H2036 CPT code: per diem SUD billing without denials

In this article▾

1. What this post covers
2. What is the H2036 CPT code and how do payers use it?
3. How should you bill H2036 correctly?
4. How do payers map H2036 to level of care?
5. What documentation do you need to support H2036?
6. Why do H2036 claims deny and how do you fix them?
7. How does H2036 compare to H0015, H0018, H0019, H0010, and H2035?
8. What this post does NOT cover
9. How can AI help work H2036 claims?
10. Common pitfalls with H2036
11. FAQ

You see H2036 denied for “wrong level of care” and suddenly half a month of SUD days are in limbo. H2036 is a per diem SUD program code that payers use in very different ways. If you do not know how each payer maps it to level of care, you will bleed revenue.

H2036 is a HCPCS Level II code that reports: Alcohol and/or other drug treatment program, per diem. Payers treat it as one covered SUD program day, with the actual level of care defined in their manuals, not in the code description.

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What this post covers

• How payers actually use H2036: Real-world definitions and level-of-care mapping.
• How to choose codes: H2036 vs H0015, H0018, H0019, H0010, and H2035.
• How to bill and defend H2036: Clean claims, documentation, denials, and appeals.
• Where AI fits: How tools like Supa and Supabill can handle the grunt work around H2036.

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What is the H2036 CPT code and how do payers use it?

Plain language first: H2036 is a per diem SUD program day. It is one day of whatever structured SUD treatment the payer defines as H2036.

Technically, H2036 is a HCPCS Level II code, not CPT, but many payers and even state manuals label it as a “CPT code.” For billing, you treat it like any other HCPCS service code.

Typical payer use cases for H2036

You will usually see H2036 used in one of three ways. Which one applies is entirely payer specific, so you must verify.

• Residential per diem:
  Some Medicaid programs map H2036 to a specific residential SUD level of care. It is often tied to a revenue code in the 010x or 100x range, or to a state-created SUD residential revenue code.

• Day treatment or PHP-style per diem:
  Other states use H2036 for intensive SUD day treatment, more than IOP but less than 24 hour residential. These are usually billed with day treatment revenue codes such as 0912 or 0913, or a state-specific SUD revenue code.

• Catch-all SUD per diem:
  In some Medicaid manuals H2036 is the generic SUD per diem. The plan then uses revenue code, place-of-service, modifiers, and provider type to distinguish residential, PHP, and sometimes group home or recovery housing settings.

If you rely on the H2036 description alone, you will pick the wrong level of care. The payer’s SUD manual and fee schedule always win.

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How should you bill H2036 correctly?

Treat H2036 like a per diem “product line.” You have to package it correctly on the claim or it will deny.

Focus on five elements:

• Correct claim form: UB-04 vs CMS-1500.
• Correct revenue code and POS: Match the payer’s defined level of care.
• Correct units and dates: One unit per covered treatment day.
• Correct prior authorization: Auth spans, numbers, and LOC alignment.
• Correct enrollment: Facility credentialed for that program and LOC.

Claim form choice for H2036

Start with your licensing and how the contract is written.

• Facility or institutional programs:
  Use UB-04 (837I) when you are billing residential, PHP, or day treatment programs that are licensed as facilities. Many states specify that H2036 is reimbursed only on institutional claims.

• Professional or clinic-style programs:
  Use CMS-1500 (837P) only if your state Medicaid or MCO manuals explicitly allow H2036 on a professional claim for clinic-based SUD programs.

If the manual says “H2036 is reimbursed only on an institutional claim,” do not force it onto a 1500.

Revenue code and POS that match the level of care

Once you confirm H2036 is allowed, pair the revenue code and place-of-service with the level of care your payer has tied to H2036.

Typical patterns (examples only, always verify):

• If the payer uses H2036 for residential:

  • Revenue code: Often in the 010x or 100x range, or a state-specific residential SUD revenue code.
  • Place of service: Often 55 (residential substance abuse treatment facility) or the residential POS code your plan lists.

• If the payer uses H2036 for day treatment or PHP:

  • Revenue code: Often a psych or day treatment revenue code, such as 0912 or 0913.
  • Place of service: Often 52 (psychiatric facility partial hospitalization) or 53 (community mental health center).

