Coordination of Care in Volume-Based & Value-Based Payment Systems

In this special edition of Today’s Wound Clinic focusing on reimbursement, we are emphasizing the need for wound care professionals and hospital-based outpatient departments (HOPDs) to meet the Institute for Healthcare Improvement’s “Triple Aim” goals related to patients, providers, and payers: 1) improving the patient experience of care; 2) improving the health of populations; and 3) reducing the per capita cost of healthcare. 

Throughout this issue of TWC, our authors will discuss the responsibility that healthcare providers have to deliver the right care to the right patient at the right time and at the total lowest cost of care while meeting the Triple Aim goals and balancing volume-based and value-based reimbursement. Therefore, this author feels obligated to provide Business Briefs readers with three very important reimbursement reminders that HOPDs should consider while coordinating care for their wound patients.

Reminder No. 1: 

Don’t “game” the National Correct Coding Initiative (NCCI) edit system. While providing reimbursement education to HOPDs throughout the country, this author is often told such things as: “To avoid the NCCI edits, when our physicians and other qualified healthcare professionals (QHPs) debride a wound, they cover the wound with a dressing and have the patient return to the HOPD the next day for the application of either a total contact cast, an Unna’s boot, a multilayer compression bandage, a cellular and/or tissue-based product for skin wounds (CTP), a negative pressure wound therapy (NPWT) durable medical equipment (DME), a disposable NPWT device, etc. To avoid the NCCI edits, when our physicians and other QHPs apply a CTP, they cover the wound with a dressing and have the patient return to the HOPD the next day for the application of a disposable NPWT device.”  

As a reimbursement specialist, it is not this author’s place to decide if these examples constitute “providing the right care to the right patient at the right time and at the lowest total cost of care.” However, it is my responsibility to share the directives that appear in Chapter 1 of the 2017 NCCI Coding Policy Manual for Medicare Services (for more info, follow the link www.cms.gov/medicare/coding/nationalcorrectcodinited/index.html). All of these directives are very important, especially those listed here: 

1. “Providers reporting services under Medicare’s Hospital Outpatient Prospective Payment System should report all services in accordance with appropriate Internet-Only Manual instructions.” 
2. “Physicians must report services correctly. There are certain types of improper coding that physicians must avoid.” 
3. “Procedures should be reported with the most comprehensive Current Procedural Terminology (CPT^®) code that describes the services performed. Physicians must not unbundle the services described by a Healthcare Common Procedure Coding System (HCPCS)/CPT code. Some examples follow: 

• A physician should not report multiple HCPCS/CPT codes when a single comprehensive HCPCS/CPT code describes these services. 
• A physician should not fragment a procedure into component parts. 
• A physician should not unbundle a bilateral procedure code into two unilateral procedure codes. 
• A physician should not unbundle services that are integral to a more comprehensive procedure.”

​4. “Physicians must avoid downcoding. If a HCPCS/CPT code exists that describes the services performed, the physician must report this code rather than report a less comprehensive code with other codes describing the services not included in the less comprehensive code.”
​5. “Physicians must avoid upcoding. A HCPCS/CPT code may be reported only if all services described by that code have been performed.”
6. “Physicians must report units of service correctly. Each HCPCS/CPT code has a defined unit of service for reporting purposes. A physician should not report units of service for a HCPCS/CPT code using a criterion that differs from the code’s defined unit of service.”
7. “Medically unlikely edits (MUEs) and NCCI procedure-to-procedure (PTP) edits are based on services provided by the same physician to the same beneficiary on the same date of service. Physicians should not inconvenience beneficiaries or increase risks to beneficiaries by performing services on different dates of service to avoid MUE or NCCI PTP edits.”

Some wound care professionals may be thinking, “But we get paid for this practice all the time.” Yes, the automated claims-processing system may pay for bundled services that were inappropriately unbundled into two different visits. However, during an audit these same automated systems can easily identify unbundling practices that circumvent the NCCI edits. This year’s NCCI manual could not be more clear about Medicare’s position about this practice. Therefore, HOPDs and wound care professionals should focus on doing the right thing at the right time, because the repayments with triple damages far outweigh the payment for the extra visit to bypass the NCCI edits. 

Reminder No. 2

Don’t ignore the consolidated billing master code lists published for home health agencies (HHAs) and skilled-nursing facilities (SNFs). 

