CTPs & Pass-Through Status

I have been honored to share wound care coding, payment, and coverage information with readers of Today’s Wound Clinic (TWC) through the column Business Briefs. However, many people have asked me to share more real-life situations that I encounter as a consultant for wound care professionals, providers, and manufacturers as a way to provide this important area of business education. With this edition of TWC, we introduce Consultation Corner, a new column that will publish periodically and offer “hot” reimbursement topics that I encounter during my consultation work. Of course, the names of my clients will never be disclosed in this column or Business Briefs, which will continue to appear monthly in this journal. Our first topic for Consultation Corner pertains to Medicare payment for cellular and/or tissue-based products (CTPs) with pass-through status in hospital outpatient wound care provider-based departments (PBDs).

SCENARIO

Many wound care stakeholders report that sales representatives they encounter will tell them that PBDs will receive additional payments above the packaged application payments for CTPs with pass-through status. The PBDs later learn that they did not receive additional payment for these same products. Many PBD program directors and medical directors seek consultation when they cannot determine why the PBD did not receive the expected additional payments.

FACTS TO CONSIDER

• The CTP application code should align with the size of the chronic wound and its anatomic location.
• A clinically appropriate CTP should be selected for the wound. Select the appropriate-sized CTP to cover the entire wound surface and to allow for fixation with the physician’s choice of fixation (sutures and staples are not required). The CTP should not be smaller than the wound surface and should not be significantly larger than the wound surface.
• The appropriate code(s) [15271-15278] and units for applying CTPs (with pass-through status) should be reported on claims.
• The number of square centimeters of the CTP (with pass-through status) purchased for the patient should be reported on claims.
• For PBD payment, Medicare assigns each procedure code to an ambulatory payment classification (APC) group that has an allowable rate. The 2018 national average allowable rate for APC Group 5054, which includes the codes 15271, 15272, 15275, 15276, 15277, and 15278, is $1,568.43. The 2018 national average allowable rate for APC Group 5055, which includes the codes 15273 and 15274, is $2,710.30. These are packaged payment rates, meaning the allowable rate is intended to cover the PBD’s portion of the application procedure and the cost of the CTP.
• The Medicare allowable rates for APC groups 5054 and 5055 include a set dollar amount to pay for the CTP portion of the packaged payment. That set dollar amount is known as the “device offset.” For 2018, the device offset dollars included in APC Group 5054 is $786.67 and is $182.67 in APC Group 5055.
• If the PBD purchases a CTP that has pass-through status, the PBD may or may not receive additional payment above and beyond the APC packaged payment for the CTP. The PBD will not receive additional payment if the cost of the CTP used in procedures assigned to APC Group 5054 is less than $786.67. In that case, the PBD will only receive the packaged payment rate ($1,568.43) for APC Group 5054. The PBD has the opportunity to receive the packaged payment rate, plus an additional amount for the CTP, when the PBD’s cost of the product exceeds the device offset amount. For example, if the CTP costs $1,000 and is used in a procedure assigned to APC Group 5054, the PBD will be allowed the packaged payment rate ($1,568.43) plus $213.33 (the difference between $1,000 and $786.67). The same is true for CTPs used in applications assigned to APC Group 5055. If the CTP costs less than $182.67, the PBD will only receive the packaged payment rate ($2,710.30). If the cost of the CTP exceeds the device offset amount, the PBD will be allowed the packaged payment rate plus the difference between the CTP cost and the device offset amount. For example, if the cost of the CTP is $500, the PBD will receive $2,710.30 plus $317.33 (the difference between $500 and $182.67).

CONSULTATION

Consultation for this scenario always begins by identifying the size and anatomic location of the wound; the brand and size of the CTP used; the codes, units, and charges reported on the claim; and the payment/denial information on the remittance advice. Any of these components can cause the claim to be paid differently than expected. However, the No. 1 reason PBDs do not receive additional dollars for the CTPs with pass-through status is when the cost of the size of the CTP did not exceed the device offset amount included in the affiliated APC group. If CTPs with pass-through status are applied in your PBD and you assumed that you were receiving additional payment above the packaged payment amount, you should investigate all the components itemized here. One or more of the components could be causing unexpected payment amounts. 

Kathleen D. Schaum oversees her own consulting business and is a founding member of the TWC editorial advisory board. She can be reached for consultation and questions at kathleendschaum@bellsouth.net