• If the payer uses H2036 as a general SUD per diem:

  • Crosswalk: The manual will usually publish a grid, for example:
    • H2036 + Rev code A + POS X = Residential.
    • H2036 + Rev code B + POS Y = Day treatment.

If the claim’s revenue code and POS do not match the level of care the plan tied to H2036, you are setting yourself up for a denial.

Units and dates for H2036

Per diem means one unit per covered program day. How you lay that out depends on the claim form.

• UB-04 (837I):

  • Use a date span in the “From” and “Through” fields.
  • Put the total number of covered days as units on that line, or bill one line per day if the payer requires daily detail.

• CMS-1500 (837P):

  • Bill one line per date of service.
  • Units equal 1 for each covered treatment day.

Watch for details that trigger denials:

• Non-covered days: Weekend holds or housing-only days within the auth period that do not meet the program definition.
• Overlapping per diems: Same-day overlap with another per diem code such as H0010, H0018, or H0019.

If the member spent 2 days in detox and 10 days in residential, you usually split the stay and bill detox and residential with the correct codes, not 12 units of H2036.

Prior authorization for H2036

H2036 is heavily dependent on prior authorization. Plans treat it like inpatient psych or PHP.

Put a hard rule into your intake and utilization management workflows:

• If the expected level of care might use H2036:
  • Confirm coverage: H2036 is covered for this member at this facility.
  • Confirm LOC mapping: Which level of care the plan maps H2036 to.
  • Confirm auth rules: Criteria, required documentation, day limits, and review cadence.

Operational billing steps:

• Place the auth number correctly:

  • UB-04: usually Form Locator 63.
  • CMS-1500: Box 23.

• Align dates and LOC:

  • Auth span must include all admit and discharge dates you are billing.
  • Authorized level of care must match the billed level of care. If the auth is for “IOP / H0015,” do not bill H2036 unless the plan’s documentation clearly allows that mapping.

If your UM team gets an auth for the wrong code or LOC, correct that before claims go out, not after the denial.

Sample H2036 claim line you can mirror

Here is an illustrative UB-04 line for H2036 as a residential per diem. Adapt it to your payer-specific revenue code and POS rules.

UB-04 line item example for H2036

• Revenue code: [the revenue code your payer assigns to this SUD program] (do not default to 0100; revenue code 0100 is "all-inclusive room and board," not a program code).
• HCPCS/Rates: H2036.
• Service date from: 01/01/2025.
• Service date through: 01/10/2025.
• Service units: 10.
• Total charges: [your total charge for 10 days].
• FL 63 (Treatment Auth Code): AUTH1234567.

You would also ensure:

• Type of bill: Correct for residential.
• Statement covers period: 01/01/2025 to 01/10/2025.
• Patient status at discharge: Matches the actual discharge disposition.

Use that structure as your template and plug in your payer’s revenue code, your charges, and the real authorization number.

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How do payers map H2036 to level of care?

Most H2036 headaches start with level-of-care confusion. The descriptor is vague on purpose. States and health plans define what H2036 means for them.

You need a clear, payer-specific link between your clinical level of care and your billing code set.

The mini-map: which SUD per diem code for which LOC?

Think of this as a mental map, not a universal rule. Your payer manuals and contracts override everything.

For your operation, turn that into a payer-specific crosswalk.

• Build a LOC-to-code grid for each major payer:
  • LOC label: As used in your clinical or utilization review system.
  • Billing code: H2036 vs H0015 vs H0018 vs H0019 vs H0010 vs H2035.
  • Revenue code and POS: Exactly as listed in the manual.
  • Auth type and day limits: Typical initial days, step-down rules, and concurrent review triggers.

If you run a larger SUD program, that grid should be shared among UM, clinical leadership, and RCM. If RCM is guessing at codes from progress notes, you will see repeated H2036 denials.

How to find your payer’s H2036 definition

Do not guess at H2036’s level-of-care mapping. Pull the source documents.

• State Medicaid SUD or behavioral health manual:

  • Search the PDF for “H2036.”
  • Note any phrases like “used to report residential treatment per diem” or “intensive SUD day treatment.”