HHA Consolidated Billing

Section 1842(b) of the Social Security Act generally requires “consolidated billing” of all home health-covered services and supplies. When a patient is under a home health plan of care, only the primary HHA can bill and receive payment from Medicare for a home health service or supply. Separate Medicare payment for the services on the HHA consolidated billing master code list will never be made. See Table 1 above for a list of the common wound care-related procedures included on the HHA consolidated billing master list. The HHA may provide the services on the HHA consolidated billing master code list either directly or through an arrangement (eg, contract) with a third-party provider (eg, the HOPD). If the HOPD provides a service that is on the HHA consolidated billing master code list, Medicare will only accept bills from and only provides reimbursement to the HHA through an arrangement with the HOPD. The HOPD must seek reimbursement from the HHA per the HOPD’s private agreement with the HHA. NOTE: HHAs are not responsible for payment to an HOPD if the HHA has no prior knowledge of the services provided by the HOPD to a patient who is under a home health plan of care. If a prior arrangement does not exist between an HHA and the HOPD, the HOPD cannot generally seek Medicare reimbursement for a service on the HHA consolidated billing master code list. It’s the responsibility of the HOPD to determine if a wound care patient is in a home health episode of care. This information can be obtained from the patient or from the relevant Medicare Administrative Contractor (MAC). If a patient is under a home health plan of care and receives one of the procedures listed in Table 1 in an HOPD, the HOPD will not be paid by Medicare. HOPDs will have to do one of two things in this instance: 1) advise the home health beneficiary, orally and via an advance beneficiary notice of noncoverage, that if they decide to accept the HOPD services rather than those provided by the primary HHA, they can be liable for the payment to the HOPD; or 2) prior to providing the service, make arrangements with the HHA for the agency to pay the HOPD. 

SNF Consolidated Billing

Medicare also pays SNFs via a bundled prospective payment system for medical services, therapy services, room, board, and DME provided to residents during covered Part A stays. This system includes specified wound care procedures that are typically provided by HOPDs. The SNF must include these bundled procedures onto a “consolidated bill” submitted to the MAC that processes the SNF’s Medicare claims. For wound care procedures subject to SNF consolidated billing, HOPDs must look to the SNF for payment and the HOPD must not bill Medicare separately for those procedures. Therefore, HOPDs must know exactly which wound care procedures are included on the SNF consolidated billing code list. See Table 1. 

Author’s Consolidated Billing Observation

This author receives numerous calls from those in HOPDs questioning why they are not receiving Medicare payment for selective debridement or nonselective debridement. In almost every case, my research finds that patients who received these procedures in the HOPD were either in a covered SNF Part A stay or were receiving HHA services covered by their Medicare Part A benefit. In all instances, the HOPD had not made prior arrangements with the SNFs and HHAs to bill them for the procedures on the consolidated billing list. In addition, this author is very surprised that HOPDs continue to apply NPWT DME and disposable NPWT to those patients receiving HHA care or who are in SNFs. As Table 1 shows, these procedures are on both the HHA and SNF consolidated billing master code lists and should be performed by the HHA or the SNF. Furthermore, effective Jan. 1, 2017, HHAs are able to bill Medicare separately for disposable NPWT (97607/97608), which includes wound assessment, furnishing a new disposable NPWT device, and instructions for ongoing use. The HHA’s 2017 wage-adjusted Medicare national average allowable rate for 97607/97608 is based on the HOPD’s 2017 national average Medicare allowable rate. Therefore, HHAs should always furnish and apply new disposable NPWT devices to their Medicare patients who need them. 

Reminder No. 3

Don’t become so focused on traditional volume-based revenue that you fail to consider the patient’s coinsurance and the various value-based contracts and payment programs in which the hospital is participating. Numerous HOPDs have reported losing patients when they consistently provided expensive procedures and products that had the potential to generate the highest revenue for the HOPD.  Yes, revenue is essential to keep the HOPD financially sound. However, total loss of patients negatively impacts the HOPD’s financial success. In addition, many hospitals are participating in various value-based contracts and payers’ shared-savings programs that are paying bonuses for improved outcomes provided at the lowest total cost of care that receive excellent patient-satisfaction ratings. Therefore, HOPDs cannot afford to only focus on traditional volume-based revenue. 

For a moment, let’s think about the Medicare-covered wound care patient. HOPD patients typically receive two bills when they’re administered wound care services from a physician or other QHP in the HOPD: one bill from the HOPD and one bill from the wound care professional. That means the patient is responsible for the 20% coinsurance of the Medicare allowable rate for both the HOPD bill and the physician or other QHP bill. The higher the HOPD Medicare allowable rate of the procedure/product, the higher the patient’s coinsurance. If the patient has secondary insurance that covers the procedures and the products, the patient may not be too concerned. However, if the patient does not have secondary insurance he or she may not be able to afford the HOPD services and the coinsurance on the two bills. This author has personally spoken to many physicians and other QHPs who said the new value-based payment programs have caused them to begin managing wound care patients in their offices and via HHAs that are already caring for the patients in their homes for other comorbidities. Likewise, many HOPDs have reported they are reevaluating the procedures and products they use so that they select those that: have excellent published evidence, achieve excellent outcomes at the lowest total cost of care, and achieve excellent patient-satisfaction ratings (which include continuing their care at the HOPD). Most recently, numerous HOPDs reported discharging patients to HHAs in their bundled payment network when the wound care nurses in the agencies can easily manage the wounds in the home while they are managing other medical conditions. In these cases, the HOPDs are helping their hospital networks achieve their Triple Aim goals and potential bonus payments from Medicare. The HOPD’s bottom line now depends on traditional Medicare volume-based payments and value-based Triple-Aim bonuses/shared savings. Now is the time for HOPDs to begin coordinating care for both volume-based and value-based payment systems! 

Kathleen D. Schaum, MS, is president and founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL; and director, medical products, reimbursement, at Smith & Nephew, Fort Worth, TX.