Magellan Healthcare
Provider Focus Newsletter
News & information for Magellan network providers


Facilities: Unbundling IOP and PHP service codes is not permitted

Think you can bill unbundled codes for intensive outpatient (IOP) and partial hospitalization (PHP) services? Think again.  

Recently, Magellan’s Special Investigations Unit (SIU) has observed instances of organizations billing unbundled IOP and PHP services as individual and group therapy codes with modifiers. When a facility has a contracted/inclusive per diem rate, this billing practice is not permitted. It’s important that you follow any inclusive/exclusive guidelines in your organization’s contract(s) with Magellan

Example of unbundling

A facility bills for IOP/PHP services with the appropriate code but then also submits separate claims for individual outpatient (e.g., 90837) and/or group therapy (e.g., 90853) services with modifier 59 for the same date of service.  

Consequences of unbundling codes

  • Can impact costs and benefit accumulations for the member.
  • May result in Magellan investigating the organization’s billing practices. (Note: When a claim is submitted/paid for a service that is already included in a per diem rate per the facility’s contract, Magellan will review for potential overpayment.) 

More information

  • Review Magellan’s policy and examples of fraud, waste, abuse and overpayment in Section 4, page 79 of Magellan’s National Provider Network Handbook (PDF), including: 
    • Misrepresenting the services performed.
    • An individual provider billing multiple codes on the same day where the procedure being billed is a component of another code billed on the same day.
  • Contact your Magellan network representative with questions regarding your inclusive/exclusive arrangement.
  • Contact the SIU via email ( or via our hotline 1-800-755-0850 if you suspect someone of unethical billing practices. (You may remain anonymous.)

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About Provider Focus

Welcome to Provider Focus, our award-winning e-newsletter for network providers! Here you’ll find articles and information to keep you up-to-date on news and topics relevant to serving Magellan members, including a section for regional- and plan-specific news. Check back as a new issue is released each quarter.

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