Capturing Cloudy Billing Patterns in Topical Oxygen Wound Therapy

When you think of wound care, Topical Oxygen Wound Therapy (TOWT) probably isn’t the first thing that comes to mind. Yet, TOWT has been in clinical practice for over 50 years¹, gaining traction as a deeper understanding of care and promising trials of this treatment deliver positive outcomes for patients. TOWT’s rising popularity in treating complex wounds has made it a fixture in the healthcare landscape—especially for the growing aging and diabetic populations in need of wound management options.

However, CMS continues to grapple with national coverage of the treatment (along with others such as skin substitutes and/or collagen dressings), leaving coverage determinations to local contractors & Medicare coverage². The complexity of TOWT continues with challenges in billing, reimbursement, and coverage, making it easy for billing errors and wasteful spending to fly under the radar. As more treatments and devices related to TOWT become available, health plans and providers struggle to keep pace with evolving coverage requirements, policy guidelines, and complex coding requirements.

In recent analysis, Shift discovered that improper billing for TOWT led to an exposure of over $1.55 million in a plans’ claims data, proving the need for oversight of these treatments, paired devices, policy and billing guidelines.

Why Topical Oxygen Therapy Matters in Modern Wound Care

TOWT works by delivering oxygen directly to the wound site, which can help accelerate healing by promoting tissue growth and decreasing chance of infection. Typically administered via an oxygen concentrator, TOWT can be delivered in three primary ways:

1. Continuous Delivery of Oxygen (CDO)
2. Constant pressure delivery in a contained chamber
3. Cyclical pressure in a contained chamber

^{Figure 1}

These devices and delivery methods provide flexibility, but the need for an oxygen concentrator in every TOWT treatment session makes billing a more complex process. Specific codes are required for the oxygen therapy (e.g., A4575) and the equipment (e.g., E1390), which are sometimes overlooked or lacking prior authorization.

Decoding the Billing Complexities of TOWT

TOWT treatments fall into a complex billing space that is often outside standard procedure-to-procedure (PTP) edits and medically unlikely edits (MUEs). This means that TOWT claims aren’t always flagged by existing automated billing systems, making it easier for errors to slip through. Without proactive monitoring, issues such as missing prior authorization or incorrect device codes can quickly add up to large financial losses for a plan.

For example, according to the NY Dept of Health, TOWT therapy A4575 must be billed alongside an oxygen concentrator under code E1390. Additionally, A4575 is listed as requiring prior authorization, creating an added layer of administrative responsibility for providers. Providers forgoing prior authorization or billing the device independently of the concentrator can lead to huge sums of improper payments or provider abrasion from correcting claims. 

How Shift Detected $1.55M in TOWT Improper Billing

After finding a high usage of TOWT treatment code A4575, Shift leveraged AI-driven web scraping and natural language processing (NLP) to analyze TOWT coverage policies and billing guidelines. Using these tools, we combed through policy language, guidelines and fee schedules for a regional plan and generated logic based on TOWT-specific guidelines, particularly focusing on prior authorization needs and device codes. The newly generated logic uncovered providers billing without a connected device, and also without prior authorization - totaling an exposure of $1.55 million, proving the need to stay current with policy and guidelines.

Shift’s GenAI models parse through unstructured text and extract specific codes and logic, making it easier to spot overlooked policies and billing codes with newly generated logic. Lead US Healthcare Data Scientist, Juandiego Marquez explains that, "By generating a more robust understanding of the regulatory landscape around TOWT, Shift was able to identify patterns of non-compliance, helping payers minimize exposure and creating provider education opportunities for savings from behavioral change."

As TOWT treatments continue to grow in both usage and complexity, aligning billing practices with updated policies will become essential to ensure that patients receive the best possible care without incurring unexpected costs. Shift’s analysis offers a glimpse into how tech-driven solutions can bridge the gap between healthcare innovation and billing compliance, paving the way for a more efficient, accurate, and patient-centered healthcare system.

Learn More:
Contact us to learn more about preventing improper billing when it comes to TOWT or other procedures. 

^{Figure 2: http://www.emedny.org/providermanuals/dme/PDFS/2008-4_New%20York%20State%20Medicaid%20Topical%20Oxygen%20Wound%20Therapy%20Guidelines.pdf} 

About the Author

Mark Starinsky, AHFI, CFE, CHC, SA

Mark Starinsky, AHFI, CFE, CHC, SE is the product lead for Shift Technology’s Payment Integrity solutions, where he is responsible for building and managing Shift’s leading AI capabilities. Before Shift, Mark managed Product and Service Delivery for other tech-based payment integrity solutions. Prior to his technology roles, Mark was a criminal investigator and senior auditor for the U.S. Department of Health and Human Services, Office of Inspector General (OIG). During more than 10 years with the OIG, Mark successfully identified more than $1 Billion of fraud, waste and abuse. He led various reviews of Medicare and Medicaid providers including home health agencies, durable medical equipment suppliers, mental health centers and health maintenance organizations. Mark has received several awards for meritorious service and is an active AHFI, CFE, and CHC.