Article - Nebulizers - Policy Article (A52466)

CMS National Coverage PolicyN/AArticle TextNON-MEDICAL NECESSITY COVERAGE AND PAYMENT RULESFor any item to be covered by Medicare, it must 1) be eligible for a defined Medicare benefit category, 2) be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and 3) meet all other applicable Medicare statutory and regulatory requirements. Information provided in this policy article relates to determinations other than those based on Social Security Act 1862(a)(1)(A) provisions (i.e. reasonable and necessary).Nebulizers are covered under the Durable Medical Equipment (DME) benefit (Social Security Act 1861(s)(6)). In order for a beneficiarys equipment to be eligible for reimbursement, the reasonable and necessary (R&N) requirements set out in the related Local Coverage Determination must be met. In addition, there are specific statutory payment policy requirements, discussed below, that also must be met.A large volume pneumatic nebulizer (E0580) and water or saline (A4217 or A7018) are not separately payable and should not be separately billed when used for beneficiaries with rented home oxygen equipment.If a large volume nebulizer, related compressor/generator, and water or saline are used predominantly to provide room humidification it will be denied as noncovered.A prefilled disposable large volume nebulizer (A7008) is noncovered under the DME benefit because it is a convenience item. An unfilled nebulizer (A7007, A7017, or E0585) filled with water or saline (A4217 or A7018) by the beneficiary/caregiver is an acceptable alternative.Kits and concentrates for use in cleaning respiratory equipment will be denied as noncovered.Aztreonam lysine is an inhalation solution that is indicated for beneficiaries with cystic fibrosis with chronic Pseudomonas aeruginosa infection. Because it has been determined that the nebulizer that is FDA-approved for administration of aztreonam lysine is not sufficiently durable to meet the statutory requirements for coverage under the DME benefit, claims for that nebulizer, aztreonam lysine inhalation solution and related accessories will be denied as noncovered (no Medicare benefit).Drugs that are not administered through DME (e.g. Foradil Aerolizer and metered-dose inhalers (MDIs)) are not billed to the DME MAC but may be covered under other Medicare benefits (i.e., Medicare Part D). If the supplier chooses to submit a claim for drugs not administered through DME, the drug must be billed using code J3535 (DRUG ADMINISTERED THROUGH A METERED DOSE INHALER) and is non-covered by the DME MACs.Disposable equipment or equipment in which a major component required for their function is disposable do not meet the definition of durable medical equipment and must be billed using code A9270 (noncovered item or service).DISPENSING FEE:An initial dispensing fee (G0333) is payable to a pharmacy for the initial 30-day supply of covered inhalation drug(s) regardless of the number of drugs dispensed, the number of shipments, or the number of pharmacies used by the beneficiary during that time. This initial 30-day dispensing fee is a once in a lifetime fee and only applies to beneficiaries who are using inhalation drugs for the first time as a Medicare beneficiary on or after 01/01/2006. If code G0333 is billed for a 30-day supply of covered inhalation drugs and it is not the initial 30-day supply (i.e., G0333 has already been billed to Medicare for that beneficiary), the claim will be denied as incorrect coding. When code G0333 has been billed once in a beneficiarys lifetime, subsequent claims for a 30-day dispensing fee must be billed using code Q0513.Medicare will only pay for one of the following for covered inhalation drugs regardless of the number of drugs dispensed, the number of shipments, or the number of pharmacies used by the beneficiary during that time period - an initial dispensing fee (G0333), a 30-day dispensing fee (Q0513), or a 90-day dispensing fee (Q0514).For a refill prescription, payment of a dispensing fee will be allowed no sooner than 10 days before the end of usage for the current 30-day or 90-day period for which a dispensing fee was previously paid. Medicare will not pay for more than 12 months of dispensing fees per beneficiary per 12-month period.If the dispensing fee is billed sooner than the interval specified above, it will be denied as not separately payable. For example, if a 90-day fee (Q0514) is billed on 1/30/06 and is covered and there is a subsequent claim for a 30-day fee (Q0513) on 4/10/06, the dispensing fee on 4/10/06 will be denied as not separately payable.Both a Q0513 and a Q0514 dispensing fee are not covered on the same date of service. If a supplier dispenses a 90-day supply of one drug and a 30-day supply of another drug on the same day, code Q0514 (90-day fee) must be billed.The dispensing fee must be billed on the same claim as the inhalation drug(s). If it is not, it will be denied as incorrect billing.A dispensing fee is not separately billable or payable for saline, whether used as a diluent or for humidification therapy.Medicare will not pay for a separate fee for the compounding of inhalation drug(s).REQUIREMENTS FOR SPECIFIC DMEPOS ITEMS PURSUANT TOFINAL RULE1713 (84 Fed. Reg Vol 217)Final Rule 1713 (84 Fed. Reg Vol 217) requires a face-to-face encounter and a Written Order Prior to Delivery (WOPD) for specified HCPCS codes. CMS and the DME MACs provide a list of the specified codes, which is periodically updated.The required Face-to-Face Encounter and Written Order Prior to Delivery List is availablehere.Claims for the specified items subject to Final Rule 1713 (84 Fed. Reg Vol 217) that do not meet the face-to-face encounter and WOPD requirements specified in the LCD-related Standard Documentation Requirements Article (A55426) will be denied as not reasonable and necessary.If a supplier delivers an item prior to receipt of a WOPD, it will be denied as not reasonable and necessary. If the