Working in a Wound Care Provider-Based Department: The Medical Director’s Perspective

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We have often discussed the topic of regulations pertaining to wound care provider-based departments (PBDs) in this Business Briefs column, but we have never viewed PBDs through the eyes of physicians who work in PBDs or who serve as PBD medical directors. In this edition of Business Briefs, we offer an interview with Today’s Wound Clinic (TWC) clinical editor Caroline Fife, MD, FAAFP, CWS, FUHM, who has worked as a medical director in several PBDs. Additionally, Dr. Fife has worked with many other physicians working within PBDs who utilize the U.S. Wound Registry and/or the Intellicure Inc. electronic health record (EHR), for which she respectively serves as executive director and chief medical officer. Our conversation spans multiple topics, including the often misunderstood regulation for physician supervision in the wound care PBD. 

Kathleen Schaum (KS): Dr. Fife, please share your perspective on the role of the PBD in the continuum of care for patients living with chronic wounds?

Caroline Fife (CF): The wound care PBDs were created to manage patients who live with chronic wounds that are too complicated to be cared for by a primary care physician, but who are not sick enough for hospitalization. These wound care PBDs comprise a small percentage of hospital-based outpatient departments (HOPDs) that are paid by Medicare’s Outpatient Prospective Payment System (OPPS). The majority of PBDs (eg, emergency departments [EDs], dialysis departments, infusion departments) care for relatively complex patients. Therefore, wound care PBDs should care for patients with similar acuity levels. If the patients can reasonably receive their chronic wound care in their physician’s office, they simply do not need to be seen in a PBD.
Read more about this in a 2014 article (www.todayswoundclinic.com/articles/medical-necessity-hopd-are-you-seeing-right-patients) published by TWC. For example, PBDs are not intended to be dressing-change clinics. Physician offices can easily perform dressing changes for patients who cannot be taught to change their dressings and/or do not have caregivers who can change their dressings at home. PBDs are intended to conduct thorough evaluations of the factors contributing to higher-acuity chronic wounds and to develop and implement appropriate treatment plans, which may include procedures such as surgical debridement, total contact casting, multilayer high-compression bandaging systems, negative pressure wound therapy (NPWT; both disposable and durable medical equipment), cellular and/or tissue-based products for skin wounds, and hyperbaric oxygen therapy (HBOT).  

KS: What does “provider-based department” mean from the PBD medical director’s perspective?

CF: To the best of my understanding, provider-based status is a Medicare payment designation established by the Social Security Act that allows wound care HOPDs with provider-based status to receive Medicare payment based on the OPPS. This OPPS payment is typically higher (often more than 50% higher) than Medicare payment in a physician’s office. When patients living with chronic wounds are evaluated and managed by physicians and other qualified healthcare professionals (QHPs) in PBDs, the patient and the payer receive two bills: one from the PBD for the component of the service related to the facility’s operating costs and one from the physician/QHP for the professional component of the same service. Because Medicare beneficiaries are responsible for paying 20% of all Medicare Part B allowable rates, their co-insurance payments are typically higher by 50% or more when they receive wound care in PBDs than when they receive care in the physician’s office. The Office of Inspector General (OIG), the Centers for Medicare & Medicaid Services, (CMS), and the Medicare Payment Advisory Commission (MedPAC) continue to question the value of the higher costs in PBDs. The OIG conducted an audit of PBDs that revealed widespread disregard for the PBD billing rules. In its June 2016 report pertaining to this audit, the OIG recommended that CMS eliminate the PBD designation. The MedPAC, a nonpartisan legislative branch agency that provides Congress with analysis and policy advice on the Medicare program, also made the same recommendation. To date, CMS has chosen not to implement the OIG and MedPAC recommendations, but reimbursement for new off-campus PBDs was reduced significantly in 2017. Read the guest editorial by Shaun Carpenter, MD, FAPWCA, CWSP, in the July edition of TWC (www.todayswoundclinic.com/issue/4120) about an underinsured patient whom he chose to care for in his private office in order to have more flexibility and to decrease the patient’s coinsurance.  

