Skip to main content

Uncharted Territory: Site Neutrality & Hyperbaric Therapy

Where is the utilization of HBOT for wounds headed? That all depends on where the clinician is working. 

It seems the Medicare program is always looming on the brink of insolvency. Governmental agencies, from the U.S. Department of Health & Human Services’ Office of Inspector General (OIG) to the Centers for Medicare and Medicaid Services’ (CMS) Medicare Payment Advisory Commission (MedPAC), are perpetually looking for ways to solve this crisis. One recurring theme that’s evident after reviewing many of their recent recommendations: CMS is paying more for the same service based on where the service is rendered. This inequity has driven recommendations that may have far-reaching consequences for wound care and hyperbaric oxygen therapy (HBOT) in the United States. 

Site Neutrality in Payment

The Budget Act of 2015 and Section 6031 on site neutrality were driven by the findings and recommendations of the 2013 MedPAC.2 The report noted that Medicare was paying 141% more for a Level II echocardiogram in a hospital-based outpatient department (HOPD) than in a physician’s office. That example of “same service, different payment” was instrumental in the crafting of legislation. Hospital officials argue they have higher overhead costs than physician offices; however, hospitals have been acquiring physician practices and reclassifying them as HOPDs, which has resulted in a dramatic increase in costs to Medicare without obvious benefits to the patient (or any real difference in the service provided) — virtually overnight. The example of a Level II echocardiogram being more expensive when provided in an HOPD versus the cardiologist’s office resonated with lawmakers. Site-of-service adjustment (“site-neutral payments”) seemed an easy way to decrease Medicare costs without actually cutting services. Most HBOT is provided in HOPDs because the hospital can charge a “facility fee” that covers the overhead costs of providing the chamber and the staff to run it. Although wound and hyperbaric clinics were not singled out for scrutiny, the implications of Section 603 could include: 

  • Site neutrality in outpatient hospital reimbursement for services provided in any new HOPDs. Existing departments (those that had submitted charges before Nov. 2, 2015) were to be “grandfathered” in, but would revert to “new” status if they offered any additional services, expanded, or relocated. In the HBOT and wound care world, that would have meant that those facilities currently providing only wound care would not have been able to add hyperbaric services to their programs because that would have made the wound center ineligible for Medicare outpatient (ie, “provider-based”) reimbursement unless located on campus. (That means physically in the hospital or within 250 yards of it.) In response to public comments, CMS is not currently finalizing this proposal, and has chosen to monitor expansion of clinical service lines by off-campus, provider-based departments and to continue considering whether or not a limitation on service line expansion should be adopted in the future. 

Explaining the “G” Code

Medicare officials nearly always provide an indication of what their plans are several years before setting plans into place. The problem with the hyperbaric industry has been that clinicians don’t pay attention to Medicare’s hints. In 2015, CMS changed the formula for hyperbaric reimbursement and separated the practice expense (Site of Service 11 [private office] or Site of Service 49 [independent clinic]) from the physician work component and created a facility code that can be charged across all lines of service (G0277). What did the creation of the “G” code actually mean? It means CMS segregated the physician work component from the provision of the treatment, or the “facility fee.” Doing this paves the way for a site-of-service adjustment in which the hyperbaric physician receives the same reimbursement rate regardless of where the HBOT is provided (doctor’s office or hospital), but the facility fee for providing the treatment is significantly different. Let’s imagine how this would work based on the formula CMS used for a cardiologist performing an echocardiogram. The physician work component (99183) stays the same. With the site-of-service adjustment, the facility payment (G0277) for a 30-minute segment in the HOPD would be 139% more than in the private office setting, since the same treatment is being provided with the same level of intensity and complexity. (In 2016, G0277 unadjusted Medicare Physician Fee Schedule = $45.14; Outpatient Prospective Payment System [OPPS] unadjusted payment = $107.71.) 

By separating the facility charges, Medicare has made site neutrality simple for hyperbaric services. The physician will be paid the same regardless and the facility will have to attest to the provider-based status or risk a significant reduction in facility charges. When CMS created the “G” code, it seemed like a random action. In light of the possibility of a site-of-service adjustment, it starts to make more sense.

