HOPDs: Prepare for ‘Payment Packaging’

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. 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 responsibility for verifying information accuracy lies with the reader.   Normally, the Centers for Medicare & Medicaid Services (CMS) release the Outpatient Prospective Payment System (OPPS) Final Rule for the upcoming calendar year around Nov. 1. That timeline allows staff within hospital-based outpatient wound care departments (HOPDs) approximately 60 days to read, interpret, implement, and train their entire department regarding any Medicare payment changes that will take place Jan. 1. Unfortunately, this year’s government shutdown forced a delay of the 2014 OPPS Final Rule, which was released nearly 4 weeks late at the close of business Nov. 27. HOPDs across the country will now have only a few weeks to digest and implement several major Medicare payment changes that will significantly impact their wound care business. In fact, there are too many changes to discuss in a single “Business Briefs” column. Therefore, we will discuss more of the 2014 OPPS changes in the next issue. In this edition, in honor of the holiday season and that many readers are busy wrapping “packages” for their family and friends, I thought it was appropriate to first discuss the “payment packaging” portions of the 2014 OPPS Final Rule: payment packaging of add-on codes and of cellular and/or tissue-based products for wounds (CTPs) [old term “skin substitutes”].

Medicare Packaged Payment of Add-On Codes

  Several years ago, the CPT® editorial panel revised the surgical debridement codes, the application of skin substitute codes, and the active wound management codes. Many of these chronic wound procedures have primary codes (which represent the work that is performed on the first 20, 25, or 100 sq cm) and add-on codes (which represent the work that is performed on each additional 20, 25, or 100 sq cm, or part thereof).   Let’s look at an example of reporting a primary code and an add-on code on the same insurance claim in 2013 vs. 2014:   The medical director of an HOPD debrides 35 sq cm of subcutaneous tissue from a diabetic foot ulcer:   He/she should submit a claim, which includes two codes to Medicare:   11042 for debridement of the first 20 sq cm of subcutaneous tissue.   11045 for debridement of the additional 20 sq cm, or part thereof, of subcutaneous tissue.   In 2013, the national average Medicare allowable is $62.26 for 11042 and $27.56 for 11045. Therefore, the total Medicare allowable for the medical director’s work is $89.82. Medicare will pay 80% ($71.86) of the allowable and the medical director should collect the remaining 20% ($17.96) of the allowable from the patient.   Because the patient received this subcutaneous debridement in an HOPD, the HOPD should also submit a claim to Medicare. The claim should include the same pair of codes that were billed by the medical director. In 2013, both the primary and add-on debridement codes are in the ambulatory payment classification (APC) group 0016. The 2013 national average Medicare allowable is $209.65 for 11042 and 50% of $209.65 for 11042. Therefore, the total Medicare allowable for the HOPD’s work is $314.48. Medicare will pay 80% ($251.58) of the allowable and the HOPD should collect the remaining 20% ($62.90) of the allowable from the patient.   In 2014, qualified healthcare professionals (QHPs) will continue to be paid separately for the primary procedure code and the add-on code. The only items that may change the 2013 Medicare payment rates for QHPs are the relative value units (RVUs), which are assigned to the procedure codes and the add-on codes, and the conversion factor that converts RVUs into Medicare allowable rates.   Effective Jan. 1, HOPDs will no longer receive separate payment for any add-on codes. CMS has unconditionally packaged all procedures described as add-on codes. HOPDs will now receive 1 packaged payment for surgical and medical debridement regardless of the wound surface area debrided. See Table 1 on page 6 for a comparison of the 2013 vs. 2014 national average Medicare allowable rates when debridement is performed in HOPDs. Now, let’s return to our example to see how the packaged payment for add-on codes affects the HOPD’s Medicare payment:   As you can see from Table 1, CMS did not change the APC groups for the primary debridement procedure 11042. However, CMS did package the payment for the 11045 add-on code into the payment for 11042. Therefore, the total Medicare allowable for the HOPD’s work is $274.81. Medicare will pay 80% ($219.84) of the allowable and the HOPD should collect the remaining 20% ($54.97) from the patient. This 2014 packaged payment is less than the HOPD was paid in 2013 for wounds that are > 20 sq cm. However, the HOPD will receive the same packaged payment rate when QHPs debride subcutaneous tissue from wounds that are < 20 sq cm: $274.81 in 2014 vs. $209.65 in 2013.

