Considering Wound Care Compliance for Getting Paid on Time

All hospital staff members working in the wound center provide services under the direct supervision of an advanced practitioner (AP) (I.e. physician, podiatrist, or nurse practitioner). The practitioner can be employed by the hospital or in private practice.

There have been cases in which providers’ alleged failures to satisfy provider-based criteria have given rise to charges via the False Claims Act. If there is no AP directly supervising at all times in the wound center, no services can be provided by anyone. The concept of a “nurse only” visit may be viable for some services, such as changing a negative pressure wound dressing, but the AP still has to be immediately available to on-campus clinics and physically inside the building for off-campus clinics at all times, even if he or she did not see the patient. In other words, if there is no AP who can immediately step in and take over, then no services can be provided.

Unfortunately, Medicare used the words “incident to” in two different situations, and this has caused great confusion with regard to physician billing and supervision. Within Outpatient Hospital Services (OPPS) in the wound center environment, “incident to care” rules mean the patient care has to be conducted under the direct supervision of an AP. However, this is different than the “incident to payment” rule in private practice for the physician, which is part of Medicare Part B regulations.

When a physician employs a staff member in his/her own office under the Part B payment rules, he/she can bill for services provided by staff as if the physician performed the service. It is important not to confuse the “incident to care” rules of OPPS with the “incident to payment” rules of Medicare Part B. It has come to CMS officials’ attention that there is a high volume of hospitals billing provider-based services.

Since there is a high risk of non-compliance, CMS intends to scrutinize facilities more closely in the future through audits. The recently released changes to OPPS rules proposed a unique modifier to be reported on off-campus provider-based claims but was not implemented due to the fact that hospitals have such difficulty appending modifiers of any kind on their claims. CMS is evaluating other options such as the development of a new revenue code or place-of-service code that will be unique to the provider-based status.

The physician’s place of service (POS) must be reported as POS 22 (hospital outpatient). Medicare reduces the physician’s payment rate in this setting in consideration of the fact that he or she does not have to pay overhead or nursing salaries when practicing within the hospital setting. If physicians fail to report the POS correctly, this is considered an overpayment by Medicare. There have been cases of wound center-based physicians having to repay substantial sums to CMS as a result of incorrect POS designation.

It is important to know that physicians who work in the Hospital-based Out-Patient Department (HOPDs) do not have to “rent” space, or otherwise pay overhead to the hospital. The hospital is not able to provide services under OPPS unless the AP is physically present. Therefore, the physician does not have to lease space from the hospital in order to have adequate facilities to care for patients in the hospital clinic setting or to attend to administrative duties related to that service.

A lease between the physician and hospital may be required if the physician is utilizing office space for services unrelated to the wound center (e.g., physician-employed billing staff). The physician’s revenue is reduced by CMS to account for the fact that the hospital has provided the necessary infrastructure for operations.


  • The wound center operates under the same license as the hospital.
  • Clinical services are fully integrated with those of the hospital, with common privileges, quality assurance, and monitoring (as is for any other hospital department).
  • Medical records for patients treated in the facility or organization will be integrated into a unified retrieval system (or cross-reference) of the main provider. This means that those professionals practicing at either the main provider or the provider-based site must be able to “obtain relevant medical information about care in the other setting.”
  • The financial operations of the wound center are fully integrated within the financial system of the main provider and costs are reported in the main provider’s cost centers.
  • The location is held out — by signage and otherwise — to the public and payers as part of the main hospital.
  • The on-campus wound center has to comply with the same requirements of the Emergency Medical Treatment & Labor Act and billing rules applicable to HOPDs.
  • The hospital must indicate POS 22 (outpatient) and bill type (13X) consistent with OPPS. (The charges should be processed through the current outpatient code edits and not through inpatient code edits.)
  • All hospital staff members working in the wound center provide services under the direct supervision of an AP.

There are many steps that need to take place prior to a wound center’s opening to ensure the applicable rules and regulations have been complied with, otherwise, hospitals and physicians run the risk of submitting improper claims for the services they render.

Medical Billers and Coders (MBC) can help you in wound care billing as our experienced billers and coders know how to remain compliant with these guidelines. To know more about our wound care coding and billing services contact us at 888-357-3226/