Medicare payment issues for physicians specializing in skin and wound management

Advances in Skin & Wound Care,  Jan/Feb 2003  by Schaum, Kathleen D

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Q: In your July/August 2002 Payment Strategies column, you reviewed payment increases and decreases for procedures performed in hospital-owned outpatient wound care departments. Do those same payment rate changes apply to physicians who perform those procedures?

A: The answer is definitely no. This question, which was asked by more than 100 physicians who phoned or sent E-mails to me, focuses attention on the confusion skin and wound care professionals have regarding the various Medicare payment systems throughout the continuum of care.

When professionals share Medicare payment system information, they should clarify the provider, place of service, and payer/payment system that they are discussing. The July/August 2002 column clearly identified that the provider and place of service was the hospital-owned outpatient department and the payer/payment system was the Medicare Prospective Payment System, called Ambulatory Payment Classification (APC). The fees discussed in that column were the hospital-owned outpatient department's payment for the work provided in that department.

Physicians are paid by Medicare for the their services according to the Resource-Based Relative Value System (RBRVS) and according to the place where they provide the service.

Q: Can you clarify the place of service codes that physicians should use on Medicare claims?

A: The Medicare Physician's Fee Schedule delineates different payment fees (facility and nonfacility) based on the places where physicians provide services. The nonfacility fee is higher than the facility fee because (1) physicians typically incur the cost of the resources associated with the service, and (2) Medicare also pays the facility for the clinical staff, supplies, and equipment needed to care for the patient in the facility. Effective January 1, 2003, the Centers for Medicare and Medicaid Services (CMS) implemented new place of service codes and new nonfacility/facility designations (Table 1).

Q: What codes can physicians use to bill for wound care dressings used in their office practices?

A: Surgical dressings are included in the practice management component of the Medicare Physician's Fee Schedule. Therefore, physicians are expected to purchase and provide, without additional payment, the primary and secondary dressings and securement products needed to dress wounds during office visits.

This question is frequently asked because physicians know they can bill Medicare when they apply Unna boots or multilayer sustained graduated high compression bandage systems. Keep in mind that physicians are paid by Current Procedural Terminology (CPT)* codes, which represent (1) their evaluation and management skills, and (2) procedures they perform. In the case of Unna boots and compression systems, physicians are paid for the application procedures. From the money physicians receive for those procedures, they must perform the work and purchase the products used during the applications. In essence, the dressings are "incident to" the procedure because surgical dressings are "incident to" either the evaluation and management or the procedure codes and are not separately payable.

Q: When surgical debridement services are performed in physicians' offices, should physicians bill with the 11040 to 11044 or the 97601 to 97602 debridement CPT codes?

A: In that explicit case, the 11040 to 11044 range of CPT codes are appropriate. The CPT codes 97601 and 97602 were introduced in the physical medicine and rehabilitation section of the 2001 CPT book. Their purpose is to report interventions associated with active wound care management performed by nonphysician health care providers.

The answer to this question would be different if you were not in the office suite and a nonphysician health care provider performed the debridement. Then either 97601 or 97602 would be the appropriate CPT code to use, depending on whether the debridement was selective or nonselective. Remember that the removal and application of dressings associated with these debridement techniques are considered part of the work associated with the procedures and should not be reported separately.

Q: Did physicians who specialize in skin and wound care receive any new billable HCPCS codes in 2002?

A: Yes. Medicare issued a national coverage decision to cover services provided for the diagnosis and treatment of diabetic sensory neuropathy with loss of protective sensation (LOPS) (diabetic peripheral neuropathy) effective for services on or after July 1, 2002. Medicare covers an evaluation of the feet no more than every 6 months for individuals with a documented diagnosis of diabetic sensory neuropathy and LOPS, as long as the beneficiary has not seen a foot care specialist for some other reason in the interim. The HCPCS codes that represent that work are: G0245-Initial physician evaluation and management of a diabetic patient with diabetic sensory neuropathy resulting in LOPS, which must include:

* the diagnosis of LOPS

* a patient history