What Cosing System Are Used Primarily For Products, Supplies, And Services

Adv Wound Care (New Rochelle). 2013 Dec; ii(10): 576–582.

HCPCS Coding: An Integral Office of Your Reimbursement Strategy

Received 2013 Jun four; Accepted 2013 Jul 5.

Abstract

The get-go step to a successful reimbursement strategy is to ensure that your wound care product has the most appropriate Healthcare Common Procedure Coding System (HCPCS) code (or billing) for your product. The correct HCPCS code plays an essential role in patient access to new and existing technologies. When devising a strategy to obtain a HCPCS lawmaking for its production, companies must consider a number of factors as follows: (1) Has the product gone through the Food and Drug Administration (FDA) regulatory procedure or does it demand to do then? Will the FDA code designation impact which HCPCS code will be assigned to your product? (2) In what "site of service" practice yous intend to market your production? Where will your customers use the product? Which coding system (CPT^® or HCPCS) applies to your product? (three) Does a HCPCS code for a similar product already exist? Does your production fit nether the existing HCPCS code? (iv) Does your production need a new HCPCS lawmaking? What is the linkage, if whatever, betwixt coding, payment, and coverage for the product? Researchers and companies demand to first early and place the aforementioned accent on a reimbursement strategy as information technology does on a regulatory strategy. Your reimbursement strategy staff should be involved early in the process, preferably during production inquiry and development and clinical trial discussions.

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Introduction

Congratulations! Your regulatory staff has informed you that your wound care production has been cleared nether the particular Food and Drug Assistants (FDA) regulation that applies to it. Now, you are ready to commercialize the product in the United states.

The side by side hurdle is attaining reimbursement for your product, which includes coding, payment, and coverage. Whether your wound care production is a cellular and/or tissue-based product for wounds (CTP) [previously known equally a "skin substitute"], a surgical dressing, negative pressure wound therapy, support surface, or a new technology that does not fit into any of these categories, the reimbursement strategy process should starting time well in advance of the product launch.

In fact, your reimbursement staff or consultant should be included in conversations beginning with the earliest product research and development discussions and in the blueprint of the clinical trials. These reimbursement specialists will help your executives and scientists empathise the information needed past insurance payers, who are critical to your product's commercial success. They must sympathize the coding, payment, and coverage processes to establish realistic commercialization time frames and sales goals.

Discussion

What is an HCPCS code?

This article will address the importance of obtaining an appropriate Healthcare Common Procedure Coding Organisation (HCPCS) code (or billing) for your production. While there are ii levels of HCPCS codes, information technology is the Level Ii codes that manufacturers will exist interested in since these volition be the ones used to place their products.

• Level I consists of the Current Procedural Terminology (CPT^® [registered trademark of the American Medical Association]), an alpha-numeric coding organisation maintained by the American Medical Association to place medical services and procedures furnished by physicians and other health care professionals.
• Level Ii of the HCPCS is a standardized coding system that is used primarily to place products, supplies, and services not included in the CPT codes such equally drugs and biologicals, or durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) used in outpatient settings such equally infirmary outpatient departments (HOPD), physicians' offices, and patients' homes.

Currently, Level Ii HCPCS codes stand for ∼4,000 carve up categories of like items or services that comprehend millions of products from different manufacturers. About every product used in wound care will need a HCPCS code—this includes surgical dressings, back up surfaces, negative pressure wound therapy and its supplies, suction pumps, pneumatic compression devices, CTP, biologics, and drugs. The HCPCS lawmaking consists of a single alphabetical letter followed past four numeric digits and contains a generic descriptor that provides the definition of the items that can be billed using that code. The code descriptors use terminology that will include similar items into the aforementioned code. For instance, there are 7 HCPCS codes describing hydrogel surgical dressings depending on the size and whether it has an adhesive border. Hither is the language for the HCPCS lawmaking A6245:

Hydrogel dressing, wound encompass, sterile, pad size sixteen sq. in. or less, with whatever size agglutinative border, each dressing.

To avoid whatsoever appearance of endorsement of a detail product through HCPCS, brand or trade names mostly are not used to depict the products represented by a lawmaking unless make distinction is deemed necessary to facilitate compliance with Department 1847A of the Social Security Act (e.g., as it pertains to single-source drugs and biologicals).^ane Therefore, since CPTs are biologicals, they volition have their own brand name HCPCS lawmaking descriptor.

Coding is distinct from both coverage and payment, merely provides essential and universally accepted terminology used in coverage and payment decision-making. These codes are part of a universal code set up that is used past all payers: Medicare, Medicaid, and private insurance.

