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Respiratory Therapists Have Concerns about Changes to Coding Edits

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February 7, 2014

The AARC has received numerous emails from concerned respiratory therapists about a change in Medicare billing practices as it relates to the National Correct Coding Initiative (NCCI) Edits for certain nebulizer treatments (94640, 94060, and 94664) and code pairs that became effective January 1, 2014. The issue stems from the fact that, in part, changes issued by the Centers for Medicare and Medicaid Services (CMS) contradict guidance from the AMA CPT® Manual.


Since most of the comments we are receiving come from respiratory therapists who work in the inpatient hospital setting, we first need to clear about the purpose of NCCI edits. These coding edits only apply to services billed under Medicare Part B and are directed to claims filed by physicians and other practitioners who have authority to bill Medicare directly and outpatient hospital departments that bill Part B claims. The coding edits do not apply to inpatient services because services furnished in that setting are paid under the DRG and are not separately billable. The purpose of the NCCI process is to promote national correct coding methodologies and to prevent Medicare from making improper payments for Part B claims when incorrect code combinations are reported.

Current AMA CPT Guidance

The current issue involves inconsistent guidance between CMS and the American Medical Association. The AMA guidance for CPT code 94640 (pressurized or non-pressurized inhalation treatment for acute airway obstruction…) states: “For more than one inhalation treatment performed on the same date, append modifier 76”. Modifier 76 reads: “Repeat procedure or service by another physician or other qualified health care professional.”

CMS Revised Guidance

In Chapter XI of the 2014 NCCI Policy Manual (pages XI 22-23), changes to the manual instruct hospitals that they may no longer report the subsequent inhalation treatments using modifier 76. The manual states “CPT code 94640 should only be reported once during a single patient encounter regardless of the number of separate inhalation treatments that are administered.” Further, it is a misuse of CPT code 94060 to report it in addition to CPT code 96460. The inhaled medication may be reported separately.

The CMS NCCI edits also state that CPT Codes 94640 and 94664 (demonstration and/or evaluation of patient utilization of an aerosol generator…) “generally should not be reported for the same patient encounter.” It clarifies that “the demonstration and/or evaluation described by CPT code 94664 is included in CPT code 94640 if the same device is used in the performance of CPT code 94640.” However, if the two services are performed at separate patient encounters on the same date, the codes may be reported separately.

The Medicare Benefit Policy Manual (100-02, Chapter 6, Hospital Services Covered Under Part B, Section 20.3) defines encounter as: A hospital outpatient “encounter” is a direct personal contact between a patient and a physician, or other person who is authorized by State licensure law and, if applicable, by hospital or CAH staff bylaws, to order or furnish hospital services for diagnosis or treatment of the patient.

If you wish to view the 2014 NCCI Policy Manual, you can go to the CMS website (National Correct Coding Initiative Edits—Centers for Medicare & Medicaid Services) and click on the manual link at the bottom of the page.

What does this mean for respiratory therapists?

If you work in the outpatient hospital setting or a physician practice, the answers to questions related to coding and billing changes and how they may impact your specific facility can be answered with authority only by the Medicare contractor that pays the claims submitted by your hospital. To be certain you are following correct policy, we suggest you check with your billing department for guidance or ask them to contact the Medicare contractor on your behalf if necessary.

In some of the discussions on the AARC’s list serves that have surrounded this issue, we have learned that an in-depth article in the MedAsset’s Coding and Compliance Focus Newsletter(CCFN) will be coming out in the month of February that will offer additional details and suggestions for dealing with the changes resulting from the 2014 facility NCCI edit updates. If you have access to this newsletter, we recommend you look out for the update.

It has also been suggested that hospital outpatient departments review the new guidance to determine if there is an impact to non-Medicare payers. Some payers may still accept the use of the 76 modifier with the inhalation code 94640 as outlined in the AMA CPT coding guidance. We speculate that in the outpatient and ED areas this may decrease reimbursement if the patient is not admitted. However, only your specific facility or physician practice can determine the overall impact.

Keep in the Loop on Coding Issues

Also as a reminder AARC members can join the Coding List Serve which serves as a community bulletin board for coding questions. Sign up is easy (as is unsubscribing). Start here from our Coding Resource page.