HCPCS code C1763 – Connective tissue (non-human)

Key takeaways

HCPCS code C1763 reports non-human connective tissue, including synthetic products, while human tissue such as fascia lata is reported with C1762.

Under the CY2026 OPPS, C1763 carries status indicator N, so its cost is packaged into the procedure’s APC with no separate payment.

Hospital outpatient departments still report C1763 on the UB-04 under revenue code 027x, which captures device charges for cost reporting.

Ambulatory surgery centers bill Medicare on the professional-format claim (CMS-1500 or 837P), and packaged devices earn no separate ASC payment either.

Keep the operative note, product name, lot number and invoice together, because auditors and some payers ask what was implanted.

What HCPCS code C1763 means

HCPCS code C1763 is the CMS Level II code for connective tissue, non-human (includes synthetic). Hospitals use it to report porcine, bovine, equine or synthetic tissue implanted during an outpatient procedure. Medicare packages its cost into the procedure payment, so the line carries a charge but no separate payment.

The official descriptor itself carries the parenthetical “(includes synthetic)”. That wording brings fully synthetic matrices into scope alongside acellular dermal matrices processed from animal sources. Its counterpart, C1762, covers connective tissue of human origin, including fascia lata.

C1763 belongs to the C-code series, which CMS maintains within HCPCS Level II for the hospital outpatient prospective payment system (OPPS). C-codes identify devices, drugs and services for OPPS reporting, and only some of them carry pass-through status at any one time. C1763 was added to HCPCS on April 1, 2001, and it is not payable under the Medicare Physician Fee Schedule.

Coders sometimes misread the descriptor as covering any non-human biological material. The scope is narrower: connective tissue specifically, meaning structural matrix products used to reinforce or replace fascial, dermal, or pericardial tissue planes. Products that primarily deliver cells, growth factors, or pharmaceuticals code differently.

What C1763 covers and what it excludes

A C1763 product is defined by two things. Its origin is non-human or synthetic, and it works as a connective tissue replacement or reinforcement. Porcine dermis, bovine and equine pericardium, and synthetic matrices designed to mimic fascial or dermal tissue all fall within the descriptor.

A common exclusion error is reporting C1763 for a human cadaveric allograft. Human connective tissue, including fascia lata, has its own code, C1762. Both codes are packaged under the CY2026 OPPS, so the mix-up rarely changes payment. It still misstates the device on the claim and skews the cost data tied to the procedure.

Packaged status under the CY2026 OPPS

C1763 is a packaged code. The October 2026 OPPS Addendum B lists it with status indicator N, with no APC and no payment rate. Medicare pays for the tissue through the APC of the procedure it was used in.

Device pass-through payment under 42 CFR 419.66 is a transitional status that lasts at least two and no more than three years. C1763 has been reportable since 2001, so any early pass-through period ended long ago. The code stays in the file because hospitals still use it to report the device.

Packaged status changes what billing teams should expect. On the remittance, the C1763 line shows a charge and a zero payment. That zero is how packaging works, so appealing it only costs staff time. There is no pass-through offset to calculate and no pass-through audit exposure for this code.

How to report C1763 by setting

C1763 is an OPPS reporting code, so where it appears depends on who bills the facility side of the procedure. The grid below compares the four settings at a glance, and the list after it covers each one in detail.

• Hospital outpatient department (HOPD): Report C1763 on the UB-04 (CMS-1450, or the 837I electronically) under revenue code 027x, usually 0278 for other implants. List it with the units and charge for the tissue used. The line is packaged, but the charge feeds the cost data CMS uses to set future APC rates.
• Ambulatory surgery center (ASC): ASCs bill Medicare on the professional-format claim, the CMS-1500 or 837P, not the UB-04. Under the ASC payment system, implanted devices without pass-through status are packaged into the procedure payment. Follow your MAC’s guidance on whether to list C1763 as a no-pay line.
• Physician professional claim: C-codes are not payable under the Medicare Physician Fee Schedule. The surgeon’s professional claim reports the procedure CPT code and does not carry C1763.
• Inpatient hospital: C-codes are outpatient codes. Inpatient device costs are bundled into the MS-DRG payment and are not separately billable using HCPCS Level II C-codes.

Accurate device reporting still matters on OPPS claims. For procedures CMS classes as device-intensive, the claim must carry a device HCPCS code alongside the procedure. Reporting C1763 when non-human tissue was implanted keeps those claims complete.

