Billing for wound care supplies to Medicare or private insurance carriers has always been a challenge. Every payer has its unique billing guidelines and reimbursement policies making it difficult to receive accurate reimbursement for wound care supplies. In this article, we shared the top 5 tips while billing for wound care supplies which will help you to reduce claim denials and accurately bill insurance carriers. Most of the guidelines we followed in this article are referred from The Centers for Medicare & Medicaid Services (CMS) billing guidelines as most private payers consider it as a reference. 

1. Defining Key Terminologies for Wound Care Billing

The definitions applicable to wound care supplies are found in the 42 Code of Federal Regulations (CFR) 413.65. For accurately billing for wound care supplies let's understand definitions of outpatient encounters; wound care supplies; and other applicable terminologies. 

  • The Centers for Medicare & Medicaid Services (CMS) defines hospital outpatients and outpatient encounters as ‘a hospital outpatient is a patient [who] has not been admitted to the hospital as an inpatient, but is registered as a hospital outpatient and receives services, rather than supplies alone, directly from the hospital.’ This definition specifically speaks to the situation of a hospital merely dispensing supplies and no provision of services. In this case, the hospital would be acting as the supplier, similar to a durable medical equipment (DME) supplier, and is unable to bill supplies alone as a hospital provider.  
  • An encounter is defined as ‘direct personal contact between a patient and a clinician authorized by state licensure and hospital staff bylaws (e.g., privileges) to order or furnish services for diagnosis or treatment of the patient.’
  • We should review the definition (i.e., requirements) for supplies that can be separately reported as covered charges but are not considered ‘routine’ supplies. The cost of ‘routine’ supplies that are not patient-specific, often referred to as ‘floor stock,’ are generally included or packaged into the visit or procedure charge and are not separately itemized on a patient account or bill. Some examples of ‘routine’ supplies are: exam table paper, cotton swabs, and wipes. Even though Medicare payment to the wound care PBD for its services and procedures includes payment for the ‘non-routine’ patient-specific supplies (e.g., specific sterile surgical dressings, enzymatic debriding agents), each of the ‘non-routine’ supplies should be reported as a separate charge under appropriate revenue codes in the ‘covered’ column of the claim. This will ensure the ‘non-routine’ charges are reported to Medicare or the other insurer while not being billed directly to patients. 
  • If the item or supply is identifiable to an individual patient, typically via either order for the item or supply or documentation regarding the direct application of the specific item or supply to the patient, and that item or supply is not reusable (e.g., single-use, disposable, or represents a cost for each preparation, as with the sterilization of surgical instruments), it is separately chargeable on patient accounts. Therefore, most patient-specific wound care supplies, if properly ordered and documented in the medical record, meet the requirements for separate charges on patient accounts. 

2. Understanding Top Denial Reasons

Once you understand top denial reasons, your billing team can take precautionary measures to avoid them. You can make required changes in your billing process flow to avoid these top denial reasons while billing for wound care supplies. Note that we referred to the Medical Review Department research report to identify top denial reasons. 

  • Wound debridement was not seen in the document. For those who dispense wound dressings, this simple rule is not complicated and in fact, is rather obvious. Debridement, either mechanical or chemical, must be documented as a part of the wound treatment regimen. If you are treating wounds routinely without debridement, this falls below the standard of care for wound treatment.
  • Documentation does not support moderate-high exudative full-thickness wounds (stage III-IV): Alginate dressings are dressings indicated for wounds that produce heavy drainage. Why would CMS pay for foam or an alginate dressing if there is no documentation of drainage or exudate in the wound? The same can be said of the use of hydrogel. Should CMS pay for a hydrogel if there is no documentation of excessive dryness in the wound? In the era of EHR, there is simply no excuse for not templating and documenting the characteristics of the wounds. 
  • Wound evaluation missing type, location, size, depth, and/or drainage amount: These simple and painfully obvious findings should be recorded whether you are dispensing dressings or not. Again, using the simple wound template described above can assure that these basic clinical findings are recorded. As it is the case that wound/surgical dressings are reimbursable ‘only’ if the wound is a full-thickness wound, it goes without saying that the depth and staging must be recorded. 
  • Order did not specify the quantity to be used at one time. This is information that should be recorded both in the patient’s medical record and in the detailed written order (DWO) and is no different than what is required in writing a prescription for an antibiotic or any other prescription product. Simply recording the information in a detailed written order and not having identical information documented in the medical record will undoubtedly result in a claim rejection. The number of wound dressings allowed for each wound is dictated by the type of dressing being used. 
  • Order did not specify dressing change frequency. Again, this is information should be recorded in the patient’s medical record and in the detailed written wound dressing prescription order described above. In most cases, the order should indicate that the patient is to change the dressing 1 time per day (collagen powder/alginate) or 1 time every 3 days (foam). Again, this should be templated on the detailed written order form that is embedded into your EHR.

