Wound Care Articles and Insights

Five New Regulations to Watch for in 2018: CMS Reimbursement

Five New Regulations to Watch for in 2018: CMS Reimbursement

As the end-of-year countdown begins, we’re looking at changes that will impact the wound care industry in 2018. For the next several weeks, we’ll be running a series of insightful blog posts from our team of experts. Our first is from Rylan Smith, CFO.

Fall brings vibrant colors, homemade chili, championship baseball – and new CMS regulations for reimbursement! In reviewing upcoming changes for 2018, here are five takeaways that wound centers need to be aware of:

Supervision of hospital therapy services for critical access hospitals and small rural hospitals will reinstate the non-enforcement of supervision requirements. In the 2018 OPPS proposed rule, CMS revisits the moratorium on enforcement of the direct supervision rule for critical access hospitals and small rural hospitals with less than 100 beds. This is a positive development for these hospitals, because physician time is at a premium. The implication for hyperbarics is that it provides for some flexibility with direct supervision. We at Wound Care Advantage always recommend having a physician immediately available when a patient is in the chamber. This rule will extend the moratorium through 2019.

Skin Substitutes: Realignment of pricing while CMS determines whether existing methodologies are effective. For fiscal year 2018, there are no changes to the current methodology on how skin substitutes are categorized into “high cost” and “low cost” groups. They do specify in the Federal Register that, “the goal of the proposal is to maintain similar levels of payment for skin substitute products for CY2018 while CMS analyzes the current skin substitute payment methodology to determine whether refinements to the existing methodologies may be warranted.”1 We at WCA believe that CMS is preparing for the next focus item in wound care. Last year, CMS focused on HBO therapy and the documentation and medical necessity of the treatments. We believe that skin substitutes are next. If you have any concerns regarding your documentation, please consult your LCD. Many of the Medicare Authorized Contractors have specific medical policies that outline what conditions need to be met in order to justify medical necessity.

New ICD-10 on non-pressure related ulcers. A total of 72 new ICD-10 codes have been created for 2018. The purpose of these codes is to report ulcers that may have involvement of muscle or bone, but do not have evidence of necrosis. There are three main categories for the new code L97 (non-pressure chronic ulcer of lower limb, not elsewhere classified) and L98 (other disorders of skin and subcutaneous tissue, not elsewhere classified).
The categories are:

  1. Non-pressure ulcer with muscle involvement without evidence of necrosis
  2. Non-pressure ulcer with bone involvement, without evidence of necrosis
  3. Non-pressure ulcer with other severity.

Providers should be aware of these new codes and begin documenting them appropriately. Always make sure in your documentation that you are recording the severity of each wound, at each visit.

Reduction in payment for off-campus PBD. This was released through the Physician Fee Schedule proposed rule. Reimbursement has already been cut for off-campus provider-based departments to 50% of OPPS rates. The new rule would further slash reimbursement to 25% of OPPS rates. CMS is going through a process to ensure that services rendered are at the right site of service. If you have a non-exempt, off-campus provider based department, sustainability will be a challenge.

New trend of Targeted Probe & Educate (TPE). TPE is not a new tool, but an effective tool that CMS has authorized their contractors to use for HBO therapy. Two MACs, Palmetto and WPS, have already started using the TPE program. Palmetto completed its three rounds, with startling results of 72% of submitted claims denied. This accounts for over $11 million dollars in HBO treatments denied. WPS completed its first round and over 90% of the submitted claims were denied. Noridian just announced that they will begin their TPE. The majority of denials were directly related to documentation. Prepayment audits have become a trend. By performing a prepayment audit, the payer can determine, based on the documentation, if they agree with paying for services already rendered to the patient. If those services are denied, the provider cannot recoup those funds from the patient and, as a result, they simply provide medical services for free. This trend is not just limited to Medicare patients. Anthem Blue Cross also announced they will begin prepayment audits.

To no one’s surprise, 2018 looks to be continuing many of the trends we’ve seen for several years: increasingly stringent requirements, greater scrutiny, and decreases in payments. Programs that deliver appropriate care and document properly will still be successful, but those that push the proverbial envelope can expect to continue feeling the squeeze from CMS.

If you have any questions or concerns regarding your documentation or the changes for 2018, please let your Luvo Liaison know and a member of our revenue cycle team will contact you. If you’re not currently part of the Wound Care Advantage family, give us call at 888.484.3922. We’d be happy provide you with an assessment of your current documentation.