1. Schaum, Kathleen D. MS

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Several times each month this author receives questions about reimbursement for ostomy supplies and/or professional services to assess ostomy sites and to provide education to patients with ostomies. After learning that ostomy care is the theme for this month's issue of Advances, this author decided to share several typical reimbursement scenarios with you. Hopefully, these scenarios will fill knowledge gaps and demonstrate that this topic should not be a secret!


Scenario: A surgeon routinely orders ostomy supplies from the local durable medical equipment (DME) supplier for his postoperative patients. Many of them complain because the DME supplier tells them that Medicare will not cover the ostomy supplies and requires the patients to purchase them.


The DME supplier reports that the surgeon typically does not provide sufficient documentation to justify the medical necessity of the ostomy supplies and/or to support the quantity of supplies ordered. Therefore, the surgeon should thoroughly read the Ostomy Supplies Local Coverage Determination (LCD) L338281 and Local Coding Article (LCA) A52487.2 These guidance documents are essential reading for those who order ostomy supplies for their patients with Medicare fee-for-service insurance. The LCD provides valuable information about the maximum quantity of supplies normally covered for the various types of ostomies and the required Standard Written Order. The LCA provides valuable descriptions of barriers, faceplates, pouches, pastes, and other miscellaneous ostomy supplies; the International Classification of Diseases, Tenth Revision codes that do/do not support medical necessity; and documentation requirements.


If the surgeon follows the LCD and LCA guidelines, justifies in the Medicare beneficiary's medical record that the item(s) ordered is/are reasonable and necessary before placing the first order with the DME supplier, and provides that documentation to the DME supplier if/when requested by the Medicare contractor, the DME supplier should dispense and bill Medicare for the ostomy supplies. Then the Medicare beneficiary should only be responsible for paying the DME supplier the required 20% copayment, all or some of which may be paid by supplemental insurance.


CAUTION: Physicians and other qualified healthcare professionals (QHPs) often mistakenly do not document the required information in the beneficiary's medical record and only complete the ostomy supply order forms provided by the DME suppliers. If the payer conducts an audit and does not find the required documentation for the ostomy supplies that were provided, the auditor will consider the submitted claims to be false, recoup the Medicare payment, and may possibly issue a large fine for every claim line item submitted.


Scenario: A certified wound/ostomy nurse works in a hospital-owned outpatient wound, ulcer, and ostomy management provider-based department (PBD). She often leaves the PBD and provides stoma marking to the hospital inpatients before their surgical procedures. In the PBD, she manages skin conditions near ostomy sites and provides ostomy care education. She wants to bill Medicare for these services.


The most important thing to remember is that nurses cannot bill Medicare directly. Their employer bills Medicare for services, which includes nursing care provided to Medicare beneficiaries. In this scenario, the nurse is employed by the PBD. When she leaves the PBD and provides ostomy services to hospital inpatients, she should have a process for checking out of the PBD and for checking in to the hospital so that the PBD will only be charged for the time she worked in the PBD, and the hospital nursing department will be charged for the time she worked in the hospital.


When the nurse manages skin conditions near the ostomy sites and provides ostomy care education in the PBD, the nurse and the PBD must remember a few important things:


* The Medicare Benefit Policy Manual3 has coverage regulations that pertain to outpatient therapeutic services incident to a physician's service:


a. The services must be furnished as an integral, although incidental, part of the physician or QHP's treatment of an illness or injury.


b. Hospital outpatient therapeutic services must be furnished under the order of a physician or other QHP practicing within the extent of the Social Security Act, the Code of Federal Regulations (CFR), and State law.


c. The services must be furnished by hospital personnel under appropriate supervision.


d. During any course of treatment rendered by auxiliary personnel, the physician/QHP must personally see the patient periodically and sufficiently often to assess the course of treatment and patient progress and, change the treatment regimen when necessary.


e. A hospital service would not be considered incident to a physician's service if the attending physician merely wrote an order for the services and referred the patient to the hospital without being involved in managing treatment.


f. The CMS requires, at a minimum, general supervision by an appropriate physician or QHP in the provision of all therapeutic services to hospital outpatients, including Critical Access Hospital outpatients. "General supervision" is specified by 42 CFR 410.32(b)(3)(i), that is, the procedure or service is furnished under the physician's overall direction and control, but the physician's presence is not required during the performance of the procedure.


* The CFR has specific conditions of participation for outpatient services4 and states that if the hospital provides outpatient services, the services must meet the needs of the patients in accordance with acceptable practice.


a. The hospital must assign one or more individuals to be responsible for outpatient services and have appropriate professional and nonprofessional personnel available at each outpatient service location, based on the scope and complexity of outpatient services.


b. Outpatient services must be ordered by a practitioner who is:


i. Responsible for the care of the patient.


ii. Licensed in the state where he/she provides care to the patients.


iii. Acting within his/her scope of practice under State law.


iv. Authorized in accordance with State law and policies adopted by the medical staff and approved by the governing body to order the applicable outpatient services.


* The CMS has specific regulations pertaining to orders for services provided in PBDs. For a service to be covered in a PBD by Medicare,


a. Documentation should support the medical necessity of the PBD service,


b. a signed and dated physician's order for the service should be in the patient's medical record, and


c. documentation should show that the service was provided.



Further, i. the ordering practitioner must authenticate the services that are provided or ordered, and ii. the physician or QHP signature must comply with Medicare's signature requirements.5


As you can see, the regulations for providing ostomy care and wound care in a PBD are identical. If the nurse provides care for a skin condition near the ostomy site, the PBD should code for the appropriate level of wound visit. If the nurse provides ostomy care education, the PBD should code for a low-level clinic visit.


Scenario: During the COVID-19 Public Health Emergency (PHE), many NPs who normally provide care and education to patients with ostomies became concerned when patients could not/would not be seen in person. The NPs contacted this author to learn what services they could provide to these patients who needed care, despite the PHE.


Physicians and QHPs have many opportunities to provide care and education during the PHE. Because of the numerous PHE waivers, telehealth services can now be provided to new and established patients in their homes in any geographic location of the country. When the PHE is over, most of the waivers will end and normal telehealth regulations will resume. However, numerous communication technology-based services can be provided both during and after the PHE ends. Those that may be useful with patients with ostomies are as follows:


* Virtual check-in services with patients to determine if an evaluation and management (E/M) visit is necessary.


* Nonphysician "non-face-to-face online digital" E/M services for established patients.


* Remote assessment of recorded video and/or images submitted by an established patient.


* Virtual check-in services for established patients



If NPs have not offered these services to their patients with ostomies, they can read about the pertinent codes in the 2021 Current Procedural Terminology* code book, and about Medicare coverage by searching for the various services on




1. Centers for Medicare & Medicaid Services. Local Coverage Determination: Ostomy Supplies (L33828). January 2020. Last accessed April 13, 2021. [Context Link]


2. Centers for Medicare & Medicaid Services. Local Coding Article: Ostomy Supplies-Policy Article (A52487). January 2020. Last accessed April 13, 2021. [Context Link]


3. Medicare Benefit Policy Manual. Chapter 6, Section 20.5.2: Coverage of Outpatient Therapeutic Services Incident to a Physician's Service Furnished on January 1, 2010 through December 31, 2019. December 2020. Last accessed April 13, 2021. [Context Link]


4. US Government Publishing Office. 42 CFR [S]. October 2015. Last accessed April 13, 2021. [Context Link]


5. Medicare Learning Network. Complying with Medicare Signature Requirements. May 2018. Last accessed April 13, 2021. [Context Link]