Understanding Outpatient Wound Care Reimbursements: Critical Access Hospitals vs. Acute Care Hospitals

Managing the constantly changing dynamics of healthcare reimbursement is challenging. For hospital executives considering an outpatient wound care service line, understanding the intricacies of the current CMS reimbursement models is essential for financial success and long-term sustainability.

As the industry leader in wound care management, we worked with our expert Revenue Cycle team to highlight the most critical factors related to reimbursement that are often overlooked.

Reimbursement by Hospital Type

Critical Access Hospitals (CAHs)

Focused on serving rural populations, Critical Access Hospitals follow a cost-based reimbursement model for Medicare beneficiaries. This approach enables CAHs to receive reimbursement for reasonable costs incurred while providing outpatient wound care services. By accounting for actual expenses, cost-based reimbursement ensures financial viability and facilitates the provision of high-quality wound care services to underserved communities.

CAHs may also elect the Optional (Method II) payment method to maximize Medicare reimbursement to the CAH.  Under this method, the provider assigns reimbursement to the hospital and the hospital bills the Medicare Administrative Contractor for professional services on the facility claim. In this case, reimbursement for professional services is 115% of the allowable amount for physicians.

Acute Care Hospitals (ACHs)

Acute Care Hospitals typically follow the Outpatient Prospective Payment System (OPPS) for outpatient wound care reimbursement. Under OPPS, payments are based on Ambulatory Payment Classifications (APCs) assigned to specific wound care procedures. This system promotes standardization and efficiency in reimbursement, ensuring equitable payments for outpatient wound care services rendered by ACHs.

ACHs participating in the Hospital Outpatient Quality Reporting Program maximize their reimbursement. By reporting on quality measures related to wound care, such as patient outcomes following outpatient surgery or patient satisfaction, ACHs can potentially earn the full OPPS reimbursement rate, reflecting their commitment to delivering high-quality care.

Additional Things to Consider

In addition to the nuances of what type of hospital you’re navigating, our Healogics Revenue Cycle team emphasized that expertise and focus on these following areas is critical to a wound care center’s success:

  • Regulatory Compliance: Understanding and adhering to Medicare regulations, such as documentation requirements, coding guidelines, and quality reporting initiatives, is crucial to optimize reimbursements while ensuring compliance within your new Wound Care Center.
  • Charge Capture and Reconciliation: Accurately capturing and billing for services in the Wound Care Center prevents revenue leakage, avoids costly errors, improves revenue integrity and maximizes reimbursement.
  • Coding and Documentation: Accurate and detailed coding and documentation practices are essential for capturing the complexity of wound care procedures. Employing certified coders and ensuring comprehensive documentation can facilitate proper reimbursement and minimize audit risks.
  • Chargemaster Review: Conducting a comprehensive analysis of the Wound Care Center chargemaster, including the impact of potential reimbursement changes, can help optimize revenue potential and guide strategic decision-making.
  • Integration with Existing Services: Integrating outpatient wound care services with existing hospital resources, such as physical therapy, laboratory services or radiology, can optimize your patient care and financial performance. Further analyzing potential synergies and cost-sharing opportunities can also enhance the viability of a new wound care service line.

Understanding reimbursement differences within outpatient wound care services is key for any healthcare decision maker at any hospital type. By grasping the unique methodologies and exploring additional opportunities, administrators can optimize their financial outcomes without losing sight of providing high-quality wound care services to their patient populations.

Healogics is proud of our successful track record in helping hospitals navigate these reimbursement differences, aiding in the creation of successful and sustainable outpatient wound care service lines. If you’re considering starting a wound care program, or would like to optimize your current strategy, and have questions about the reimbursement process, we’re here to help.

Pro Tip: Looking for additional reading? CMS offers free educational materials for health care providers on CMS programs, policies, and initiatives.

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