Background
As outlined in our blog post " Skin Substitutes - What's New in 2023? Are Major Updates Coming Up?", in 2022 the Centers for Medicare and Medicare Services (CMS) proposed to change the terminology of skin substitutes (aka cellular and/or tissue-based products, or CTPs) to ‘wound care management products’ in order to accurately reflect how clinicians use these products, to provide a more consistent and transparent approach to coding for these products, and to treat and pay for these products as incident to supplies under the Physician Fee Schedule (PFS) beginning on January 1, 2024.
In the calendar year (CY) 2023 PFS Proposed Rule, CMS outlined several objectives related to refining skin substitute policies under Medicare, including:
- (1) ensuring a consistent payment approach for skin substitute products across the physician office and hospital outpatient department setting;
- (2) ensuring that appropriate HCPCS codes describe skin substitute products;
- (3) using a uniform benefit category across products within the physician office setting, regardless of whether the product is synthetic or comprised of human or animal-based material, to incorporate more consistent payment methodologies; and
- (4) maintaining clarity for interested parties on CMS skin substitutes policies and procedures.
Taking into consideration the feedback received by stakeholders since CMS announced this intention, CMS decided to take a phased approach over multiple rulemaking cycles to examine how CMS could appropriately incorporate skin substitutes as supplies under the PFS rate setting methodology.
As a result, the CY 2024 PFS Final Rule did not finalize any new proposals for skin substitute policies. Instead, CMS solicited comments from interested parties to help us consider an approach to pricing these products as supplies.
So what's new in 2024?
As mentioned above, the CY 2024 PFS Final Rule and the CY 2024 OPPS Final Rule included no new updates regarding skin substitute policies. Below is a summary on the current status of CMS regulations involving payment for skin substitutes/CTPs and HCPCS Level II Coding in 2024, grouped by relevance to Physician/ qualified healthcare professional (QHP) offices and hospital outpatient departments (HOPDs):
Payment for CTPs and their application in 2024
For physician/QHP offices
- For CY 2024, there was no change in the way CMS pays physician/QHP offices for CTPs and their application. (CY 2024 PFS Final Rule)
- Skin substitutes with a HCPCS A2XXX code: in regards to payment for FDA 510(k)-cleared biological and synthetic CTPs that have been assigned a HCPCS A2XXX code, QHPs should continue to use high-cost CPT codes and the corresponding HCPCS A2XXX code to report their application. (CY 2024 PFS Final Rule)
For HOPDs:
- For CY 2024, the packaged OPPS payment methodology for the application of CTPs remains the same.
- Background on CMS' high-cost and low-cost classification (MLN Matters MM13041) :
- The payment for CTPs that do not qualify for CMS Hospital Outpatient Prospective Payment (OPPS) pass-through status are packaged into the OPPS payment for the associated CTP application procedure. For OPPS payment purposes, CTPs fall in 2 groups:
- High-cost skin substitute products: to be used in combination with of one of the skin application procedures described by Common Procedural Terminology (CPT) codes 15271-15278
- Low-cost skin substitute products for packaging purposes: to be used in combination with one of the skin application procedures described by HCPCS code C5271-C5278
- Drugs and biologicals with pass-through status are listed in Tables 89-91 of the CY 2024 OPPS Final Rule (no skin substitutes/CTPs are listed).
- Skin substitutes with a HCPCS A2XXX code: hospital outpatient departments should continue to use high-cost CPT codes and the corresponding HCPCS A2XXX code to report application of FDA 510(k)-cleared biological and synthetic products that have been assigned a HCPCS A2XXX code, just like in the QHP office setting.(2024 OPPS Final Rule)
- For CY 2024, CMS will continue to assign any skin substitute product that is assigned a code in the HCPCS A2XXX series to the high-cost skin substitute group, including new products without pricing information.
- New skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series would be assigned to the low-cost category until pricing information is available to re-evaluate its classification. Also, HCPCS code A4100 (Skin substitute, fda cleared as a device, not otherwise specified) continues to be assigned to the low cost skin substitute group, consistent with CMS’ existing payment policy that unclassified graft skin substitute products be assigned to the low cost skin substitute group.
- HCPCS Code C1849 (Skin Substitute, Synthetic, Resorbable, by per Square Centimeter) should no longer be used, as CMS finalized its policy to retire HCPCS code C1849, which is the code that had been used under OPPS to report the usage of synthetic skin substitute products.
- 2024 OPPS National Average Allowable rates: application of CTPs (both high-cost and low-cost products) performed at HOPDs received OPPS payment increases compared to CY 2023. For current national average rates for the application of CPT codes 15271-15278 for high cost CTPs and HCPCS Level II codes C5271-C5278 for low cost CTPs, refer to the topic “Chargemaster Template for Hospital Outpatient Wound Care Services".
