Wound care providers and their coders and billers are often confused about the proper documentation, coding, and Medicare billing required for cellular and/or tissue-based products (CTPs) for skin wounds (outdated term "skin substitutes"). For coding, payment, and coverage purposes, Medicare treats CTPs similar to drugs and biologicals. Therefore, wound care providers who use CTPs must pay close attention to the regulations pertaining to drugs and biologicals.
The Table displays the coding and billing disparities that exist for qualified healthcare professionals (QHPs) (eg, MD, DO, DPM, NP, PA, and CNS) and for hospital-based outpatient wound care departments (HOPDs). The Table illustrates that QHPs and HOPDs have different coding guidelines for the application of CTPs. In addition, QHPs cannot use products with HCPCS codes that begin with "C" in their offices. Finally, the JW modifier rules vary between care settings.
Two of the most confusing guidelines pertain to (1) the number of units reported on the claims and (2) the use of modifiers on the claim. First, confusion can be caused by the code descriptions: the application codes are described in either "25- or 100-sq-cm increments," and the product codes are described "per square centimeter." This means the number of units reported on the claims for the procedure will be in 25- or 100-sq-cm increments, and the number of units reported on the claims for the CTPs will be per square centimeter.
Here's an example of coding for a CTP applied in a QHP office: If the QHP purchases a 21-sq-cm piece of a particular CTP and applies it to a 15-sq-cm wound on the leg, the QHP should (1) use the application code 15275 and should report "1" unit on the claim form because the wound surface area was less than 25 sq cm and (2) also use the appropriate Q code for the product, but should report "21" units on the claim because 21 sq cm was purchased to appropriately cover the wound.
Many QHPs and HOPDs make the critical mistake of reporting "1" unit of the Q code to match the "1" unit of the application code. In their minds, they think they should report the product as a unit of "1" because they used "1" piece. That mistake causes them to lose money. In the above example, if the QHP had incorrectly reported "1" unit for the Q code, the QHP would be paid for only 1 sq cm of the 21-sq-cm piece that they purchased. Note: After working with wound care providers throughout the United States, this author has identified that certified coders often mistakenly use the unit of "1" to represent 1 piece of CTP, rather than the total number of square centimeters purchased. They often change the units to "1" before submitting the claims: that causes the wound care providers to lose money. Therefore, QHPs and HOPDs should audit their CTP claims to be sure the claims report the total number of square centimeters that were purchased for the application.
Next we will focus on the confusion surrounding modifiers that may be appended to the CTP codes. Several years ago, the Centers for Medicare & Medicaid Services (CMS) created 2 modifiers: (1) JC skin substitute used as a graft and (2) JD skin substitute not used as a graft. Unfortunately, CMS did not release national guidelines for these 2 modifiers. Therefore, each Medicare Administrative Contractor (MAC) implemented his/her own guidelines, usually in their local coverage determinations, for the use of JC and JD. Most of the available MAC guidelines instructed wound care providers to append the product codes with the JC modifier because the CTPs are applied topically and are not implanted in the body. Wound care providers are reminded to verify if their MACs require the use of the JC modifier on their CTP claims.
In 2008, the CMS created the JW modifier drug or biological amount discarded/not administered to any patient to report the amount of drug or biological that is discarded and eligible for payment under the Medicare Part B drug and biological policy. The JW modifier is used only for CTPs in single-use packages. If a portion of a single-use CTP is discarded after the QHP applies the correct quantity of a CTP to a Medicare patient, the Medicare program provides payment for the amount of CTP discarded, as well as the amount applied, up to the number of square centimeters indicated on the package label. The CMS encourages QHPs and HOPDs to care for and administer CTPs to patients in such a way that they can use CTPs more efficiently, in a clinically appropriate manner. Therefore, wound care providers should select the right-size CTP to cover the wound surface area and the wound margins-not too small and not too large. As the wound decreases in size, the QHP and HOPD should purchase smaller sizes of CTPs when they are available.
Similar to the JC and JD modifiers, the CMS did not release any national guidelines for appropriate use of the JW modifier. Therefore, all of the MACs had the discretion to require the use of the JW modifier. From 2008 to 2016, some MACs did not require the use of the JW modifier, whereas other MACs issued very specific strict guidelines for the use of the JW modifier. However, one thing was, and still is, very consistent: The CMS requires wound care providers to document the discarded portion of the CTP in the patient's medical record.
On June 9, 2016, CMS issued Transmittal R3538CP (Change Request 9603) that removes the MACs' discretion to require the JW modifier for discarded CTPs in order to more effectively identify and monitor billing and payment for discarded drugs and biologicals. Effective January 1, 2017, all MACs shall require wound care providers to
* use the JW modifier for claims with unused CTPs, from single-use packages, which are appropriately discarded, and
* document the discarded CTPs in the patient's medical record when submitting claims with unused CTPs, from single-use packages, which are appropriately discarded.
