The Centers for Medicaid and Medicare Services (CMS) recently released the 2014 coverage decisions for the Hospital Outpatient Prospective Payment System (OPPS). Many of the changes will affect both in wound care centers and outpatient surgeries in hospitals.
These changes will not directly affect physician reimbursement but they will limit what modalities physicians can use in hospitals and ambulatory surgery centers (ASCs). This will directly affect our patients and the available procedures we can perform.
Until now, CMS has reimbursed more for treating larger wounds when one utilized add-on codes. For example, if a podiatrist debrided a wound down to muscle that had an area of 60 cm2, he or she would use the codes 11043 (debridement of muscle up to 20 cm2) and 11046 (debridement of muscle each additional 20 cm2) x 2. However, the new coverage decision eliminates several of the add-on codes. Table 1 (left) shows the add-on codes relevant to wound care that will be eliminated.
CMS has also decided to bundle the cost of skin substitutes with the facility fee. In a hospital or ambulatory surgery center, the cost of the skin substitutes used to be paid separately with a Q code. However, now CMS will only pay for the facility fee and consider the graft part of that fee. CMS divided the skin substitutes into high cost and low cost groups. The high cost group will have a bundled reimbursement to the facility at an average $1,371.19 and the low cost group will be approximately $409.41, both indexed for geography so some areas will be higher than average and some areas lower.
But even the proposed high cost reimbursement is below what some of these products cost. In order to be viable, manufacturers and distributors will have to lower the cost significantly to allow the hospital to make a profit in the bundled payment. Table 2 (right) shows the products in the high cost and low cost groups. Two products, both placental/amniotic tissues, were given an exemption by CMS for one year. Accordingly, they will still be reimbursed by size with the Q code in 2014.
However, if you are not using an exempt product and you have a large wound requiring more skin substitute to cover the wound, CMS will not pay for any additional graft. This places patients and their hospitals that are treating wounds larger than about 4 inches in diameter (one piece of Dermagraft® or Apligraf®) at a disadvantage. CMS basically says they don’t care how large the wound is or how much product will be necessary to cover the wound. They are only paying one fee, period.
These changes will be very problematic for some manufacturers. The CEO of Organogenesis, the manufacturer of Apligraf (listed at $1,700 per piece), announced the company will undergo a major reorganization and the company will be "cutting everything that doesn't involve manufacturing, marketing or selling of Apligraf."1 Integra, which was placed in the low cost bundle, has a 2014 list price of $2,691 for a 2X2 inch piece of bilayered product. While researchers just completed a DFU trial with Integra attempting to show efficacy in the outpatient arena, the pricing of Integra is far above the average bundled payment of $409 for outpatient use. This essentially eliminates the potential of Integra for outpatients.
In our health system, in which manufacturers charge hospitals for products and hospitals charge patients for care, CMS is placing pressure on manufacturers by holding the hospitals accountable to contain cost. However, physicians, who may be employed by the hospital or be completely independent, are making the decisions with the patient on which products are necessary for his or her care. The fighting between the various interests involved will undoubtedly lead to worse care for patients with a lack of product availability or doctors will jump to split thickness skin grafting earlier, which comes with the added risk of surgical morbidity and complications with the donor site.
Again, these changes don’t affect physician reimbursement directly but there will be added pressure on physicians by hospitals to choose cost-effective therapies for hospitals, and we should be aware of them. The changes will take effect January 1, 2014.
Happy New Year!
1. Radick L. Organogenesis prepares to restructure in the face of new CMS skin-substitute policy. Available at http://www.elsevierbi.com/publications/health-news-daily/2013/12/19/orga...  . Published Dec. 19, 2013. Accessed Dec. 27, 2013.