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Medicare Payment Trends & Tips

  Information regarding coding, coverage, and payment is provided as a service to our readers. Every effort has been made to ensure the accuracy of the information. However, HMP Communications and the authors do not represent, guarantee, or warranty that the coding, coverage, and payment information is error-free and/or that payment will be received. The ultimate responsibility for verifying coding, coverage, and payment information accuracy lies with the reader.

  The following represents a typical question that wound care providers and program directors ask as we settle into calendar year 2015: “Has the Medicare payment system changed much over the last few years?”

  As you can well imagine, this author is very concerned any time a qualified healthcare professional (QHP) or anyone on staff in a wound care hospital-based outpatient department (HOPD) does not know that Medicare payment systems change from year to year, or that Medicare payment information that was “years” old would not be current in 2015. In addition, HOPDs and QHPs ask this author several times each day as to why their Medicare payment is less than they expected and/or to discuss denied Medicare claims. In response to these types of conversations, the first portion of this article will review some current payment trends that continue to affect Medicare payment for wound care businesses throughout the country.

  The second portion of this article will share some of the most frequently asked questions (FAQs) and answers pertaining to Medicare payment systems. The answers to these FAQs should serve as Medicare payment tips for 2015.

Business Briefs: Playing Musical Chairs With CTPs in 2015
Use the Correct Payment File to Find Medicare Allowable Rates

Medicare Payment Trends for HOPDs

  Trend No 1:
  APC Group Assignment Based on Submitted Claims
  Before releasing the final Outpatient Prospective Payment System (OPPS) each year, the Centers for Medicare & Medicaid Services (CMS); 1) reviews the charges submitted on Medicare claims (from two years prior) by all HOPDs in the country, 2) applies a formula to convert those charges to payments, 3) determines if each service/procedure/product is assigned the correct Ambulatory Payment Classification (APC) Group, and 4) reassigns services/procedures/products to different APC groups when warranted. This year has been no exception: CMS reviewed HOPD claims from 2013 and assigned wound care services/procedures/products to the appropriate APC groups that determined the Medicare allowable OPPS rates for 2015.

  In several instances, the 2013 charges on HOPD claims caused CMS to move some wound care procedures to higher-paying APC groups in 2015. These procedures are:
    • Application of rigid leg cast (Current Procedural Terminology [CPT] code 29445) moved from APC Group 0426 ($138.21) to APC Group 0058 ($223.29).

    • Application of multilayer compression to lower leg (CPT code 29581) moved from APC Group 0058 ($121.00) to APC Group 0059 ($127.87).

    • Nonselective debridement (CPT code 97602) moved to the same APC group (0015) as selective debridement (CPT codes 97597/97598), traditional negative pressure wound therapy (NPWT) for wounds > 50 sq cm (CPT code 97606), and as disposable NPWT for all sizes of wounds (CPT codes 97607/97608). The OPPS allowable for CPT code 97602 increased from $83.73 to $146.14.

    • NPWT utilizing durable medical equipment (DME) for wounds ≤ 50 sq cm (CPT code 97605) moved from APC Group 0013 ($83.73) to APC Group 0012 ($98.49).

    • Noncontact and nonthermal ultrasound (CPT code 97610) moved from APC Group 0013 ($83.73) to APC Group 0015 ($146.14).

  As you can see, quite a few wound care procedures (eg, CPT codes 97597, 97602, 97606, 97607, 97608, 97610) are now in APC Group 0015.

  HOPDs were caught by surprise when their 2013 claim charges caused several wound care procedures to move to lower-paying APC groups. The most surprising movements were:
    • Application of paste boots (CPT code 29580) moved from APC Group 0426 ($138.21) to APC Group 0059 ($127.87).

