Knowledge Base Article

In the Acute Care Hospital Inpatient setting, discharges are assigned to one Medicare Severity Diagnosis-Related Group (MS-DRGs) for the entire hospitalization. The MS-DRG System groups together similar clinical conditions and the procedures furnished during a hospitalization.

Principal Diagnoses, MCCs (Major Complications/Comorbidities), CCs (Complications/Comorbidities) and Procedures may all impact MS-DRG assignment. Notice I did not say will impact MS-DRG assignment. This is because there are specific MCCs, CCs and O.R. Procedures designated by CMS that will impact MS-DRG assignment and other secondary diagnoses and Non-O.R. designated procedures that won’t.

With the October 1, 2015 ICD-10-CM/PCS implementation, several new O.R. Procedure Codes impacting MS-DRG assignment had Coding Professionals and CDI Specialists questioning if the resources to perform the procedures truly supported the O.R. Procedure designation. CMS soon realized this too and included proposals in the FY 2017 IPPS Proposed Rule for consideration to re-designate certain ICD-10-PCS procedures codes from O.R. Procedures to Non-O.R. Procedures.

CMS asked and the provider community responded. In fact, CMS received over 800 recommendations and were unable to fully evaluate and finalize recommendations for release in the 2017 IPPS Final Rule.

Fast forward to the April 2017 release of the FY 2018 IPPS Proposed Rule. This year CMS is proposing to re-designate over 800 current O.R. Procedures as Non-O.R. Procedures. Specific code groups being proposed “generally would not require the resources of an operating room and can be performed at the bedside.”

For those interested in reading the detail, this discussion can be found on pages 58 through 69 of the Proposed Rule pdf document. For those that prefer the highlights, keep reading to find the Code Groups being proposed, the volume of codes being proposed for re-designation by Major Diagnostic Category (MDC), and to begin to understand the potential impact if the proposals are finalized.

Code Groups

First let’s take a look at the code groups remembering that what is being proposed are procedures that in general do not require the resources of an O.R. room and can be performed at the bedside. The following table details the number of ICD-10-PCS codes by code group and a description of the code group. 

Potential Impact of ICD-10-PCS Code Re-Designation While I agree with what is being proposed, it immediately made me wonder just how many of these codes have been driving MS-DRG assignment to a Surgical MS-DRG. For answers, as I so often do, I turned to our sister company RealTime Medicare Data (RTMD) to “crunch the numbers.” At the Medicare Administrative Contractor (MAC) level, I analyzed paid claims data for Calendar Year (CY) 2016 for the Jurisdiction J MAC that adjudicates claims for Alabama, Georgia and Tennessee. At this level the numbers “feel significant.” The following table highlights the volume of claims, total charges and actual amount paid to Providers by MDC.  

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Key Takeaway from the Data:

• For Calendar Year 2016, 3,968 claims were paid to Providers in Alabama, Georgia, and Tennessee combined in the amount of $73,718,329.42.
• MDC 4: Diseases and Disorders of the Respiratory System had the highest volume of claims paid at 645.
• MDC 9: Diseases and Disorders of the Skin, Subcutaneous Tissue & Breast came in a close second at 640 claims paid.
• Pre-MDCs, while not the highest volume of claims, resulted in the highest actual claims payment at $13,152,598.75.

MS-DRG Shift from Surgical to Medical

Yes, these 800+ ICD-10-PCS codes resulted in assignment to a surgical MS-DRG for almost 4,000 claims and several million dollars. However, it is important to remember without the ICD-10-PCS code designation, your hospital would still receive reimbursement for the Medical Principal Diagnosis. The Relative Weights of the Surgical MS-DRGs assigned ranged from 0.5865 all the way to 17.95. From this it is reasonable to assume the shift in payment will also vary widely. 

In order to put this into context, I have provided the following examples of the financial impact when there is an MS-DRG shift from a Surgical MS-DRGs to a Medical MS-DRG:

• Patient A
• Dates of Service: 3/29/2016 – 4/19/2016
• Principal Procedure Code: 06H03DZ Insertion of Intraluminal Device into Inferior Vena Cava, Percutaneous Approach
• Principal Medical Diagnosis Code: A4195 Other Gram-negative sepsis
• MS-DRG Assigned 03: ECMO or Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedure
• Relative Weight: 17.657
• CMS FY 2016 National Average Reimbursement $95,944.77.
• Without any additional procedure to drive MS-DRG assignment and without an MCC, in this scenario the MS-DRG would be reassigned to:
• MS-DRG 872: Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours without MCC
• Relative Weight: 1.0427
• CMS FY 2016 National Average Reimbursement $5,665.86
• Patient B
• Dates of Service: 5/3/2016 – 5/13/2016
• Principal Procedure Code: 30233Y0 Transfusion of Autologous Hematopoietic Stem Cells into Peripheral Vein, Percutaneous Approach
• Principal Medical Diagnosis Code: R112 Nausea with vomiting, unspecified
• MS-DRG Assigned: 016 Autologous Bone Marrow Transplant with CC/MCC
• Relative Weight: 6.1746
• CMS FY 2016 National Average Reimbursement: $33,551.79 
• Without any additional procedures to drive MS-DRG assignment, in this scenario with an MCC, the MS-DRG would be reassigned to:
• MS-DRG 391: Esophagitis, Gastroenteritis & Miscellaneous Digestive Orders with MCC
• Relative Weight: 1.1925
• CMS FY 2016 National Average Reimbursement: $6,479.85
• Patient C
• Dates of Service: 7/18/2016 – 7/23/2017
• Principal Procedure Code: 0HBFXZZ Excision of Right Hand Skin, External Approach
• Principal Medical Diagnosis Code: L03011 Cellulitis of Right Finger
• MS-DRG Assigned: 572 Skin Debridement without CC/MCC
• Relative Weight 1.0391
• CM FY 2016 National Average Reimbursement: $5,646.30
• Without and additional procedures to drive MS-DRG assignment, in this scenario, the MS-DRG would be reassigned to:
• MS-DRG 603: Cellulitis without MCC
• Relative Weight: 0.8429
• CMS FY 2016 National Average Reimbursement: $4,580.18

MMP strongly encourages key stakeholders at your facility take the time to review the proposed rule and submit comments. CMS is accepting comments through 5 p.m. EDT on June 13, 2017.

Resource:

2018 IPPS Proposed Rule published in the Federal Register: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Proposed-Rule-Home-Page.html