New Wound/Ulcer Management Practices Started During the COVID-19 Pandemic Are Now Having a Reimbursement Pandemic

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Throughout and after the COVID-19 public health emergency, many physicians and qualified healthcare professionals (QHPs) decided to start offering wound/ulcer management in their offices, in skilled nursing facilities, in non–skilled nursing facilities, and even in patients’ homes. As one would expect, before these professionals started their businesses, they focused on the procedures they intended to perform and on the products they intended to use. In fact, some professionals decided to only apply cellular and/or tissue-based products (CTPs) for skin wounds and dressings to their patients, which did not establish comprehensive wound/ulcer management businesses. In addition, very few of the professionals incorporated any type of diagnostics into their new businesses.

Unfortunately, many of the new businesses did not learn the proper coding, coverage, and payment rules that pertained to all the work needed to appropriately manage wounds/ulcers. That major oversight is now beginning to affect them in the form of failed audits and major repayments.

In case you are wondering how I know about this reimbursement pandemic, it is because I have been inundated with requests from these businesses to provide reimbursement education classes for their professionals, coders, and billers. Although I could author several books about the financial heartaches that I have witnessed, I will share the latest reimbursement calamity for which I provided consultation and education. I am sharing this with the hope that it will encourage our readers from taking part in the wound/ulcer management reimbursement pandemic.

Real-Life Scenario

A physician and nurse practitioner (NP) called me and announced that between pre- and post-payment audits, they have only been able to keep 20% of their revenue since they opened their office-based wound/ulcer management service 3 years ago. They were upset because they thought the Medicare Administrative Contractor (MAC) was unreasonable and was picking on them. They wanted me to review the results of their audits and to educate them how to stop their reimbursement pandemic.

Facts to Consider

• Payers expect wounds/ulcers to be evaluated at every encounter and to be managed with the appropriate care outlined in clinical practice guidelines, published literature, and payers’ coverage policies.
• ICD-10-CM codes are updated annually, CPT® codes are updated annually but can have added updates throughout the year, and HCPCS codes are updated semi-annually for medical devices and quarterly for drugs and biologics.
• The Centers for Medicare & Medicaid Services (CMS) write National Coverage Determinations (NCDs), and the MACs write Local Coverage Determinations (LCDs) and Local Coverage Articles (LCAs) about certain services, procedures, and products that need to be controlled.
• CMS updates the Medicare Physician Fee Schedule (MPFS) every January 1.
• In each quarter’s National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) payment edit files, CMS specifies procedures which are components of other procedures, and which will not receive separate payment.

Findings and Consultation:

First Finding: I asked the physician and NP for a list of the services, procedures, and products they are using, along with the codes they are reporting to their MAC. I was surprised to learn they are only surgically debriding, performing hyperbaric oxygen therapy (HBOT), and applying CTPs in their practice. In other words, every patient is treated with HBOT or CTPs.

First Consultation: I reminded them they are in the wound/ulcer management business, which begins with thorough assessments, including proper diagnostic tests. Because a substantial portion of wounds/ulcers will heal with standard care such as debridement, proper primary and secondary dressings, offloading, and compression, the MACs expect physicians and QHPs to provide this type of care for at least 4 weeks before moving to more advanced therapies such as HBOT and application of CTPs.

Second Finding: I asked them if they had the ICD-10-CM, HCPCS, and CPT^®1 Coding Manuals from each of the 3 years (2021, 2022, and 2023) in which they have been in the wound/ulcer management business. They proudly informed me that they had all three coding books. However, when I asked them to retrieve the manuals and to read the dates on each, I learned that all 3 manuals were dated 2010. Giving them the benefit of doubt, I asked if they were using electronic versions of the current coding manuals. They answered “no.” Finally, I asked if they used the 2010 coding manuals to set up their coding and billing systems, and unfortunately, they said “yes.”

Second Consultation: I explained that many pertinent diagnosis, service, procedure, and product codes were added, removed, and/or changed every year since 2010. In fact, the debridement and application of CTP codes were significantly revised after 2010. Therefore, it is imperative that the physician and NP get either the electronic or paper manuals every year and that they review changes to the codes that are pertinent to the work they perform. Then they should update their electronic health record, their coding, and their billing systems to incorporate all pertinent coding changes. Most important, they should refine their documentation to align with the current code descriptions and guidelines.

Third Finding: I asked the physician and NP to share the top 10–20 major payers for their patients. They informed me that they only accepted patients with original Medicare Part B insurance. I then asked them to list the Medicare NCDs, LCDs, and LCAs that they were following. To my surprise, they did not have any knowledge about NCDs, LCDs, and LCAs.