    • Disposable NPWT (new CPT codes 97607/97608 that replaced Healthcare Common Procedure Coding System [HCPCS] codes G0456/G0457) moved from APC Group 0016 ($274.81) to APC Group 0015 ($146.14) because the 2013 charges for the retired codes G0456/G0457 on the HOPDs’ claims did not adequately reflect the cost of the product.

    • Epidermal autografts performed on larger anatomic locations such as trunk, arms, and legs moved from APC Group 0329 ($2260.46) to APC Group 0327 ($430.12) Note: The same procedure performed on smaller anatomic locations, such as feet, did not move to the lower-paying APC Group.

  Wound care providers were hoping the entire country’s charges on their 2013 HOPD claims would move the APC packaged payment code for the application of cellular and/or tissue-based products for wounds (CTPs) [outdated term “skin substitutes”] to APC groups with higher Medicare allowable rates to more accurately reimburse for the true cost of the products as well as the HOPD’s cost for the application of the products. Unfortunately, the codes are assigned to the same APC groups in 2015. These APC groups did receive small increases in their 2015 Medicare allowable rates, but the increases are still not adequate to pay for the cost of some CTPs. In addition, this author was hoping HOPDs would have corrected their charges for application of CTPs to wounds ≥ 100 sq cm. Unfortunately, the HOPDs’ 2013 claims did not report higher charges for these wounds that require additional CTPs, larger primary and secondary dressings, and generally more work. Furthermore, the charges on the claims for the application of CTPs to large wounds on legs were higher than the charges on the claims for the same size wound on the foot. This makes no sense because the HOPDs had to purchase the same amount of product for a 100 sq cm wound on the leg as for a 100 sq cm on the foot. See the January/February 2015 Business Briefs for the 2015 Medicare allowable rates assigned to the application of “high cost” and “low cost” CTPs.

  TIP: HOPDs should review their Charge Description Masters to ascertain their 2015 total costs to provide each service/procedure/product is reflected in their 2015 charges. If they are not, wound care codes may be reassigned to a lower-paying APC group in 2017.

  Trend No. 2:
  Medicare Packages Payment For Products into Procedures
  Despite multiple attempts by many professional societies, coalitions, advocacy groups, manufacturers, and wound care professionals, CMS continued to package many products into their OPPS payment. This includes CTPs. Even though CMS continues to award HCPCS codes to CTPs that meet CMS’ HCPCS code criteria, CMS continues to designate CTPs into “high cost” and “low cost” packaged APC groups. A few CTPs that qualify for pass-through payment status will be assigned to the “high cost” APC groups and will be eligible for an additional payment for the CTP if their average selling price plus 6% exceeds the portion of the “high cost” APC payment that is associated with the application of the CTP. See the January/February 2015 Business Briefs for the list of “high cost” CTPs, “low cost” CTPs, CTPs with pass-through status, and the 2015 dollar amount of the product that is packaged into the procedure.

  TIP: HOPDs should include the HCPCS code assigned to each CTP on the same claim with the correct application code. In addition, HOPDs should report and charge for the total number of sq cm of CTPs purchased for each application. Note: Be sure the charge for the product and the procedure reflect the HOPD’s total cost to provide the product and support the procedure performed by the QHP.

  Trend No. 3:
  Medicare Signals HBOT Control for HOPDs
  CMS deleted HCPCS code C1300 for hyperbaric oxygen therapy (HBOT) and replaced it with a new code HCPCS G0277. CMS assigned HCPCS code G0277 to APC Group 0659, to which HCPCS code C1300 was also assigned. The 2015 Medicare allowable ($109.29) is slightly less than the 2014 Medicare allowable ($110.93).

  TIP: HOPDs should remember to report the actual number of 30-minute intervals of hyperbaric oxygen that each patient received on their claims. Many HOPDs mistakenly report only 1 unit of HCPCS code G0277, which causes their Medicare Administrative Contractor (MAC) to pay them for 30 minutes of hyperbaric oxygen, instead of the typical 120 minutes of HBOT that was delivered.

