Business Briefs: Is Your Wound Clinic Prepared to Provide Care Under Parallel Reimbursement?

Information regarding coding, coverage, and payment is provided as a service to our readers. 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 information accuracy lies with the reader.   Most wound care professionals know the terms “Medicare Shared Savings Program” and “quality-of-care initiatives,” and have heard about demonstration projects that are being implemented (eg, bundled payments for care improvement, global payment initiatives, accountable care organizations, independence at home, patient-centered medical home, etc.). Some wound care professionals may work in health systems that already participate in one or more of these programs while others may work in systems that are preparing to participate, but may not be aware of impending changes. Other wound care professionals may think their practice will never participate in these programs and may be caught off guard if their administration decides to participate. Therefore, all wound care professionals should take the time to ask their administration if/when/what types of programs are on the horizon.   No matter what stage of participation providers find themselves in, now is a good time to begin to understand the fact that you and/or your workplace could potentially be eligible to receive Medicare payments in addition to your normal fee-for-service (FFS) payment (because you and/or your workplace are participating in one of more of these programs). Otherwise, providers will experience reductions in Medicare payments because of non-participation/non-compliance. In this article, the author describes payment by the Medicare FFS program and the Medicare Shared Savings Program and/or quality-of-care initiatives as “Parallel Medicare Reimbursement Programs.” The wound care professional’s challenge is to learn how to achieve quality outcomes at the lowest total cost of care under these parallel payment programs.

Medicare FFS Payment Systems

Before we discuss how wound care providers can take the lead in Medicare Shared Savings Programs and/or quality-of-care initiatives, let’s briefly review the current volume-driven Medicare FFS payment systems.     • Medicare Physicians’ Fee Schedule: the physicians’ Medicare payment system that’s based on the resource-based relative value units assigned to each CPT® code. Under this system, physicians are paid for each medically necessary service and procedure they perform. Physicians do not have incentives to reduce visits or procedures, unless their Medicare contractor’s Local Coverage Determinations (LCDs) limit utilization.     • Medicare Severity-Diagnosis Related Groups: the acute care hospitals’ Medicare payment system. Under this system, acute care hospitals are paid a lump sum based on patient diagnosis for each medically necessary admission. Hospitals do not have incentives to reduce admissions, but do have incentives to reduce lengths of stay.     • Ambulatory Payment Classification (APC) system: the name of most hospital-based outpatient wound care departments’ (HOPDs) Medicare payment system. (There are exceptions, such as Maryland, critical-access hospitals, and Indian Health System). Under this system, HOPDs are paid based on the resource-driven APC group to which each service and procedure they perform is assigned by Medicare. HOPDs are not incentivized to reduce the number of visits or procedures unless their Medicare contractor’s LCDs limit utilization.     • Home Health Resource Group: the acuity-based Medicare payment system for home health agencies. Under this system, agencies receive lump sum payments based on resources (identified in the Outcome and Assessment Information Set that determine the patient’s functional, clinical, and service needs) that will be required by the patient for each medically necessary 60-day episode of care. Home health agencies are not incentivized to reduce episodes of care.     • Resource Utilization Group: the acuity-based Medicare payment system for skilled nursing facilities. Under this system, these facilities are paid daily per diems based on resources identified for each patient in the Minimum Data Set that is completed on days 5, 14, 30, 60, and 90. Skilled nursing facilities do not have incentives to reduce Medicare covered stays.     • Durable Medical Equipment (DME), Prosthetics, Orthotics, and Supplies Fee Schedule: the Medicare payment system for DME suppliers. Under this system, DME suppliers are paid based on the payment rate assigned to the Healthcare Common Procedure Coding System (HCPCS) code that represents the equipment or supply provided to the Medicare beneficiary. DME suppliers have very few incentives to reduce the amount of equipment or supplies they provide.   By now you probably realize that patients who live with chronic wounds do not always have a consistent wound care physician and nurse case manager to coordinate care as they move through the continuum of care. Very few physician-lead case management teams own the responsibility for providing the best outcomes at the lowest cost of care from the time the wound is identified until the wound has reached its expected outcome.   During the 2012 Wound Clinic Business (WCB) seminars, attendees have shared numerous instances in which wound care cases lacked coordination of care. Some of the most common examples reported are:     • The patient’s diagnosis was non-specific or inconsistent as various wound care physicians, podiatrists, and non-physician practitioners provided wound care for the patient in different care settings.     • Wound care plans changed significantly (sometimes with positive results and sometimes with negative results) as the patient moved to different care settings.     • Duplicate diagnostic tests were often ordered because test results were not transferred to the next site of care.     • Surgical dressings purchased by the patient were wasted because a new physician changed the dressing order unnecessarily.     • Medication errors occurred due to illegible orders.   WCB seminar attendees also report waste/duplication is often encountered as patients move to the next site of care because transferring facilities and/or providers failed to transmit complete documentation. Because each site of care/provider has different reimbursement incentives, inconsistent wound management outcome goals are often influenced by the Medicare payment system of the site of care/provider/supplier, rather than by the specific needs of each Medicare beneficiary.