A visitor must recognize that once information technology obtains a HCPCS code for its product, the lawmaking does not guarantee appropriate coverage or payment for the product—each one of these components must likewise have a specific strategy adult for them.

Why the correct HCPCS code for your product is essential to a successful reimbursement strategy

The first step to a successful reimbursement strategy is to ensure that your product has the most appropriate HCPCS code. The correct HCPCS code plays an essential role in patient admission to new and existing technologies for the following reasons.

• It enables clinicians (providers), manufacturers, and payers to identify with specificity, for billing and claims processing purposes, the product that was furnished to a patient.
• It serves as a ways to allocate, define, and distinguish a health care product and thus provide a common identifier for clinicians (providers), manufacturers, and payers for obtaining data that measure outcomes and cost.
• For wound intendance products that are durable medical equipment (DME) and supplies, the HCPCS code descriptor that is assigned to the product has a payment amount (known as a fee schedule) fastened to information technology. It is essential for your product to be placed in a lawmaking with other like products. If your product is placed in a HCPCS code that does non include similar products with similar manufacturer's suggested retail cost (MSRPs), then the reimbursement established for it by the payer could exist inappropriate and thus, not be prescribed or used. For instance, if the retail cost for your surgical dressing is $25.00 and the HCPCS code that was assigned to your product had a Medicare reimbursement amount of $17.00, it may be likely that a supplier may choose a different company's product to purchase that is closer to or less than $17.00. Thus, this HCPCS code may not be appropriate for the product, since the reimbursement rate is not adequate and including information technology in this code would not allow patient admission to your production.

Which regulatory agency problems HCPCS codes?

There are 2 organizations that effect HCPCS codes:

• The Centers for Medicare & Medicaid Services (CMS), located in Baltimore, Maryland, is the agency that issues new HCPCS codes. CMS uses a HCPCS Workgroup to make its decisions on new codes.
• The Pricing Data Analysis and Coding (PDAC), a CMS contractor in Fargo, N Dakota, has the responsibleness to determine the appropriate HCPCS code through a coding verification process. This process is used when a company believes that its product already falls under an existing HCPCS lawmaking and needs written verification of information technology from the PDAC. It is also used by companies who believe that they accept a unique production and desire verification of that before they would submit an application for a new HCPCS code to CMS.

The company will demand to determine whether there is a HCPCS code that already exists, whether its product can be placed in, or whether it is and so unique that a new code must be established for it.

CMS may assign either an existing lawmaking that describes a similar detail or service, a miscellaneous lawmaking (e.1000., a not elsewhere classified lawmaking or a not otherwise specified lawmaking), or a new lawmaking for payment purposes, whichever is appropriate based upon HCPCS coding criteria as applied to the private technology.

What factors should a visitor consider when creating an HCPCS coding strategy?

When devising a strategy to obtain a HCPCS lawmaking for its product, companies must consider a number of factors as follows.

1. Has the product gone through the FDA regulatory process or does information technology need to do so? Will the FDA lawmaking designation impact as to which HCPCS code will be assigned to your product?
two. In what site of service do you intend to market your product? Where will your customers utilize the product? Which coding system (CPT or HCPCS) applies to your product?
iii. Does a HCPCS code for a similar production already exist? Does your production fit under the existing HCPCS code?
4. Does your product need a new HCPCS code? What is the linkage, if whatever, between coding, payment, and coverage for the production?

Each i of these factors is explored beneath.

Has the product gone through the FDA regulatory procedure or does it need to do then? Will the FDA lawmaking designation touch as to which HCPCS code will be assigned to your production?

This article will assume that the production has been successfully through the required FDA regulatory procedure. However, when the visitor is developing its regulatory strategy, it should consider under which FDA production code the FDA volition classify your new production. CMS or its contractors may utilise this data when making coding decisions. For instance, if the company goes through the FDA 510(k) process for its product, it is stating that the product is substantially equivalent to a predicate device. The company should also research what HCPCS code the predicate device has been given in case its product is issued the aforementioned HCPCS code. The company should recognize that the FDA 510(k) language may make it hard to bear witness a significant divergence from the predicate device, unless specific indications justify otherwise. This has happened and does happen: the visitor must plan accordingly.

In what site of service do yous intend to market your product? Where volition your customers use the product? Which coding organization (CPT or HCPCS) applies to your product?