How to Save $80 Million 

In 2015, Medicare paid for 1,998,658 “units” of G0277 (HOPD), which equated to about $170,086,074 in billed services to Medicare. That money was paid to the HOPD. Fast forward to 2016 and assume that the volume of hyperbaric services is the same, but the reimbursement for the service is now about $45 per segment because that is what the G0277 code is reimbursed for in an office-based setting. That equates to approximately $89,939,610 in billed charges for the same volume of services. That is an immediate cost savings of $80,146,464. This could happen with very little administrative hassle on the part of the Medicare Administrative Contractors (MACs) in the various regions of the country trying to hold down the cost of hyperbaric services. Who needs the hyperbaric prior authorization program to reduce costs? Remember, when Congress passes legislation that saves Medicare dollars, the “savings” are used like a credit card to pay for spending in other areas of the budget. Where will Congress find the money to pay for Zika research or the next pressing national crisis? Site-of-service adjustment of HBOT is one place to consider. With site neutrality, there is an $80 million windfall to be distributed by the Congressional representatives who can take credit for it. When this happens, there will not be many sympathetic ears on Capitol Hill about the impact this will have on HBOT services because site neutrality does not overtly “unfund” HBOT. Think about it: CMS’ current proposal is to keep the payment rate of a physician practicing in a new HOPD unchanged. However, the new HOPD would be reimbursed at a rate that is only 50% of the current OPPS fee schedule. This would mean a new HOPD would receive about $55 for each 30-minute segment of HBOT rather than the $110 being counted on. For 2017, under the new rules, the difference in reimbursement for the technical component of HBOT at a new hospital-based program that is off campus versus an office-based (doctor’s office) hyperbaric practice would be $6. Physicians will continue to be paid the same, but the technical component is now isolated and vulnerable. Why is the technical component vulnerable? Both the OIG and MedPAC are arguing that hospitals do not provide any additional service compared to that of a doctor’s office, and the OIG has evidence to support this assertion. In 2016, the OIG found that “37 of the 50 hospitals in our sample provided information for their off-campus facilities that did not support compliance with at least one provider-based requirement.”3 At last count, less than 15% of hyperbaric programs still performed critical care or are available 24/7 for emergencies.4 Assume another 30% are directly on hospital campuses and would pass attestation. The rest of the programs in the U.S. are at risk for site-neutral payment cuts. Site neutrality is the key to the cost-savings program for the Medicare trust fund. That appears to be a brilliant strategy.

RUC & Oxygen Consumption: The Plot Thickens

Clinicians should not be naïve enough to think that losing the facility fee for HBOT cannot really happen. In 2015, the American Medical Association’s Relative Value Scale Update Committee (RUC) made a studied and validated recommendation to CMS with regard to the practice expense portion of the physician work component of 99183.5 Inexplicably, CMS chose not to accept the RUC recommendation and significantly reduced the oxygen consumption value of the physician-practice expense. This reduction in the oxygen consumption value was arbitrary and is not in keeping with industry standards, and resulted in a significantly reduced reimbursement rate for office-based HOPDs. Most hyperbaric physicians didn’t notice this and, indeed, there would be no reason to care about it since only a handful of physicians in the U.S. actually provide HBOT in a private-office setting. One CMS report6 shows only 79 providers are reporting a site of service “office (11/49)” to CMS versus more than 2,488 reporting “facility (22/19).” CMS also reported 71,493 units of G0277 in 2015 being provided in non-HOPDs, representing a payment of $2,574,278. Currently, there is a huge disparity between the payment rate for HBOT in an HOPD and in a private office, which of course is the reason almost nobody provides HBOT in a doctor’s office. If the oxygen-consumption figures were corrected, the reimbursement rate for the practice expense of office-based HBOT would be much closer to the actual cost of providing the hyperbaric treatment in an office-based setting. Although CMS has a “secret sauce” that it uses in its calculations, there would likely be a $25-$30 increase in the reimbursement per segment in the office setting if the RUC recommendation had been implemented. This would still be about $35 less than the HOPD setting.  Why would CMS accept the RUC recommendation on physician work and disregard the recommendation for the practice expense, making a change that significantly reduces the practice expense of providing HBOT? Maybe it’s because officials knew they were going to make a site-of-service adjustment and they were preparing for that payment rate to be as low as possible.

Through the Looking Glass

By looking at the “facts” as they seem to emerge, one can see a pattern, the hint of an alternate universe that is just beyond the horizon. While reading this list, remember that none of these changes are part of the Affordable Care Act, and thus none will be subject to repeal or replacement in a Trump administration. 