KS: Physicians and other QHPs often tell me that they want to call their practice a “PBD” so that they can bill a facility fee and a professional fee. Do you have a similar dialogue with your wound care peers?

CF: Yes! Even though you have provided numerous articles in this journal about requirements to bill as a PBD, many physicians, wound care professionals, and hospital executives believe they can simply decide to become a PBD and receive Medicare payment via the OPPS. Nothing can be further from the truth. To appropriately bill Medicare, hospitals and their PBDs must meet specific requirements described in Title 42 Code of Federal Regulations 413.65 and CMS Transmittal A-03030. These requirements pertain to practice licensure and integration of clinical services, financial operations, and medical records. As you have said many times, hospitals should verify, via an attestation, that their Medicare Administrative Contractor (MAC) agrees that their planned wound care PBD meets OPPS requirements. Hospitals are not required to submit an attestation to their MAC, but they can decide to voluntarily submit an attestation that documents that a PBD facility meets the OPPS requirements. If the MAC agrees with the attestation, the hospital receives a letter from the MAC “attesting” that the hospital has permission to bill Medicare under the PBD rules. If a hospital decides to simply open a wound care department and does not go through the attestation process, CMS may recoup overpayments if the MAC audits the program later and determines it does not meet the requirements of a PBD. The overpayment amount is the difference between the OPPS allowable rate and the Medicare Physician Fee Schedule allowable rate in a physician’s office. Note that, according to an OIG report, more than three quarters of 50 hospitals reviewed had not voluntarily attested for their PBDs. These facilities may be billing Medicare improperly and may be receiving overpayments. When my new wound care clinic opened, the individual responsible for obtaining the attestation said she had obtained it, but, in fact, she hadn’t. Given the increasing scrutiny of PBDs, I insisted that we submit the required attestation documents. Our MAC contested the distance between our wound care clinic and the main hospital. We had to provide architectural drawings and maps to prove we met the “on-campus” criteria of being within 250 yards of the main hospital. It’s a scary thought that we did not obtain our attestation before we opened the wound care clinic. At some point in the future, Medicare could have decided we didn’t meet PBD criteria and might have demanded recoupment of all the facility fees that had been paid! The take-home message is that it is better to complete the attestation process, even though it is voluntary. 

KS: Are medical directors and other wound care physicians/QHPs aware of the requirements to distinguish between “on-campus” and “off-campus” PBDs on claims they submit to Medicare?

CF: Although an inordinate number of articles and educational materials have been provided about using the correct place of service (POS) on claims submitted to Medicare, many physicians/QHPs still use the POS code for offices (11) on their claims when they actually performed the work in a hospital-based PBD. The POS code requirement became more finite on Jan. 1, 2016, when CMS began requiring physicians/QHPs to use different POS codes that distinguish between services performed in on-campus (22) and off-campus (21) PBDs. Note that off-campus PBDs are > 250 yards, but ≤ 35 miles from the main buildings of the main hospital. I always remind physicians not to guess if a PBD is considered off- or on-campus. Instead, they should verify the PBD’s status with the chief financial officer of the hospital. 

KS: I am repeatedly challenged by wound care nurses, wound care physicians, and hospital executives when I explain the direct-supervision requirements of wound care PBDs. Do you experience the same challenges?

CF: Yes! I have no idea why this regulation is so little understood. Ever since the OPPS was initiated by CMS in 2000, several OPPS final rules have reiterated that direct supervision is required for all services performed in PBDs. Direct supervision means that the medical doctor, doctor of podiatric medicine, doctor of osteopathic medicine, nurse practitioner, physician assistant, or clinical nurse specialist must be immediately available to the PBD during all patient encounters. For wound care, there are only a few exceptions: 

99406 — Behavioral change smoking cessation, 3-10 minutes
99407 — Behavioral change smoking cessation, > 10 minutes
29580 — Application of Unna’s boot
29581 — Application of multilayer high-compression bandage system.