Following are the most frequent questions that this author has received pertaining to this new JW modifier requirement:
Q: Is the JW modifier required in both HOPDs and physician offices?
A: Yes, the JW modifier is required in both sites of care. However, the regulations are different for each setting.
* Physician offices
[white circle]The JW modifier applies to all Medicare Part B separately payable CTPs.
* HOPDs
[white circle] The JW modifier applies only to Medicare Part B separately payable CTPs assigned status indicator G pass-through drugs and biologicals. Therefore, HOPDs must report the discarded portions of CTPs with pass-through status.
The JW modifier does not apply to CTPs assigned status indicator N items and services packaged into APC rates. Therefore, HOPDs are not required to report the discarded portions of CTPs that are packaged into payment for the application. However, the discarded portion must still be documented in the medical record.
Q: Are there specific care settings where the JW modifier does not apply?
A: Yes, the JW modifier does not apply in rural health clinics (RHCs) or in federally qualified health centers because drugs and biologicals are generally not separately payable under Part B in those settings. Instead, the payment for drugs and biologicals is included in the RHC's all-inclusive rate or the federally qualified health center's prospective payment system rate for the patient's visit. In addition, the JW modifier is not intended for use on claims for hospital inpatient admissions that are billed under the Inpatient Prospective Payment System.
Q: Is it true that critical access hospitals and eligible/participating 340B providers are exempt from reporting the JW modifier?
A: No, that is not true. Critical access hospitals and eligible/participating 340B providers are not exempt from reporting the JW modifier.
Q: Can wound care providers begin using the JW modifier before January 1, 2017?
A: The CMS stated that providers may report the JW modifier prior to January 1, 2017. However, the MACs are not required to recognize the JW modifier until January 1, 2017. For the remainder of 2016, wound care providers should verify their MAC's current JW modifier direction.
Q: How should wound care providers use the JW modifier on claims to report the discarded portions of CTPs?
A: The JW modifier is applied only to the amount of the CTP that is discarded. That portion of the CTP should be billed on a separate claim line with the JW modifier. The unit field on that claim line should reflect the number of square centimeters that were discarded.
For example, if 21 sq cm of a single-use CTP is purchased and opened for a patient covered by Medicare Part B, but only 15 sq cm is applied to the entire wound surface and wound margins of a chronic leg ulcer, use
* code Qxxxx, 15 units on one line item of the claim, and
* code QxxxxJW, 6 units on another line item of the claim.
Q: When using the JW modifier, should the dollar amount be included on the wastage line or should the claim line reflect only units?
A: General billing rules may require a charge be included on each line of the claim. However, each MAC that processes claims may have specific billing policies or guidance where there is not national guidance from CMS. For further billing instructions, wound care providers should contact the MAC who processes your claims.
Q: What documentation for discarded CTPs is required?
A: The CMS requires the documentation to include the following:
* total number of square centimeters purchased for the application,
* total number of square centimeters applied, and
* total number of square centimeters discarded.
Note: The CMS has directed the units billed must correspond with the smallest number of square centimeters available for purchase from the manufacturer(s) that could provide the appropriate size to cover the wound bed and the wound margins. Wound care providers should also check with the MAC that processes your claims to obtain additional documentation requirements. For example, some MACs also require the documentation to include the following:
* date, time, and location of ulcer treated,
* reason for the wastage, and
* manufacturer's serial/lot/batch or other unit identification number of the CTP.
Q: What will happen if a wound care provider does not use the JW modifier on claims that include discarded CTPs?
A: Claims for CTPs, furnished on or after January 1, 2017, which contain billing for discarded CTPs and which do not use the JW modifier correctly, may be subject to review. Exception: HOPD claims for packaged CTPs that are assigned the status indicator of "N" should not use the JW modifier. However, the discarded portion of the CTP must be documented in the medical record.
Q: Is the JW modifier used only by Medicare?
A: The JW modifier is not limited to Medicare plans. Many private payers may also require the use of the JW modifier. Wound care providers should verify each private payer's requirements for reporting discarded CTPs. For example, this author has read numerous private payers' medical policies that require the JW modifier and that state the documentation in the medical record must include the
* name of CTP administered,
* National Drug Code (NDC Labeler Code) number of the CTP
* number of square centimeters applied,
* number of square centimeters discarded,
* the reason for the wastage,
* date and time CTP was discarded, and
* the name, licensure, and signature of the person who wasted the CTP.
Similar to MACs, many private payers also expect the following documentation:
* Every page of the medical record is expected to be legible and include both the appropriate patient identification information (eg, complete name, date(s) of service(s), and information identifying the physician or nonphysician practitioner responsible for and providing the care to the patient.
* The submitted medical record should support the use of the selected diagnosis code(s).
The submitted Current Procedural Terminology*/HCPCS code should describe the service performed.
*Current Procedural Terminology is a registered trademark of the American Medical Association.