Wound Care Nets Reimbursement “Wins” With Bipartisan Budget Act

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Issue Number: 
Volume 12 Issue 5 - May 2018
Kathleen D. Schaum, MS

The signing of the Bipartisan Budget Act of 2018 that took place Feb. 9 received much in the way of national media coverage because it ended the United States’ governmental shutdown. However, the act also provided the wound care industry some “wins” that were not well publicized. This article will focus on the major “wins” that pertain to wound care professionals who work in outpatient provider-based departments (PBDs) as well as various other sites of care and payment models. 


Hospital-based outpatient wound care PBDs are required to have direct physician supervision when Medicare beneficiaries are receiving therapeutic services. However, these same departments that are housed in critical access hospitals (CAHs) were exempt from the direct supervision requirement until 2014, when the Centers for Medicare & Medicaid Services (CMS) announced that it was going to enforce the direct-supervision requirement for CAHs. At that time, Congress stepped in and prevented CMS from enforcing the direct-supervision requirements for 2014, 2015, and 2016. However, Congress did allow CMS to enforce direct supervision in CAHs effective Jan. 1, 2017. That new requirement surprised many and caught staff members in the CAH space off guard, especially among those who did not have the availability of physicians or other qualified healthcare professionals who could be immediately available when patients were receiving care in the PBDs. Therefore, many of those PBDs operated in 2017 without direct supervision, which put them in a possible audit situation and repayment situation. CMS suspended enforcement of direct supervision in CAHs for 2018 and 2019, but that still left those facilities in an audit/repayment situation for 2017.

The big “win” for the CAH outpatient wound care PBDs is that the new law suspended enforcement of the direct-supervision requirement for 2017, which should prevent the CAHs that did not have direct supervision that year from noncompliance audits and repayments. 


Even though required by the Medicare Access and CHIP Reauthorization Act, the physicians’ Merit-Based Incentive Payment System (MIPS) did not include the “cost performance” category in its first year. CMS reported that this was due to a lack of cost quality measures. The “cost performance” category was supposed to be phased in over three years and was supposed to be weighted at no more than 10% in the first year of the MIPS program, not more than 15% in the second year, and not more than 30% in the third year. Since the cost performance was one year late in starting, CMS officials announced that it would be weighted at 10% in 2018 and 30% in 2019. (That would have been a large increase in just one year.) The big “win” for physicians is that the new law pushed the timeline for implementation of the 30% weighting of cost performance until 2023. Therefore, physicians do not have to worry about the cost performance MIPS weight moving from 10% to 30% in just one year. CMS is now empowered to phase-in the cost performance weighting, which begins in 2018 with 10%. 


Medicare uses the Geographic Practice Cost Index (GPCI) to adjust physician allowable payment rates: GPCI reflects the varying costs of delivering physician services across different geographic areas. In 2003, Congress established a “floor” of 1.0 on the “work” component of the Physician Fee Schedule. This floor prevented physician payments from dropping in a geographic area because the relative cost of physician work in that area fell below the national average. For example, if the relative value units for a service/procedure increased and the GPCI decreased, those physicians’ Medicare allowable rates could have decreased without the 1.0 floor. 

The GPCI 1.0 floor was scheduled to expire Dec. 31, 2017, and 52 states and/or metropolitan areas would have dropped below the 1.0 floor. The largest decreases would have been in parts of Missouri, Oklahoma, and South Dakota. The new law extended the GPCI 1.0 floor through 2019, which is a big “win” for physicians in those 52 states and/or metropolitan areas.  

Expanded Telehealth Services Provided by ACOs 

Currently, only a limited list of telehealth services is covered by Medicare. Unlike some state Medicaid plans and the U.S. Department of Veterans Affairs, Medicare patients cannot receive a telehealth service in their homes, and the originating site must be in a county outside of a metropolitan statistical area (MSA) or in a rural health professional shortage area either outside of an MSA or in a rural census tract. The growing number of accountable care organizations (ACOs) are striving to provide the highest quality outcomes at the lowest total cost of care and to provide high-quality patient experiences. Many ACO stakeholders believe that telehealth could assist in numerous ways (see the list that follows), but location restrictions have prevented ACOs from using telehealth services throughout their innovative programs.

  • Fill the healthcare gaps faced by patients in rural communities.
  • Provide easy access to on-demand care.
  • Provide care to patients who do not have reliable means of transportation.
  • Provide care to patients who live with disabilities or mobility challenges that make travel difficult.
  • Reduce hospital readmission rates by enabling physicians to monitor patients outside their offices.

The big “win” for ACOs in the new law is that beneficiaries assigned to ACOs may now receive telehealth services in their homes. In addition, the new law eliminates the geographic restriction of the originating site for patients assigned to ACOs. 


The Balanced Budget Act of 1997 placed annual caps on physical therapy and speech and language pathology services combined, as well as another annual cap for occupational therapy. Many healthcare professionals were concerned that the caps would restrict medically necessary therapy services. These concerns caused Congress to suspend the therapy caps from 2000-05.

The therapy caps were reinstated again in 2006, but a new exception process allowed additional provider-certified medically necessary therapy services. The exception process was authorized by Congress each year through Dec. 31, 2017. If the Bipartisan Budget Act did not address the exception process, the therapy caps would have been implemented, without an exception process, effective Jan. 1, 2018. The big “win” for beneficiaries who require therapy above the therapy cap is that, effective Jan.1, 2018, the new law permanently repealed the therapy caps. However, therapists must continue to use Modifier “-KX” on claims that exceed $2,010 in 2018, which attests that the therapy services are medically necessary. 

Additionally, the threshold for targeted medical review of therapy services was lowered from $3,700 to $3,000 through 2027. However, claims that exceed the $3,000 threshold will not automatically be subject to targeted medical review. Medicare Administrative Contractors will target providers who meet specified criteria (eg, providers with a high percentage of claim denials or providers who have unusual billing patterns compared to their peers).  


Those stakeholders in PBDs in which any or all of these changes in the law pertain to wound care practice should make the appropriate changes in their processes to take advantage of these “wins.” 

Kathleen D. Schaum is president and founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL. She can be reached for questions and consultation at 561-964-2470 or kathleendschaum@bellsouth.net