messages?

  • Claim Adjustment Reason Code CO-11 - The diagnosis is inconsistent with the procedure
  • Remarks Advice Remarks Code N657 - This should be billed with the appropriate code for these services

If so, you should know that CMS requires all paper claims include the necessary ‘ICD Indicator’ in Item 21 of the CMS 1500 claim form to prevent claim rejection. A claim rejected for omission of the ‘ICD Indictor’ must be corrected and resubmitted as a new claim.

The 'ICD Indicator’ identifies the ICD code set being reported. 

  • Enter the ICD-10-CM ‘ICD indicator’ 0 (zero) when including ICD-10-CM diagnosis codes on paper claims.
    • Enter the indicator as a single digit between the vertical, dotted lines.
  • Enter up to 12 diagnosis codes. The diagnosis codes are to be entered on the lines with letters A-L. Relate lines A-L to the lines of service in 24E by the letter of the line.
  • Do not insert a period in the ICD-10 code.

Full instructions on proper completion of the CMS 1500 claim form are available on the Palmetto GBA website. Additional details regarding this requirement are in the CMS Internet Only Manual (PDF, 665 KB), Publication 100-4, Medicare Claims Processing Manual, Chapter 26, Section 10.4.


Last Updated: 04/23/2018