• Plan-specific provider manuals and fee schedules:

  • Medicaid MCOs often narrow or override the state-level definition.
  • Some commercial plans publish SUD coding appendices with code grids.

• Authorization and UM criteria documents:

  • Sometimes the code mapping lives in UM criteria, not in the fee schedule.
  • Language such as “Authorization is required for H2036 for residential level of care” is a clear signal.

Once you know how a payer defines H2036, hard-wire that into:

• Eligibility and benefits scripts: So VoB checks ask the right H2036 questions.
• EHR visit types and program mappings: So clinical staff choose the correct “billable program.”
• Billing rules and edits: So claims for that payer only use H2036 for the correct LOC.

If your internal build does not match the manual, you will keep losing H2036 disputes, even with good documentation.

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What documentation do you need to support H2036?

Payers look at H2036 through two lenses:

1. Program-level documentation: Does this program actually meet the level-of-care definition tied to H2036.
2. Date-of-service documentation: Did this specific day meet the criteria for that program and LOC.

You need both, especially when you fight level-of-care or medical necessity denials.

Program-level documentation packet

This tells the story of what your H2036 program is, not just what happened on one day.

• Program description and daily schedule:

  • Written description of the SUD program that uses H2036.
  • Typical day outline: group therapies, individual sessions, recovery activities, nursing checks, and supports.
  • Enough detail to show it meets the payer’s listed criteria for that level of care.

• Licensure, accreditation, and staffing:

  • Facility or program license that matches the LOC the payer ties to H2036.
  • Accreditation if required by contract.
  • Staffing patterns that align with the payer’s standards, such as RN coverage or counselor-to-patient ratios.

• Contracting and credentialing details:

  • Proof that the facility is credentialed for “residential SUD” or “day treatment,” not just IOP or outpatient.
  • If the payer credentialed you only as an IOP clinic, billing H2036 as residential will be a constant uphill appeal.

You do not attach all of this to every claim, but you should have it ready as a consistent packet for H2036 appeals involving level-of-care disputes.

Date-of-service documentation for H2036 days

This tells the story of what happened on each billed H2036 day.

At a minimum, keep:

• Admission assessment and LOC decision:

  • A SUD assessment using the tool your payer accepts (for example ASAM criteria).
  • A clear rationale for the selected LOC that matches how the payer defines H2036.

• Daily progress or treatment notes:

  • Attendance and participation in the program’s core elements on that date.
  • Names and credentials of treating staff.
  • Any critical events, clinical changes, or reasons to continue at that LOC.

• Treatment plan and updates:

  • Initial treatment plan consistent with the H2036 LOC.
  • Periodic reviews that justify continued stay.
  • A discharge plan that shows measurable progress or barriers.

• Time and service detail:

  • Even though H2036 is per diem, document approximate hours of structured treatment.
  • Enough detail to clearly distinguish this from “room and board only” or simple case management.

If your notes read like housing-only support, many payers will argue that H2036 is the wrong code and will downgrade to a lower LOC or deny for medical necessity.

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Why do H2036 claims deny and how do you fix them?

Most H2036 denials fall into a few repeatable patterns. You want to fix both the immediate claim and the upstream process that caused it.

Common H2036 denials

When you see a cluster of H2036 denials by payer, assume a system problem: LOC mapping, UM workflow, or contracting. Do root cause analysis, not just one-off corrections.

For deeper denial-code explanations, see the behavioral health denial glossary.

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How does H2036 compare to H0015, H0018, H0019, H0010, and H2035?

H2036 sits in a family of SUD codes. Using the wrong sibling is a common way to invite “wrong level of care” denials.

Quick comparison table

These are conceptual patterns. Your payer’s written rules always control.

When to prefer H2036 vs other SUD codes

Use simple rules of thumb, then confirm against the manual before changing anything.

• Payer assigns residential to H2036:
  If the payer manual says “Residential SUD is billed with H2036,” use H2036 instead of H0018 or H0019 for that payer.

• Payer uses H2036 or H2035 for SUD PHP:
  Follow their grid. Use the listed code, revenue code, and POS, and do not substitute.

• Payer assigns IOP to H0015 only:
  If the plan describes IOP services under H0015 and never mentions H2036 for IOP, keep using H0015. Do not try to “upgrade” IOP days to H2036 to chase a better rate.