3. Don’t Neglect Deductibles

As more private carriers are increasing deductible amounts and co-pays for DME services, it is imperative that patient benefits and deductible amounts be recorded prior to dispensing DME. If the patient’s deductible has not been met, the amount for the wound dressings or their co-pay amount needs to be collected at the time of dispensing. Make sure that your patients are aware of these amounts as many products cannot be returned (e.g., any opened wound dressing or used compression garment).

The allowable number of dressings per wound is most often determined by Medicare and is based on a 30-day period. Each product has its own unique purpose and design and it is imperative that the physician make the determination of how many units are covered in a 30-day period. It’s not always necessary to dispense items based on thirty days and each wound should be assessed individually to determine the frequency and duration of dressing changes.

Making sure that the number of dressings dispensed and the type of dressing being utilized matches the description of the wound in your note is vital. It is appropriate to dispense a full month's supply if you determine that the patient will need that amount based upon your description of the wound, among other contributing factors that could impact wound healing.  

4. Understanding Billing Guidelines of Private Payers

Private insurance varies by state, plan, and provider. When dispensing wound care products from your office, it’s always best to obtain benefits for all services you offer in your practice prior to the patient visit, including wound care supplies, in order to smoothly and quickly expedite coverage determination. While it’s not a common scenario, some carriers will not cover wound care supplies being dispensed by the physician. Learning which plans have this restriction is important. Adding wound care supplies to your list of items asked about when obtaining benefits will save a lot of time and frustration.

In the event a particular payer will not cover the items from your office, a local supplier should be able to accommodate your request. Make sure the patient has a prescription and it’s clear the items cannot be substituted, as many of these companies try to reduce their cost by providing the cheapest product possible to maximize their profits. Even though products may be in the same category, not all products are created equal. If the supply house values your business, it should be able to supply the products you request and maintain a healthy bottom line. 

5. Outsource Medical Billing

As you know there are a lot of factors that determine reimbursement for wound care supplies. Whether it’s payer reimbursement policy or individual patient plan coverage, it’s always challenging to receive accurate reimbursement while billing for wound care supplies. Wound care billing has always been a tough job requiring experienced wound care coders who have knowledge of coding guidelines for local and federal insurance carriers.

When you outsource your wound care billing to a medical billing company, you keep the headache of billing and coding to the billing company. You can focus only on your practice while the billing company ensures every single submitted claim gets reimbursed. Just complete a careful evaluation of the medical billing company and leave the headache of wound care billing to them. 

Medical Billers and Coders (MBC) is a leading medical billing company providing complete medical billing and coding services. We understand the unique billing challenges of wound care billing and shared these ‘top 5 tips while billing for wound care supplies’ for provider education. You can refer following reference links for a detailed understanding.

For more assistance needed in wound care billing and coding and to receive accurate reimbursement for your wound care supplies, email us at: or call us: 888-357-3226.


A Step-by-Step Approach to Billing Wound Care Products Through Your Office

Medicare Coverage & Payment of Outpatient Wound Care Supplies

Cardinal Health Wound Care supplies 2022 Coding Guide

Published By - Medical Billers and Coders
Published Date - Sep-21-2022 Back

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