CurrentMolina HealthcarePolicy N/A

UB-04 condition codes and device credit reporting for replacement of medical devices

Defines Molina Healthcare's billing and reimbursement guidance for institutional and ambulatory claims when medical devices are replaced due to malfunction, warranty, or recall and how manufacturer credits should be reported; applies to Molina Medicaid, Medicare, and Marketplace lines of business.

Policy Summary

PayerMolina Healthcare

PolicyUB-04 condition codes and device credit reporting for replacement of medical devices

Policy CodePolicy N/A

Change TypeNew policy

Effective DateApr 28, 2025

Next Review DateN/A

Key ActionSubmit claims for medically necessary removal and replacement of recalled or defective devices and include appropriate condition codes (49, 50, 53) and Value Code FD or modifier FB/FC where applicable.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3Condition codes covered (49, 50, 53)

FDValue code for ≥50% credit

FB, FCOutpatient/ASC modifiers

FL 39-41UB-04 value code fields

Device Replacement Reimbursement and Reporting

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Device replacement reimbursement and reporting criteria

Coverage and reporting rules for replacement of recalled or defective devices and handling of manufacturer credits:

Molina provides coverage for removal and replacement of recalled or defective medical devices when medically necessary.

Molina reserves the right to audit any claims submitted in connection with removal and replacement of recalled or defective devices; Molina may adjust payment when the facility receives full or partial manufacturer credit and is not liable for the full replacement cost.

Providers must include applicable UB-04 condition codes and value/modifier reporting as described below on inpatient, outpatient, and ASC claim forms, as appropriate.

Condition codes (place in UB-04 FL 39-41)

Condition Code 49 — product lifecycle replacement earlier than anticipated due to malfunction (warranty-based replacement). Value Code FD is usually used alongside Condition Code 49 when a full or partial manufacturer credit of 50% or more is received.
Condition Code 50 — product replacement for known recall by manufacturer or FDA. Value Code FD is usually used alongside Condition Code 50 when a full or partial manufacturer credit of 50% or more is received.
Condition Code 53 — initial placement of a medical device provided as part of a clinical trial or free sample; only for outpatient and ASC claims and not to be used on inpatient claims. When reported, Value Code FD is usually reported as well.

More than one condition code (49, 50, 53) may be reported on the same UB-04 claim only when they accurately reflect different, distinct services or different, distinct medical devices reported on that claim.

Value Code FD — report when the facility receives a full or partial manufacturer credit of 50% or more; enter FD in a value code field (FL 39a, 40a, or 41a) and place the dollar amount of the manufacturer's credit beside it (e.g., FD = $2,000). Reporting FD allows Molina to adjust payment and avoid double reimbursement.

Value Code FD is not always reported with Condition Codes 49, 50, or 53; FD is used only when the manufacturer credit impacts reimbursement.

Outpatient/ASC reporting — do not use Value Code FD on ASC claims; instead report Condition Codes 49, 50, or 53 and use modifiers FB (full credit) or FC (partial credit) in FL 44 for outpatient/ASC claim lines as applicable; attach modifier FB to the CPT/HCPCS procedure line (not the device line); device line should reflect a $0 or $1 charge when item furnished at no cost or fully credited.

Do not use modifier FC when the manufacturer credit is less than 50%; when credit is less than 50% no credit modifier is used.

For ASC, the device HCPCS line-item charge reported in FL 47 should reflect the reduced cost after partial credit is applied.

Per CMS Transmittal 11937, hospitals paid under OPPS are no longer required (effective January 1, 2014) to use modifiers FB or FC on UB-04 outpatient claims to reflect dollar amounts of manufacturer credits.

In cases of conflict, federal/state guidelines and the member benefit plan documents supersede this policy; provider contract language prevails.