  Although CMS did not make a major payment change for HBOT, it did signal the intention to reduce expenditures while maintaining or improving quality of care for HBOT provided by HOPDs. The signal came in the form of the nonemergent HBOT prior authorization project for providers who submit HBOT Medicare claims with bill type 13 – HOPDs in:
    • Illinois (serviced by MAC J6, National Government Services Inc.),
    • Michigan (serviced by MAC J8, Wisconsin Physicians Service Insurance Corp.), and
    • New Jersey (serviced by MAC JL, Novitas Solutions Inc.).

  These MACs began accepting prior authorization requests on March 1, 2015 for HBOT of the six included conditions occurring on or after April 13, 2015. CMS believes using a prior authorization process will help ensure HBOT services are provided in compliance with applicable Medicare coverage, coding, and payment rules before HBOT services are rendered and before claims are paid.

  Even if HOPDs are not in these three states, they should read the prior authorization rules ( and make a concerted effort to ensure their wound care professionals’ utilization of HBOT and their documentation impeccably meet the HBOT national coverage determination (NCD) requirements as well as any local coverage determination (LCD) and/or article requirements published by their MAC. Note: If CMS achieves its goals with this prior authorization project, CMS is likely to extend prior authorization to the entire country.

Medicare Payment Trends for QHPs

  Trend No. 1:
  MACs Expect Documentation to Align with NCDs and/or LCDs Before Payment or During Post-Payment Review
  Nearly every day this author receives calls from QHPs and/or their coders and billers who usually begin by saying they “did not receive Medicare payment for a service/procedure/product.” Sadly enough, many do not know the name of the MAC that processes their claims when asked. In fact, they will typically incorrectly answer “Medicare.” After we then determine their MAC and locate any NCDs/LCDs/articles pertaining to their issue on the Medicare coverage website (, we then focus attention on their submitted claims and review the primary and secondary diagnosis code(s). Then we review each CPT code/number of units and HCPCS code/number of units. Finally, we read the explanation of medical benefits they’ve received from the payer, including every CPT code and HCPCS code that was paid or denied and the stated reason for the denial. Following are the most common reasons for claims denial that we often encounter:
    • The QHP/coder/biller “never heard of” an NCD/LCD/article; did not know where to locate NCDs and their MAC’s LCDs/article; and had not read the pertinent NCD/LCD/article before providing the care, documenting the care, and submitting the claim.
    • The diagnosis code(s) reported on the claims were nonspecific.
    • The diagnosis code(s) reported were not covered by their MAC.
    • The primary diagnosis code was not listed first on the claim.
    • The units reported on the claim did not match the description of the code(s).
    • Combinations of services and procedures that are prohibited by the National Correct Coding Initiative (NCCI) edits were reported on the claim.
    • The narrative record on the claim was not completed for services/procedures/products that are contractor priced.
    • The documentation in the medical record did not provide all information required by the MAC.

  Very often, people are very surprised to learn that the problem was not the service/procedure/product, but due to a lack of knowledge about the pertinent NCD/LCD/article, a diagnosis that was not medically necessary, an improper claim preparation, and/or insufficient documentation by the QHP.

  TIP: QHPs should assign someone to check their MAC’s LCD website on a monthly basis (visit That person should print all new/revised LCDs and their attached articles and give copies to all QHPs, coders, and billers. Then, QHPs, coders, and billers should read the LCD/article and should highlight medical necessity requirements, limitations of coverage, documentation requirements, coding requirements, and utilization guidelines. The LCD/article requirements should then be built into the medical decision-making, documentation, coding, and claim preparations of the entire team. Likewise, QHPs should assign someone to review the updates to the NCCI edits at the beginning of each quarter: That review will help the team understand why some codes should not be coded together.

