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Consultation Corner

Controversy: Coding and Billing for Packaged CTPs Received at ‘No Cost’!

Information regarding coding, coverage, and payment is provided as a service to our readers. Every effort has been made to ensure accuracy. However, HMP and the author do not represent, guarantee, or warranty that coding, coverage, and payment information is effort-free and/or that payment will be received.

The clinical team, revenue cycle team, and compliance officers who work in and/or support hospital owned outpatient wound/ulcer management provider-based departments (PBDs), continue to disagree how PBDs should code and bill for Ambulatory Payment Classification (APC)-packaged cellular- and/or tissue-based products (CTPs) for skin wounds, which they received at “no cost,” and which their physicians and other qualified healthcare professionals (QHPs) applied to patients. This month’s Consultation Corner should end this controversy.


Now that over 100 CTPs are available, physicians and other QHPs who work in PBDs often have difficulty determining which CTP will deliver the best outcomes for their patients. Of course, reading the published clinical evidence about the various CTPs should be their first step. However, before they commit to adding a CTP to their PBD’s formulary of products, some physicians/QHPs also want to try CTPs that are new to them. Some manufacturers accommodate these physicians/QHPs by providing them with one or more pieces of the CTP to try on appropriate patients. In addition, some of those manufacturers require the PBDs, which received the “no cost” CTPs, to sign a document that states the PBD will not bill Medicare for the product.    

Facts to Consider

•    When CTPs are applied in PBDs, Medicare packages together the payment for the application of the CTP and the payment for the product.

•    Medicare assigns CTPs (except those that have pass-through status) to either a high-cost APC payment package or a low-cost APC payment package.

•    Even though Medicare payment for the CTP is packaged into the APC high-cost or low-cost payment for the application procedure, Medicare requires the PBD to report the work on two lines of their claims:
1. One claim line should include the code, units, and charge for the application of either the high-cost or low-cost application procedure code.
2. Another claim line should include the code, the total number of sq. cm. purchased for the patient, and the charge for the entire piece of CTP applied to the patient’s chronic ulcer.
If the PBD only bills for the application code, Medicare rejects the claim until the PBD submits a claim that is correctly coded and billed for both the application and the CTP.

•    When a procedure code exists, professionals and providers must use the code when the procedure is performed.  


During many educational programs and teleconsultations conducted throughout last year, and even in the first quarter of this year, I was surprised to hear that this controversy about coding and billing for the use of “no cost” CTPs still continues. Following are the 3 most common incorrect beliefs that I heard about this process:

•    Some PBD employees were adamant that they should only code and bill for the application, and should not code or bill for the “no cost” CTP

•    Other PBD employees emphatically stated that the PBD should not code or bill for the application or the product because Medicare pays a packaged payment

•    Some PBD employees were dead-set that they should only code and bill an evaluation and management (E&M) for the visit

I have been most surprised that only a few stakeholders knew the correct answer. The others were very surprised when I explained the correct coding and billing for APC-pacakged CTPs that are received at “no cost”:

•    On one claim line, report the specific CTP acquired at “no cost” and applied to the patient
o Report the “Q” code for the CTP received at “no cost”
o Report the total number of sq. cm. purchased and opened for the patient
o Report a charge less than $1.01 in both the 1) non-covered charge field, and 2) the total charge field of the claim
Example: Q4XXX    30 units    $1.00    $1.00

• On a separate claim line, report the appropriate code for the application of the CTP received at “no cost”
o For the application of CTPs assigned to the APC high-cost package, select one of these procedure codes: 15271–15278
o For the application of CTPs assigned to the APC low-cost package, select one of these procedure codes: C5271–C5278
o To indicate that the procedure was performed with a CTP received at “no cost,” attach modifier FB to the appropriate application procedure code. The definition of modifier FB is: Item provided without cost to provider, suppliers, or practitioner, or credit received for replacement device (some examples include, but are not limited to: covered under warranty, replaced due to defect, free samples)
o Report the PBD’s normal charge for this code
Example: 15271FB    1 unit    $XX.XX (normal charge)

When Medicare receives the claim and sees the FB modifier on the application procedure code and a charge less than $1.01 for the CTP, Medicare will only pay the appropriate Medicare allowable rate for the application procedure code minus the device offset amount for the APC group to which that application procedure code is assigned. Table 1 displays the 2020 APC device offset rates assigned to the 2 APC groups aligned with the codes for the application of CTPs.

Example: If a “no cost” CTP is applied to the leg (15271), the national average Medicare allowable payment will be $863.14 (National Average APC rate of $1,622.74 minus the APC Device Offset Rate of $759.60).


Because the controversy and misinformation about coding and billing for APC-packaged CTPs continues to be widespread, all readers who work in PBDs should not assume that their current process is correct. If your PBD accepts “no cost” CTPs that are APC-packaged, you should conduct an audit of the actual claims that were submitted for the application of these products. If the audit shows that your PBD is coding and billing correctly, you should congratulate everyone on your entire revenue cycle team. If the audit shows incorrect coding and billing when “no cost” CTPs are applied, you should immediately meet with your entire revenue cycle team and agree to rectify the process as soon as possible.

Kathleen D. Schaum oversees her own consulting business and is a founding member of the Today’s Wound Clinic editorial advisory board. She can be reached for consultation and questions at

Consultation Corner
Kathleen D. Schaum, MS
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