Wound intendance products can exist used in a diverseness of settings: hospitals, physicians' offices, HOPDs, patients' homes, skilled nursing facilities, etc. Information technology is important to know which settings your company will be targeting with your production. Some settings (i.e., hospitals, skilled nursing facilities) are under a Medicare prospective payment system. In these cases, product costs are typically included in the payment rate and a HCPCS code may not be needed. If the new product targeted toward HOPDs, it might be bundled into a procedure lawmaking (CPT) and thus may not demand a HCPCS lawmaking to identify information technology. Other product costs, such as CTPs, are separately payable in HOPDs and do require a HCPCS lawmaking. If the visitor believes its new product will be sold for use by the patient at dwelling house, obtaining a HCPCS code will be necessary for the DME supplier to bill for Medicare Part B covered products.

There is i exception to the normal HCPCS lawmaking process: transitional pass-through codes for employ by HOPDs. The outpatient prospective payment system allows for a temporary (ii or 3 years) pass-through code (known as C codes) to some new products. If the Medicare contractors embrace the new production, the C code provides a way for the HOPD to lawmaking the product and CMS to pay for it and collect data well-nigh the product. This data assistance Medicare determine how to incorporate payment for the new technology into existing or new HOPD Ambulatory Payment Classification groups.

Does a HCPCS code for a similar production already exist? Does your product fit under the existing HCPCS lawmaking?

HCPCS codes for wound intendance products begin with the following letters:

• A codes: Medical surgical supplies such equally surgical dressings.
Instance: A6021—Collagen dressing, sterile, pad size 16 sq. in. or less, each
• Due east codes: DME such as support surfaces or negative pressure level wound therapy
Instance: E0193—Powered air flotation bed (low air loss therapy)
• Q codes: Biologics such as CTPs [outdated term "peel substitutes"].
Example: Q4124—Haven Ultra Tri-Layer Wound Matrix, per square centimeter
• C codes: Laissez passer-through code used in HOPDs.
Example: C9363—Skin substitute, Integra Meshed Bilayer Wound Matrix, per square centimeter

The data below is appropriate for those products that would be classified under A or E codes. CTPs take a unique circumstance: since 2009, CMS uses the actual product proper noun to define the lawmaking rather than a generic term. Nearly every CTP has its own Q lawmaking. Nonetheless, CMS has recently assigned identical products, which take unlike brand names, to the aforementioned HCPCS Q code.

A company will need to make up one's mind if a HCPCS lawmaking for its product already exists past perusing the current twelvemonth'due south HCPCS coding book or by researching the HCPCS codes on the CMS website. Even if a visitor finds that its product may fit under an already existing lawmaking, information technology should consider the post-obit.

Does the code descriptor accurately depict the product?

Every bit stated previously, the descriptor is generic except for CTPs and drugs, where it is a brand proper noun, but information technology is important to ensure that the descriptor does reverberate the full general engineering of your product.

Is a competitive production already assigned to this code?

For case, the company can expect on the PDAC website nether the DME Coding System (DMECS)² to run across which competitive products would be grouped and listed under a particular code. A company that manufactures a negative pressure wound therapy device could list either its product's name or visitor or HCPCS code (E2402) in this website and all of the products that have been code verified nether this code would be listed. The company would and then be able to run across which products were in this lawmaking thus validating that it would want to code verify its product under this code.

Is the reimbursement rate (known as a fee schedule) adequate for the product?

If the answer to any of those questions is no, then the company may want to consider applying for a new HCPCS code.

If the company is satisfied that its product fits well into an already existing HCPCS code, information technology may want to have its product code verified by the Medicare PDAC. This process is only mandatory if the production is negative pressure wound therapy, Group Ii support surfaces and a certain category of slope compression wraps. However, it is mutual practice for companies to code verify their products for the following reasons.

• Those products that are code verified will announced on the PDAC website under Production Classification Lists. This allows the visitor's customers to run into that its products are assigned to a particular code and helps for marketing purposes.
• Payers, such every bit some Medicaid programs, may want to run into a PDAC letter from the manufacturer showing that the product falls under a sure lawmaking.

The PDAC is located in Fargo, North Dakota, and coding verification applications can exist found on their website.³ The visitor will demand to figure out which type of production it has and submit the particular type of coding verification awarding for it. For instance, there are distinct applications for surgical dressings and support surfaces. If your production is considered DME, such as negative pressure wound therapy or a pneumatic compression device, you lot would use a DME awarding.

