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From the Editor

Goodbye Volume, Hello Value

How much of your time do you spend focused on volume-based payment (the way you have always done things) vs. the new value-based system? Are you beginning the transition away from volume-based payment, or hoping you can retire before you have to?

I recently had the good fortune to spend two days at a fascinating wound care summit with Kathleen Schaum, MS. The goal was to enable attendees to identify operational and reimbursement challenges at their institution, and then design strategies to overcome them. You can check out an artist’s depiction of my talk, “The Current State of Wound Care in 15 Minutes.”1 However, the speakers did very little talking and a lot of listening to the attendees.

Every hospital inpatient program wanted to improve quality of care and patient outcomes but designing a way to do that is impossible when no institution is able to link cost to outcome. That is largely because institutions are unable to measure outcomes that are relevant to wound patients, with the exception of inpatient hospital data on pressure ulcers. In fact, no institution could even link cost to reimbursement for their wound care program. We heard frequent, anguished cries about the inadequacy of the hospital’s electronic health record (EHR) to meet the needs of either the institution or the patients.

The story was a little different for the outpatient wound centers. The outpatient payment system (OPPS) has been around for two decades and over time we have developed some metrics we think define the success of an outpatient wound center program such as: “conversion rate” for hyperbaric oxygen, debridements per patient or per month, new patients per month, visits per month, and of course, wound healing rate (to name only a few). Some outpatient program directors proudly flourished “dashboards” with attractively colored reports.

But when Kathleen began talking about alternative payment models, moving the focus away from volume toward value and the advent of bundled payments for cellular products, the confidence evaporated. Those beautiful wound center dashboards had no data on quality measure performance, physician participation the Merit based Incentive Payment System (MIPS), hospital re-admission rate, or patient Hierarchical Condition Category (HCC).

Even though OPPS billing is as arcane and complicated as any billing system ever devised, most program directors have at least a vague understanding of how it works (although we still found outpatient wound centers that bill their services monthly, which means they don’t really understand OPPS). The Centers for Medicare and Medicaid Services (CMS) are tracking patient outcomes that have not been on our radar screen. We worry about amputations, which are infrequent and often occur years down the road from a diabetic foot ulcer. In contrast, CMS is tracking annual Medicare Spending per Beneficiary (MSPB), episodes of cellulitis and re-hospitalization rate. It is frightening to consider that even though I only practice 2 days a week, 10 of my patients got readmitted to the hospital during the year. If penalties for hospital readmissions kick in when a practitioner has 20 of them per year, and I had 10 while practicing only 2 days a week, it’s a pretty sure bet that if I practiced 5 days a week, I would have at least 20 hospital readmissions per year. If that were to happen, then like the hospital, I would be at risk of a claw-back of Medicare payments for failing to keep my patients out of the hospital, even though their wound may have had nothing to do with the reason they got hospitalized. That’s why I have become engaged in the management of my patients’ heart failure. Readmission penalties have made heart failure my problem.

Every practitioner is being evaluated in relation to his or her cost of care and quality score. The ideal is high quality (measured by quality measure performance score) at low cost. I maximized my MIPS quality score by reporting through the U.S. Wound Registry (USWR). That is important because private payers can refuse to allow their patients to be seen by practitioners with poor quality performance. Unfortunately, despite having optimized my quality score, my cost per patient is high. The numbers in my MIPS report reveal that my patients cost $58,000 per episode rather than $16,000, which is the average for a family practice doctor. (I am compared to family practice doctors because that’s the specialty in which I am board certified.)

However, my high MSPB can be explained by my average Hierarchical Classification Code (HCC) score, which is the way that CMS understands patient complexity. At 3.24, my HCC score is twice that of the average physician in the country (about the same as a nephrologist) because my patients are much sicker than average. According to my MIPS data, more than half my patients have chronic kidney disease, half have ischemic heart disease, nearly half have diabetes, 38% have heart failure and more than 25% have chronic obstructive pulmonary disease. Those diagnoses are among the most expensive conditions a Medicare beneficiary can have. Wound center patients nearly always have one of these conditions, and most of them have two.

Your wound center performance dashboard is going to need some new metrics. We may still have one foot in the volume camp, but the other needs to get firmly planted in the value camp. We need to include practitioner quality performance on those dashboards, and I would start with the three measures that CMS has recently included on its Physician Compare website: Diabetic foot ulcer offloading, venous leg ulcer adequate compression and arterial screening of patients with leg ulcers.2 We need to start tracking re-hospitalization rates and the incidence of cellulitis among our patients. We will need to start reporting the healing rates of even the sickest patients, rather than classifying them as “palliative.” Their healing rates will be closer to 50% than 95%. To explain their higher cost, we will need to report their HCC scores or, since that calculation is tricky, we need at least the prevalence rate of the most relevant, high cost co-morbid conditions. We need to track MSPB.

In other words, we are caught between two systems. In the old system, we were successful if we increased in Medicare spending per patient. In the new system, we are successful if we decrease Medicare spending per patient, but without sacrificing outcome. Straddling these competing expectations will be difficult for awhile, which is why I think we should focus on the quality story. We won’t be able to tackle these new challenges with our old ways of thinking. It’s time to say goodbye to volume, and hello value in the future world of reimbursement.

Caroline E. Fife is Chief Medical Officer at Intellicure Inc., The Woodlands, TX; executive director of the U.S. Wound Registry; medical director of St. Luke’s Wound Clinic, The Woodlands; and co-chair of the Alliance of Wound Care Stakeholders.


From the Editor
Caroline E. Fife, MD, FAAFP, CWS, FUHM

1. Fife C. Artist’s depiction of the “Current State of Wound Care in 15 Minutes.” Available at:
2. Fife C. Wound care quality measure performance on Physician Compare. Available at:

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