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High-cost cell-based gene therapy drug Encelto approved

Effective for claims with dates of service (DOS) on or after October 1, 2025, Medicare approved a groundbreaking new cell-based gene therapy drug, Encelto™, when furnished in Ambulatory Surgical Centers (ASCs) under the ASC Fee Schedule and Hospital Outpatient Departments (HOPDs) under the Outpatient Prospective Payment System (OPPS).

This article provides billing guidance and claim submission instructions for providers administering Encelto™ when provided in an ASC and HOPD settings.

Part A billing instructions for HOPDs

For Part A claims, report the following information on the CMS-1450 claim form (UB-04) or electronic equivalent:

  • HCPCS J3403 (revakinagene taroretcel-lwey, per implant) on a separate claim line
  • 1 unit per implant furnished, consistent with the HCPCS code descriptor "per implant":
    • Current 2026 OPPS payment is $261,579.65 per implant (1 unit).
    • Note: Access Addendum B from the Quarterly Addenda Rate to locate the current fee.
  • Type of bill (TOB) 0131
  • Revenue code 0636 for drugs/biologicals 
  • Associated procedure performed for implantation (for example, the surgical implant procedure when applicable), since OPPS payment is based on the HCPCS/CPT codes reported on the outpatient claim.

Note: Due to the high cost of this drug, please add remarks on the claim indicating charges have been verified.

Payment is processed under the OPPS/APC methodology for hospital outpatient departments.

Part B billing instructions for ASCs

Due to the high cost of this drug, ASCs must submit multiple claims to be reimbursed properly. 

For Part B claims, report the following on the CMS-1500 claim form or electronic equivalent:

  • HCPCS J3403 (revakinagene taroretcel-lwey, per implant)
  • Place of service (POS) 24
  • Associated procedure performed for implantation (for example, the surgical implant procedure when applicable) from the ASC Fee Schedule (ASCFS)
  • Fractionate unit
  • Modifier LU (fractionated billing):
    • Must be reported on each claim
    • Claims for fractional units billed without modifier LU will be denied.
  • Modifier 76 (repeat service or payment by the same physician or other qualified health care professional):
    • Report on subsequent fractional claims to prevent denials.

Understanding fractionated units

When entering the dollar amount for the charge of a service, providers are limited to a maximum of $99,999.99 per claim because $100,000.00 would exceed the Part B Medicare Claim System (MCS) field size. 

The total payment for the high-cost cell-based gene therapy drugs will be divided in fractionated units. The provider will need to bill the total number of claims for these fractional units to reach the total Medicare allowed payment amount or one complete unit (1.0) as follows:

  • Providers billing $499,999.99 or less would submit 5 claims for 0.2 fractional units per claim, for one complete unit (1.0).
  • For claims priced over $500,000.00, providers would submit 10 claims for 0.1 fractional units per claim.

The total units for fractions billed shall not exceed one complete unit (1.0).

Part B billing claim example

Each dose is allowed payment per one complete unit (1.0) with a payment amount of $261,579.65.

  • If billing in 0.1 increments, 0.1 units = 26,157.96
    • Claim 1 - J3403 with modifier LU billed with 0.1 units = $26,158.01.
      • This claim should also be billed with the surgical code from the ASCFS.
  • Claims 2, 3, 4, 5, 6, 7, 8, 9 and 10 - J3403 with modifiers LU, 76 billed with 0.1 units = $26,157.96.
  • If billing in 0.2 increments, 0.2 units = $52,315.93
    • Claim 1 - J3403 with modifier LU billed with 0.2 units = $52,315.93.
      • This claim should also be billed with the surgical code from the ASCFS.
  • Claims 2, 3, 4, and 5 - J3403 with modifiers LU, 76 billed with 0.2 units = $52,315.93.

Each fractional unit would be billed on a separate claim. Contractors will only pay up to one complete unit (1.0) per HCPCS code. Anything above one complete unit (1.0) will be denied.

Note: Access Addendum BB from the ASC Payment Rate - Addenda to locate the current fee. 

 

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