Why Treating Tobacco Dependence Pays off

Better Care, Better Returns:
Making 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.

Smoking cessation is one of the few preventive services that is cost effective. Smoking cessation leads to fewer hospital admissions and lower medical expense for several years.

The impact of routine counseling in a fee-for service environment can be substantial. EMR data from WellSpan Health, a 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. However, even brief counseling, Quitline referrals, and prescriptions for cessation medications can be reimbursed (1). When these interventions are performed consistently, the financial impact can be significant.

The economic impact of systems change approaches can be seen in the first year. A 2024 study showed that a systems change approach to smoking cessation, including the hire of tobacco treatment specialists, showed that patients in a smoking cessation registry had an average reduction of $42 in monthly health care costs (2).

Clinicians can feel confident that counseling and pharmacotherapy are reimbursable because they’re supported by national guidelines and standard practice models. The U.S. Public Health Service Guidelines recommend interventions for every smoker at every visit, regardless of readiness to quit. Follow-up sessions further increase effectiveness (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 by auxiliary staff and billed by the supervising practitioner when delivered "incident to" an office visit (5).

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

Two Paths to Financial Impact: Fee-for-Service and Value-Based Models

Most medical groups operate under a mix of payment structures. Some visits are billed through fee-for-service, where CPT codes like 99406 and 99407 can generate direct revenue. Others fall under value-based contracts, which reward providers for improving outcomes and reducing overall care costs.

To help practices estimate the financial benefits of tobacco cessation under either model, we've created a simple reimbursement calculator. It includes two tabs:

• One for fee-for-service billing estimates

• One for value-based cost savings projections, based on reductions in medical expense in the first year

Whether your practice is focused on billing opportunities or long-term cost savings, both models demonstrate that tobacco cessation delivers measurable financial value.

Want to see how this adds up in your practice?

Estimate the impact of consistent tobacco cessation counseling in your practice. Use our simple tool to explore your potential revenue.