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WoundReference Editors WoundReference Editors, | Updated on Oct 25, 2022

As announced in July of 2022the Centers for Medicare and Medicaid Services (CMS) is proposing several changes to their policies for skin substitute products (aka cellular and/or tissue-based products or CTP) to streamline the coding, billing, and payment rules and to establish consistency in how CMS codes and pays for these products across various settings. Specifically, CMS is proposing to change the terminology of skin substitutes 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 PFS beginning on January 1, 2024.

Additionally, CMS is soliciting feedback on our key objectives related to skin substitute policies, which include:

  • (1) ensuring a consistent coding and payment approach for skin substitute products across the physician office and hospital outpatient department setting;
  • (2) ensuring that all skin substitute products are assigned an appropriate HCPCS Level II code, including proposal regarding what documentation is necessary to provide CMS for currently marketed and future products;
  • (3) using a uniform benefit category across products within the physician office setting, regardless of whether the product is synthetic or comprised of material, so we can incorporate payment methodologies that are more consistent; and
  • (4) maintaining clarity for interested parties on CMS skin substitutes policies and procedures.

The Alliance of Wound Care Stakeholders alerted CMS that changes to the way cellular- and/or tissue-based products for skin wounds are coded and paid for in the physician office under the proposed 2023 Physician Fee Schedule could create barriers to care that could ultimately lead to increased amputations and infections for patients with chronic non-healing wounds. The Alliance urged CMS to remove or delay implementation of the proposed CTP provisions from the final 2023 Physician Fee Schedule until patient access issues can be further studied.

Summary of proposed changes regarding payment for skin substitutes 

See proposed changes in their entirety on the Federal Register 

Changing the Terminology of Skin Substitutes

CMS is proposing to replace the term “skin substitutes” with the term “wound care management” or “wound care management products.” CMS believes this new term more accurately describes the suite of products that are currently referred to as skin substitutes while providing enough specificity to not include bandages or standard dressings, which are not considered real skin substitutes as they do not actually function like human skin that is grafted onto a wound. CMS recognizes that the proposed term could cause confusion with the care management series or Evaluation or Assessment and Management (E/M) codes of AMA CPT codes. But they also considered alternate terms such as wound coverings, wound dressings, wound care products, skin coverings and cellular and/or tissue-based products for skin wounds and still believe the proposed terms are more technically accurate and descriptive for how these products are used than the alternative's considered. 

Revising Payment for Skin Substitutes

In order to ensure we treat skin substitutes consistently in terms of coverage, coding, and payment, CMS proposes that skin substitute products that are commonly furnished in the physician office setting be considered as incident to supplies in accordance with section 1861(s)(2)(A) of the Act, effective January 1, 2024. “Incident to supplies” refers to supplies that are furnished as an integral, although incidental, part of the physician's personal professional services in the course of diagnosis or treatment of an injury or illness (§ 410.26). Under CMS' proposal, in the office setting, CMS would no longer pay separately for skin substitute products under the ASP+6% payment methodology.

  • CMS believes that the suite of products referred to as skin substitutes should be treated in a uniform manner across different outpatient care settings. In terms of payment for these products within the office setting, CMS acknowledges the current variation between contractor pricing for synthetic skin substitute products and payment based on ASP+6% for non-synthetic skin substitute products; and also the challenges to the clear categorization of products as synthetic or non-synthetic. As a result, CMS believes establishing a consistent framework for how these products are treated within the physician office and hospital outpatient settings will help ensure equitable access and appropriate payment for these services.
  • Treating these products as incident to supplies would mean that the resource costs for these products would be included in establishing PE relative value units (RVUs) for the associated physicians' service with which they would be furnished. For example, for CPT Code 15271 (application of skin substitute graft, leg or ankle), we establish the PE RVU by considering three separate categories of PE resource costs involved in furnishing the service: clinical labor, supplies, and equipment. Together, these costs are the total direct PE resource inputs. When considering these skin substitute products as a supply, CMS would add their associated cost to the direct PE inputs for the service with which the product is furnished.
  • CMS further proposes to establish “A” codes for all skin substitute products meeting the criteria for a HCPCS Level II code, and propose to contractor price these codes effective January 1, 2024.
  • For CY 2023, skin substitute products that were previously assigned Q codes will continue to be paid under the current ASP+6% payment methodology.

Summary

To summarize, CMS proposes to treat skin substitutes (including synthetic skin substitutes) as incident to supplies as described under section 1861(s)(2)(A) of the Act when furnished in non-facility settings and to include the costs of these products as resource inputs in establishing practice expense RVUs for associated physician's services effective January 1, 2024. This proposal would mean skin substitutes are treated in the same manner for purposes of payment when furnished in non-facility settings, and would be consistently contractor priced through CY 2024. Given these significant changes, CMS believes maintaining the current treatment of these products for purposes of payment during CY 2023 will aid interested parties through the transition. CMS also proposes to discontinue the use of the term skin substitutes beginning January 1, 2024 and to instead refer to this suite of products as “wound care management products.” CMS is soliciting feedback on their proposals.

About the Authors

WoundReference Editors,
The WoundReference Editorial Board is comprised of wound care and hyperbaric medicine clinicians with a diverse background, such as physicians, advanced practice registered nurses, physician assistants, wound continence and ostomy nurses, hyperbaric technologists, therapists, nutritionists and more.
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