The Fairy Tale is Over in the Wound Center

Once upon a time there was a happy land where at least half the patients seen in a hospital-based outpatient wound center (HOPD) were Medicare Fee for Service (FFS) beneficiaries. Their treatments were covered and we got paid for providing them. The most the patient had to worry about was the 20% “patient responsible portion.” In that kingdom, only private payers required prior authorization for services like hyperbaric oxygen therapy (HBOT), negative pressure wound therapy (NPWT), or “skin substitutes,” but at least they actually authorized those treatments upon request.

Once upon a time, private payer deductibles were hundreds of dollars rather than thousands of dollars. In those happy days of yore, surgical dressings were covered by everyone’s insurance so all patients had access to them, and insurance always covered services like debridement and compression bandaging.

However, the fairy tale days of the HOPD are over.

Although Medicare Advantage (MA) plans are supposed to cover the same services as Medicare, they do not. The extent of the violations of Medicare coverage policy vary, but MA plans may not cover basic treatments like compression stockings for venous leg ulcers (VLUs) or even surgical dressings. Contrary to the promises made by the companies that market them, the “Advantage” (sic) plans have high deductibles so elderly patients are responsible for thousands of dollars of treatment charges before the policy begins to pay, and that’s not the worst of it. MA plans often cover only one or two “brands” of cellular- and/or tissue-based products (CTPs), and if they are not the specific products to which your HOPD has access, the patient gets nothing.

Furthermore, the MA plans are quite happy to take the Nancy Reagan approach and “just say no” to any advanced therapeutic, no matter how well you document the need and appropriateness of the requested treatment. Nowadays, I don’t even bother requesting a CTP for a patient with Medicare Advantage.

In the unhappy reality of today, a compression wrap or debridement will cost the patient hundreds of dollars thanks to the “contracted rate” that payer’s MA plan has with the hospital. You won’t know until the patient is in your clinic that they can’t afford the basic treatments they need, at which point they will be angry—not at their insurance company, but at you. You walk into the examination room of a new patient with a necrotic ulcer to be greeted with, “Doctor, please don’t perform a debridement because I can’t afford it.” And yet, ostensibly, the patient has “Medicare.” At least, they thought they did.

When you see the rare Medicare FFS patient, you may find yourself doing a happy dance because you don’t need to go through a laborious prior authorization process for treatments they clearly need. But later, you are subjected to pre-payment reviews, post-payment reviews, Targeted Probe and Educate (TPE) audits, Recovery Audit Contractor (RAC) audits, and other mechanisms of monetary recoupment that are often focused entirely on whether the right phrases are included in your notes. One physician told me that his HOPD had paid back all of its charges for CTPs among Medicare FFS patients and was no longer using skin substitutes at all. Ironically, I can only use CTPs in Medicare FFS patients because there’s no point in trying to get Medicare Advantage, or even most private payers, to approve them. The worst part of this story is that in many cases, patients would pay less money out-of-pocket for wound care services if they had no insurance at all. At least for cash-pay patients, the hospital provides a substantial discount. However, it’s illegal to offer a cash pay price for patients who have so-called Medicare.

My podiatry colleagues, however, are living in a fairy tale. They aren’t under package pricing for CTPs and they aren’t getting audited for applying more CTPs per patient than my Medicare Administrative Carrier (MAC) says they can. In their office they can provide CTPs that are $10,000 whereas my hospital loses money if a CTP costs more than $1,100.

That’s got me thinking about what it would be like to run a wound center out of my private office. I have even wondered what would happen if I didn’t take Medicare (or Medicare Advantage) insurance. If I offered wound care services only on a cash basis, most patients with Medicare Advantage would save money considering they often have a deductible of more $5,000 and still pay huge fees for compression wraps and wound dressings. I could offer the best products at the lowest possible price and not have to employ people to go through a time consuming and futile authorization process. I would not be subject to capricious and draconian audits that take months or years to resolve, take hundreds of man-hours and require enough paper to fell a forest. I could offer treatments that I know work which Medicare doesn’t cover—rather than being told by the payer I can’t provide the treatments that Medicare is supposed to cover.

In this unhappy tale, no prince is going to show up on his white horse to rescue me from the confines of the HOPD and the evil forces of so-called insurance, but honestly, it’s the patients who need rescuing.

Caroline E. Fife is Chief Medical Officer at Intellicure Inc., The Woodlands, TX; executive director of the U.S. Wound Registry; medical director of St. Luke’s Wound Clinic, The Woodlands; and co-chair of the Alliance of Wound Care Stakeholders.