  • In a bipartisan move, Congress will have total control over which services get site-of-service adjustments (site neutrality), so it does not matter which side of the political aisle one sits on. The recent Republican sweep of Congress will not change this reality. This is not something unique to HBOT, but it affects every hospital-based outpatient service.
  • Congress needs “cost savings” to spend on other crises, so stop thinking HBOT charges are too small to worry about and think instead in terms of what those “savings” could fund that a local congressman or congresswoman might be under pressure to find money for (eg, a much-needed infrastructure upgrade to a local overpass or bridge). Again, not an issue unique to HBOT.
  • For HBOT, the creation of the C1300 code was the first step in making this happen, which segregated the physician work from the treatment. 
  • The creation of the G0277 code was the next step in getting rid of the hyperbaric facility fee that standardized the method of billing HBOT regardless of the site of service.
  • The next step was CMS artificially reducing the practice-expense portion of physician work by reducing the oxygen consumption below the market rate, setting the stage for future reductions. 

Diabolically Brilliant?

On paper, physicians will still be paid when the site-of-service adjustment happens, so there will not be any sympathy for them from Congress. However, there won’t be enough money in the hospital’s adjusted payment to cover the actual cost of providing the hyperbaric service when 100% of what it takes to offer the hyperbaric service (purchasing the chamber, paying technicians and nurses, providing oxygen, facility overhead) will be based on the site-neutral payment for a doctor’s “office”(G0277). The hospital facility fees will be markedly reduced, but nobody really has a lot of sympathy for hospitals on Capitol Hill. Congress will have saved millions of dollars without changing HBOT coverage policy at all. It will also end all the complaining about the prior authorization program. If hospitals are unable to provide HBOT in the first place, that program will be irrelevant. Those who don’t remember the past are condemned to repeat it. HBOT nearly came to an end with a flick of Medicare’s pen twice before. In 1998, the work component of physician supervision was set at zero. That crisis was averted just in time for a 75% reduction in the facility fee due to issues relating to the calculation of respiratory therapy costs.7 In 2000, CMS began working on a new national coverage determination for HBOT that removed “preparation for skin graft” and (after several tense years of work) narrowly approved coverage of diabetic foot ulcers with specific criteria. Also in 2000, the OIG launched an investigation into the use of HBOT and concluded that a very large percentage of Medicare payments were “improperly paid.” Reasons included: 1) billing Medicare for a condition that isn’t covered, 2) documentation that doesn’t support the medical necessity of HBOT, 3) giving patients more hyperbaric treatments than medically necessary, 4) failing to perform the appropriate tests or treatment before instituting HBOT, and 5) not having a physician in attendance during the hyperbaric treatment. In its report, the OIG charged the MACs with correcting these problems.8 The OIG report was revalidated by the findings of the Supplemental Medical Review Contractor (SMRC) report9 in 2014 that determined 58% of hyperbaric claims were paid in error. The SMRC’s findings were additional evidence that there are significant concerns with fraud and abuse (ie, overpayment). That is what led to the current prior authorization program. 

Sheriff’s Back in Town

The OIG recently released its work plan for 2017, and HBOT appears once again.10 We can expect to see a report similar to the damning report published in 2000. Last year, the OIG put on its work plan to review whether HOPDs were in compliance with the requirements for billing, and that report is now out.2 The OIG concluded that CMS is unable to adequately monitor provider-based facilities and ensure appropriate payments. Additionally, the OIG reaffirmed its 1999 recommendation to eliminate the provider-based designation. The OIG also concluded that more than 60% of the hospitals were unable to meet provider-based requirements for their HOPDs. Here’s a quote from the OIG report: “CMS also has not provided OIG with evidence that services in provider-based facilities deliver benefits that justify the additional costs to Medicare and its beneficiaries.” Therefore, the OIG will continue to support previous recommendations to either eliminate the provider-based designation or equalize payment for the same physician services provided in different settings. Yes, that means site-neutral payments. As an aside, there are still wound centers that do not understand that patient care services cannot be provided unless an advanced practitioner is physically present to supervise the care. Patient visits in an HOPD with only nursing care and supervision are not permitted (and never have been). The OIG goes on to recommend that CMS require hospitals to submit attestations for all provider-based facilities, to ensure regional offices and MACs apply provider-based requirements appropriately when conducting attestation reviews, and to take appropriate action against the off-campus, provider-based facilities the OIG identified as not meeting requirements. In 2017, the OIG’s work plan is to evaluate the difference in payment between provider-based settings and non-provider-based settings. It sounds like they are just gathering more ammunition to support their argument for site neutrality.

