Hold on to Toto, Dorothy, the winds of change are here, and it looks more like a tornado than a gentle breeze. This week, CMS published their proposed changes for OPPS, (Outpatient Prospective Payment System, which provides the rulebook on how outpatient provider based centers, which wound centers usually are, get paid) which was first implemented in 2000. Having been a director of a wound center at that time, I clearly remember the concern, angst, and general fear this approach fostered. However, with this weeks proposal from CMS, I am not hearing the wailing or gnashing of teeth I had anticipated. My guess is, that most people are just not paying attention! This revision, in my opinion, constitutes the most sweeping changes proposed for OPPS since it’s inception over 13 years ago.
Having read through the document this week, I can tell you that the writing is on the wall when it comes to the CMS goal of bundling all services. The first example is the replacement of all Evaluation and Management Codes, of which there are five separate CPT codes currently, with one single HCPCS G-code. This will have a significant effect on wound center revenue.
Another item to be aware of is the volume of products and services which will now be “packaged”, a nicer word for bundled payments. Certain debridement codes are to be removed, and proposed changes to biologic products could be devastating to that industry, reducing the tools that a center can use while remaining profitable.
This information presents a paradox for hospitals with wound centers. On one hand, the new regulations almost require facilities to have an experienced wound center management team to rely on for implementation of these sweeping changes, (documentation, process, training, regulations, financial review, etc.) however, there will also undoubtedly be a financial impact on hospitals necessitating the need to reduce expenses allowing for centers to remain profitable.
If you are paying $50 per visit, and only collecting $80, you may end up upside down fast, and I do not want to hear about how “downstream revenue” or “spinoff” will make up for it, or how hyperbaric oxygen will save the center, because I believe 1) It wont. 2) This is not an anomaly people, this is a trend with the ultimate goal of a bundled service across the continuum of care, and 3)Your center should stand on it’s own feet with everything else being gravy.
Looking at the entire healthcare landscape, wound centers will become even more vital to hospitals in the coming years to assist with reduction of length of stay, readmissions, and the ability to treat complex patients outside of the hospital, and even with these changes, will remain profitable if managed well, so I believe now is the time to review your center expenses and find options.
Wound Care Advantage has been helping hospitals transition from higher cost management contracts to a lower cost approach while focusing on collections allowing for both a reduction in expenses, and most commonly an increase in collections and profitability. ( My blog, so I get one shameless plug per entry!) If you are not sure how your center is currently doing, get a few stats on your center together, and visit our Center Report Card tool here. It will give you a general idea of how your current center is doing. If you are running your own program, give us a call, we may be able to provide a lot of assistance while paying for ourselves. (ok, I exceeded my shameless plug quota!) Our revenue response team has prepared our facility impact report already, so feel free to call if you would like to discuss how these proposed changes might affect your center.
Here is a great story on the changes from Health Leaders: http://www.healthleadersmedia.com/page-1/HEP-294021/OPPS-Proposed-Rule-Significantly-Affects-Coding