CY2026 payment and documentation for HCPCS code C1763

Under the CY2026 OPPS, C1763 has no separate payment rate. Its cost is built into the APC payment for the procedure, which CMS sets each year in the OPPS final rule. The hospital’s reported charges for C1763 flow into the claims data behind those APC rates.

Because the tissue is never paid on its own line, C1763 documentation serves accuracy and audit readiness. A claim file that holds up to review includes the following, in line with general billing compliance requirements:

• Operative or procedure note: Names the tissue product and confirms it was implanted or applied during the billed procedure. It also links the product to the clinical indication.
• Product record: Shows the supplier, product name, lot or serial number, quantity, and acquisition cost. Keeping the itemized invoice on file is good audit practice, and some payers or MACs ask for it.
• Supporting ICD-10-CM diagnosis codes: Establish medical necessity for the procedure. The diagnosis should match the clinical reason for using a non-human connective tissue product.
• Medical necessity narrative: For some payers, a brief narrative in the clinical record explains why the non-human or synthetic product was selected over alternatives.
• Prior authorization number (if required): Certain commercial payers and some state Medicaid plans require prior authorization for connective tissue implants. The authorization number must appear on the claim.

Many facilities keep the product sticker or invoice in the patient’s record, so a coder can confirm the descriptor before the claim goes out. Retaining that copy also speeds up any audit response.

Modifiers and C1763

Modifiers rarely change how a C1763 line processes, because the line is packaged either way. Some payers ask for RT or LT on device lines to show which side received the tissue. Check the payer’s billing guidance before adding them.

Modifiers 59, XE, XS, XP, XU and 50 describe procedures. Appending one to the C1763 line does not unpackage it or create separate payment. Where a procedure pair hits an NCCI edit, the modifier belongs on the procedure line and needs operative note support.

Payer coverage policies for HCPCS code C1763

Medicare sets the reference treatment for C1763 because the code exists for OPPS reporting. Other payers set their own rules, and the reimbursement path depends on the patient’s coverage.

Check each payer’s policy before assuming C1763 is recognized. Some commercial contracts carve out high-cost implants for separate payment, while others bundle them as Medicare does. Some commercial and Medicare Advantage plans also require prior authorization for connective tissue implants.

Common C1763 claim errors and how to fix them

Most C1763 problems come from expecting a payment that packaged status never produces, or from describing the wrong product. The medical billing denial codes that appear on C1763 claims share three causes. They are the wrong product code, the wrong claim format, and missing records.

Effective denial management for C1763 starts before the claim is submitted. A pre-bill check of the product code, claim format, diagnosis link and prior authorization prevents the errors above. Medical billing workflows that separate facility claims from professional claims also keep C-codes off the surgeon’s claim.

How Pabau supports claims for procedures that use C1763

Practices whose surgeons operate in hospital outpatient departments or ASCs still produce the clinical record those facility claims depend on. The operative note, the product used and the diagnosis often sit in different systems, so coders end up chasing them.

In Pabau, the EHR and billing platform we build, the treatment note, consent forms and diagnosis sit in one patient record. Pabau’s claims management software submits your professional claims from that existing record data through Claim.MD, then tracks each one until it is paid or rejected.

The facility’s UB-04 for C1763 stays with the hospital or ASC billing team. Your notes give them the product details they need, and your own claim status sits in one place.

Keep claim records and status in one place

Pabau keeps treatment notes and diagnoses in one patient record, then submits and tracks your claims through Claim.MD. Your team spends less time chasing claim status.

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Conclusion

C1763 earns no money on its own line, so treat it as a reporting duty. The tissue is paid through the procedure’s APC, which leaves two jobs: describe the product accurately and keep the record behind it.

Get the product right first. Non-human and synthetic tissue goes to C1763, while human tissue, including fascia lata, goes to C1762. Then route the claim correctly: the UB-04 under revenue code 027x for hospital outpatient departments, and the professional-format claim for ASCs.

A zero-paid C1763 line is the expected result, so spend appeal time on the procedure line instead. Book a demo to see how Pabau keeps your clinical records and claim status in one place.

Continue your research

Need a framework for reducing claim rejections across supply codes? Superbill documentation guide explains what every line of a complete claim package must include to pass payer edits.

Working through a denial backlog on implant codes? Revenue cycle management overview maps the end-to-end process from encounter to payment, including where supply-code denials most often originate.

Trying to understand HCPCS code structure for staff training? Medical billing fundamentals covers how HCPCS Level I and Level II codes fit into the broader claims workflow.

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