Coding & Reimbursement

New therapy = new code

New therapies always engender questions about reimbursement — and often, new codes. Dexamethasone ophthalmic insert falls into this category.

Q. What is dexamethasone ophthalmic insert?

A. Dexamethasone ophthalmic insert is a new drug marketed as DEXTENZA, from Ocular Therapeutics. According to both the manufacturer and the FDA, it is indicated for the treatment of ocular inflammation and pain following ophthalmic surgery.

The drug, dosed at 0.4 mg, is a corticosteroid intracanalicular insert placed in the punctum, a natural opening in the eyelid, and into the canaliculus. The insert is designed to deliver dexamethasone, without preservatives, to the ocular surface for up to 30 days. Following treatment, the insert resorbs and exits the nasolacrimal system without the need for removal.

Q. How is the procedure coded?

A. A new Category III CPT code, 0356T (insertion of drug-eluting implant including punctal dilation and implant removal when performed into lacrimal canaliculus, each), is used to report the procedure.

Q. How is the supply coded?

A. Effective July 1, 2019, Healthcare Common Procedure Coding System (HCPCS) assigned C9048 (dexamethasone, lacrimal ophthalmic insert, 0.1mg) to report the supply of the drug.1 Claims are billed with four units. Effective Oct. 1, 2019, HCPCS code J1096 (dexamethasone ophthalmic insert, 0.4mg) will be used; bill with one unit.

Q. Is it covered?

A. Coverage by Medicare and other third-party payers for placement of the insert (0356T) and the supply (C9048) is not guaranteed. Even when coverage is secured, the payer might not make separate payment; payer policies vary.

Q. Do HOPDs or ASCs get a facility payment?

A. For Part B Medicare beneficiaries, there is separate payment for C9048 because it qualifies as a pass-through drug under the Outpatient Prospective Payment System (OPPS) that governs reimbursement to hospital outpatient departments (HOPDs) and ASCs.2 In the Medicare payment schedule for HOPDs and ASCs, this is represented by status indicator “G” in the OPPS files. Other payers may follow CMS’s policy but are not obliged to do so.

Effective July 1, 2019, CMS assigned C9048 to APC 9308 within the national OPPS payment schedule for facilities (HOPD or ASC).3 Each unit is currently allowed at $138.749, so four units are allowed at $555. The reimbursement rate changes periodically and depends on the manufacturer’s average selling price as reported to CMS.

In the ASC, there is no allowed amount for 0356T and no separate payment applies. In the HOPD, payment of APC 5733 depends on how the allied procedure is categorized. When the procedure performed is cataract surgery with IOL, the payment for 0356T is bundled within the comprehensive APC 5491 ($1,917) so the surgeon receives no additional payment.

In neither case is the facility allowed to hold the beneficiary financially responsible, even with a financial waiver or ABN.

Q. What about the surgeon’s reimbursement?

A. Surgeon reimbursement for 0356T is unknown. Medicare does not bundle 0356T with most ophthalmic procedures, including cataract surgery. The 2019 Medicare Physician Fee Schedule offers no set allowed amount. Given the absence of a national coverage policy for 0356T, each Medicare Administrative Con-tractor will determine coverage and payment for the surgeon.

If a payer defines 0356T as not covered, you may ask the patient to assume financial responsibility using a financial waiver, which take several forms depending on insurance.

Q. Do Medicare copayments apply?

A. Drugs having pass-through status are subject to the 20% Medicare copayment in an ASC, but not in an HOPD. Additionally, 81% of Medicare beneficiaries with Part B coverage have supplemental insurance to cover some or all of cost-sharing requirements.4

Q. Does using dexamethasone ophthalmic insert affect MIPS scores?

A. Whether to use a pass-through drug can be an important consideration within the Merit-Based Incentive Payment System (MIPS). For eligible clinicians, under the Resource Use component of MIPS, lower cost of an average episode of routine cataract surgery earns points while higher cost loses points. Only covered items and services used during routine cataract surgery are counted toward the surgeon’s 2019 MIPS score, which is a factor in determining future Medicare payments in 2021. Clinicians who achieve a final composite score of 75 or higher will be eligible for the exceptional performance adjustment, while those with a score below 30 will be penalized.

Importantly, the use of dexamethasone ophthalmic insert in complex cataract surgery, nonroutine cases or within Medicare Advantage is not counted toward the MIPS composite score. OM


  1. CMS Manual System. Centers for Medicare and Medicaid Services. . Accessed July 29, 2019.
  2. Social Security Act TITLE XVIII Part B, 42 U.S.C. §1833(t)(6). The United States SOcial Security Administration. . Accessed July 29, 2019.
  3. OPPS Addendum B, July 2019. Centers for Medicaid and Medicare Services. . Accessed July 29, 2019.
  4. Sources of Supplemental Coverage Among Medicare Beneficiares in 2016. Kaiser Family Foundation. . Accessed July 29, 2019.