Therefore, I requested to review their documentation for debridement, HBOT, and application of CTPs. In every medical record that I reviewed, the physician and/or NP documented that they performed the procedure, but did not address the medical necessity, utilization, or documentation requirements of the LCDs/LCAs that pertain to the work performed.

Third Consultation: I explained that Medicare’s NCD pertinent to HBOT, and their MAC’s LCDs/LCAs pertinent to wound care, debridement, and the application of CTPs should be their “playbook” for 1) determining if a specific service, procedure, and/or product meets the medical necessity and utilization guidelines, for 2) learning the documentation requirements, and for 3) identifying the appropriate codes and coding guidelines. I taught them how to find the coverage documents, how to read them, and how to incorporate them into their practice. In addition, I shared my motto with them: “You can’t receive and keep your payment without following the coverage playbooks.” Because these coverage policies can be released/refined at any time throughout the year, someone in the practice should be assigned to check them monthly, and to educate the entire medical and revenue cycle team about pertinent changes that should be implemented.

Fourth Finding: I asked the physician and NP who was checking the changes to the Medicare Physician Fee Schedule (MPFS) Final Rule that is implemented every January 1. They did not know about this important payment guidance document. Therefore, no one in their practice is assigned to read it, share the pertinent changes with the professionals/billers/coders, and to incorporate required changes to their processes.

Fourth Consultation: I explained that each new year’s MPFS explains how their Medicare payment rates will be calculated and major changes to the payment for numerous services, procedures, and products. Because their entire business model is based on original Medicare payment, they cannot afford to miss these annual payment changes.

Fifth Finding: By this point in the consultation, I could predict why the physician and NP failed their pre-payment and post-payment audits. To be sure, I asked for the reports from their audits. Because they were using outdated codes, were not following the coverage policies, and did not implement the payment changes every year, their claim denials and repayments could have been prevented 3 years ago if they had taken the time to set up their revenue cycle process before they started to see wound/ulcer patients. Following are a few of the errors that caused them to only receive/keep 20% of the revenue that they thought they should have been paid:

• Complete wound/ulcer assessments, including required diagnostic tests, were not performed and documented at every encounter.
• Standard wound care was not provided and documented for 4 weeks before HBOT and application of CTPs were performed.
• After debriding a wound/ulcer, they did not document the implement that was used, the level of tissue removed, the size of the wound/ulcer before and after the debridement, the amount of blood lost, etc. In addition, they always reported surgical debridement of subcutaneous tissue even when they were only debriding biofilm, exudate, fibrin, or slough.
• When providing HBOT, they did not document wound/ulcer assessment before the treatment and did not document an assessment every 30 days. In fact, they did not prove medical necessity for the treatment. They simply selected the first ICD-10-CM diagnosis code that popped up on their electronic health record screen; it was an unspecified diagnosis code. In addition, they reported an evaluation and management (E/M) code at every encounter when HBOT was provided, even though they did not manage a separate identifiable problem.
• Before applying CTPs, they did not 1) assess the wound/ulcer and document the size before and after the application, and 2) did not document the reason the specific CTP was selected. They did not document the complete application procedure and how the CTP was secured. In addition, they always reported surgical debridement of subcutaneous tissue along with the application of a CTP, even though subcutaneous tissue was not removed.

NOTE: I noticed that they only used one brand of CTP, one large size (regardless of the size of the wound/ulcer) and the brand did not have published evidence. I asked them why that brand was selected, and they said it was the brand which provided them with the greatest profit.

Summary

I shared this real-life scenario because it depicts what happens when professionals do not take the time to set up their revenue cycle processes before they begin seeing patients. This physician and NP did what was logical to them, rather than what was logical to their MAC and to CMS.

CAUTION: If a physician and NP set up most of their revenue cycle process correctly, but missed only one major part, they could still fail pre-payment and post-payment audits, which will reduce their expected revenue. Therefore, I encourage all new, or established, wound/ulcer management professionals to pay attention to coding, coverage, and payment regulations and guidelines. If you are not sure how to implement the regulations and guidelines, seek education from a wound/ulcer management reimbursement specialist.

Kathleen D. Schaum oversees her own consulting business and is a founding member of the Today’s Wound Clinic editorial advisory board. She can be reached for consultation and questions at kathleendschaum@gmail.com.

Reference
1. CPT is a registered trademark of the American Medical Association.