Why The Proposed 2014 Medicare Reimbursement Changes Will Harm Providers and Patients

Lee C. Rogers DPM

The Centers for Medicare and Medicaid Services (CMS) has published proposed changes to the Outpatient Prospective Payment System (OPPS) for 2014. Some of these changes will have a real impact on patients and providers.

1. A proposed change to the skin substitute policy to bundle payment of the graft and the procedure together.

Dermagraft (Shire Regenerative Medicine) (Q4106) and Apligraf (Organogenesis) (Q4101) are both FDA, premarket approved (PMA) products indicated for the treatment of diabetic foot ulcers (DFU). These are two of the only three products available in the United States with PMA for DFUs. The other is Regranex (Healthpoint Biotherapeutics). Randomized controlled trials have shown that Apligraf and Dermagraft are not only safe but effective in treating diabetic foot ulcers.1,2

The grafts cost about $1,500 and the physician fee allowable by Medicare is about $110. The 2014 OPPS proposed rule would bundle both payments together and allow $840, which is even less than the cost of the graft. No hospital or doctor can afford to absorb a $600 loss every time they use a product.

2. Proposed elimination of add-on codes for the area of debridement performed.

You may recall that in 2010, the CMS changed the OPPS to reimburse for the area of ulcer debrided instead of the number of ulcers debrided. The CPT billing codes reflected the first 20 cm2 of surgical debridement (11042-11044). Then if one debrided a larger wound, for every additional 20 cm2, one used an “add-on” code (11045-11047). That change resulted in a 22 percent reduction in revenue for wound care providers.3

The CMS is now proposing to eliminate the add-on codes altogether, which will reduce reimbursement even further. These codes are the same whether the patient receives treatment in a physician’s office, wound care center or operating room. Some wounds, like burns, venous leg ulcers or infections, are pretty extensive and require a time-consuming debridement to remove all devitalized tissue, especially if treatment occurs in the operating room.

The CMS’s new proposed rule to eliminate the add-on code discounts the skill and time required to perform an adequate surgical debridement, especially in larger ulcers. This rule change would penalize patients with larger wounds and the doctors who treat them.

3. Durable medical equipment (DME) proposed change to reclassify bone ultrasonic stimulators to a “capped rental” category.

Bone stimulators can help heal high-risk or non-healing fractures or fusions. Physicians frequently use these devices on or near an incision or skin ulcer in people with diabetes and the ultrasonic stimulators need ultrasound gel in direct contact with the skin to work properly. Due to the risk of contamination between patients, they are Class III medical devices approved by the FDA for single patient use only.

The CMS’s proposal to change these single use devices to a rental category implies that physicians can use the devices on multiple patients, which they cannot. This rule change threatens cross-contamination of patients, many of whom are in high-risk categories for infection (diabetes, vascular disease).

In Conclusion

Each of these changes will place patients at risk by limiting FDA approved options, reducing the number of providers treating wounds or risking infection by contradicting FDA indications.

It is imperative that doctors submit comments about these proposed rule changes. There is a public comment period through September 6, 2013 and you can choose to comment in two ways:

Submit electronic comments to www.regulations.gov . Follow the instructions under the ‘‘submit a comment’’ tab.

Send written comments to:

Centers for Medicare & Medicaid Services
Department of Health and Human Services

Attention: CMS–1601–P

P.O. Box 8013

Baltimore, MD 21244–1850

Please allow sufficient time for mailed comments to be received before the close of the comment period. Refer to the Hospital Outpatient Prospective Payment-Proposed Rule 2014.

Click here (www.tinyurl.com/OPPS2014 ) to watch a 10-minute video for more information on how these changes will affect you.


1. Marston WA, Hanft J, Norwood P, Pollak R; Dermagraft Diabetic Foot Ulcer Study Group. The efficacy and safety of Dermagraft in improving the healing of chronic diabetic foot ulcers: results of a prospective randomized trial. Diabetes Care. 2003;26(6):1701-5.
2. Veves A, Falanga V, Armstrong DG, Sabolinski ML. Apligraf Diabetic Foot Ulcer Study. Graftskin, a human skin equivalent, is effective in the management of noninfected neuropathic diabetic foot ulcers: a prospective randomized multicenter clinical trial. Diabetes Care. 2001; 24(2):290-5.
3. Rogers LC. Putting salt in my wound center; Lower reimbursement for preventative services will mean more amputations. Wounds 2011; 23:E4-5

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