An Overview of the 2023 CMS Payment Policies Impacting Wound Care

In early November, the Centers for Medicare and Medicaid Services (CMS) issued three final rules that guide Medicare payments over the year ahead: the 2023 Home Health Prospective Payment System (PPS), the 2023 Hospital Outpatient PPS and the 2023 Medicare Physician Fee Schedule. These payment systems set the method of reimbursement in which Medicare payments are made based on a predetermined, fixed amount that are based on the classification system of that service. Each thousands of pages long, the annual policy updates have far reaching impact across medicine and medical care. With the help of the policy experts and advocates at the Alliance of Wound Care Stakeholders, below is a summary of the provisions most relevant to wound care.

2023 Home Health PPS

There are several problematic changes contained within the final 2023 Home Health PPS that will impact wound care providers.

• CMS reduced home health reimbursement rates by 7.85% on top of a series of past cuts. Together, these cuts negatively impact the ability of home health agencies (HHAs) to provide care.
• A concerning potential outcome of this cut in payment: it may make home health agencies less willing to take on complex wound patients due to their cost of care. Since the pandemic has started, home health providers took on a brunt of patient care. Their workload went up exponentially and the severity of cases being treated in the home have also increased significantly, yet at the same time CMS is cutting payments. Home health agencies are now taking care of more wound patients and more complex patients. They likely cannot continue to do so with these cuts in payment in place.
• Home care associations across the country have lobbied Congress to intervene. Legislation is being considered to try to get many of the HHA payment cuts reversed. This is an issue the Alliance will be tracking and advocating on.

2023 Medicare Physician Fee Schedule

When CMS' 2023 Physician Fee Schedule (PFS) final rule was published in early November, the highly problematic provisions regarding the payment of cellular- and tissue-based products (CTPs) that were included in the proposed PFS were removed. CMS elected to delay its planned overhaul of CTP payment in the physician office setting—for now—until the patient access impacts could be more fully vetted. The removal of problematic CTP payment provisions was the result of a proactive, aggressive collective and unified advocacy effort led by the Alliance of Wound Care Stakeholders and its allies, clinical associations, medical societies, manufacturers, and individual clinicians. Advocacy had elevated concern that CMS' proposed changes to reclassify all CTPs as “supplies incident to a physician service” and packaged payment into the practice expense would challenge a provider’s ability to purchase CTPs in the absence of adequate reimbursement—creating barriers to care that could lead to increased amputations and infection for patients with chronic non-healing wounds. Comments urged CMS to remove the proposed CTP provisions or to at least delay implementation until patient access issues could be further studied and vetted.

The wound care voice was heard and acted upon: Instead of implementing the proposed provisions impacting the nomenclature, coding, and payment of CTPs that would have gone into effect January 1, 2024, CMS will now convene a “Town Hall” in early 2023 to address stakeholder concerns and discuss potential approaches to bring consistency to CTP payment methodology under the Physician Fee Schedule and across different sites of service. Advocacy efforts will continue as the wound care community now has opportunity to engage CMS further during the Town Hall. The Alliance of Wound Care Stakeholders and Today’s Wound Clinic will share updates and advocacy opportunities once the Town Hall is scheduled and the agenda set.

Make your voice heard. CMS takes seriously the comments from clinicians—be it from professional clinician societies and/or from individual clinicians who see patients and treat wounds every day.

Other provisions in the 2023 Medicare Physician Fee Schedule relevant to wound care include:

• Payment rates: The final rule establishes a 4.47% cut to physician payments under the 2023 fee schedule. These payment reductions are compounded by the second year of CMS’ phased in implementation of its clinical labor pricing update. The primary concern is that the ongoing Medicare payment cuts undermine the long-term financial viability of physician practices and, in turn, beneficiary or patient access to treatments and procedures. These payment reductions come at a time when physician practices, hospitals that employ physicians and other stakeholders are facing uncertainty about the future of their pandemic recovery, rising costs due to inflation, staffing shortages and significant challenges from other regulatory burdens (eg, prior authorization, interoperability requirements and participation in Medicare quality programs such as MIPS). In light of these burdens, the provider community has turned to Congress for intervention. The Alliance joined with the Clinical Labor Coalition, which represents numerous clinical and medical specialty associations, to advocate Congress to mitigate the Medicare reimbursement cuts. Legislation has been introduced that could, if passed, offset or mitigate the payment cuts.
• Telehealth: During the pandemic, CMS issued several waivers and flexibilities that made it easier to provide certain telehealth services to Medicare beneficiaries. The 2023 Fee Schedule extended payment for these telehealth services to 151 days (5 months) after the end of the Public Health Emergency. It maintains the same payment rates for office visits provided in-person or via telehealth through the end of 2023 instead of reducing payments for telehealth visits to the facility rates.
  •    Evaluation and management (E/M) visits: Finalized and adopted the revised CPT guidelines and codes and the AMA/Specialty Society RVS Update Committee (RUC) recommended relative values for additional E/M visit code families, including hospital visits, emergency department visits, home visits and nursing facility visits. These changes allow time or medical decision-making to be used to select the E/M visit level. Learn more.
• Split or shared visits: The policy also imposed a one-year delay of CMS’s policy requiring a physician to see the patient for more than half of the total time of a split or shared E/M visit in order to bill for the service. This action will continue to allow physicians and qualified health care professionals to use history, physical exam, medical decision making (MDM), or more than half of the total time spent with a patient to determine the substantive portion of the split/shared visit in 2023.
• Quality Payment Program (QPP): CMS finalized five new and seven revised Merit-Based Incentive Payment System (MIPS) Value Pathways (MVPs), a new participation option beginning in 2023. CMS also finalized a total of 198 quality measures for the 2023 performance period. Despite the American Medical Association and numerous other medical organizations raising alarms due to CMS’ estimate that one-third of MIPS-eligible clinicians would receive a penalty, CMS finalized its proposal to maintain the MIPS performance threshold, which is the minimum score necessary to avoid a penalty, at 75 points. Learn more.

