1. Schaum, Kathleen D. MS

Article Content

Wound/ulcer management stakeholders often waste a significant amount of time discussing inaccurate information about reimbursement for services, procedures, and/or products. During the last 6 months, numerous rumors have traveled across the country about coding and Medicare payment for cellular and/or tissue-based products (CTPs) for skin wounds (previously called "skin substitutes") applied in hospital-owned outpatient wound/ulcer management provider-based departments (PBDs) paid by the Medicare Outpatient Prospective Payment System (OPPS). When reimbursement and claims are involved, it is important to rely on facts rather than rumors. Therefore, this article will address the most common fictional statements versus facts that pertain to CTPs applied in PBDs in 2021.


Before we begin, let's discuss the current terminology. Nearly 3 decades ago, the first "skin substitute" products were launched. As time went on, the US FDA informed most manufacturers that the products were not really substitutes for skin and should not be marketed in that way. However, by that time, the Healthcare Procedure Coding System (HCPCS) product code descriptions and Current Procedural Terminology (CPT*) procedure code descriptions included the term. Eventually, the CMS removed "skin substitute" from the HCPCS product code descriptions and simply listed the brand name of each product. In addition, the American Society for Testing and Materials, an international standards organization, created and adopted the term "cellular and/or tissue-based products for skin wounds" and released a standard pertaining to CTPs. The new term encompasses the wide variety of products in this space and has been widely adopted.


Unfortunately, the American Medical Association (AMA) still uses the term "skin substitutes" in the code descriptions of procedures to apply these products. In addition, the term appears in many of the CMS final payment rules and guidance documents. Hopefully, the AMA will revise the CPT code descriptors for the application procedures, which will lead the way for the CMS to also use the updated terminology comprehensively. Until that time, manufacturers, physicians, and clinicians should understand that "CTPs" is the most precise terminology and the remainder of this column will use the "CTP" terminology except when directly quoting the CMS.


Now let's review fiction versus facts as they pertain to CTPs.


Fictional Statement #1: The CMS no longer awards "Q" codes for CTPs.


The facts: The CMS is still awarding "Q" codes for CTPs and, in fact, now accepts applications for and releases newly approved "Q" codes biannually. The CMS did not release any new "Q" codes for CTPs in January or April 2020. See the Table for the CTPs that were assigned "Q" codes in July and October 2020. The CMS did not release any new "Q" codes for CTPs in January 2021.

Table 1 - Click to enlarge in new windowTable 1. CELLULAR AND/OR TISSUE-BASED PRODUCTS ASSIGNED NEW "Q" CODES IN 2020

Fictional Statement #2: When new CTPs are assigned "Q" codes, the CMS also assigns them to a low- or high-cost group for OPPS payment to PBDs. That assignment never changes.


The facts: Since 2016, the CMS has determined the low- or high-cost status for each CTP based on either a product's geometric mean unit cost (MUC) exceeding the geometric MUC threshold or the product's per-day cost (PDC; the total units of a CTP multiplied by the MUC and divided by the total number of days) exceeding the PDC threshold. The final 2021 MUC threshold is $48 per cm2 (rounded to the nearest $1), and the final 2021 PDC threshold is $949 (rounded to the nearest $1). The CMS assigns each CTP that exceeds either the MUC threshold or the PDC threshold to the high-cost group and vice versa for the low-cost group. If the manufacturer of a new CTP does not provide sufficient sales price data to the CMS, the product is automatically assigned to the low-cost group. Later, if the manufacturer provides the required information to the CMS, and if the sales price data exceed the threshold for the low-cost group, the CTP may be reassigned to the high-cost group.


Fictional Statement #3: The CMS does not consider synthetic products to be CTPs.


The facts: Decades ago, the CMS did not consider whether synthetic products could be classified as CTPs because synthetic products did not exist until recently. The CMS now considers both biologic and synthetic products to be "skin substitutes" for Medicare payment purposes. Their new definition is "a category of biological and synthetic products that are most commonly used in outpatient settings for the treatment of diabetic foot ulcers and venous leg ulcers. Skin substitute products do not actually function like human skin that is grafted onto a wound; they are not a substitute for a skin graft. Instead, these products are applied to wounds to aid wound healing and through various mechanisms of action they stimulate the host to regenerate lost tissue.[horizontal ellipsis]"


Accordingly, in July 2020, the CMS created a new HCPCS code: C1849 Skin substitute, synthetic, resorbable, per square centimeter. This code was assigned to the high-cost group for OPPS payment to PBDs, which is great news for the manufacturers of resorbable synthetic CTPs, as well as for the patients who can benefit from the new technology. However, this new code is a bit confusing:


* All biologic CTPs are assigned specific HCPCS "Q" codes for each unique brand, but the CMS states that all synthetic resorbable products will use the same code (C1849).


* All manufacturers of biologic CTPs must submit their cost data to the CMS to enable appropriate low- and high-cost group assignment, but the CMS states that all synthetic resorbable products are assigned to the high-cost group regardless of their cost.


* All biologic CTPs that are assigned a "Q" code can be reported by both PBDs and physician offices, but synthetic resorbable products can only be reported by PBDs because "C" codes cannot be reported on physician office claims submitted to Medicare.


* Further, it is unclear if all synthetic resorbable products in the marketplace can be reported with C1849 because the CMS did not provide the relevant brand names.



NOTE: By the time this column is published, the CMS may have released further guidelines to clear up these confusing issues.


Fictional Statement #4: Starting in 2021, PBDs are no longer paid for CTPs based on their assignment to low- and high-cost groups. The PBDs are now paid one single payment regardless of the cost of the product.


The facts: In 2018, the CMS announced that they were considering possible refinements to the existing OPPS payment methodology for CTPs and that they were accepting suggestions. In 2019, the CMS released four suggested methodologies and solicited public comments about their pros and cons.


The numerous comments submitted to the CMS educated them about the complexity surrounding the OPPS payment methodology for CTPs. Therefore, in the 2021 OPPS Final Rule, the CMS did not change their payment methodology and stated that they will continue to study issues related to any changes. Accordingly, in 2021, PBDs will continue to receive packaged OPPS payment for CTPs based on each product's assignment to the low- or high-cost group.



After reading the 2021 coding and Medicare payment facts about CTPs, readers should understand the dangers of relying on fictional information. The CMS and the Medicare administrative contractors release volumes of regulations and guidelines and publish all relevant information on their websites. If readers cannot verify coding or Medicare payment information via their websites, it is likely fictional.