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Reimbursement Round-up: Wound Care "Wins" in Bipartisan Budget Act of 2018

Reimbursement Round-up

Reimbursement Round-up: Wound Care "Wins" in Bipartisan Budget Act of 2018

This occasional column is published to share important reimbursement updates with OWM readers.

Although the news media focused on the February 9, 2018 signing of the Bipartisan Budget Act of 2018 because it ended the government shutdown, the wound care industry received some “wins” that were not well-publicized. This article reviews some of the major wins that may pertain to you and/or your wound care peers.  

 Removed “Direct Supervision” requirements for outpatient wound care departments in critical access hospitals (CAHs). Hospital-based outpatient wound care provider-based departments (PBDs) are required to have direct physician supervision when Medicare beneficiaries are receiving therapeutic services. However, those same departments in CAHs were exempt from the direct supervision requirement until 2014, when the Centers for Medicare and Medicaid Services (CMS) announced they were going to enforce the direct supervision requirement for CAHs. At that time, Congress stepped in and prevented the CMS from enforcing the CAH direct supervision requirements for 2014, 2015, and 2016. 

However, Congress did allow the CMS to enforce the direct supervision requirement in CAHs effective January 1, 2017. That new direct supervision requirement surprised and caught the CAHs offguard, especially those that did not have the availability of physicians or other qualified healthcare professionals who could be immediately available when patients were receiving care in the outpatient wound care PBDs. Therefore, many of those CAH wound care PBDs operated in 2017 without direct supervision, which put them in a possible audit/repayment situation. The CMS suspended enforcement of direct supervision in CAHs for 2018 and 2019, but that still left those facilities in an audit/repayment situation for 2017.

The big win for the CAH outpatient wound care PBDs is that the new law suspended enforcement of the direct supervision requirement for 2017. This action should prevent the CAHs that did not have direct supervision that year from noncompliance audits and repayments. 

Moved full implementation of the cost performance category in the Merit-Based Incentive Payment System (MIPS) to 2023. Even though required by the Medicare Access and CHIP Reauthorization Act, the physicians’ MIPS did not include the cost performance category in its first year. The CMS reported this was due to a lack of cost quality measures. 

The cost performance category was supposed to be phased in over 3 years and be weighted at no more than 10% in the first year of the MIPS program, no more than 15% in the second year, and no more than 30% in the third year. Because the cost performance category was a year late in starting, the CMS announced it would be weighted at 10% in 2018 and 30% in 2019; that would have been a large increase in just 1 year. 

The big win for physicians is that the new law pushed the timeline for implementation of the 30% weighting of cost performance until 2023. Therefore, physicians do not have to worry about the cost performance MIPS weight moving from 10% to 30% in just 1 year. The CMS is now empowered to phase-in the cost performance weighting that begins in 2018 with 10%. 

Extended adjustment of the Geographic Practice Cost Index (GPCI) to the physician Medicare payment. The GPCI reflects the varying costs of delivering physician services across different geographic areas. Medicare uses the GPCI to adjust physician allowable payment rates.

In 2003, Congress established a floor of 1.0 on the work component of the physician fee schedule. This floor prevented physician payments from dropping in a geographic area because the relative cost of physician work in that area fell below the national average. For example: If the relative value units for a service/procedure increased and the GPCI decreased, without the 1.0 floor those Medicare physician allowable rates could have decreased. 

The GPCI 1.0 floor was scheduled to expire on December 31, 2017, and 52 states and/or metropolitan areas would have dropped below the 1.0 floor. The largest decreases would have been in parts of Missouri, Oklahoma, and South Dakota. The new law extended the 1.0 GPCI floor through 2019, a big win for physicians in those 52 states and/or metropolitan areas.   

Expanded telehealth services provided by accountable care organizations (ACOs). Currently only a limited list of telehealth services is covered by Medicare. Unlike some state Medicaid plans and the Department of Veterans Affairs, Medicare patients cannot receive telehealth service in their homes, and the originating site must be in a county outside of a metropolitan statistical area (MSA) or in a rural health professional shortage area, either outside an MSA or in a rural census tract. 

A growing number of ACOs are striving to provide the highest quality outcomes at the lowest total cost of care and to provide high-quality patient experiences. Although location restrictions have prevented ACOs from using telehealth services throughout their innovative programs, many ACOs believe telehealth can:

  • Fill health care gaps faced by patients in rural communities;
  • Provide easy access to on-demand care;
  • Provide care to patients who do not have a reliable means of transportation;
  • Provide care to patients who struggle with mobility challenges or disabilities that make travel difficult; and
  • Reduce hospital readmission rates by enabling physicians to monitor patients outside their office.

The big win for ACOs in the new law is that beneficiaries assigned to ACOs may now receive telehealth services in their homes. In addition, the new law eliminates the geographic restriction of the originating site for patients assigned to ACOs. 

Caps on outpatient therapy services permanently repealed. Ten (10) years ago, the Balanced Budget Act of 1997 placed annual caps on physical therapy and speech and language pathology services combined, and a separate annual cap for occupational therapy. Many health care professionals were concerned the caps would restrict medically necessary therapy services. These concerns caused Congress to suspend the therapy caps from 2000 to 2005.

Although the therapy caps were reinstated again in 2006, a new exception process allowed additional provider-certified, medically necessary therapy services. The exception process was authorized by Congress every year through December 31, 2017. If the Bipartisan Budget Act of 2018 did not address the exception process, the therapy caps would have been implemented, without an exception process, effective January 1, 2018. 

The big win for beneficiaries who require therapy above the therapy cap is that effective January 1, 2018, the new law permanently repeals the therapy caps. However, therapists must continue to use modifier -KX on claims that exceed $2010 in 2018, which attests that the therapy services are medically necessary. In addition, the threshold for targeted medical review of therapy services was lowered from $3700 to $3000 through 2027. However, claims that exceed the $3000 threshold will not automatically be subject to targeted medical review. Medicare Administrative Contractors will target providers who meet specified criteria (eg, providers with a high percentage of claim denials or providers who have unusual billing patterns compared to their peers).  

In summary, if any or all these changes in the law pertains to your wound care practice, you should make the appropriate changes in your processes to take advantage of these wins.


Ms. Schaum is President and Founder of Kathleen D. Schaum & Associates, Inc, Lake Worth, FL. She can be reached for questions and consultation at (561) 964-2470 or by email: This article was not subject to the Ostomy Wound Management peer-review process