Wound Product Insurance Authorization and Home Health Care: Some Practical Advice

As wound specialists, we pride ourselves on an accurate diagnosis and delivery of evidence-based wound care. Many of us are avid researchers, spending hours combing through the literature as well as attending conferences and continuing education events to ensure that the clinical choices we make are sound. However, the best care plan and wound care products are useless to many of our patients if we are unable to help them obtain insurance authorization and reimbursement. In this report, I am going to discuss important concepts for optimizing insurance reimbursement for wound care products and home care services.

Many patients with complex or chronic wounds are older than 65 years of age and are insured through Medicare or privatized Medicare Advantage Plans. Both Medicaid and private insurance for individuals younger than 65 adhere to reimbursement guidelines that are based on Medicare guidelines. Because learning specific guidelines for every insurance plan in the United States is not feasible, I recommend that all clinicians become familiar with Medicare reimbursement guidelines and use them as a general reference tool when treating wounds.

Before diving in, I would like to make one point regarding the ethics of using insurance guidelines as a reference when formulating a wound treatment plan. You may be saying, “But these insurance companies have financial motivations behind their guidelines. My knowledge and experience contradict these recommendations. I am the provider and write orders based on what I think is best for the patient.” While the truth behind these sentiments is certainly valid, that is a discussion for another time. The fact of the matter is that documentation, coding, and product usage guidelines will dictate what will and will not be covered, and providers must recognize this reality.  When choosing not to follow guidelines, a provider is ethically obligated to initiate a frank discussion with the patient about potential out-of-pocket costs due to a lack of adherence, offer an alternative reimbursable option, and allow the patient to make an informed choice regarding their care.

Medicare lists their allowable number of dressings for a wound in a 30-day period. Table 1 summarizes clinical criteria and monthly Medicare allowances for an assortment of wound dressings.¹ This is not an exhaustive list, but most durable medical equipment (DME) catalogs contain a similar allowance chart for the products they carry. A provider should call the DME company or local product representative and ask for this information. In addition to U.S. Centers for Medicare & Medicaid Services (CMS) websites, product manufacturers can be an excellent resource for reliable information about insurance allowances. In the author’s experience, most companies can provide a list of qualifying criteria, codes, and allowances for each product they carry. They are typically eager to help you obtain optimal reimbursement. Make sure the product you wish to use has a Healthcare Common Procedure Coding System (HCPC) code assigned to it and use this code in your order. HCPC codes are how Medicare categorizes dressings for billing purposes.  If it does not have an HCPC code, Medicare has not approved it for reimbursement. Contact the manufacturer if you cannot find the HCPC code.

You will also need to provide accurate documentation and diagnosis codes to support the wound care order. The scope of documentation and assigned International Statistical Classification of Diseases and Related Health Problems (ICD-10)² diagnosis codes will make or break an authorization approval for wound products and home health services. It is worth your time to familiarize yourself with what codes are needed to obtain approval for specific products along with documentation requirements. One way to do this is to work in reverse; look up a product and contact the manufacturer to ask what diagnosis codes are needed for insurance authorization. Then document accordingly. Sometimes this information can be found on the manufacturer website.

Your note is just as important as your diagnosis. Documentation of wound measurements as well as wound bed descriptions including presence and percentage of necrotic tissue, amount of drainage, or lack of drainage are all mandatory. This information is used to establish medical necessity for specific wound products. For example, a hydrofiber or alginate dressing may not be authorized unless there is documentation of moderate to heavy drainage, and certain collagen products will not be authorized unless the wound bed is documented as being mostly free of necrotic tissue. 

Insurance companies base their preauthorization approvals for home health visits on dressing allowances. If using an antimicrobial foam dressing, we know from Table 1 that Medicare will purchase 3 of these dressings per week for the patient. Therefore, your order for dressing change frequency and skilled nursing visits should reflect this. If you do not choose to make your order reflect this and instead order daily dressing changes with an antimicrobial foam dressing, there are a few unfortunate outcomes that can occur: the home health company absorbs the cost of excessive product usage and will no longer want to see the patient, or the patient will face a denial of services based on nonadherence to Medicare guidelines and will lack the care and products they need. You will also likely receive phone calls and letters from the insurance company requesting a discussion of the plan of care or peer-to-peer review with a clinical reviewer. None of these outcomes are optimal or an efficient use of time and resources. However, these roadblocks are easily avoidable with Medicare guideline adherence and good documentation. Unfortunately, many orders for inappropriate dressing change frequencies originate in the primary care office or are part of a hospital discharge packet, which highlights the importance of timely wound specialist referral.

