Wound Care Billing for HMO Practices: What You Need to Know

Proper wound care billing is essential for any in-house wound care program. While capitated practices may not bill for many services the same way fee-for-service practices do, understanding coding and documentation is still critical — for tracking, quality reporting, encounter submissions, and any carved-out services.

This guide covers the essential wound care CPT codes, documentation requirements, and billing considerations specific to HMO-contracted practices.

Key Wound Care CPT Codes

Evaluation & Management (E/M) Codes

Standard E/M codes apply when wound care is part of an office visit:

Active Wound Care Management

These codes are for the hands-on treatment of wounds, separate from E/M:

Skin Substitute Application

If your program uses skin substitutes:

Compression Therapy

Documentation Requirements

Proper documentation is essential regardless of payment model. It protects against liability, supports quality tracking, and ensures accurate encounter data.

Required Elements for Every Wound Visit

• Wound location: Anatomical site with laterality
• Wound dimensions: Length × width × depth in centimeters
• Wound bed description: Tissue type percentages (granulation, slough, necrotic)
• Exudate: Amount (none, scant, moderate, heavy) and type (serous, purulent, etc.)
• Periwound skin: Condition of surrounding tissue
• Signs of infection: Document presence or absence
• Pain assessment: Patient-reported pain level
• Treatment provided: Detailed description of procedures and dressings
• Patient education: What was taught and patient understanding
• Plan: Next steps and follow-up timing

Photography Documentation

While not strictly required, wound photography is strongly recommended:

• Date and patient identifier visible (or linked in EHR)
• Consistent lighting and angle
• Ruler or measurement tool in frame
• Before and after treatment images when relevant

ICD-10 Diagnosis Coding

Accurate diagnosis coding is critical for encounter data and risk adjustment:

Common Wound Diagnosis Codes

Importance for Risk Adjustment

Under Medicare Advantage, accurate coding affects your plan's risk adjustment scores. Capturing the full picture of wound complexity helps ensure appropriate payment to the health plan — which ultimately affects your capitation rates.

Capitation Considerations

For capitated practices, billing strategy differs from fee-for-service:

What's Typically Included in Capitation

• Office visit E/M codes
• Basic wound care procedures (debridement, dressing changes)
• Compression therapy
• Most supplies used in-office

What Might Be Carved Out

Some contracts carve out certain services for separate payment:

• Skin substitute products (drugs billed separately)
• NPWT equipment and supplies
• High-cost advanced dressings
• Hyperbaric oxygen therapy (if you refer for this)

Why Coding Still Matters Under Capitation

1. Encounter submission: Payers require encounter data for risk adjustment
2. Quality reporting: Proper coding supports HEDIS and quality measure reporting
3. Contract negotiations: Data on services provided strengthens your position
4. Tracking: Internal analysis of wound care program performance
5. Carved-out services: Some services may be billable separately

Billing Tips for HMO Practices

1. Submit Complete Encounter Data

Even if you don't receive separate payment, submit encounter data with full coding to support risk adjustment and demonstrate value.

2. Use Appropriate Modifiers

• -25: Significant, separately identifiable E/M service on the same day as a procedure
• -59: Distinct procedural service (when billing multiple wound care procedures)
• -LT/-RT: Left/right side laterality

3. Document Time Appropriately

Under 2021 E/M guidelines, time can be used to select visit level. Document total time spent, including non-face-to-face time.

4. Know Your Contract

Review your capitation contract to understand what's included vs. carved out. Some practices discover services they could be billing separately.

5. Track Your Internal Costs

Monitor supply costs, staff time, and volume to understand the true economics of your wound care program.

Sample Documentation Template

Getting Help with Billing

Wound care billing can be complex. Resources include:

• WCHMO consulting: We help practices set up proper documentation and billing processes as part of our program setup
• Your billing staff: Involve them early in program development
• Payer representatives: Clarify what's included in capitation vs. carved out
• Professional coders: Consider a coding review if you're uncertain