Here’s how I explain the direct-supervision requirements: Patients living with chronic wounds are referred to wound care physicians/QHPs who work in wound care HOPD centers of excellence that are designated as PBDs when the wound management required is beyond the expertise of the current physician(s). The referring physicians and their patients expect these wound care physicians/QHPs to diagnose why the patients’ wounds are not healing, to develop and implement appropriate care plans, and to manage the patients’ wound until the patients are ready to return to their referring physicians. The hospital supplies the space, the office staff to handle scheduling/insurance benefit verification/coding/billing, the clinical staff to assist the wound care physician/QHP, the equipment, and supplies, etc. Therefore, the regulations require direct supervision of PBDs by the wound care physician/QHP. The issue is not that the PBD staff is not competent enough to manage wounds. The issue is that, from a regulatory standpoint, the patient is making a visit specifically to be seen by the wound care physician/QHP. Without the wound care professional, a patient cannot be seen in a PBD, regardless of how skilled the nurse is, or regardless of the fact that the nurse is certified in wound care. For example: If I wake up with the flu and I’m not able to go to the wound care PBD where I work and I’m not able to arrange for another wound care physician/QHP to take my place, patients cannot be seen in the wound care PBD that day, even if the nurses are capable of managing the patient without me (eg, patients who need their traditional or disposable NPWT dressing/fluid management component changed). I am often asked if the wound care physician/QHP has to be in the examination room while the nurses are performing nursing services. The answer is “no, but the wound care physician/QHP must be immediately available — and that does not mean via the telephone.” 

KS: Wound care physicians/QHPs often tell me they do not have any space to work outside of the PBD examination rooms. Have you experienced similar situations?

CF: Funny you should ask that question. Let me tell you my personal experience. Several years ago, I was hired to oversee the building and operations setup, and to be the medical director of the first wound care PBD that the hospital was going to operate under OPPS regulations. When we were building the space for the wound care PBD, the chief executive officer (CEO) refused to allocate room for the physicians to work unless the physicians/QHPs would agree to rent the space from the hospital, because there was fear about Stark Law. I was unable to convince this individual that under OPPS, she could not operate the wound care PBD unless I or another physician/QHP was immediately available, and that we couldn’t stand in the hallway between patient encounters. After the wound care PBD was completed, the CEO learned that, like in the ED, which is regulated by the same OPPS, the physicians are working in hospital-owned space (POS 21 or 22), not in their own offices (POS 11). The CEO had to bring back the construction crew to remove the sink and countertop from an examination room to make space for the small office that the physicians/QHPs and nurses now share in order to handle phone calls, conduct case management meetings, etc. I know this is a silly example, but it clearly shows the lack of OPPS understanding. 

KS: I spend most of my time educating wound care PBD staff members on how to appropriately code and bill for their portion of the services/procedures performed and the products used by the wound care physicians/QHPs. I am always surprised at the lack of knowledge about this very important portion on the PBD business. Do you encounter similar situations?

CF: Sadly, many hospitals have little or no understanding of the way outpatient billing works. For example, when I started the new wound care PBD I explained that the PBD should bill per encounter, not monthly. The response I received from administration was (and this is a direct quote), “You just can’t be right about that.” The administration insisted on monthly billing until the hospital was purchased by another system that better understood PBDs. It took the new organization exactly one week to change the wound care PBD to per-encounter billing. TWC has published several articles about PBD encounter billing. Read the article (www.todayswoundclinic.com/work-happens-patient-seen-chargemaster-and-billing-cycle) by Toni Turner, RCP, CHT, CWS. Those who need further convincing about the necessity for billing per encounter, please remember that PBD status indicators and National Correct Coding Initiative (NCCI) edits are typically enforced per claim. Therefore, if two or more procedures were performed at different encounters but submitted on the same claim, the status indicators or NCCI edits may cause some of the procedures to be denied. If the PBD had submitted separate claims, each of the procedures would probably have been paid. Imagine only being reimbursed for one procedure per month, regardless of how many procedures were reported on the claim. That is what is happening to wound care PBDs that use monthly billing, and that is exactly what was happening to my clinic until the new administration implemented per-encounter billing, as I originally requested. 

KS: We’ve mentioned POS codes. Recently, physicians/QHPs told me they repaid sizeable amounts to Medicare because they reported incorrect POS codes on their claims. Will you please address this issue for our readers?