  Trend No. 2:
  Medicare Continues to Incentivize QHPs Who Provide Wound Care Services
  Despite the clamor about reduced QHP Medicare payment, QHPs who perform wound care services (both in their offices and in HOPDs) have not been affected much if they have complied with the e-prescribing/Meaningful Use of electronic records/reporting of pertinent quality measures. In some instances, Medicare appears to be incentivizing QHPs to perform some wound care work in their offices. Following are a few notable examples:
    • Medicare appears to be incentivizing QHPs to perform debridement procedures, particularly 97597/97598, in their offices.
    • Medicare appears to be incentivizing QHPs to apply CTPs to chronic wounds ≥ 100 sq cm in their offices.
    • Effective Jan. 1, Medicare also began paying QHP offices that provide HBOT in a manner similar to HOPD Medicare payment. In the past, QHPs who provided HBOT in their offices were only paid for the HBOT attendance and supervision (CPT code 99183), per session. Now they will be paid for both CPT code 99183 per session, as well as HCPCS code G0277 HBOT, per 30-minute interval (to pay for the use of the HBOT chamber).

  TIP: All of these incentives make it imperative that QHPs take the initiative to understand correct coding, payment, and coverage rules for their very important wound care work.

  Trend No. 3:
  QHPs’ Lack of Detail Causes Medicare Repayment
  Wound care professionals spend a lot of time diagnosing underlying conditions that cause chronic wounds. In addition, they use a high level of medical decision-making to determine how to manage each wound. However, they do not always take the time to “brag” about the depth of their work in the patient’s medical record. Then, when Medicare conducts post-payment reviews of those medical records, the QHP is often asked for a repayment because the medical record did not justify medical necessity for the work performed. Following are a few of the most common wound care “lack of detail” medical record omissions:
    • exact primary diagnosis, secondary diagnosis, and comorbidities;
    • description and size of wound, photograph of wound before and after treatment;
    • circulation/oxygenation to support tissue growth/wound healing;
    • details of and response to standard treatment provided, such as edema control; venous hypertension control; control of infection or colonization with bacterial or fungal elements; mechanical offloading; compression; debridement; management of concomitant and inciting medical issues (eg, blood glucose control, tobacco use, etc. ); and provision of wound environment to promote healing use of appropriate dressings;
    • level of tissue debrided and total sq cm debrided (not total sq cm of wound);
    • detailed procedure note (similar to operative notes) by QHP for all procedures performed; and
    • wastage of CTPs documented in QHP’s procedure note:
      o amount of utilized and wasted product (eg, date, time, and location of ulcer treated);
      o name of CTP and how product supplied;
      o amount of CTP used;
      o amount of CTP discarded;
      o reason for the wastage; and
      o manufacturer’s serial/lot/batch or other unit identification of CTP. (When manufacturer does not supply unit identification, the record must document such.)

  TIP: QHPs owe it to themselves and to their patients to thoroughly document their work immediately after performing it. Be sure to “paint the picture” with words to the level of detail required by the payers. Documentation time spent at this stage is “priceless” if the payer requests the medical record, if prior authorization or a predetermination is required, or if/when records are audited.

HOPD Medicare Payment FAQs

  Clinic Visit
  Q: Is it true the 2015 Medicare allowable for the clinic visit HCPCS code G0463 was significantly reduced?
  A: No. In 2015, HCPCS code G0463 is assigned to the same APC group (0634) as it was in 2014. The payment rate increased slightly from $92.53 to $96.25. Note: This APC allowable rate may decrease in 2017 if the HOPDs’ 2015 claims do not report their true total costs to perform the five levels of new and established clinic visits.

Debridement Medicare Payment

  Q: I am the program director of an HOPD. Our coders told me HOPDs do not have to report add-on codes for surgical and medical debridement because Medicare no longer pays separately for those. I disagree and believe we should continue coding and charging for these add-on codes. Am I correct?
  A: Yes! CMS clearly directs HOPDs to continue coding and charging for packaged add-on codes.

