New high-cost cell-based gene therapy drug Encelto approved for use in the ambulatory surgical center (ASC) setting
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, for use in the ASC setting. This high-cost drug, however, presents unique billing challenges due to system limitations.
This article provides billing information and instructions for providers about this gene therapy when provided in an ASC.
Billing instructions
Effective for DOS on or after October 1, 2025:
- Medicare will pay claims from ASCs for HCPCS code J3403 (revakinagene tarorectcel-lwey, per implant) when billed with an appropriate surgical procedure code from the ASC fee schedule (ASCFS).
Place of service (POS)
For Part B ASC claims, HCPCS code J3403 will only be paid in POS 24. Any other place of service will be denied.
Number of 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).
Providers must submit multiple claims and append modifier LU (fractionated billing) to each claim. To prevent duplicate denials, also use modifier 76 (repeat service or payment by the same physician or other qualified healthcare professional) to bill all subsequent fractional units to ensure proper payment.
- Claims for fractional units billed without modifier LU will be denied.
Billing claim example
Each dose is allowed payment per one complete unit (1.0) with a payment amount of $257,500.00:
- 0.2 units = $51,500
- Claim 1 -- J3403 with modifier LU billed with 0.2 units = $51,500.00
- 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 = $51,500.00
- Claim 1 -- J3403 with modifier LU billed with 0.2 units = $51,500.00
Note: 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.