CF: I am not surprised by the repayments. CMS recently released a file that contains 2015 physician Medicare claims data. This file lists the name, address, POS, and services provided by physicians/QHPs who submitted claims to Medicare. Surprisingly, the file shows that numerous physicians/QHPs who work in PBDs listed POS office (11) on their claims. Many of my peers ask me, “Why is that a problem?” Actually, the answer is quite simple: Because the hospital provides the wound care PBD space, the nurses, the supplies, and all the overhead. CMS pays wound care physicians/QHPs less for most of the services and procedures provided in a PBD (POS 21 or 22) than in their office (POS11). If the wound care physicians/QHPs perform wound care in their own offices, they personally incur the additional expenses associated with providing space, staff, supplies, and overhead. Therefore, if the wound care physician/QHP working in POS 21 or 22 reports POS 11 on his or her claim, two problems result: 1) The wound care physician/QHP is overpaid by Medicare, and that constitutes Medicare fraud due to improper billing (even if the provider did it unknowingly), and 2) The wound care physician/QHP jeopardizes the PBD’s payment because POS 11 on the professional claim form “tells” the payer that the work was performed in a private office (not in a wound care PBD as was reported by the hospital). One of the requirements for the hospital to bill under OPPS is that the hospital must ensure that all the wound care physicians/QHPs report POS 21 or 22 on their claims. Hospital wound care PBD program directors must ensure that the physicians’/QHPs’ claims report the correct POS (21 or 22). In fact, that is part of the attestation process that allows the hospital to bill under OPPS. Interestingly, the Medicare allowable rate for supervising HBOT is the same regardless of whether it is performed in POS 11, 21, or 22. Read an article (www.todayswoundclinic.com/articles/uncharted-territory-site-neutrality-hyperbaric-therapy) by Helen B. Gelly, MD, FUHM, FACCWS, UHM/ABPM, about this topic.

KS: Dr. Fife, thanks for sharing your thoughts about wound care professionals working in PBDs. Before we began this interview, you mentioned that you had an unusual situation happen during your recent Joint Commission survey. Would you explain?

CF: Sure, I will be glad to. Although hospitals can purchase separate outpatient survey packages from the Joint Commission, some hospitals do not purchase them. Therefore, Joint Commission surveyors apply hospital inpatient standards to the PBD survey. First, let’s list a few facts:

• In PBDs, the wound care physicians/QHPs and the PBD clinicians share the same EHR and perform “point-of-care” charting in the examination room.  
• The nurses measure wounds and take digital photos before and after work performed on the wound.
• In order to align PBD documentation with the work performed by the wound care physicians/QHPs, the nurses typically verify with these wound care professionals any procedures that they performed. 
• Wound care physicians/QHPs understand the role of debridement in wound healing. 
• Most MACs have published local coverage determinations (LCDs) that control the utilization of debridement. In fact, my MAC’s LCD states that “removal of non-tissue integrated fibrin, exudates, crusts, biofilms, or other materials from a wound without removal of tissue does not meet the definition of any debridement code and may not be reported as such.” Now, here’s what happened during the recent Joint Commission survey of our wound care PBD: The surveyor opened a record in our EHR and saw some “before and after” photos of a patient’s wound for whom I did not document a debridement. The surveyor penalized the hospital for my “failure to document a procedure” because, in the surveyor’s mind, I performed a debridement. In fact, the truth is exactly opposite; I simply scraped away slough, which my MAC clearly says should not be reported as selective debridement. In the PBD, as the physician I am the only one who can decide whether I have simply scraped away slough (which my MAC and the OIG specifically say is not a debridement). Yes, I used a curette, but the use of a certain tool does not determine whether a wound care physician/QHP performed surgical debridement, selective debridement, or a simple wound cleaning. Inpatient hospitals may choose to report wound cleaning as debridement, but that is not acceptable in wound care PBDs. Now I have to educate the Joint Commission surveyor! In other words, in the PBD only the provider can decide whether a debridement has occurred. Furthermore, due to the unique issues surrounding the PBD, the provider is ultimately responsible for the accuracy of all the information in the chart, which is why it is a shared chart.