Medicare Packaged Payment of CTPs

  The 2014 OPPS Final Rule explains that CMS packaged 2 different items into the primary code for the application of CTPs. Just like the debridement codes, CMS packaged the payment for the add-on codes into the payment for the primary procedure. In addition, CMS packaged the payment for the CTP products into the payment for the primary procedure. In order to accommodate the various CTPs with widely different costs, CMS divided the CTPs into 3 packaged payment groups:     1. Low-cost CTPs (See Table 2)     2. High-cost CTPs (See Table 3)     3. CTPs with “pass-through” codes (See Table 4).   For your convenience, the CTPs that are underlined in Tables 2, 3, and 4 are currently covered in 1 or more Medicare Local Coverage Determinations.   CMS packaged the payment for the high-cost products (Table 3) into the payment for the existing CPT codes 15271-15278 (Table 5). Nevertheless, HOPDs should continue to separately bill for the appropriate CTP with the correct number of units purchased and with their current charge that correctly reflects their current cost. As you review the packaged payment rates for high-cost CTPs in Table 5, you will see the 2014 packaged payment rate is $1371.19 for the procedure, add-on code, and high-cost CTPs applied to wounds < 100 sq cm.   CMS created new Healthcare Common Procedure Coding System codes (Table 6) in which to package the payment for the low-cost CTPs (Table 2). Therefore, HOPDs must immediately add the new codes C5271- C5278 (Table 6) to their charge description master (CDM), to their billing and coding systems, and to their electronic medical records. This has to be accomplished before Jan. 1 in order to be prepared to submit claims for the application of low-cost CTPs. HOPDs should also continue to separately bill for the appropriate CTP with the correct number of units purchased and with the HOPD’s current charge that correctly reflects their current cost. As you review the packaged payment rates for low-cost CTPs in Table 6, you will see the 2014 packaged payment rate is $409.41 for the procedure, add-on codes, and low-cost CTPs applied to wounds < 100 sq cm.   Finally, let’s discuss how CTPs that have been assigned temporary pass-through codes will be handled in this new packaged payment methodology. New CTPs may be assigned temporary pass-through codes for 2-3 years. NOTE: Each brand’s temporary pass-through code will terminate at different times. Once the temporary pass-through code is removed by CMS, these products will be packaged by CMS into either the high-cost or low-cost groups. As of the publication of this article, the CTPs in Table 4 have temporary pass-through codes for use by HOPDs. The 2014 OPPS Final Rule directs HOPDs to report the application of these products with the CPT codes 15271-15278 for high-cost products. HOPDs should continue to separately bill for the appropriate CTP with the correct number of units purchased and their current charge that correctly reflects their current cost. As long as the CTP has a pass-through code, CMS will continue to pay for the CTP separately, at the average sales price plus 6% minus the device offset amount that is packaged into the procedure code.

Next Steps for HOPDs

  As HOPDs review the 2014 OPPS packaged payments for CTPs, their application, and their add-on codes, HOPDs may find that some CTPs cost more than Medicare’s packaged payment allowable. CMS intends for the packaged procedure payment rate to represent the average cost of purchasing and applying all the CTPs in the high-cost and low-cost category. CMS used several pieces of data to calculate the dollar value that is packaged into the procedure payment (eg, average sales price submitted by the manufacturers and claims submitted by HOPDs). Therefore, HOPDs should be very careful that their claims for the application of CTPs actually report the correct number of sq cm purchased for each application and the correct charge per sq cm. The only way HOPDs can verify the accuracy of their claims is to actually review the submitted claims. Many auditors have reported finding the following CTP claim errors:     • HOPDs billed for 1 unit (which represents only 1 sq cm) rather than billing for the total number of sq cm in the piece.     • HOPDs billed for only the number of sq cm used and failed to also bill for the number of sq cm wasted.     • HOPDs failed to load the correct cost per sq cm into the CDM.   To prevent large losses of reimbursement and to provide correct data to CMS about the costs of CTPs, HOPD staff should check the CDM and billing programs to be sure claims are correctly reporting the total number of sq cm purchased for each application and the correct charge.   While the HOPD staff members are working with the CDM, they should make any needed changes to the charges for the primary and add-on debridement codes and to the charges for the primary and add-on codes for the application of the CTPs. Most importantly, HOPDs must add C5271-C5278 to their CDM in order to bill for the packaged payment of the low-cost CTPs. Remember, all of these changes to your CDM must be accomplished by Jan. 1. Have a happy holiday season! Look for more information about Medicare payment changes in the next “Business Briefs” column in the January/February edition of Today’s Wound Clinic. Kathleen D. Schaum is president and founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL. She may be reached for questions and consultations at 561-964-2470 or kathleendschaum@bellsouth.net.