• Detox days:
  These are usually H0010 per diem days, not H2036, unless the state has a special rule.

If you run detox, residential, PHP, and IOP in one building, you must split days by LOC and code each segment correctly. Payers look hard at per diem stacking and unexplained LOC upgrades.

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What this post does NOT cover

To keep the focus tight, this post stays at the H2036 level.

• IOP coding and billing details:
  For a deep dive on IOP, see: H0015 CPT code: how to bill IOP without getting crushed on denials.

• Short-term residential specifics for H0018:
  If your residential program bills H0018 instead of H2036, use: H0018 CPT code guide for residential SUD.

Use this H2036 guide alongside those code-specific breakdowns so your whole SUD continuum lines up.

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How can AI help work H2036 claims?

Most H2036 work is not picking the code. It is verifying benefits, getting auth, aligning LOC, and grinding through repetitive follow-up. That is where AI agents are useful right now.

You should offload three buckets to AI:

• Repetitive grunt work: Portal checks, status pulls, and basic claim edits.
• High-friction tasks: Long hold times with payers and manual data entry.
• Error-prone steps: LOC mapping, auth span checks, and overlap detection.

Your team then focuses on nuanced decisions:

• Complex LOC and medical necessity judgment.
• Edge cases and contract interpretation.
• Clinical and utilization decisions.

Benefits and LOC verification for H2036

An AI-based benefits and VoB agent can handle the front-end checks that make or break H2036 claims.

• Pull benefits data:

  • Log into payer portals or use EDI to confirm eligibility.
  • Identify whether H2036 is a covered benefit for that member.

• Clarify H2036 use:

  • Flag how the payer defines H2036: residential, day treatment, both, or not covered.
  • Capture limits such as max days per year, per-episode caps, or carve-outs.

• Feed intake and scheduling:

  • Store that information in your PM or EHR so staff see “H2036 allowed for residential only” at scheduling.

In a platform like Supa’s Supabill, those AI VoB agents can write the benefit and H2036 mapping data straight into your intake workflow and EHR build. That prevents your team from picking H2036 when the plan only pays H0015 or H0018 for that level of care.

Prior authorization and LOC alignment

H2036 almost always needs prior auth. AI agents can take on the repetitive but critical auth work.

• Check auth rules by payer and LOC:

  • Hit portals to see whether H2036 requires auth at your facility.
  • Read and store rules about initial days and reauth timing.

• Pre-fill and submit auth requests:

  • Use data from your assessments and ASAM criteria to populate forms.
  • Submit through payer portals or fax workflows, depending on the plan.

• Track approvals and day counts:

  • Monitor approved days and reauth dates.
  • Compare approved code or LOC against what your EHR plans to bill.

If an agent in Supabill sees “Auth approved for H0015 IOP” but the claim line is H2036 for that payer, it can flag or block the claim before submission, so you fix it upstream.

Clean claim generation and claim edits

You should not rely on humans to spot every bad H2036 pairing or overlap. Claim-scrubbing agents can enforce your rules.

• Enforce H2036 pairings:

  • Check that H2036 is paired only with allowed revenue codes and POS values for each payer.
  • Block claims that use H2036 in unsupported settings.

• Catch overlapping per diems:

  • Look for H2036 billed on the same day as H0010, H0018, or H0019.
  • Force a split of the stay or code correction before submission.

• Validate units and auth span:

  • Confirm one unit per covered day, with no stray extra units.
  • Ensure all billed days fall within an active auth span.

The goal is to reach essentially clean H2036 claim submission for all standard cases, so human billers in Supabill or another system only touch exceptions and complex scenarios. In practice, Supabill agents can handle roughly 80 to 90 percent of day-to-day billing work and surface the outliers to your team.

Denial analytics and automated follow-up

H2036 denials will still happen. AI can help you see patterns faster and resolve them with less manual effort.

• Cluster and analyze denials:

  • Group by payer, code, revenue code, POS, and denial reason.
  • Spot patterns such as “Plan X changed from H2036 to H0018 for residential.”

• Automate straightforward corrections:

  • Auto-generate corrected claims where the fix is obvious, such as a wrong revenue code or missing auth number.
  • Queue only the messy cases for human review.