WOPD is not obtained prior to delivery, payment will not be made for that item even if a WOPD is subsequently obtained by the supplier. If a similar item is subsequently provided by an unrelated supplier who has obtained a WOPD prior to delivery, it will be eligible for coverage.POLICY SPECIFIC DOCUMENTATION REQUIREMENTSIn addition to policy specific documentation requirements, there are general documentation requirements that are applicable to all DMEPOS policies. These general requirements are located in the DOCUMENTATION REQUIREMENTS section of the LCD.Refer to the LCD-related Standard Documentation Requirements article, located at the bottom of this Policy Article under the Related Local Coverage Documents section for additional information regarding GENERAL DOCUMENTATION REQUIREMENTS and the POLICY SPECIFIC DOCUMENTATION REQUIREMENTS discussed below.MISCELLANEOUSA diagnosis code describing the condition which necessitates nebulizer therapy must be included on each claim for equipment, accessories, and/or drugs.MODIFIERSJW AND JZ MODIFIERS:Effective for claims with dates of service on or after January 1, 2017, the JW modifier is required when billing for unused and discarded amounts of drugs and biologicals from single-dose containers that are administered by the supplier.Effective for claims with dates of service on or after July 1, 2023, the JZ modifier is required when billing for drugs and biologicals from single-dose containers that are administered by the supplier but have no unused and discarded amounts. Effective January 1, 2024, the JZ modifier is also required when billing for drugs and biologicals from single-dose containers that are dispensed by the supplier but self-administered by the beneficiary or the beneficiarys caregiver.The JW modifier is not required for drugs dispensed by the supplier and self-administered by the beneficiary or the beneficiarys caregiver in the beneficiarys home, as it is not expected that the beneficiary or their caregiver provide discarded drug information to the supplier. The JZ modifier is required in this scenario (effective for claims with dates of service on or after January 1, 2024).Multi-use vials are not subject to payment for discarded amounts of drug or biologicals.The DME MACs expect rare use of the JW modifier on claims due to HCPCS code descriptors and their associated Units of Service (UOS) for DMEPOS in addition to the limited instructions for use.Below are two scenarios in regard to the JW modifier.Scenario 1When the HCPCS code UOS is less than the drug quantity contained in the single use vial or single dose package, the following applies:The quantity administered is billed on one claim line without the JW modifier; and,The quantity discarded is billed on a separate claim line with the JW modifier.In this scenario, the JW modifier must be billed on a separate line to provide payment for the amount of discarded drug or biological. For example:A single use vial is labeled to contain 100 mg of a drug.The drug's HCPCS code UOS is 1 UOS = 1 mg.95 mg of the 100 mg in the vial are administered to the beneficiary by the supplier.5 mg remaining in the vial are discarded.The 95 mg dose is billed on one claim line as 95 UOS.The discarded 5 mg is billed as 5 UOS on a separate claim line with the JW modifier.Both claim line items would be processed for payment.Scenario 2When the HCPCS code UOS is equal to or greater than the total of the actual dose and the amount discarded, use of the JW modifier is not permitted. As of July 1, 2023, the JZ modifier is required in this situation. If the quantity of drug administered is less than a full UOS, the billed UOS is rounded to the appropriate UOS. For example:A single use vial is labeled to contain 100 mg of a drug.The drug's HCPCS code UOS is 1 UOS = 100 mg.70 mg of the 100 mg in the vial are administered to the beneficiary by the supplier.30 mg remaining in the vial are discarded.The 70 mg dose is billed correctly by rounding up to one UOS (representing the entire 100 mg vial) on a single line item with the JZ modifier.The single line item of 1 UOS would be processed for payment of the combined total 100 mg of administered and discarded drug.The discarded 30 mg must not be billed as another 1 UOS on a separate line item with the JW modifier. Billing an additional 1 UOS for the discarded drug with the JW modifier is incorrect billing and will result in an overpayment.KX, GA, AND GZ MODIFIERS:Suppliers must add a KX modifier to codes for E0574, J7686, K0730 and Q4074 only if all of the criteria in the Coverage Indications, Limitations and/or Medical Necessity section of the related LCD have been met.If all of the criteria in the Coverage Indications, Limitations and/or Medical Necessity section have not been met, the GA or GZ modifier must be added to the code. When there is an expectation of a medical necessity denial, suppliers must enter GA modifier on the claim line if they have obtained a properly executed Advance Beneficiary Notice (ABN) or GZ modifier if they have not obtained a valid ABN.Claim lines billed without a KX, GA, or GZ modifier will be rejected as missing information.CODING GUIDELINESEQUIPMENT:In this policy, nebulization of inhalation solutions is accomplished by two types of devices. Pneumatic compressor nebulizers achieve nebulization of liquid by means of air flow. Ultrasonic or electronic nebulizers produce nebulization of liquid by means of a vibrating mechanism.HCPCS code E0565 describes an aerosol compressor, which can be set for pressures above 30 psi at a flow of 6-8 L/m and is capable of continuous operation.A nebulizer with compressor (E0570) is an aerosol compressor, which delivers a fixed, low pressure and is used with a small volume nebulizer. It may be AC-powered, DC-powered or both.A light duty adjustable pressure compressor (E0572) is a pneumatic aerosol compressor which can be set for pressures above 30 psi at a flow of 6-8 L/m, but is capable only of intermittent operation.