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Navigating Reimbursement for Wound Care Dressings

It is becoming increasingly difficult to be involved in wound care at any level without having a working knowledge of the intricacies of varying policies regarding surgical dressings for wounds. Care setting, Medicare Administrative Contractor (MAC) for your geographic region and pertinent DME Local Coverage Determinations (LCD), type of dressings desired, and wound assessment are all factors that clinicians responsible for ordering supplies should be aware of. For practical purposes, we will mainly discuss Medicare as a reference for payors, as many commercial, contracted, and private payor policies are modeled after Medicare* policies.

Care Setting

Hospital-Based Outpatient Department (HOPD): Many wound related procedures performed in HOPDs have the supply charge bundled into the procedure, meaning supplies used during the procedure are not separately payable. This is a motivating factor for HOPDs to select cost-effective products to utilize during patient visits. For other products which are separately payable, such as CTPs (cellular and/or tissue based products), or casting supplies, the HOPD must weigh the cost of the item versus the allowable amount per individual payor. Some payors may reimburse more than the cost of the item, while others reimburse less.

Acute Care (hospital or long-term acute care hospital): For long-term acute care hospital and acute care stays, the Diagnosis-Related Group (DRG) system dictates the total payable cost for a given diagnosis (i.e. a lump sum payment based on what Medicare determines the cost should be for treating a patient with a given diagnosis).

Like HOPD billing, the DRG system drives facilities to remain vigilant of cost with regard to wound dressing supplies for the duration of the patient's acute stay. Facilities prefer to order items on contract from vendors in bulk (several cases) in lieu of 2-3 boxes of a given item which can require special order. This can be difficult for clinicians with varying brand preferences and can potentially increase cost of care.

Long-Term Care/Nursing Home (skilled or long-term care/assisted living): Long-term care (LTC) billing is slightly more complex, and varies depending on if the patient is receiving skilled nursing services (Medicare part A-hospital insurance), or long-term care services (Medicare part B-medical insurance). Some of the same cost issues that plague acute care facilities also affect long-term care.

Patient's Home: The community-dwelling patient with wound care needs will either be performing self-care, using the assistance of a caregiver, or receiving home health services. Medicare part B will be utilized in all of these scenarios. If home health is involved, Medicare will be paying the company for services under the Home Health Prospective Payment System (HHPPS).

Home health companies may be reluctant to utilize certain products if they become cost-prohibitive for the total reimbursement of the patient encounter. It is imperative that clinicians in the outpatient setting work with home health to ensure the patient's encounter, including cost of supplies, is feasible for the home health entity.


MACs serve a distinct geographical area and dictate regional reimbursement schedules for facility and provider entities. Some regional MACs may have guidelines which are more restrictive than nationally proposed rules, and some may be less so. Be sure to know your governing MAC, and become familiar with their website and regional representative in the event questions arise.

LCDs are created by MACs to determine coverage for a given service line by Current Procedural Terminology (CPT). For example, an area covered previously by one MAC which has transitioned to another may not cover the same services.

Wound Assessment and Demystifying Dressing Types

The payor's surgical dressing policy requires that supply orders contain documentation of wound exudate, size, and depth. Of course, the wound has to have been made surgical at some point to even receive covered supplies (i.e. some documented form of debridement). Some situations can become problematic, such as when wounds cover a large contiguous surface area.

For example, a patient with a partial-thickness burn to the entire right arm may have a provider order for daily hydrogel, covered with 4x4's and roll gauze. The 4x4's and roll gauze are likely feasible, however the monthly hydrogel filler limit of 3 ounces per wound would preclude this dressing regime from being possible unless the patient were to pay out of pocket for additional units of the hydrogel.

All wound dressings eligible for reimbursement will have an assigned Healthcare Common Procedural Coding System (HCPCS) code that corresponds with a surgical dressing category. Identifying categories that dressings belong to without this number can be cryptic. Often products have names and descriptions that do not necessarily depict what HCPCS category they belong to. Additionally, some dressings claim that they are appropriate "for any exudate level", which can be appropriate clinically, but the dressing itself may not be coded accordingly. For example, if such a dressing is coded as a hydrogel, the surgical dressing DME policy dictates it is only eligible for use on wounds with a documented assessment of small or less exudate.

Another prominent example is the use of foam dressings for pressure relief or protection with neuropathic or pressure ulcers. This makes clinical sense, but unless the documented wound assessment demonstrates a minimum of moderate exudate, the foam is non-covered. Each surgical dressing category has utilization requirements, including what wound type it can be used for and the allowable dressing quantity. This concept is understandably difficult for clinicians because clinical judgment is involved when selecting wound dressings, but the payor rules unfortunately trump that judgment.

Let's take a collective breath. We have touched on the bare basics of the wound supply game (sometimes it feels more like a game than medical care). After reading this, you may be thinking wound supply management could easily be a small novel. Taking care of our patients often requires a great deal of "behind the scenes" work in order to ensure they receive the necessary supplies during the course of wound treatment. Obviously, cost is a common factor regardless of care setting. Understanding the payor rules and how to navigate the wound dressing landscape will serve to expedite the patient care process, and promote longevity for the care entity.

*Do not forget that all payors have an ombudsman who is available to answer questions about any policy. Having the contact information for the ombudsmen of commonly used payors can be very time saving!

The following links are from the Medicare website. Other payors may not list their policies online, but will usually email or fax upon request.

Find your MAC…

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Find HCPCS Codes…

I thank you for taking the time to read my blog. I enjoy learning through the feedback of others, so please feel encouraged to share your thoughts, ideas, and experiences! Until we blog again...I leave you with this quote:

"A mind needs books like a sword needs whetstone."
-Tyrion Lannister, Game of Thrones

About the Author
Samantha Kuplicki is board certified in wound care by both the American Board of Wound Management as a Certified Wound Specialist (CWS) and by the Wound, Ostomy and Continence Certification Board as a Certified Wound Care Nurse (CWCN) and Certified Foot Care Nurse (CFCN). She serves on the American Board of Wound Management (ABWM) Examination Committee and also volunteers for the Association for the Advancement of Wound Care.

Disclaimer: Information regarding coding, coverage and payment is provide as a service to users. Every effort has been made to ensure the accuracy of the information. However, Kestrel Health Information, Inc. and its subsidiaries do not represent, guarantee or warranty that the coding, coverage and payment information is error-free or that payment will be received. Users should always verify coverage policy, medical necessity requirements and coding instructions, and should review bulletins issued by the specific payor.

The views and opinions expressed in this blog are solely those of the author, and do not represent the views of WoundSource, HMP Global, its affiliates, or subsidiary companies.