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Negative pressure wound therapy (NPWT) is widely accepted, prescribed, and used in all sites of care. This month’s Consultation Corner topic pertains to NPWT provided in hospital-owned outpatient wound management provider-based departments (PBDs).
Many PBD directors encourage physicians, home health agencies, and skilled nursing facilities to send their patients to the PBD for application of both negative pressure wound therapy (NPWT) durable medical equipment (DME) and disposable NPWT. Because the PBD directors are submitting charges for these procedures, they believe that they receive Medicare payment for every application they perform. However, this author has received many phone calls from PBD directors after their chief financial officer conducted a financial review of the department and informed them that they did not receive the expected payment for a large number of NPWT applications.
Facts to Consider
- When performed in PBDs, both the applications of NPWT DME (97605/97606) and disposable NPWT (97607/97608) require direct supervision.
- Both the NPWT DME and disposable NPWT procedure codes are in column 2 of the National Correct Coding Initiative (NCCI) edits when performed during the same encounter as a variety of other procedures, such as selective debridement (97597/97598) and the application of cellular and/or tissue-based products (CTPs) for skin wounds (15271–15278; C5271–C5278).1
- The NPWT DME procedure codes are assigned status indicator “Q1,” which means they have packaged Ambulatory Payment Classification (APC) payment if billed on the same claim as another HCPCS code assigned status indicator “S,” “T,” or “V.”
- The disposable NPWT procedure codes are assigned status indicator “T,” which means the multiple procedure reduction applies when the codes are billed on the same claim as another procedure assigned status indicator “T.”
- The NPWT DME procedure codes are on the consolidated billing list for skilled nursing facilities (SNFs).
- The disposable NPWT procedure codes are on the consolidated billing list for home health agencies (HHAs).
During many teleconsultations with PBD directors and their revenue cycle team, I learned that no one educated them about the facts listed above. In fact, many PBD directors intentionally scheduled their patients who needed wound assessment and reapplication of NPWT DME or disposable NPWT on days when they did not have direct supervision in the PBD. Therefore, in many of those instances the coders did not submit claims for those encounters when direct supervision was not provided. However, that created another problem because the PBDs could then be criticized for inducing patients because they provided “free” service. See the April 2019 Consultation Corner.
I always educated the teams on how to filter the NCCI edits and how to identify when 97605/97606 and 97607/97608 are in column 2 of the edits. I reminded them that the only time procedures in column 2 will be paid is when they are performed on separate anatomic locations from the procedures in column 1 of the NCCI edits. I also reminded them that modifiers should not be added to column 2 codes, just to force payment of the claim, because those claims could then be considered fraudulent.
The PBD team was usually surprised to learn that status indicators are assigned to every service, procedure, and product that is provided in the PBD. They incorrectly believed that if the codes for two services/procedures are assigned to different Ambulatory Payment Classification (APC) groups that both of the codes would always be paid. That is true only if the two codes are assigned the “S” status indicator: procedure or service, not discounted when multiple, or the “T” status indicator: procedure or service, multiple procedure reduction applies. It is not true when the two codes are assigned the following status indicators:
hospital Part B services paid through a comprehensive APC (C-APC)
hospital Part B services that may be paid through a comprehensive APC (C-APC)
items and services packaged into APC rates
packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator “S,” “T,” or “V”
packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator “T”
Because many services and procedures performed in the PBD have a status indicator of “S,” “T,” or “V,” and NPWT DME codes (97605/97606) have a status indicator of “Q1,” NPWT DME is usually packaged into the payment of the other service/procedure. In most cases, the application of NPWT DME only receives APC payment when no other service is performed and reported on the same claim.
I also reminded the PBD directors and revenue cycle team that disposable NPWT codes (97607/97608) have a different status indicator than NPWT DME: the disposable NPWT codes are assigned to status indicator “T.” Therefore, if performed during the same encounter with another procedure that is also assigned status indicator “T,” the procedure with the lowest allowable payment rate will be reduced by 50%. Before ending the status indicator discussion, I always took the time to tell the team that the status indicators for every service/procedure performed in the PBD can be found in Addendum B, which is located on the Outpatient Prospective Payment System (OPPS) website.2
When we turned our attention to consolidated billing of SNFs and HHAs, the PBDs rarely had negotiated contracts that allowed the PBDs to charge the SNFs and HHAs for services/procedures that are subject to consolidated billing. In fact, the PBD directors typially reported marketing their services as “no charge” to the SNFs and HHAs. The PBD directors and and revenue cycle team often “pushed back” to me and said, “but we received payment for the service that was on the consolidated billing list.” Then I challenged them to see if Medicare took a repayment from the hospital once the SNFs and HHAs submitted their claims to Medicare. So far, in every case we reviewed, Medicare recouped the payment from the PBDs after the SNFs and HHAs submitted their claims and Medicare recognized that the service was on the consolidated billing list. I usually ended the teleconsultations by providing the PBD director and the revenue cycle team with links to the the consolidated billing lists for SNFs and HHAs.3,4
Because NPWT is such an important part of wound management, this consultant hopes that all PBD directors and their revenue cycle teams now better understand that the application of NPWT requires direct supervision when it is performed in the PBD. In addition, I hope they now have an awareness about when the applications of NPWT DME and disposable NPWT are separately reimbursed, when they are packaged into other PBD payment, when they are included in the consolidated billing of SNFs and HHAs, and why contracts should be negotiated with SNFs and HHAs. Then the PBD directors can set realistic expectations about the revenue that should be generated 1) from the payers, and 2) from the SNFs and HHAs for who they perform work that is on their respective consolidated billing lists.
Kathleen D. Schaum oversees her own consulting business and is a founding member of the Today’s Wound Clinic editorial advisory board. She can be reached for consultation and questions at email@example.com.
1. National Correct Coding Initiative Edits. Available at https://www.cms.gov/Medicare/Coding/NationalCorrectCodInitEd/NCCI-Coding-Edits.html . Last accessed June 18, 2019.
2. OPPS Addendum B. Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html . Last accessed June 18, 2019.
3. SNF Consolidated Billing List. Available at https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/index.html . Last accessed June 18, 2019.
4. HHA Consolidated Billing List. Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/coding_billing.html . Last accessed June 18, 2019.