Many thanks to Sharon Hannan, Executive VP of Integumetrix, for her insightful reaction to this article.


Dr. Fife,

As a previous Director of Wound and HBO services at a major hospital system, I can attest to the inaccuracies of hospital financial data related to wound departments and HBO visits specifically. When I left my hospital position, I had 9 HOPD wound centers reporting to me and I reported to the Division CFO with access to all financial data for the departments. Although these departments were exceptionally good at capturing revenue since billing was very department/CPT specific, expenses were not as clear cut. Since Wound Care was usually a small generator of revenue for a hospital, not much focus was placed on detailed expense tracking. Many departments did not even own a scanner since most supplies were bundled under single procedure payments. Additionally, like we learned with the TPE failures, CMS correspondence and audits at the hospital level are usually not managed by personnel who understand the inner workings of these departments. Usually, these issues are overseen by financial departments that may even be contractors. Here are a few things that complicate the matter for hospital reporting.

Hospitals usually have the wound centers as one outpatient department and include HBO and the expenses tied to HBO as part of the overall expenses of the wound care department. Most of the supplies and expenses for HBO are non-chargeable therefore there is no way to attach them to a specific procedure or patient. For example, the use of a gown, sheets, testing supplies, and oxygen are not separately billable and would not be tied to HBO but rather the department. Medications and dressings (if changed on the same day) may be tied to the patient if itemized in the billing, but not all the departments separately bill these since most insurances do not pay for them separately. These may just come in as an expense from the pharmacy at the end of the month and hit the department.

Staffing is also extremely complicated. HBO technicians can be employees of the hospital who work 40 hrs. a week in the department regardless of patient volume. Another scenario is that the HBO technician is an employee of a contract company, and their hours are charged out monthly through a general wound care contract. Another scenario is that an RN who works in the wound clinic could also double as an HBO technician depending on volume, they could be playing both roles on any given day. Productivity for hospitals usually tied to stats assigned by the hospital. Therefore 4 units of HBO could have 4 stats associated with it and 1 stat could account for whatever amount of time the hospital assigns to it. In this case let us assume 1 stat accounts for 30 minutes of time, then the technician hours will only be counted in accordance with the time they were working with patients and not all of the time actually required to run the chambers. In around 2016-2019 we also had an issue that caused 0 stats to be assigned to the HBO CPT. This causes the system to not associate any of the productivity to be connected to the HBO CPTs. Some departments fixed this issue and others did not.

Not all charges even make it to the wound care department therefore they would never be tied to one specific procedure. For example, I have never seen the depreciation of capital expenses attached to a P&L of an HOPD, which says there is no cost to using this extremely expensive chamber. Oxygen is another expense that is often not tracked. Oxygen usually comes from an oxygen farm which is expensive to install and often has a monthly rental and oxygen use charges. Since most HOPDs are attached to hospitals it is a customary practice to tap into these main systems already in use by the hospitals. Because of this the hospitals do not typically charge the wound departments for the oxygen they use since it comes in one bill from the supplier. The only oxygen expense you may see is for back up tanks for pts and medical air. Unfortunately, this is only a fraction of the expense.

Rent is another complicated expense for wound departments. HBO suites are often as large or larger than the wound clinics. Because the areas for the chambers with the gurneys need to be so large and changing rooms are required, at least half of the expenses should be assigned to HBO. Some clinics have office space assigned to departments specifically, but if the rent is associated with a property the hospital owns or rents in bulk these expenses also do not make it on to the P&L.

If you understand how inpatient hospitals run, then you will understand why these departments are not tracking detailed expenses. Additionally, almost all outpatient wound services are paid as bundled payments (instruments, rx, and supplies) included in procedures or E&M so the effort to bill and track those is also unnecessary. Today if someone from an accounting department had to pull a cost analysis to treat one unit of G0277, I am just not sure how they would do it. You would really need to take a stand-alone HBO facility to even come close to the actual expense.

Sharon Hannan
Executive Vice President
Office | 1-844-Open-Wound (673-6968) ext 710