CTP Medicare Payment

  Q: My hospital administrators do not want to set HOPD charges correctly because they do not want patients to complain when they see their HOPD bill. Is it really true that the charges on the claims we submit to Medicare help to determine the packaged Medicare payment for the application of CTPs that the HOPD will receive two years from now?
  A: Yes. In fact, following are a few items that no one can dispute:
    • Patients always see the HOPD’s charges to Medicare, which reflect the HOPD’s cost of doing business.
    • Patients covered by Medicare do not pay based on the HOPD’s charges. They pay based on the Medicare allowable rate to the HOPD. Typically, the patient or his/her secondary insurance is responsible for 20% of the Medicare allowable rate — not the charge to Medicare.
    • Medicare clearly uses charges submitted on HOPD claims to set the OPPS rates two years from now. For example: Charges that HOPDs submitted to CMS for CTPs in 2013 helped set the allowable for the 2015 packaged payment of the “high cost” and “low cost” CTPs. It is obvious that HOPDs did not set their charges to correctly reflect their true costs of CTPs in 2013 because the 2015 Medicare packaged allowable rate to apply CTPs does not cover the costs of many products.
    • Hospital administration is free to set their charges as they see fit. If they do not care about the Medicare allowable rate in 2017, you may want to get that in writing so you are not held accountable for not setting your charges correctly in 2015.

NPWT Medicare Payment

  Q: I work in an HOPD and, while conducting an internal audit on our NPWT claims, found that we charged the same for both traditional and disposable NPWT. The rate that the hospital charged was below the cost of the disposable NPWT system. Do you think that may have contributed to CMS moving disposable NPWT to a lower-paying APC group in 2015?
  A: First, congratulations on conducting internal audits. It is amazing what you find when you conduct audits! Second, you now have a firsthand example of how claims data impact OPPS payment rates. Third, numerous HOPDs provided misinformation to CMS when they set their charges exactly the same for traditional and disposable NPWT.

  This does not make sense because Medicare Part B patients receive their traditional NPWT pumps and supplies from a DME supplier. The patients then brought their equipment and supplies to the HOPD, where the wound care specialists assessed their wounds and reapplied their NPWT pump and dressings to the wound. Note: The HOPD did not incur any expenses for the pump/supplies. Therefore, the HOPD charge should only be for the work described by CPT codes 97605/97606. Because disposable NPWT systems are not “DME,” they are not currently covered under the Medicare Part B benefit.

  Therefore, the HOPD purchased the disposable systems, assessed the wound, and applied the disposable system. It only makes sense that the HOPD’s charge for the old 2014 HCPCS codes (G0456/G0457) and for the new 2015 CPT codes (97607/97608) should have been higher than the charges for traditional NPWT because the HOPD purchased the disposable NPWT system in addition to assessing the wound and applying the NPWT system.

QHP Medicare Payment FAQs

  Evaluation & Management (E&M)
  Q: I am one of the physicians who provides HBOT in my office. I understand that I should now code and bill to Medicare both CPT code 99183 and HCPCS code G0277. My coder told me the units reported should be the same for both codes. Is this true?
  A: You are correct that you should report both codes when you provide HBOT in your office. However, your coder is not correct. You should bill 1 unit for CPT code 99183 because it is “per session.” You should bill the correct number of units for HCPCS code G0277 to represent the number of 30-minute intervals of HBOT that were provided to the patient.

  Q: I am a physician who attends and supervises HBOT in the HOPD. I told my coder that I could now bill Medicare both CPT code 99183 and HCPCS code G0277 for my work in the HOPD. She said that I could not bill Medicare for both. Who is correct?
  A: In this instance, your coder knows best. Physicians who attend and supervise HBOT in the HOPD should continue to bill Medicare only CPT code 99183. Physicians who provide HBOT in their offices are now allowed to bill Medicare for both CPT code 99183 and HCPCS code G0277.

Kathleen D. Schaum, MS
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