For both HOPDs and Physician/QHP offices:
- 2024 updates on skin substitute cost category assignment (high-cost or low-cost):
- For CY 2024, CMS changed categories of the following products (2024 OPPS Final Rule, Table 95):
- From the low-cost category to the high-cost category: Q4135 Mediskin, Q4218 Surgicord, Q4221 Amniowrap2, Q4250 AmnioAMP-MP, Q4253 Zenith Amniotic Membrane
- From the high-cost category to the low-cost category: no changes
- To find out which cost category (high cost or low cost) each CTP has been assigned to in CY 2024, visit Table 95 of the CY 2024 OPPS Final Rule "Skin Substitute Assignments to High Cost and Low Cost Groups for CY 2024".(2024 OPPS Final Rule, Table 95)
- Sheet versus powdered products: CMS continues to cover only CTPs that are in sheet form and not powdered skin substitute products (e.g. micronized sheet skin substitute broken down into particulate form).(2023 OPPS Final Rule)
- CMS interprets the term ‘‘skin substitute graft’’ as sheet skin substitute products that would be grafted in the wound area. According to CMS, a powder is not a graft even if the product forms a sheet scaffolding similar to a skin substitute product. If a skin substitute product is not a sheet product, then it is not described by the skin substitute graft application codes, and the product cannot be assigned to the high cost or low cost skin substitute groups.
- JZ and JW modifiers (skin substitute waste reporting):
- The JW modifier is used to report the amount of a drug or biological (like a skin substitute) that is discarded and not administered to the patient. The JZ modifier was introduced to be used when no drug amount is wasted during a procedure.
- In the 2023 PFS Final Rule, CMS finalized the proposal to require that billing providers report the JZ modifier (used when no drug amount is wasted) beginning no later than July 1, 2023. Also, CMS stated that it would begin claims edits for both the JW and JZ modifiers beginning October 1, 2023. CMS delayed reinforcement of the reporting requirement until October 1, 2023.
- In regards to how CMS will handle claims for skin substitutes reported with the JW modifier in a future payment methodology: in the 2024 PFS Final Rule, for CY 2023 and 2024, CMS finalized that JW units of skin substitutes will not be used for the discarded drug refund calculations and CMS will not issue reports to manufacturers with respect to skin substitutes.
- For clinical, reimbursement and documentation updates and checklists, see topic "Cellular and/or Tissue Based Products". For a list of LCDs and LCAs by MACs, see topic "Medicare Coverage Determinations for Wound Care".
HCPCS Level II Coding for CTPs in 2024
Summary:
- For CY 2024, CMS did not finalize any of the HCPCS Level II coding proposals described in the CY 2023 PFS Proposed Rule.(CY 2023 PFS Final Rules, CY2024 PFS Final Rule)
- CTPs have now HCPCS A codes or Q codes. HOPDs and QHPs should verify that their electronic health record, their charging system, and their coding and billing software are updated with the correct HCPCS codes for the CTPs that they use. For more information on the classification of skin substitutes, and HCPCS A or Q codes, see blog post "Skin Substitutes - What's New in 2023? Are Major Updates Coming Up?"
This page will be updated as new updates arise.
Resources
About the Authors
Elaine Horibe Song, MD, PhD, MBA
Dr. Song is a Co-Founder and Chief Executive Officer of WoundReference, Inc., a clinical and reimbursement decision support & telemedicine platform for wound care and hyperbaric clinicians. With a medical, science and business background, Dr. Song previously served as medical director for a regenerative medicine-focused biotech company in California, and for a Joint Commission International-accredited hospital network. Dr. Song also served as a management consultant for Kaiser Permanente, practiced as a plastic surgeon in private practice and academia, and conducted bench and clinical research in wound healing, microsurgery and transplant immunology. Dr. Song holds a position as Affiliate Professor, Division of Plastic Surgery, Federal University of Sao Paulo, and is a volunteer, Committee Chair of the Association for the Advancement of Wound Care. She has authored more than 100 scientific publications, book chapters, software registrations and patents.
Tiffany Hamm, BSN, RN, CWS, ACHRN, UHMSADS
An Advanced Certified Hyperbaric Registered Nurse and Certified Wound Specialist with expertise in billing, coding and reimbursement specific to hyperbaric medicine and wound care services. UHMS Accreditation Surveyor and Safety Director. Principal partner of Midwest Hyperbaric LLC, a hyperbaric and wound consultative service. Tiffany received her primary and advanced hyperbaric training through National Baromedical Services in Columbia South Carolina. In 2021, Tiffany received the UHMS Associate Distinguished Service Award. "This award is presented to individual Associate member of the Society whose professional activities and standing are deemed to be exceptional and deserving of the highest recognition we can bestow upon them . . . who have demonstrated devotion and significant time and effort to the administrative, clinical, mechanical, physiological, safety, technical practice, and/or advancement of the hyperbaric community while achieving the highest level of expertise in their respective field. . . demonstrating the professionalism and ethical standards embodied in this recognition and in the UHMS mission.”