• Draft appeal letters:

  • Pull in clinical documentation and program descriptions.
  • Reference the payer’s own manual language on H2036 and LOC criteria.

Voice agents can also run payer calls for status checks or simple disputes. They dial, wait on hold, and work most of the conversation with payer reps so your staff does not have to.

Used correctly, AI and platforms like Supa and Supabill do the repetitive H2036 work at scale. Your staff make the level-of-care and compliance calls, not the bots.

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Common pitfalls with H2036

Avoid a few predictable mistakes and you will prevent a lot of H2036 denials.

Do not:

• Assume a universal LOC: Treat H2036 as “always residential” or “always PHP” across payers.
• Chase rates by code switching: Use H2036 because “the rate is better” when the manual tells you to use H0015 or H0018.
• Stack per diems: Bill H2036 and H0010 or H0018 for the same member and date without very explicit payer guidance.
• Skip auth on assumptions: Ignore pre-auth because “we never needed it with the last plan.”
• Ignore benefit limits and carve-outs: Fail to check H2036-specific benefits during VoB.
• Treat H2036 as one-size-fits-all: Use a single H2036 build across states and plans.
• Appeal without criteria mapping: Send appeals that do not tie your documentation to the payer’s written LOC standards.

If you avoid those, H2036 becomes a reliable per diem tool instead of a denial magnet.

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FAQ

Is H2036 a CPT code or a HCPCS code?

Technically, H2036 is a HCPCS Level II code, not a CPT code. Many payers and even state manuals still call it a “CPT code,” which is why you see the phrase “H2036 CPT code” in contracts, policy bulletins, and provider portals. For billing, you treat H2036 like any other HCPCS procedure code.

When should my SUD program use H2036 instead of H0015?

Use H2036 only when your payer’s manual or contract states that the level of care you are delivering is billed with H2036. If the plan describes IOP services under H0015 and never mentions H2036 for IOP, stay with H0015. Do not substitute H2036 for H0015 just because you prefer H2036’s rate or description.

Can I bill H2036 on a CMS-1500, or does it have to be a UB-04?

You can see H2036 on either form, but it depends on licensing and payer rules.

• Facility-based residential or day treatment programs: Often required to bill H2036 on a UB-04 only.
• Clinic-style SUD programs in some states: Sometimes allowed to bill H2036 on a CMS-1500.

Your state Medicaid and Medicaid MCO provider manuals will state which claim format is allowed for H2036. Follow that guidance for each payer.

How many units of H2036 can I bill per day?

H2036 is a per diem code, so the standard is 1 unit per covered treatment day.

• On a UB-04 with a date span, units equal the number of covered days in the span.
• On a CMS-1500, you usually bill one line per date of service with 1 unit on each line.

If your EHR is producing multiple H2036 units per day, that is almost always a configuration error that needs to be fixed.

Can I bill H2036 on the same day as H0010 detox?

Usually no, unless the payer has a written policy that allows split billing for the same day and your documentation clearly separates times and services. Most payers expect one per diem level of care per member per day, so you pick the primary LOC code for that date. That is often H0010 for detox days or H2036 for program days, but not both.

Why would a payer tell me to use H0018 or H0019 instead of H2036?

If a payer tells you to use H0018 or H0019 instead of H2036, it means that their system reserves H0018 and H0019 as the residential SUD per diem codes, and H2036 is reserved for a different use or is not active at all. When you see that message on a remit, update your internal LOC-to-code map for that payer and adjust your billing rules so your team stops sending H2036 for that payer’s residential stays.

Does H2036 always require prior authorization?

In practice, very often yes, especially with Medicaid and Medicaid MCOs.

• There can be carve-outs or short-stay allowances that waive auth for a few days.
• The safest operational rule is to treat H2036 like inpatient psych or PHP and assume that auth is required until VoB and auth-check prove otherwise.

VoB and auth-check workflows should confirm prior authorization requirements before day one of a H2036 stay.

Are room and board included in the H2036 rate?

Room and board treatment under H2036 is payer specific.

• Some residential contracts bundle room and board into the H2036 per diem.
• Other contracts separate clinical services from housing or recovery housing.

