Parallel Paths to Medicare Reimbursement: Surgical Dressings & NPWT Pumps (Traditional and Disposable)

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 responsibility for verifying coding, coverage, and payment information accuracy lies with the reader.   Let’s take a walk down memory lane: First, there were gauze surgical dressings. Then, the concept of moist wound healing was introduced. Before long, there were many forms of surgical dressings that created a moist healing environment, such as hydrocolloid, hydrogel, transparent film, etc. As these advanced dressings became widely used, it became obvious that Medicare Part B benefits should cover surgical dressings used by patients in their homes. A group of forward-thinking wound care professionals and manufacturers worked with the Centers for Medicare & Medicaid Services (CMS) to:     1. Create Healthcare Common Procedure Coding System (HCPCS) codes for each of the surgical dressing categories that existed at the time,     2. Establish a Medicare Part B Durable Medical Equipment, Prosthetics/Orthotics, and Supplies (DMEPOS) Fee Schedule allowable rate for each surgical dressing category, and     3. Write a surgical dressing coverage policy (called a Local Medical Review Policy [LMRP] at the time).   As new categories of surgical dressings (eg, alginate, foam, collagen, and compression bandaging) were developed, manufacturers applied to CMS for HCPCS codes for each of the new surgical dressing categories. CMS then established Medicare Part B fee schedule allowable rates for most of the new surgical dressing categories. The Medicare contractors then added coverage language for most of the new surgical dressing categories to their LMRPs. In a few years’ time, manufacturers produced multiple brands in each of the surgical dressing categories. CMS established a website where qualified healthcare professionals (QHPs) can verify the correct HCPCS code for each brand of surgical dressing (www.dmepdac.com/dmecsapp/do/search). When the multilayer, high-compression bandage system was developed, several professional societies worked with the American Medical Association (AMA) to create CPT® codes (29581, and later 29582-29584) for this time-consuming work. CMS then established Medicare Part B allowable payment rates for the new CPT codes on the Medicare Physician Fee Schedule (MPFS), on the Hospital Outpatient Prospective Payment System (HOPS), and on the Ambulatory Surgery Center (ASC) payment system. And, you guessed it, Medicare Administrative Contractors (MACs) began writing Local Coverage Determinations (LCDs) about the new compression CPT codes. Because each site of service across the patient’s continuum of care is paid differently, surgical dressings are either:     1. Bundled into the prospective payment system (eg, acute care hospitals, long-term care hospitals, Medicare Part A stay in skilled-nursing facilities, etc.) or     2. Paid according to the DMEPOS Fee Schedule (eg, DME suppliers for patient’s use at home, physicians, etc.) for patient’s use at home, or in Medicare Part B-covered stays in skilled nursing. QHPs should not only understand how their site of service is paid, they should also understand how their referral site of service is paid and how the site of service to which they will refer the patient is paid. Coordination of care and use of surgical dressings across the continuum of care are essential.   Today, QHPs who specialize in wound care have a variety of surgical dressings from which to choose. Their job is to select the most clinically appropriate surgical dressing that will deliver the best outcomes, the best patient satisfaction, and the lowest total cost of care for the patient, the provider, and the payer.

