Knowledge Base Article

Q:I am confused about how to charge and bill for inhalation treatments, CPT code 94640. I heard the Correct Coding Initiative (CCI) information changed, but I notice the MUE limit is still 2. Could you please explain what the rule is and how hospitals should handle this? 

A:
You are correct that the CCI information changed for 2017. In the 2017 CCI Policy Manual, the wording for how often CPT code 94640 can be reported changed from “once during a single patient encounter” to “once during an episode of care” regardless of the number of separate inhalation treatments that are administered. The manual further clarifies exactly what is meant by an episode of care.“An episode of care begins when a patient arrives at a facility for treatment and terminates when the patient leaves the facility.

If a patient receives inhalation treatment during an episode of care and returns to the facility for a second episode of care that also includes inhalation treatment on the same date of service, the inhalation treatment during the second episode of care may be reported with modifier 76 appended to CPT code 94640.

If inhalation drugs are administered in a continuous treatment or a series of “back-to-back” treatments exceeding one hour, CPT codes 94644 (continuous inhalation treatment with aerosol medication for acute airway obstruction; first hour) and 94645 (...; each additional hour) should be reported instead of CPT code 94640.”

Based on this information, the MUE limit of 2 would be appropriate to accommodate those patients that return to the facility for a second episode of care.

Now let’s address “charging” versus “billing:”

This is a “billing” rule for Medicare, and it is specific to outpatient “billing”. The hospital may “charge” for one treatment for each face-to-face encounter with the patient, but when the bill drops for outpatient Medicare, the hospital would have to apply a “billing” rule of reporting a quantity of 1 for each episode of care.

If a hospital does not charge for each treatment, their gross revenue will be affected; it is important to report charges for all services to Medicare so total cost is accurately reflected regardless of the number of units reported in accordance with Medicare requirements. Other payers may not have quantity limits for 94640 in which case billing more than one would be appropriate. Your hospital should check with each payer to determine their requirements.

Also remember, that under Medicare outpatient payment (OPPS), CPT code 94640 is conditionally packaged with a Status Indicator of “Q1.” These means Medicare does not provide separate payment if the code is on a claim with other outpatient services with status indicators of S (significant procedures), T (mostly surgical procedures), or V (visit codes including ED visits).