To know for sure, check:

• Your contracts and fee schedules: Look for language about room and board.
• State Medicaid manuals: Many states have explicit rules about room and board for residential SUD.
• Any housing codes: See if the payer expects separate billing for housing services.

Do not assume room and board is always included or always excluded for H2036. Verify for each payer.

Can I use modifiers with H2036?

Yes, you can use modifiers when the payer specifically requires them for H2036.

• Telehealth modifiers: Often not paired with H2036, since H2036 usually represents a facility-based per diem program day.
• Provider type or intensity modifiers: Some states and plans require modifiers to indicate service intensity, staff type, or ASAM level.

Always pull the payer’s SUD coding grid. If no modifiers are listed for H2036, do not invent your own.

What is the difference between H2035 and H2036?

Both codes are SUD-related, but they are used differently.

• H2035: Often labeled as “partial hospital” style SUD services in some programs. It is commonly tied to SUD PHP.
• H2036: Defined as “AOD treatment program, per diem,” and states use it flexibly for residential or day treatment SUD depending on their design.

Most payers pick either H2035 or H2036 for a given SUD PHP or day treatment level of care. Follow the payer’s coding grid, not just the textbook descriptions.

How do I handle mid-stay LOC changes when billing H2036?

Handle mid-stay level-of-care changes by splitting the stay.

1. Bill the first segment under the initial LOC and code: For example, H0010 for detox days.
2. Bill the next segment under the new LOC and code: For example, H2036 for residential, starting on the date the LOC changed.

Make sure:

• Auth is updated or reissued to match the new LOC and dates.
• Documentation clearly shows the LOC change and the clinical rationale.

If you keep billing H2036 through a detox phase or step-down without changing codes, denials are likely.

What documentation do payers actually read for H2036 appeals?

For level-of-care or medical necessity disputes involving H2036, payers focus on a few key documents.

• Initial assessment and LOC rationale: How you decided this LOC was appropriate at admission.
• Daily progress notes for the denied days: Evidence of active treatment and clinical need.
• Treatment plan and updates: Whether the plan aligns with the LOC and is actually followed.
• Program description: Proof that your program meets the payer’s criteria for the H2036 LOC.

If your appeal packet only restates claim details and includes a discharge summary, it is weak. Tie your documentation directly to the payer’s published criteria language for that LOC.

Our H2036 rate is very different by payer. Is that normal?

Yes, H2036 reimbursement varies significantly by:

• State Medicaid program.
• Managed care and commercial contracts.
• Whether room and board are included or carved out.
• How each plan defines the intensity of its H2036 program.

Do not rely on another facility’s rate or on what a call center rep says. Use:

• Contract fee schedules.
• State-published Medicaid fee schedules.
• Historical paid claims to confirm what you actually get paid today.

Colorado is a clear public illustration: one code (H2036), four ASAM levels, four U-modifiers, $190.00 to $669.50 per diem. Colorado Medicaid FFS pays $190.00 for ASAM 3.1 (U1), $293.25 for 3.3 (U3), $425.00 for 3.5 (U5), and $669.50 for 3.7 (U7), all eff. 04/01/2026. One code, four rates: the modifier, not the code, sets the price. These are real published figures that still vary by state and year, so verify against your own fee schedule. Source: https://hcpf.colorado.gov/sites/hcpf/files/Behavioral%20Health%20Fee%20Schedule%20AprFY26%20v1_Accessible%20(1).pdf

Can AI safely change H2036 to another code on my claims?

An AI agent can flag mismatch patterns and prepare suggested corrections, but the final decision to change H2036 to H0015, H0018, H0019, or H0010 should stay with your RCM lead and compliance team.

A safe pattern looks like:

• Agent: “For Payer X, your contract says residential is H0018, but this residential stay is billed as H2036.”
• Human: Confirms the LOC, contract language, and payer rules, then approves the corrected claim.

The heavy lifting of finding these errors at scale and preparing corrected claims is ideal for AI. The level-of-care and compliance decisions stay with you.

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If you want to see how a system like Supabill from Supa can take over most of the repetitive H2036 work and surface only the complex cases to your team, you can book a live demo here: https://calendly.com/heysupa/demo.