Within 90 days of receiving the application, the PDAC volition provide a letter to the manufacturer stating the HCPCS code under which the contractor believes information technology should be billed. Information technology is usually the code for which the manufacturer has submitted. If it is non, the visitor can submit a reconsideration form and speak to the PDAC clinical staff. In addition, the PDAC will meet with manufacturers before a coding verification is submitted, if the visitor wants to educate the contractor on its product. This process is usually a relatively quick and easy one for the manufacturer.

Does your product need a new HCPCS code? What is the linkage, if any, between coding, payment, and coverage for the product?

If the visitor determines that a HCPCS lawmaking does not exist for its production and customers do not desire to bill information technology with a miscellaneous HCPCS code, then the visitor should pursue obtaining a new HCPCS code.

For new CTPs, this has been a very straightforward pathway. A company completes the HCPCS lawmaking application and, for the most function, the CMS HCPCS Workgroup issues a brand-specific lawmaking for the CTP. Equally noted higher up, however, CMS has recently assigned identical products, which have unlike make names, to the same HCPCS Q code.

Still, for new DME and supplies, the CMS HCPCS coding process has non been transparent, understandable, or predictable. Both the number of applications submitted and the number of new HCPCS codes assigned to DMEPOS by the CMS HCPCS Workgroup take dramatically decreased over the years. Each yr, there are typically 10–fifteen or less new HCPCS codes issued past CMS. In fact, unless the company believes it has a quantum technology, many manufacturers have chosen not to navigate through the new HCPCS coding process. Instead, they put their resources elsewhere and merely attempt to place their production in an existing HCPCS code by submitting a coding verification application.

If the company wants to submit for a new HCPCS code, these are the issues that should be considered, especially when developing the company's reimbursement strategy.

Timing.

HCPCS code applications are accustomed throughout the year, but the deadline for each year is the outset calendar week in January (in 2013, it was January 4th). The CMS HCPCS Workgroup makes preliminary coding decisions in April/May and there is a HCPCS public coming together, during which the bidder or its designated representative tin can make a 15-min presentation if it did non receive the code information technology requested. The terminal HCPCS codes are released in mid-November and take upshot in January of the side by side calendar year. Currently, there is no HCPCS lawmaking reconsideration or appeal process. If CMS did non honor the requested code, the company should reapply by the side by side January deadline.

Accessing the HCPCS code application.

The HCPCS code application can exist found on the CMS website.⁴

By completing this, the visitor can inquire to establish, revise, or discontinue a HCPCS code via the HCPCS code application.

As stated earlier in this article, when the company establishes its reimbursement strategy, it is essential for the visitor to review the HCPCS coding application and the criteria used by the HCPCS Workgroup to establish a new HCPCS. The determination tree and definitions that CMS uses are bachelor online.^v

By doing this, the visitor will understand the criteria it will need to collect (as noted below) mode in accelerate of submitting the application to CMS. For example, when the company does its studies for the FDA, it might be able to use the aforementioned written report, but include additional criteria to satisfy CMS'south option of endpoints.

Collecting data

Information that the company will need to program ahead to collect and then as to include in the application:

Clinical studies to demonstrate how the product results in a significantly improved medical outcome or significantly superior clinical outcome.

This is one of the key questions in the HCPCS code application. CMS will enquire the company to articulate the clinical therapy behind the merits of significant therapeutic stardom, including differences in the product or its performance as it compares to currently coded products. CMS volition too ask the visitor to provide the best available information related to the production'southward merits and to include copies of all published manufactures that result from the company's systematic analysis of the bachelor literature and whatever unfavorable published articles with whatsoever appropriate rebuttal or caption.

CMS volition asking the highest level of scientific evidence such as randomized controlled clinical trials, but will have other types of studies equally long equally they are published in peer-reviewed journals. The HCPCS Workgroup prefers U.South. based journals and frequently asks for trials that are performed on Medicare qualified patients, even though the HCPCS lawmaking set is for all payers.

Historically, CMS's request for this loftier level of evidence has been associated with obtaining coverage, non coding. Traditionally, CMS has used criteria such as significant technological differences, significant clinical indications, and unlike patient populations to establish a code. Unfortunately, there has been a trend over the past 10 years for CMS and its HCPCS Workgroup to commingle coverage criteria with coding criteria in its HCPCS coding process. Its coding determinations often include the review of clinical evidence similar to the information used to determine coverage policies. This approach overlooks the fact that HCPCS codes are used by numerous health plans nationwide; these plans may take coverage and payment policies that are different from Medicare as well as fellow member demographics that differ markedly from the Medicare population. This approach too overlooks the fact that under the Medicare plan and many nongovernmental health plans, coverage, coding, and payment are singled-out functions that utilise different standards. Thus, the company should be aware that by CMS tying together coding criteria with coverage criteria for a new code to exist established for a production may undermine other payers' power (such as state Medicaid agencies and individual insurance), to establish their own coverage policies effectually technologies that they believe all-time meets the needs of their enrollees.