What Can Hyperbaric Practitioners Do?

HBOT prepayment review is spreading, probably because prior authorization didn’t save much money.11 HBOT practitioners can expect to see more requests for records after they have provided hyperbaric service (but before being paid). There’s frankly nothing providers can do about prepayment review.12 It’s within Medicare’s authority. Payments can be held up for many months due to the backlog in judicial courts. What follows is a “survival to-do list” that may help:  

  1. Ensure your facility would “survive” attestation of its provider-based status.
  2. If your facility is off campus, ensure any management company being partnered with does not employ any of the staff members who have physical contact with patients.
  3. Establish a process to receive medical records requests from the OIG to the hyperbaric center for review, and send all the pertinent records. More than half of the SMRC requests for medical records were unanswered and went into the “fraud pile.”9 The requests likely went unanswered, in part, because the hyperbaric or wound center records were not readily available to the medical records department. They were conceivably not available because those records were on a third-party server for a specialized wound or hyperbaric electronic health record at a wound center that did not have a document feed to ensure all of these specialized records were eventually “married” to the rest of the patients’ charts. Not having a process to identify where all of the parts of the medical record are is a HIPAA violation.
  4. Ensure the correct site of service is being used on professional claims. Physicians who have mistakenly billed Site of Service 11 (office) rather than 22 or 19 (on-campus HOPD, off-campus HOPD), perhaps because they simply didn’t understand what this meant and never looked at their own claims, may have already given their hospital a site-of-service adjustment. If the professional claims tell the government that HBOT was provided in a private office, that gives the government permission to take back the facility fees it paid the hospital. The site of service that physicians put on their claims is public knowledge and available for review.6 Review of the publicly available files of the physicians who were billing hyperbaric chamber supervision in 2014 revealed many doctors who are working in a hospital-based facility are billing the wrong site of service. 
  5. Individual hyperbaric practitioners must get ready to succeed with Medicare’s Merit-Based Incentive Payment System (MIPS), effective Jan. 1. Sequestration has negatively impacted reimbursement by 2%, and that is never coming back. Every hyperbaric practitioner in the U.S. should participate in a valid registry in order to get credit for “advancing care information” and submit quality measures through a valid registry. It’s possible to get bonus money under MIPS. Those who don’t participate will lose even more money. 

Helen B. Gelly is emeritus medical director of Hyperbaric Physicians of Georgia and chief executive officer of HyperbaRXs. 


1. Bipartisan Budget Act of 2015. U.S. Congress. Accessed online: 

2. June 2013 Medicare and the Health Care Delivery System: Report to the Congress. MedPAC. Accessed online:

3. CMS is Taking Steps to Improve Oversight of Provider-Based Facilities, but Vulnerabilities Remain. Office of Inspector General. Accessed online:

4. Chin W, Jacoby L, Simon O, et al. Hyperbaric programs in the United States: locations and capabilities of treating decompression sickness, arterial gas embolisms, and acute carbon monoxide poisoning: survey results. Undersea Hyperb Med. 2016;43(1):29-43.

5. Fife CE, Gelly H, Walker D, Eckert KA. Rapid analysis of hyperbaric oxygen therapy registry data for reimbursement purposes: technical communication. Undersea Hyperb Med. 2016; 43(6):627-34.

6. Physician and Other Supplier Data CY 2014. Centers for Medicare & Medicaid Services. Accessed online:

7. Gelly H. Personal Interview. Caroline Fife, MD. 18 Nov 2016

8. Hyperbaric Oxygen Therapy: Its Use And Appropriateness. Office of Inspector General. Accessed online:

9. Project Y1P4 – Final Project Results: Hyperbaric Oxygen Therapy (HBO) Services. Supplemental Medical Review Contractor. Accessed online:

10. OIG Work Plan 2017. Office of Inspector General. Accessed online:

11. Medicare Prior Authorization of Non-Emergent Hyperbaric Oxygen (HBO) Therapy Model Status Update. Centers for Medicare & Medicaid Services. Accessed online:

12. Gelly H. Hyperbaric oxygen therapy in wound care: a service under true pressure. TWC. 2014;8(8):12-6.

Back to Top