Look Forward To NPWT

  Traditional NPWT Pumps   Similar to surgical dressings, there was first just one negative pressure wound therapy (NPWT) pump. The manufacturer of that device had the difficult job of introducing NPWT to Medicare; obtaining HCPCS codes for the product, canister, and dressings; obtaining a reasonable DMEPOS Fee Schedule allowable payment rate; obtaining a CPT code to account for the QHPs work of applying the device; working with the DME MACs to write the first LCD for NPWT; and working with the MACs to include positive coverage for the application of NPWT in their LCDs. See Table 1 for a list of HCPCS codes created for traditional NPWT pumps/supplies/dressings and the 2013 national average DMEPOS Fee Schedule rates for those codes. These codes and allowable rates apply when a patient obtains the equipment from a DMEPOS provider/supplier and uses the equipment in his/her home. If a home health agency (HHA) is providing care to the patient in the home, the HHA is not required to supply the traditional NPWT pump/supplies/dressings. The Medicare Part B-covered patient should acquire the NPWT equipment/supplies/dressings from a DMEPOS provider/supplier.   Similar to the “explosion” of surgical dressings on the market after HCPCS codes and DMEPOS Fee Schedule allowable rates became available, numerous brands of NPWT pumps/supplies/dressings with the same/different features are now available in the marketplace. Those interested in ordering a new brand of NPWT pump can find a listing of traditional NPWT pumps/supplies/dressings that CMS verified eligible to use the traditional NPWT HCPCS codes at www.dmepdac.com/dmecsapp/do/search.   NOTE: Traditional NPWT pumps/supplies/dressings were added to the Competitive Bidding Program effective July 1. If the patient lives in a competitive bidding area (CBA), the DMEPOS provider/supplier will not be paid the rate listed in Table 1. Instead, the DMEPOS provider/supplier will be paid a single payment rate for that specific CBA. Those competitive bidding rates can be viewed at www.dmecompetitivebid.com. For example: If the patient lives in the Indiana-Chicago Metro competitive bidding area, the single payment rates are:     A6550 $24.38     A7000 $7.86     E2402 $800.00   During a recent survey of NPWT manufacturers that asked if they expected competitive bidding to impact payment by the private/commercial payers and by the state Medicaid programs, nearly every manufacturer believed that the competitive bidding pricing shifts would influence other payers to adjust their payment to the DMEPOS providers/suppliers. However, manufacturers are concerned that many DMEPOS providers/suppliers may not financially survive if this occurs because the competitive bidding rates are very low compared to the traditional fee-for-service allowable rates.   See Table 2 for an overview of the 2013 national average MPFS and HOPS allowable payment rates. If the NPWT pump/dressings are applied to the patient’s wound in a physician’s office, Column 2 in Table 2 provides the national average Medicare allowable payment rate. Column 3 in Table 2 provides the national average Medicare allowable payment rate for physicians who personally apply the pump/supplies/dressings to patients in facilities such as hospital-based outpatient wound care departments (HOPDs). CAUTION: If a physician orders NPWT to be applied in an HOPD but does not personally apply the pump/supplies/dressings, the physician should not report these codes on his/her claim. If the NPWT pump/supplies/dressings are applied during a patient’s encounter at the HOPD, Column 4 in Table 2 provides the HOPS national average Medicare allowable payment rate.   When NPWT pump/supplies/dressings are applied in an acute care hospital, a long-term care hospital, and a skilled nursing facility during a Medicare Part A covered stay, the facility is responsible for purchasing/renting the equipment/supplies/dressings out of their respective Medicare payments: medical severity diagnosis related group payment, long term care diagnosis related group payment, and resource utilization group (RUG) payment.   See Table 3 for the links to the pertinent DME MACs’ LCDs and MACs’ LCDs effective July 1. As we have often discussed in “Business Briefs,” the existence of a HCPCS and/or CPT code and the existence of a published payment rate does not guarantee coverage. If the Medicare contractor does not publish an LCD, the contractor evaluates each claim based on medical necessity. If the Medicare contractor publishes an LCD, then the contractor evaluates each claim based upon the LCD guidelines. As you can see from the first four lines of Table 3, all four DME MACs have published an LCD regarding traditional NPWT. Therefore, QHPs who order NPWT for patients at home should pay particular attention to the LCD requirements for orders, medical necessity guidelines, utilization guidelines, and documentation guidelines. The QHP must provide all information required by the LCD to the DMEPOS provider/supplier who will be providing the pump/supplies/dressings. As you can see from the remainder of Table 3, some Medicare A/B MACs have published an LCD that pertains to the application of traditional NPWT pumps/supplies/dressings. QHPs, therapists, and HOPDs should pay particular attention to these LCDs that typically provide guidance regarding orders, medical necessity, utilization, and documentation.   Disposable NPWT Pumps   To satisfy patients’ requests to reduce the size of NPWT pumps, manufacturers have developed numerous small, disposable devices. QHPs should review the nuances of each brand and select the appropriate device for each patient. QHPs should not expect disposable pumps to be reimbursed in the same manner as traditional pumps because they are innovative, they fulfill different patient needs than traditional pumps, and they are not “DME.” Additionally, the disposable devices have entered the market at a time when wound care professionals are being challenged to manage patients across the continuum of care, rather than in a single site of service. In these cases, rather than focusing on cost versus reimbursement, wound care professionals may find that these products can fit perfectly into protocols that are focused on quality of care, patient satisfaction, and lowest total cost of care across the continuum. In fact, some patients may begin with traditional pumps and transition to disposable pumps. Or, some patients may not need traditional pumps and may begin with disposable devices. For those QHPs and sites of care that are still focused on how products are reimbursed in a single site of service, let’s take a quick look at the early stages of coding, payment, and coverage for the disposable pumps:   If QHPs want this reimbursement to change, they must take an active role in educating the payers about the value of disposable technology. Remember: We would not have the LCDs for surgical dressings if wound care professionals had not rolled up their sleeves and helped the manufacturers educate the payers about the new dressings, the need for HCPCS/CPT codes, the need for published allowable payment rates, and the need for coverage even if the products are not “DME.” As of July 15, CMS has created two temporary HCPCS codes (G0456 and G0457) that have published allowable rates on the HOPS Fee Schedule and that are “carrier priced” when physicians perform the work (see Table 4). Like many new codes, the allowable rates may/may not be adequate to cover the cost of the devices/supplies. In these instances, QHPs should take the time to educate the payers about the actual invoice price of the products. Remember how providers influenced the Medicare allowables for surgical dressings?   Like surgical dressings, disposable NPWT devices/supplies/dressings are included in the Medicare payments to hospitals, long-term care hospitals, and skilled-nursing facilities during a patient’s Medicare Part A-covered stay. In addition, HHAs must purchase disposable NPWT devices/supplies/dressings for patients receiving Medicare Part A-covered home health services. HOPDs and physicians may receive payment for the application of disposable NPWT devices/supplies/dressings via HCPCS codes G0456-G0457, if the service is covered by their MAC. Also, as of July 15, AMA has not created a CPT code for the application of disposable NPWT pumps/supplies/dressings.   When you review MAC LCDs, articles, and bulletins listed in Table 3, you will find a “mixed bag” of Medicare coverage: Some have not written an LCD and cover based on medical necessity; some consider the products non-covered; some have provided coverage guidelines through LCDs or bulletins. QHPs should read these documents carefully and implement the guidelines into their practices. QHPs should also educate their respective payers when the payers make coverage determinations that do not necessarily align with achieving optimum outcomes, patient satisfaction, and lowest total cost of care. Kathleen D. Schaum is president and founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL. She can be reached for questions and consultations at 561-964-2470 or kathleendschaum@bellsouth.net.   Acknowledgements: The author and TWC would like to thank the manufacturers that participated in a survey used for this article: Devon Medical Products, Equinox Medical LLC, Innovative Therapies Inc., Medela Inc., and Spiracur Inc.