Medicare Shared Savings

  Recognizing that current Medicare FFS payment programs do not emphasize patient-centered outcomes and reduction of total cost of care, Medicare has released numerous incentive programs to begin achieving these goals. These new programs offer payment incentives for providers to work together and become accountable for coordinating patient care. For example:     • In the “bundled payments for care improvement” initiative, Medicare makes a single payment to provide all services related to a treatment or condition during an episode of care. To succeed in this initiative, wound care professionals should focus on coordinating wound care for an entire episode of care (from 3 days prior to hospitalization, through hospitalization, and 30 days following discharge).     • In the “global payment” initiative, Medicare makes 1 payment to primary care physicians to manage each patient across the healthcare delivery system. To succeed in this initiative, wound care professionals should work with primary care physicians to coordinate care of patients living with chronic wounds in that delivery system.     • In “accountable care organizations,” Medicare offers payment incentives for healthcare providers to work together to treat an individual patient across care settings. To succeed in this program, wound care professionals should use their skills, clinical practice guidelines, and published data about wound care procedures and products to lower the growth in wound care costs while meeting performance standards on quality of care and by putting patients first (patient satisfaction).     • In the “independence at home” initiative, Medicare provides payment incentives to physicians and nurse practitioners to direct home-based primary care teams. To succeed in this initiative, wound care professionals should work with primary care physicians to reduce preventable hospitalizations, prevent hospital and skilled nursing facility readmissions, decrease unnecessary emergency department visits, improve the quality of wound care, and decrease the total cost of wound care. Note that these incentives are expected to boost physician house calls.     • In the “patient-centered medical home” initiative, Medicare provides payment incentives to healthcare settings that facilitate partnerships between individual patients and their physicians and, when appropriate, the patient’s family. To succeed in this initiative, wound care professionals must understand how to work with registries, information technology, and health information exchanges.

Who Should Lead New Initiatives?

