Reason code W7087 and Medically Denied Lines for Skin Substitute Services

Reason code W7087 is received when a skin substitute application procedure is billed without the appropriate skin substitute product code. This edit causes claims to return to the provider (RTP) as unprocessable. The outpatient code editor logic requires that these services be billed on the same claim as covered services. 

It has been brought to our attention that medical necessity or Medically Unlikely Edits (MUE) denials that occur on the skin substitute product code cause the charges to move to non-covered. This ultimately causes the claim to return with reason code W7087 because the charges are now in non-covered. The RTP does not offer appeal rights and does not allow you to provide any kind of documentation to support the actual medical necessity or MUE denials that occur on the line levels. 

CMS has approved a workaround for this problem. We will be suspending all claims that receive the W7087 edit. If the claim is billed correctly with the appropriate skin substitute application and skin substitute product code and charges are in non-covered due to a medical policy edit, we will medically deny all skin substitute services. This will cause the claim to process with appeal rights on the entire claim. You then can submit a redetermination request on the claim and submit medical documentation for the skin substitute product code. The documentation will need to support either the medical necessity of the services or support the units that are considered over the MUE.

Please ensure the appropriate skin substitute application and product codes are billed on the claim. Claims that are not billed correctly will RTP. You may refer to our LCD L35041, Application of Bioengineered Skin Substitutes to Lower Extremity Chronic Non-Healing Wounds and its related local coverage article A54117, for the complete listing of application and product codes.