Q: I am a physician working in a hospital-owned outpatient wound care department (HOPD). We assess and manage the most difficult chronic wounds for patients who are also receiving home health care. Many of these wounds require advanced surgical dressings. Often when I write orders for surgical dressings that should be used by the patient at home, between HOPD visits, the home health care agency refuses to purchase them. Can you please explain the responsibilities home health care agencies have for purchasing surgical dressings that physicians order for patients covered by Medicare Part B?
A: A home health care agency is responsible for providing physician-ordered surgical dressings to manage a patient's wounds. The ordered dressings must be included in the HCPCS surgical dressing categories listed in the consolidated billing regulation for home health care agencies. If the dressings are not on the list, the agency is not required to purchase them.
Your first step is to determine the Medicare-verified HCPCS code(s) for the surgical dressings you want to order. Once you do that, check the consolidated billing HCPCS code list for home health care agencies. If the HCPCS codes of the dressings you are ordering are on the consolidated billing list, the home health care agency is responsible for purchasing the dressings.
Q: I am a podiatrist, and I manage most of the nonhealing chronic diabetic foot ulcers in our community. I use a variety of advanced wound care dressings. For the convenience of my patients, I have a Medicare durable medical equipment (DME) supplier number. When my Medicare patients need to change their dressings at home, between office visits, I offer them a choice of acquiring their surgical dressings from the DME supplier of their choice, or acquiring their surgical dressings from my DME supply business. I have been very careful to keep the surgical dressings that I purchase for my office separate from the surgical dressings that I purchase for my DME business. In my office, I never use the dressings that the patient has purchased for use at home.
Last week, another DME supplier made a sales call to my office (he did not know that I have a DME supplier number). He was hoping that I would refer my patients to his DME business for their surgical dressings. He said he would accept Medicare Part B assignment and that the patients could bring some of the dressings back to my office for me to use when I assess their wounds. That would save my office practice a considerable amount of money, he said.
Can you please clarify if podiatrists and physicians are no longer required by Medicare Part B to purchase surgical dressings that they use for office visits?
A: Nothing has changed: Physicians and podiatrists are still required to purchase and provide surgical dressings as part of their office practice for patients covered by Medicare Part B. Surgical dressings that DME suppliers provide to patients are for patients' use at home, between office visits. They are not for use in the office.
Remember, the evaluation and management codes and the CPT* codes you use have relative weights that take into account the surgical dressings that must be purchased to manage wounds. Medicare Part B pays 80% of the allowable charges; the patient pays the remaining 20% of the allowable charges. If the patient purchases surgical dressings from the DME supplier and then brings the dressings to your office, the patient is essentially being charged for dressings twice. The only way to prevent this overcharge would be for you to reduce your charges to the Medicare program and, in turn, to the patient.
I am not an attorney, so I am not qualified to evaluate the legalities of either a DME supplier offering free product in return for referrals that will be billed to the Medicare program or a physician/podiatrist using free surgical dressings instead of purchasing the surgical dressings for the office. If you are accepting the referral arrangement, you may want to discuss this practice with your attorney first.
You are currently doing a great job in following Medicare's surgical dressing supply regulations for both your office practice and your DME supplier business. Why not continue with business as usual?
Q: I am the program director of an HOPD. Medicare Part B covers most of our patients, and the Medicare Ambulatory Payment Classification (APC) system is our major payer. I have been purchasing all of the drugs, dressings, and biologics that we use in the HOPD. As I understand it, the APC payments that the HOPD receives are inclusive of drugs and dressings purchased for patients.
Last week, a consultant told our hospital administration that the HOPD should reduce costs by doing 1 of 2 things: (1) only use dressings and drugs that manufacturers provide as samples, or (2) cooperate with an outside DME supplier that provides dressings for use in the HOPD in return for referrals to provide dressings that patients will use at home (between visits to the HOPD).
This recommendation does not sound correct. Can you please comment?
A: Great work; you are managing your HOPD perfectly! Medicare sets its APC payment rates according to the costs associated with all the resources used in caring for patients. If HOPDs begin using free dressings and drugs, they will signal to Medicare that APC payment rates should be reduced.
The concept of using free samples (except in formal clinical studies and trials) is not sustainable over time: Corporate compliance regulations typically prevent manufacturers from supplying dressings and drugs to HOPDs in return for DME orders and prescriptions for patient use of these items at home. In addition, many hospital pharmacists do not allow HOPDs to dispense drugs that have been received free of charge and that have not passed through the pharmacy.
With regard to using free products supplied by DME suppliers, you should check with legal counsel before entering into such an arrangement.