UB-04 Condition Codes, Value Codes, Modifiers, and Thresholds

UB-04 Condition CodesmixedCovered

49	Product lifecycle replacement earlier than anticipated due to malfunction (warranty-based replacement)
50	Product replacement for known recall by manufacturer or FDA
53	Initial placement of a medical device provided as part of a clinical trial or free sample (outpatient/ASC only)

Manufacturer credit reporting threshold

Reporting thresholdReport Value Code FD or use modifier FB or FC when manufacturer credit is 50% or greater; do not use modifier FC when credit is less than 50%.

Where FD is placedEnter FD in one of the Value Code fields (FL 39a, 40a, or 41a) and place the dollar amount of the manufacturer's credit next to it.

When FD may be omittedFD is not always reported with Condition Codes 49, 50, or 53 when the replacement did not result in a credit that impacted reimbursement.

Claims Submission Requirements and Audit Notice

Documentation Required

Submit claims with condition codes, value code or modifier; expect possible audit

Submit claims for medically necessary removal and replacement of recalled or defective devices and include the appropriate UB‑04 condition code(s) (49, 50, 53) in Field Locator (FL) 39‑41. When a full or partial manufacturer credit of 50% or more is received, report Value Code FD (dollar amount) or use outpatient/ASC modifiers FB/FC as applicable. Molina reserves the right to audit any claims submitted in connection with these services and may adjust payment when credits are received.

Place Condition Codes 49, 50 or 53 in UB‑04 FL 39‑41 as appropriate.
Report Value Code FD with the dollar amount when manufacturer credit is 50% or greater.
For outpatient/ASC claims, use modifiers FB (full credit) or FC (partial credit) as applicable.
Molina may audit related claims and is not liable for the full replacement cost when credits are received.

Key Form, Code, and Modifier Definitions

Condition Codes

DefinitionTwo-character numeric or alphanumeric indicators on the UB-04 that convey details affecting claim processing (used to reflect patient, service, setting, or billing circumstances).

Role in this policyUsed to indicate device replacement circumstances (Condition Codes 49, 50, and 53) so payer can process reimbursement and adjustments appropriately.

Code assignmentsNUBC assigns: 49 = product lifecycle replacement for malfunction; 50 = product replacement for known recall; 53 = initial placement of device from clinical trial or free sample (53 limited to outpatient/ASC).

Value Codes / FD

DefinitionValue Codes are fields on the UB-04 (Field Locators 39-41) used to report credits or other monetary adjustments associated with a claim.

FD (Value Code)FD indicates manufacturer credit amount and is reported as a dollar amount (e.g., FD = $2,000) in FL 39-41 to show credit received (typically ≥50% when used).

PurposeCommunicates to the payer how much the facility received back from the manufacturer so payment can be adjusted downward to avoid double reimbursement.

Modifiers FB and FC

FB - full creditModifier FB indicates an item provided without cost to the provider or full credit received; attached to the CPT/HCPCS procedure line (not the device HCPCS line) and entered in FL 44.

FC - partial creditModifier FC indicates partial credit received (used when credit is equal to or greater than 50%); attached to the CPT/HCPCS procedure line and entered in FL 44. Do not use FC when credit is less than 50%.

FL 44 usageModifiers FB and FC (up to four modifiers) are entered in Field Locator 44 immediately following the HCPCS/CPT code with no spaces; they were created for outpatient/ASC reporting per Medicare guidance.

UB-04 Form

Form purposeThe UB-04 is the standard institutional claim form used to bill inpatient, outpatient, ASC, and other facility services; it includes specific Field Locators referenced in this policy.

FL 39-41 (Value Codes)Value Codes and corresponding credit amounts should be placed in Field Locators 39-41; use FD in one of these fields to report manufacturer credit dollar amount.

FL 44 and FL 47Enter modifiers (FB/FC) in FL 44 (HCPCS/Rate/HIPPS Code) following the procedure code; report device line total charges in FL 47 (Total Charges) — $0 or $1 for fully credited devices or reduced charge after partial credit.