Knowledge Base Article

Have you noticed that when Medicare changes the rules, you are always working to come up with new processes to deal with the changes? Such was the case with the numerous revisions finalized for OPPS for 2014. Hopefully since it is now the middle of March, most hospitals have the new processes in place. But we thought it would be a good reminder to review the new requirements and some suggested process revisions for Skin Substitutes.

The 2014 OPPS Final Rule contained a lot of changes, one of which was the packaging of skin substitute products for 2014. Medicare now considers these products to be in the category of “drugs and biologicals that function as supplies or devices when used in a surgical procedure” so in 2014 Medicare will not make a separate payment for the product itself. The payment for the product is “packaged” into the payment for the application procedure.

The good news is that due to comments from the proposed rule, Medicare created two levels of payment for the application of skin substitutes based on whether the skin product was high or low cost. The addition of new HCPCS codes to accommodate the differential application codes requires hospitals to have processes to ensure the correct application code is billed with the correct type of skin product. The payment rates for application of a high-cost substitute are more than double the low-cost substitute application for most codes so the process is definitely important.

High-cost skin substitutes will continue to be billed with the current CPT skin substitute application codes, 15271-15278. The application of low-cost skin substitutes are to be reported with new HCPCS codes C5271-C5278. Note that the HCPCS codes are the same as the CPT codes with the beginning numeral “1” replaced with a “C” (for example CPT 15271 equates to HCPCS C5271).

Hospitals will have to consider if skin substitute application codes are built into the Charge Description Master (CDM) and selected when a charge is entered by the department or if the applications are coded by Medical Records coders. If these codes are built into the CDM, you will now have to have two sets of application charges, one for high-cost substitutes and one for low cost substitutes. Instead of eight items, you now have sixteen CDM entries.

Then the person selecting the charge in the department or the coder selecting the code will have to know whether a high-cost or low-cost skin substitute was applied. See the table (link) at the bottom of this article for a list of high and low-cost skin substitutes. This table includes the changed assignment of two skin products from the April OPPS update. For department charge entry, the superbill or charge sheet will need to be revised to reflect the new application codes. Coders will have to be careful in their selection of codes; automated coding systems may have edits to assist in assigning the proper codes.

Finally, Medicare has installed edits on their billing systems to identify mismatches between the skin substitute product and the application code. Claims hitting these edits will RTP (return to the provider) for correction. Billers will have to be made aware of what the RTP issue is and how to correct it. It is likely they will have to communicate with the department or coders to determine the proper correction.

As I stated above, it is always a process when dealing with Medicare. Guess that means job security for those of us who track and handle compliance with Medicare regulations.

Skin Substitute Product Assignment to High Cost/Low Cost Status for CY 2014