ICD-10-PCS Procedure Codes Re-Designated as Non-O.R., Part 2

on Friday, 30 June 2017. All News Items | Documentation | Coding

A Deeper Dive into the Analytics

In May, MMP released the article ICD-10-PCS Procedure Codes Re-Designated as Non-O.R. Codes. As a quick recap, in the FY 2018 IPPS Proposed Rule, CMS has proposed 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.”

O.R. Procedures drive MS-DRG assignment to surgical MS-DRGs. In general, a surgical MS-DRG has a higher Relative Weight (R.W.) assignment than a medical MS-DRGs. Higher R.W.’s result in higher reimbursement and higher Case Mix Index (CMI) to a hospital.

The May article focused on paid claims data for Calendar Year (CY) 2016 for states included in the  Jurisdiction J MAC (Alabama, Georgia and Tennessee). This article broadens the focus to include Florida and Georgia as the HFMA Region 5 is comprised of these five states. This first table details by state the volume of claims with a principal procedure code proposed for re-designation to a Non-O.R. Code, the actual amount paid, and the CMI for this group of claims.

Table 1: State Compare of claims billed with a Principal Procedure being proposed for re-designation as a Non-O.R. Procedure.

HFMA Region 5 Compare
StateTotal ClaimsActual Amount PaidCMI
Alabama 1,226 $20,956,758.48 3.04126
Florida 5,037 $89,193,053.67 2.99966
Georgia 1,623 $34,027,505.29 3.14814
South Carolina 1,208 $16,065,867.05 3.06448
Tennessee 1,358 $23,927,015.36 3.08866
Overall 10,452 $184,170,199.85  

MS-DRG Shift from Surgical to Medical

In the absence of a valid O.R. Procedure code, hospitals will still receive reimbursement for the Medical Principal Diagnosis. The challenge is trying to identify the financial impact of the MS-DRG shift from a Surgical MS-DRG to a Medical MS-DRG.

To help answer this question, our sister company, RealTime Medicare Data (RTMD) provided MMP with CY 2016 paid claims data for MS-DRGs with a principal procedure code that has been proposed for re-designation to a Non-O.R. procedure code. The data included the principal and secondary medical diagnoses. With this information we are able to identify the medical MS-DRGs that would have been billed in the absence of the O.R. Procedure.  

To date, we have analyzed over 200 claims and are finding that in general hospitals can anticipate a decrease in payment for this group of claims anywhere from 36% to 45%. That would equate to the state of Alabama realizing a potential $7.5 million to $9.4 million decrease in paid claims revenue.  I would like to point out that while this group of 1,226 claims is a small subset of the 226,204 Medicare paid claims in Alabama for CY 2016, in the current health care environment, losing $7.5 million to $9.4 million in payment doesn’t feel “small.”

Also, noteworthy is the decrease in CMI that can be anticipated. Again, of the over 200 claims that we have analyzed, the potential decrease in a hospital’s CMI has ranged from 1.5706 to 2.1533. Thinking back to my hospital days, the C-suite seemed to turn to Coding and CDI Professionals to explain decreases in CMI. If the proposed rule is finalized, this is one example of a shift in CMI that is outside of the Coding and CDI Professional’s control. What is controllable is being aware of and making sure your C-Suite understands this change.  

Top Procedures Proposed for Re-Designation

Now, let’s drill a bit deeper into the detail. Analyzing the types of procedures by volume revealed that all five states had similar volume patterns for the most frequent types of procedures being proposed for re-designation to a Non-O.R. Procedure. This next table highlights the Top Principal Procedure Codes.

Table 2: Top Principal Procedure Code/Code Group HFMA Region 5 Combined

Top Principal Procedure Code or Code Group Overall
Code or Code GroupCode DescriptionExample of ProcedureTotal ClaimsTotal Actual Amount Paid
Code: 06H03DZ Insertion IVC Filter N/A 3,983 $74,442,868.32
Code Group: 0HB Excision Group: Skin & Breast-Excision Nonspecific excisional debridement 1,752 $23,454,642.86
Code Group: 0J9 Drainage Group: Subcutaneous Tissue & Fascia-Drainage Other, incision of soft tissue 1,831 $20,997,017.47
Code Group: 0JQ Other Repairs Group: Subcutaneous Tissue & Fascia-Repair Other, plastics operation of fascia 784 $8,377,761.03
Code Group: OBC Drainage Group: Respiratory System-Extirpation Removal bronchial foreign body 404 $10,095,985.23
Codes: 30233Y0, 30243G0 &30243Y0 Transfusion of Autologous Stem Cells or Bone Marrow, Percutaneous Approach 326 $12,844,413.17

Most amazing to me was the top Procedure Type in all five states was not a code group but the single code (06H03DZ) for insertion of IVC filter which accounted for 38% of all claims.

This last table details the top principal procedures at the state level.

Table 3: Top Principal Procedure Code/Code Group State Specific

Top Principal Procedure Code or Code GroupState Compare
No. 1: Code 06H03DZ – Insertion IVC Filter
StateClaims VolumeActual Amount Paid
Alabama 407 $7,391,796.17
Florida 2,055 $37,917,343.81
Georgia 624 $13,967,390.21
South Carolina 438 $6,485,989.83
Tennessee 459 $8,680,348.30
Note: IVC Filter placement is performed under radiologic guidance via femoral or jugular vein access.
 
No. 2: Code Group 0HB – Excision Group: Skin & Breast – Excision
StateClaims VolumeActual Amount Paid
Alabama 239 $3,667,013.15
Florida 840 $14,128,405.40
Georgia 270 $5.168.181.60
South Carolina 186 $2,204,922.85
Tennessee 217 $3,454,301.46
 
No. 3: Code Group 0J9 – Drainage Group: Subcutaneous Tissue & Fascia - Drainage
StateClaims VolumeActual Amount Paid
Alabama 218 $2,149,549.79
Florida 786 $9,377,479.33
Georgia 285 $3,771,585.37
South Carolina 221 $2,076,608.70
Tennessee 321 $3,621,794.28
 
No. 4: Code Group – 0JQ – Other Repairs Group: Subcutaneous Tissue & Fascia - Repair
StateClaims VolumeActual Amount Paid
Alabama 98 $920,039.41
Florida 382 $3,973,628.05
Georgia 124 $1,490,010.95
South Carolina 80 $767,839.32
Tennessee 100 $1,226,243.30
 
No. 5: OBC – Drainage Group: Respiratory System – Extirpation
StateClaims VolumeActual Amount Paid
Alabama 59 $1,448,535.95
Florida 176 $4,519,812.58
Georgia 52 $1,466,717.39
South Carolina 66 $1,457,403.73
Tennessee 51 $1,203,515.58
   
No. 6: Codes 30233Y0 / 30243G0 & 30243Y0: Transfusion of Autologous Stem Cells or Bone Marrow, Percutaneous Approach
StateClaims VolumeActual Amount Paid
Alabama 38 $1,944,927.97
Florida 131 $5,923,652.46
Georgia 84 $4,032,877.53
South Carolina 24 $942,955.21
Tennessee 49 $2,198,172.90

The time has passed to comment on the Proposed Rule (June 13, 2017). Now is the time to anticipate a potential shift in your Medicare paid claims and CMI.

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

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system.  In her current position, Beth monitors, interprets and communicates current and upcoming Case Management / Clinical Documentation issues as they relate to specific entities concerning Medicare.  You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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