Reimbursement for Tobacco Cessation

ROI: Why Treating Tobacco Dependence Pays Off
Better Care, Better Returns: The Case for Reimbursement

Tobacco cessation services are reimbursable in a fee for service payment model—and can generate substantial revenue when consistently billed. These services also support performance in value-based contracts, where providers are rewarded for improving outcomes and lowering overall care costs. Yet many clinicians do not routinely bill for add-on codes 99406 or 99407, even when eligible, often due to low perceived reimbursement, unfamiliarity with billing processes, or workflow challenge.

However, even brief counseling, Quitline referrals, and prescriptions for cessation medications can be reimbursed. When these interventions are performed consistently, the financial impact can be significant. Clinical practice guidelines (1) support an evidence-based intervention for every smoker, every visit, regardless of their readiness to change. Scheduled follow-ups to counselling double the impact of any intervention, and additional sessions further enhance outcomes. Cessation interventions apply to all types of tobacco.

The impact of routine counseling can be substantial. EMR data from WellSpan Health, a health system in Pennsylvania and Maryland, showed that if every eligible tobacco cessation encounter were billed, the three-year reimbursement potential would total $5.9 million (2).

A 2023 study showed that patients in a smoking cessation registry had an average reduction of $42 in monthly health care costs, demonstrating population-level savings that benefit payors and can contribute to value-based care performance metrics8. These savings would exceed the calculated value of fee for service gains. (3)

CMS (Centers for Medicare & Medicaid Services) guidelines, adopted by most payors, allow for up to eight cessation counseling sessions per patient, per year (4). CMS also allows tobacco cessation counseling to be delivered by auxiliary staff and billed by the supervising practitioner when delivered "incident to" an office visit (5).

The American Lung Association provides additional medical record documentation standards (6).

Want to see how this adds up in your practice?

Use the simple tool below to estimate what your practice could earn by consistently billing for tobacco cessation services.

Calculate Your Reimbursement

  1. Why This Matters
    Tobacco cessation improves patient health—and it pays off. When billed consistently, even brief counseling generates revenue in a fee-for-service model. In value-based contracts, the return on investment is even greater due to reductions in long-term care costs.

  2. How to Use This Tool
    To estimate your practice’s potential revenue, enter the number of adult ambulatory visits, local tobacco use prevalence, payor mix (Medicare/Medicaid/Commercial), and reimbursement rates for each. The calculator will estimate annual reimbursement totals. Shortcut: For a quick estimate, use the standard Medicare payment rate of $15.50 per counseling visit.

  3. Your Options

·        Try the shortcut: For a quick estimate, use the: estimate the number of tobacco users you see each year and multiply by the standard Medicare payment rate of $15.50 per counseling visit for code 99406.

  • Use your EMR to calculate the number of tobacco users that could be billed and subtract the number

  • Try the Calculator Go to the XL Worksheet here
    ✓ Formulas are locked
    ✓ Make a copy to use the tool freely

     References and Resources

1. Treating Tobacco Use and Dependence: 2008 Update. Agency for Healthcare Research and Quality. https://www.ahrq.gov/prevention/guidelines/tobacco/index.html

2. "A Lost Opportunity in Tobacco Cessation Care: Impact of Underbilling in a Large Health System." Am J Prev Med, Jan 2025.

3. "Cost-Effectiveness of a Comprehensive Primary Care Smoking Treatment Program." ScienceDirect, Mar 2024.   
4. Counseling to Prevent Tobacco Use. NGS Medicare. Counseling to Prevent Tobacco Use (ngsmedicare.com)4. CY 2023 Medicare Physician Fee Schedule Final Rule. CMS.
5. Details on CMS requirements for documentation, billing and coding are available here

American Lung Association. Billing Guide for Tobacco Screening and Cessation, 2021, p. 11. https://www.lung.org/getmedia/275e15df-413d-450f-9bed-b98a9fb04e1a/ala-billing-guide-2021.pdf

Resources and tools to support changes in office workflow and other systems change:

Tobacco Cessation Change Package (hhs.gov) (The Million Heart Initiative)

American Academy of Family Practice Office Champions

Practice leaders and administrators are invited to “do the math” and estimate the impact. Follow the link to an XL spreadsheet that supports an estimate of the reimbursement based on billing every smoker for a 3-minute counselling cessation. . Go to the XL Worksheet here to do the math for your practice. References and tools are a click away.

Cost-Effectiveness of a Comprehensive Primary Care Smoking Treatment Program - ScienceDirect. The is no doubt that additional savings will accrue in subsequent years.

The cost of implementing systems-based improvements in smoking cessation is modest and the benefits continue to accrue and increase over future years that members are retained.

Details on CMS requirements for documentation, billing and coding are available here

Please share your thoughts and questions with me.

Edward Anselm, MD Clinical Assistant Professor, Icahn School of Medicine at Mount Sinai

eanselm@MSN.com