  It is well known that physicians control approximately 85 percent of the decisions that drive quality and cost of medical care. Just like physicians are leading programs and initiatives for the management of heart disease, diabetes, end-stage renal disease, etc., those physicians with wound care expertise should lead and be rewarded for coordinated patient-centered wound care initiatives. Their goals should be to reach wound care-related quality benchmarks and to decrease the total cost of wound care across the continuum of care. Also similar to other major disease states, wound care physicians must use electronic health records (EHRs) to capture data that measure their patient-centered wound care outcomes. To assist in managing the care of the patients throughout the continuum of care, wound care physicians should surround themselves with excellent nurses, therapists, and non-physician practitioners. Together, they should learn and speak the performance-based language, participate in the early development of case management-based wound care programs, set clear goals and strategies for quality wound care, accept accountability for reaching quality benchmarks, use EHRs to capture useful patient-centered outcomes data, and share risk through various Medicare and commercial incentive programs based on improved quality outcomes at the lowest total cost of care.   These wound care case management teams should provide evidence-based, patient-centered care, coordinate care with all stakeholders, improve efficiency, eliminate unnecessary diagnostic tests, reduce duplication of effort, reduce medical mistakes, reduce unnecessary readmissions, reduce waste, emphasize prevention, and use data to show quality of wound care provided.   Most importantly, these wound care case management teams should not wait for someone from administration to come to them. Instead, they should blaze new frontiers for coordinated wound care services by proactively approaching administration with their ideas of how to case manage wound care across the continuum of care. These teams will require courage to transform the way wound care is delivered. However, the rewards of changing the paradigm for patients living with chronic wounds will be gratifying and may lead to additional Medicare payments. Together, wound care case management teams can improve quality, reduce cost, and create a sustainable system to manage wounds for a population that will increasingly require their expertise and care.   Imagine that your outpatient wound care department deploys case management teams to the hospital, to the long-term care hospital, to the skilled nursing facility, to patients at home, and to patients who must be seen in outpatient wound care departments (for deep surgical debridements, for application of cellular and/or tissue-derived products, for hyperbaric oxygen, etc). Also imagine that your outpatient wound care department has a telemedicine system that will allow case management teams to communicate and collaborate on difficult cases. Finally, imagine your outpatient wound care department housing the master EHR for all patients living with chronic wounds throughout your health system. This type of wound care case management system would allow you to provide the right patient-centered care, for the right reason, at the right time, and for the right payment. Most importantly, your wound care case management system would prove to be fiscally responsible and sustainable under the parallel FFS programs and the Medicare Shared Savings Programs.

Coding, Payment, Coverage

  Many wound care professionals have the mistaken idea that they will not need to pay attention to using the correct ICD-9-CM/ICD-10-CM diagnosis codes, the correct CPT service and procedure codes, and the correct HCPCS codes for medical equipment and supplies when they participate in the Medicare Shared Savings Programs and/or quality-of-care initiatives. Many wound care professionals also mistakenly believe they will no longer have to stay abreast of the latest Medicare payment system updates, of Medicare’s National Coverage Determinations (NCDs), or of their Medicare contractor’s LCDs. However, nothing is farther from the truth when providers and health systems are working under parallel Medicare reimbursement programs. In some way, each of these parallel Medicare reimbursement programs is based on codes, the current year’s Medicare payment system, and coverage guidelines established by the Centers for Medicare & Medicaid Services (CMS) and/or by the Medicare contractor that processes the Medicare claims of each provider.   Therefore, all wound care professionals must learn and properly use all codes that are pertinent to their Medicare payment system. In addition, all wound care professionals must read and implement payment system regulations that are published as “final rules” and are effective on Oct. 1 (hospitals, home health agencies, and skilled nursing facilities) and Jan. 1 (physicians, HOPDs, and DME suppliers).   Most importantly, all wound care professionals must read and comply with all NCDs and/or LCDs pertaining to the services, procedures, and products they provide to patients who live with chronic wounds. Because CMS will still process claims based on ICD-9-CM/ICD-10-CM codes justifying medical necessity; CPT codes identifying services and procedures performed; and HCPCS codes identifying separately payable drugs, biologics, medical devices, and supplies, coding correctly and following Medicare coverage guidelines are more important tasks than ever. These behaviors lead to payment under the traditional Medicare FFS programs, and are used to track quality of care and total cost of care under Medicare Shared Savings Programs and/or quality-of-care initiatives (which can lead to an additional Medicare payment if quality of care is acceptable and total cost of care has dropped below Medicare established thresholds). Kathleen D. Schaum is president and founder of Kathleen D. Schaum & Associates Inc. She can be reached at 561-964-2470 or kathleendschaum@bellsouth.net.