Sales.

For DMEPOS HCPCS code applications, there must exist at least 3 months of sales following the FDA approval date. The company will also need to state for the 3 months before submitting the lawmaking application, the total number of units sold in the U.Southward., and the total dollar amount in sales broken down past Medicare, Medicaid, and private insurance. For those companies who manufacture CTPs, just the date of the start auction is required, rather than any information regarding the number of units sold.

This question is asked to ensure that there are enough sales of the product that a new HCPCS lawmaking is warranted versus the CMS HCPCS Workgroup issuing it a miscellaneous lawmaking or placing it in an already existing code.

MSRP or listing price of the particular.

The visitor will again need to exist aware that this question is asked on the application and must plan ahead to establish the MSRP for the product as it develops plans for the product launch.

Does the product qualify nether a Medicare defined do good category?

Some other requirement in the HCPCS code application is to select the HCPCS category that most accurately describes the particular, such as surgical dressing, drug/biological, or DME. For a production to be covered under the Medicare programme, information technology must fit into one of these Medicare covered benefit categories. This is one of the ways by which the visitor must call back virtually the linkage between coding, coverage, and payment.

For instance, one tendency for wound care manufacturers is in creating disposable products. Currently, the Medicare program does not have a defined benefit category for disposable products. Therefore, disposable products may non be covered or reimbursed under Medicare. When companies manufacture dispensable products, they should develop a marketing and sales strategy that volition target sites of care, where disposables are bundled into their Medicare payment rate.

To clarify its noncoverage of disposable products, CMS recently changed its definition for DME. There are at present questions on the HCPCS lawmaking application that asking the length of time that the product tin withstand repeated utilise, its warranty, and if the production is disposable or has disposable components.

Determination

After reading the commodity, many might question whether it is worth the attempt to try to obtain a new HCPCS code. Appropriate HCPCS codes are of import when launching new applied science into the market. Researchers and companies need to start early on and identify the same emphasis on a reimbursement strategy as information technology does on a regulatory strategy. Involve your reimbursement strategy staff early in the process, preferably during product research and development and clinical trial discussions.

Abbreviations and Acronyms

CMS	Centers for Medicare & Medicaid Services
CPT^®	Common Procedure Terminology
CTP	Cellular and/or Tissue-Based Products for Wounds
DME	Durable Medical Equipment
DMECS	Durable Medical Equipment Coding Organization
DMEPOS	Durable Medical Equipment Prosthetic and Orthotic Supplies
FDA	Food and Drug Administration
HCPCS	Healthcare Common Process Coding Organisation
HOPD	Hospital Outpatient Departments
MSRP	Manufacturer'south Suggested Retail Price
PDAC	Pricing Data Assay and Coding

Acknowledgments and Funding Sources

No grant back up or funding sources were provided for this manuscript.

Author Disclosure and Ghostwriting

No competing financial interests exist. The content of this article was expressly written by the author listed. No ghostwriters were used to write this commodity.

About the Author

Marcia Nusgart, RPh, is the Executive Director of the Alliance of Wound Care Stakeholders, a nonprofit interprofessional association of health care professionals and patient organizations that accost regulatory and legislative issues impacting wound intendance. She also serves as the Executive Managing director for the Coalition of Wound Care Manufacturers and President of Nusgart Consulting LLC.

As executive director of the Brotherhood, she organized its efforts in writing a manuscript, published in May/June 2012, Wound Repair and Regeneration defining a set of principles providing direction to stakeholders involved in clinical research in wound healing as well as commenting on Medicare coverage policies impacting wound care.

She is an manufacture leader in providing comprehensive strategies to medical device manufacturers regarding coding, coverage, and reimbursement bug under Medicare and Medicaid. Her accomplishments range from advocating successfully, in her coalition chapters, for the CMS to modernize the HCPCS coding process to make information technology more timely, transparent, and understandable for manufacturers to, in her consulting part, obtaining new HCPCS codes forth with appropriate coverage and payment for manufacturers' products. Ms. Nusgart is also well known in the wound care industry through speaking engagements at national conferences.

References

Articles from Advances in Wound Care are provided here courtesy of Mary Ann Liebert, Inc.