Another common pitfall when referring a patient to home health services is requesting daily dressing changes and daily skilled nursing visits. It is very rare that Medicare will approve daily visits for any significant period. There is clinical evidence suggesting daily dressing changes are not beneficial to stable wounds due to heat loss, traumatic dressing removal, and inability to maintain appropriate moisture levels.³ Due to this evidence and the development of advanced wound products that can be left in place for several days at a time, Medicare will often only approve daily wound care when other options have been exhausted and, even then, only on a temporary basis (eg, when awaiting the arrival of an alternative product or during a 2-week trial of chemical debridement). 

There are, however, advanced wound care products on the market that require daily reapplication (eg, enzymatic debriders or human platelet-derived growth factor products). This can be a conundrum for providers that opt to use these products because home health care will not be authorized for long-term daily visits just because one of these products is selected, as enzymatic debriders are not covered under the Medicare dressing benefit. If alternative wound care and frequency decrease is not implemented, the patient can be left with no services due to the eventual denial of daily visits. Therefore, if daily wound care products are being considered, the best option is to evaluate the patient for the ability to perform wound care independently or the availability of a caregiver who can assist with daily dressing changes. Home health care services can then be ordered for wound oversight, usually 1–2 visits weekly or more if the caregiver is only available part time. Document caregiver status clearly and ensure that home health is aware that the caregiver is to be taught wound care and then the visits can be reduced from daily. If the patient cannot perform the wound care and a caregiver is not available to do at least some of the daily wound care, it is in the patient’s best interest to consider an alternative wound care product that does not require daily dressing changes, because authorization of daily visits will be short-lived.

Finally, I would like to discuss obtaining DME for patients with chronic lymphedema or venous insufficiency. These patients require compression wrapping to heal their wounds and, once healed, long-term compression garments to prevent wound recurrence. Most providers opt to apply a topical wound dressing and a multilayer compression wrap to the lower extremity that is changed 1–3 times weekly until the wound has resolved. The patient is then assisted with transitioning to long-term compression garments or stockings to prevent venous congestion or edema from returning. However, problems are often encountered because Medicare will not pay for long-term stockings or garments after the wound has resolved. The wound must be open and measurable, and the correct wound etiology documented, to obtain authorization for long-term compression stockings. This means that a plan for ordering long-term compression should be a priority almost immediately—before wound closure and while the legs are still being wrapped. Do not count on home health services to know this or request a timely order for long-term compression stockings without prompting. 

A good guideline is to measure the legs and order long-term compression once lower extremity edema has stabilized from wrapping. Getting this done early will also provide more opportunities to teach the patient how to don and doff the stockings and allow time to order modified stockings, specialized donning/doffing equipment, or physical therapy/occupational therapy services if indicated. To the consternation of many patients and providers, Medicare does not consider the application of compression wraps to be a skilled need in the absence of wounds nor appropriate for preventive care. This includes Unna boots and applies even if the patient cannot apply compression stockings independently. Insurance may authorize a few home health visits to apply wraps and order long-term compression, but the patient will have to pay out of pocket for long-term compression DME if the wound is already closed. If the patient is unable to pay out of pocket for this DME, they may end up without any type of compression, as home health will not receive authorization to wrap the legs indefinitely. Unfortunately, even patients who are truly unable to apply compression stockings due to strength or dexterity issues are still held to this standard; therefore, it is important to start education early and evaluate for the availability of a caregiver to help with donning/doffing during the initial assessment. 

These rules also apply to patients with chronic lymphedema. For this patient population, referral to a lymphedema specialist in addition to home health services may be a valuable resource for ongoing management after the wound has resolved. Once the wound has resolved, insurance will expect home health to discharge the patient.

This report aimed to help clinicians understand insurance reimbursement as related to their specialty. Even the best advanced wound care products and most skillful care will not heal a wound if the patient has financial barriers that prevent reliable access to it. By no means is this a comprehensive list of products or services. This is just a starting point. It is the author’s hope that it was useful. All clinicians are encouraged to consider insurance reimbursement as an important factor in product selection and a crucial element of research and practice.