1. Schaum, Kathleen D. MS

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For the past few months, this author has received an unusually high number of questions about Healthcare Common Procedure Coding System (HCPCS) codes. The questions were submitted by a variety of wound/ulcer management stakeholders. Below you will find a summary of these frequently asked questions. The answers may help you understand why this author often tells wound/ulcer management stakeholders that "just because a service, procedure, or product has a code does not mean it will be covered and separately paid by Medicare."


Question from Wound/Ulcer Management Nurse: When I worked in a hospital-owned outpatient wound/ulcer management provider-based department (PBD), we always reported the surgical dressings applied at each encounter in our charging system and on our Medicare claims. I now work as a wound care nurse in a physician office that specializes in wound/ulcer management. To allow the practice to recoup the cost of the advanced dressings that I apply, I want to report the surgical dressing HCPCS codes into our charging system and on our Medicare claims. The office coders will not place the dressing HCPCS codes onto claims because they say that Medicare does not separately pay physician offices for dressings. Can you explain why the PBD reports and gets paid by Medicare for wound dressings but the physician office does not?


A: Just because some PBDs report the HCPCS codes for the surgical dressings their wound care nurses apply does not mean that Medicare separately pays the PBDs for the dressings. Because costs reported on PBDs' claims help Medicare assign services and procedures to appropriate ambulatory payment classification (APC) groups in future years, many PBDs choose to separately report the surgical dressings applied by wound care nurses. However, the Medicare payment for each APC group is all-inclusive. Medicare does not separately pay for the dressings that are reported on the PBD claims.


The Medicare payment system for physician offices differs from that for PBDs. Physician office charges do not impact their Medicare payment in future years. The Medicare Physician Fee Schedule assigns relative value units to each service and procedure. Physician office practice expenses, including the cost of surgical dressings, are a component of these units. Therefore, physician offices have no reason to report surgical dressings on their Medicare claims, even though the dressings have assigned HCPCS codes.


Question from PBD: Many surgical dressings we use in the PBD have HCPCS codes, but our hospital only chooses to report the HCPCS codes for products that cost more than $25.00. Would our PBD's Medicare payment increase if all the surgical dressings with HCPCS codes were reported on our claims?


A: No. The PBDs do not receive extra payment for supplies reported on their Medicare claims. They only receive payment for the services or procedures performed, which includes payment for the supplies. Finance departments have different philosophies about reporting supplies on Medicare claims: some do not want their PBDs to report any supplies, some want their PBDs to report all the supplies used, and others only want their PBDs to report supplies with costs above a certain level. No matter what supply cost reporting decision is made, the Medicare payment for the PBD encounter is not impacted. However, reporting some or all supply costs can positively impact future years' APC assignments/payments.


Question from Physician Office: The standard of care for diabetic foot ulcers is to offload the pressure from the ulcer. Our physicians always select offloading boots that have verified HCPCS codes. In nearly every instance, Medicare denies our claims for the offloading boots. Will you please review the physician documentation and reported diagnosis/product codes to identify why the claims are denied?


A: When this author reviewed the office documentation and the reported diagnosis code(s), it was clear that Medicare does not cover the device if its primary purpose is for offloading to remove pressure on a wound/ulcer. The boots that were ordered are considered ankle-foot orthoses and are covered under the Medicare Braces Benefit (Social Security Act [S]1861(s)(9)). For coverage under this benefit, the orthosis must be a rigid or semirigid device used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body. In other words, Medicare only covers these products for orthopedic conditions, not for wound/ulcer management.


If the patient has an orthopedic condition such as lateral ankle instability, Charcot foot, degenerative joint disease of ankle and rearfoot, adult-acquired flatfoot, tendinopathy of the ankle, and so on, the physician's documentation of goals and objectives and X-ray results should be clear evidence that the boot was ordered for the orthopedic condition. If the patient also has a diabetic foot ulcer, the physician's documentation for the wound/ulcer should be totally separate and should clearly describe the procedure and products that were medically necessary to manage the wound/ulcer.


Question from Durable Medical Equipment (DME) Supplier: We supply many types of surgical dressings that have verified HCPCS codes to patients for use at home. Over 100 cellular and/or tissue-based products (CTPs) for skin wounds (outdated term, "skin substitutes") have HCPCS codes. Why are we not allowed to supply the CTPs to patients for their use at home and use the HCPCS codes to bill Medicare?


A: Surgical dressings are covered under the durable medical equipment, prosthetics, orthotics, and supplies Medicare benefit. The DME suppliers may bill for surgical dressings that have verified HCPCS codes and used by the patient in their home. However, CTPs are covered under the drug and biological Medicare benefit and are not administered via any covered equipment. Therefore, DME suppliers cannot purchase and supply CTPs to patients for use in their home. In fact, CTPs are aligned with surgical procedure codes for their application.


When physicians apply CTPs in their offices, they purchase the products and bill Medicare for both the product (using the appropriate HCPCS code) and the application (using the appropriate Current Procedural Terminology [CPT]1 code(s) 15271-15278). NOTE: The application code and the product code must appear on the same claim.


When physicians apply CTPs in PBDs, the PBDs purchase the products and bill Medicare for both the product (using the appropriate HCPCS code) and the application (using the appropriate CPT code(s) 15271-15278 for high-cost products and C5271-C5278 for low-cost products). However, the PBDs do not receive separate payment for the CTPs. Instead, the product payments are packaged into the PBDs' high- and low-cost application payments. NOTE: The application code and the product code must appear on the same claim. In this scenario, the physicians only bill for their work by using the appropriate CPT code(s) 15271-15278.


Question from Sales Representative: Our multilayer compression bandage system has been assigned several HCPCS codes. We have provided those codes to DME suppliers, but the suppliers told us they cannot use those HCPCS codes because most of their compression bandage system customers are home health agencies, physician offices, and PBDs. Is it true that DME suppliers cannot bill Medicare in these scenarios?


A: Yes, the DME suppliers are correct for the following reasons:


* When a Medicare beneficiary receives care from a home health agency, the agency is responsible for purchasing the surgical dressings. Therefore, the DME supplier must sell the multilayer compression bandage systems to the home health agency; the DME supplier cannot bill Medicare for the dressings.


* When a Medicare beneficiary goes to a physician office or to a PBD for wound assessment and to have their multilayer compression bandage system (re)applied, the physician office and PBD are responsible for purchasing the product. The office and PBD then bill for the procedure, which includes the product, by reporting CPT code 29581 Application of multi-layer compression bandage system: leg (below knee), including the ankle and foot. Therefore, the DME supplier must sell the multilayer compression bandage system to the physician office and PBD. In this case, neither the DME supplier, nor the physician office, nor the PBD can bill the Medicare program separately for the multilayer compression bandage system. NOTE: Physician offices and PBDs cannot use any surgical dressings, including multilayer compression bandage systems, which patients bring from home.



Because most Medicare beneficiaries or their family members cannot correctly apply multilayer compression bandages, DME suppliers would rarely supply those bandage systems directly to patients. Therefore, DME suppliers would rarely use the HCPCS codes assigned to multilayer compression bandage systems.


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