If you’ve been in the healthcare realm for at least 20 minutes, you’ve heard of skin substitutes. While it may initially sound like something in a sci-fi thriller, skin substitutes represent major advancements in the treatment of wounds. They are biological or synthetic products that are engineered to cover and protect wounds, provide a scaffold for native tissue regeneration, and deliver essential growth factors to promote healing. Skin substitute procedures, vital for complex and chronic wound healing, are high-cost services that frequently come under scrutiny for improper billing.
Last month, HHS published an article that outlined some significant fraud, waste and abuse risks[1]. That report summarized that Medicare Part B expenditures for skin substitutes provided in non-institutional settings have skyrocketed over the last 2 years, surpassing $10 billion annually by the end of 2024. This high-volume growth is tied to patterns consistent with improper billing.
What to Look For
Skin substitute billing requires two key components: an application CPT code (e.g., CPT codes typically used are 15271–15278) and a supply HCPCS code (e.g., Q41XX/Q42XX codes are typically used for the product). Look for application codes with non-graft wound dressings (gels, powders, ointments) or injected substitutes, as they may be considered bundled into other standard wound management services and are not separately payable with a skin substitute application code. Conversely, watch for billing for the high-cost supply codes without an accompanying application code. The application code must be present to show the product was used in a surgical skin replacement procedure.
Skin substitute application codes are tiered based on size and location are highly dependent on the wound surface area treated, so look for inaccurate units/size. Billing for a larger wound area than what is documented or using an add-on code without the corresponding primary code can lead to overpayments. The medical record must also clearly document the name of the skin substitute product, the package size, the amount that was actually applied, and the amount that was discarded. For high-cost products, claims must accurately reflect the units used and adhere to rules for reporting product waste. Look for the use, and overuse, of waste modifiers: the JW modifier to document and bill for the discarded amount of an unused drug or biological and the JZ modifier to attest that there were no discarded amounts. Misuse or omission of these modifiers can be a red flag.
Skin substitute application is typically covered for chronic, non-healing wounds that have failed to improve after a period of standard care. Lack of documentation of medical necessity is another area to watch. Missing or insufficient history of standard wound care attempts, exceeding utilization limits and/or inadequate procedure notes would fail to support the medical necessity of billing skin substitutes.
HCFS Has You Covered
Combating improper billing in skin substitutes and application codes requires a multi-pronged approach. Payers need to leverage advanced data analytics to identify suspicious billing patterns and inappropriate number of services. If you’re using the HCFSPlatform™, we’ve got you covered. Our Artificial Intelligence (AI) models can identify spikes and other anomalous billing patterns. We can also help identify new provider billing patterns to potentially catch any inappropriate billing quickly. Additionally, we have peer comparison and excessive billing alerts that identify outliers in billing. Some examples of our alerts include:
- [2090-01] through [2091-02] -UNBUNDLING-SKIN GRAFTS
- [2546-01] – INAPPROPRIATE SERVICES, SKIN SUBSTITUTES FOR WOUND CARE
- [2754-01] through [2754-04] – CODING GUIDELINES, AUTOLOGOUS SKIN CELL TRANSPLANT, HARVEST, PREP AND APPLICATION
- [2799-20] – INAPPROPRIATE MODIFIER(S), JZ AND 76 WITH SKIN SUBSTITUTES SPIKE
- [2832-20] – OUTLIERS, SKIN SUBSTITUTES
- [2836-01] – INAPPROPRIATE SERVICES, SKIN SUBSTITUTES PRODUCTS WITHOUT APPLICATION CODES
[1] https://oig.hhs.gov/documents/evaluation/10939/OEI-BL-24-00420.pdf
If you’re not using the HCFSPlatform™ and you’re interested in knowing more, email us at [email protected].
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