2023 Hospital Outpatient PPS

The Hospital Outpatient Prospective Payment System (HOPPS) sets reimbursement for hospital outpatient services. In addition to payment rates, the 2023 HOPPS final rule includes policies that align with several key goals of the Biden Administration: addressing the health equity gap, fighting COVID-19, encouraging transparency in the health system, and promoting patient-centered care, rural health and 340B drug pricing were among the many other areas addressed in the vast rule. Learn more.

Most relevant to wound care were the provisions related to payment for CTPs (skin substitutes).

While CMS has said it will be taking a phased approach over the next several years to implement changes to the current CTP payment methodology, the Agency for the time being did not significantly change the payment methodology for CTPs in the 2023 HOPPS. While organizations such as the Alliance of Wound Care Stakeholders had urged CMS to use the HOPPS annual update opportunity to correct inadequacies in CTP payments that are causing barriers to care in provider-based departments (PBDs), the CTP payment provisions in the November final rule were unchanged from the July draft rule that was issued.

This means for CTP payment in hospital outpatient sites of service:

• Payment methodology: When CMS packaged payment for skin substitutes in 2014, it established a policy that divides CTPs into a high-cost or low-cost group to meet the agency's stated goal of ensuring "adequate resource homogeneity among APC assignments for the skin substitute application procedures." In the 2023 HOPPS, CMS will continue its current methodology of assigning CTPs to a high- or low-cost group. Any CTP that was included in the high-cost tier will remain there—including synthetic CTPs.
• HCPCS Codes: Based on related CMS policies that evolved over the past year, HCPCS “A” codes (supply codes) continue to be issued for some CTP products instead of the traditional “Q” HCPCS codes, including synthetics. There was quite a lot of written discussion within the rule where CMS recognizes that many CTP products being issued “A” codes are in fact biologicals and/or that several of the synthetic products also have biological components. Yet CMS is still moving forward in issuing HCPCS “A” codes to CTPs—ignoring the therapeutic significance of these products. The Alliance and other advocates have been fighting against this and will continue to dialogue with CMS on this matter.

Other provisions in the vast 2023 HOPPS rule that are relevant to wound care include:

• OPPS Payment Rate: Most wound care procedures saw a decrease in the OPPS rate, while a few saw an increase including: HBOT (2.7% increase), non-invasive vascular study (2.0% increase), disposable negative pressure wound therapy (dNPWT) (5.7% increase), and application of CTPs from the low-cost bucket (an 8.6% increase), though application of low-cost skin substitute graft to trunk, arms, legs, total wound surface area greater than or equal to 100 sq cm (C5273) saw a decrease of 1.3%. The largest decrease is for the application of a CTP from the high-cost bucket (CPT 15273) at 9.5%. 

Looking Ahead

While there were no significant methodological payment changes for CTPs in the HOPPS this year, it is something that we are expecting, and advocating around, as our dialogues with CMS continue. As the problematic provisions that were included—then removed—from the 2023 Physician Fee Schedule show, the Agency has an intention to move forward in creating a more consistent approach for the suite of products they referred to as skin substitutes. There will be need for ongoing education and advocacy—by the Alliance, by clinical associations and medical specialty societies, by wound centers, and by individual wound care clinicians. It is the role of the Alliance to assess the impact of policies on wound care providers and patients, educate policymakers and make suggestions and policy change recommendations to protect and defend wound care. Follow the Alliance of Wound Care Stakeholders on LinkedIn for real-time updates on policies and opportunities to submit your comments to policymakers on policies that impact your practice and your patients.

Marcia Nusgart, RPh, is the Chief Executive Officer of the Alliance of Wound Care Stakeholders—an association of medical specialty societies, clinical and patient associations whose mission is to promote quality care and access to products and services for people with wounds. Through advocacy and educational outreach in the regulatory, legislative, and public arenas, the Alliance unites leading wound care organizations and experts to advocate on public policy issues that may create barriers to patient access to treatments or care.

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