IPPS FY 2021 Final Rule: MS-DRG Changes

on Wednesday, 09 September 2020. All News Items | Case Management | Documentation | Coding

Providing Patients with Better Value and Results

CMS released the display copy of the Fiscal Year (FY) 2021 Inpatient Prospective Payment System (IPPS) Final Rule last Wednesday September 2, 2020. As of the release of this article, you have twenty-one days to read and absorb the information as you prepare for the October 1, 2020 start of the 2021 CMS FY.  

At least annually, MS-DRG classifications and relative weights are adjusted to reflect changes in treatment patterns, technology, and other factors that may change the relative use of hospital resources. This week highlights finalized changes to specific MS-DRG Classifications.

 

Pre-MDC: Bone Marrow Transplants

Surgical vs. Medical MS-DRGs

Currently, the Bone Marrow Transplant (BMT) MS-DRGs (MS-DRG 014 (Allogeneic Bone Marrow Transplant), MS-DRG 016 (Autologous Bone Marrow Transplant with CC/MCC or T-Cell Immunotherapy), and MS-DRG 017 (Autologous Bone Marrow Transplant without CC/MCC) are designated as surgical MS-DRGs.

In the proposed rule, a request was made to re-designate these three MS-DRGs as medical MS-DRGs as a Bone Marrow Transplant does not involve a surgical procedure or require the use of an O.R. The requestor noted that this change “would clinically align with the resources utilized in the performance of these procedures.”

Clinical advisors agreed and CMS finalized their proposal to re-designate MS-DRGs 014, 016, and 017 as medical MS-DRGs effective October 1, 2020.

BMT Procedures Designation O.R. vs. Non-O.R.

The requestor also noted that MS-DRGs 016 and 017 includes ICD-10-PCS procedures codes designated as Non-O.R. while the following eight procedures are designated as O.R. Procedures:

  • 30230AZ: Transfusion of embryonic stem cells into peripheral vein, open approach
  • 30230G0: Transfusion of autologous bone marrow into peripheral vein, open approach
  • 30230X0: Transfusion of autologous cord blood stem cells into peripheral vein, open approach
  • 30230Y0: Transfusion of autologous hematopoietic stem cells into peripheral vein, open approach
  • 30240AZ: Transfusion of embryonic stem cells into central vein, open approach
  • 30240G0: Transfusion of autologous bone marrow into central vein, open approach
  • 30240X0: Transfusion of autologous cord blood stem cells into central vein, open approach
  • 30240Y0: Transfusion of autologous hematopoietic stem cells into central vein, open approach.

CMS finalized the re-designation of these codes from O.R. to Non-O.R. procedures affecting their current MS-DRG assignment.  

Chimeric Antigen Receptor (CAR) T-Cell Therapies: New MS-DRG

In the FY 2020 IPPS Proposed Rule, a request was made to create new MS-DRGs for CAR T-cell therapy. The requestor noted this would improve payment in the inpatient setting. CMS did not believe enough data was available to make a change at that time. However, CMS did seek comments on payment alternatives for CAR-T cell therapies.

In the FY 2020 Final Rule CMS finalized the continuation of the new technology status and add-on payments for FY 2020 for this therapy.

In the FY 2021 proposed rule, the request was again made to create a new MS-DRG as this therapy will no longer be eligible for the new technology add-on payment (NTAP) for FY 2021. CMS responded by noting they now have enough data to consider the development of a new MS-DRG. Further, CMS clinical advisors found a vast discrepancy in resource consumption and clinical differences warranting the creation of new MS-DRG.

In the Final Rule, CMS finalized their proposal to:  

  • Assign cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 to a new MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell immunotherapy, and
  • Revise the MS-DRG 016 title to “Autologous Bone Marrow Transplant with CC/MCC.”

The following table highlights the MS-DRG relative weight (RW) and geometric mean length of stay (GMLOS) for the BMT MS-DRGs and the new CAR T-Cell MS-DRG:

MS-DRGMS-DRG DescriptionFY 2021 R.W.FY 2021 GMLOS
014 Allogeneic Bone Marrow Transplant 12.778 24.1
016 Autologous Bone Marrow Transplant with CC/MCC 6.7262 17.1
017 Autologous Bone Marrow Transplant without CC/MCC 4.8302 8.9
018 Chimeric Antigen Receptor (CAR) T-Cell Immunotherapy 37.3290 15.6
Table 5. – List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay – FY 2021 Final Rule

 

MDC 1: Diseases and Disorders of the Nervous System

Carotid Artery Stent Procedures: Background

In FY 2020 CMS finalized their proposal to reassign 96 ICD-10-PCS procedures describing dilation of carotid artery with an intraluminal device(s):

  • From MS-DRGs 037, 038, and 039 (Extracranial Procedures with MCC, with CC, and without CC/MCC respectively)
  • To MS-DRGs 034, 035, and 036 (Carotid Artery Stent Procedures with MCC, with CC, and without CC/MCC respectively)

Carotid Artery Stent Procedures: FY 2021 Proposals

In response to a request, CMS proposed to reassign the following six ICD-10-PCS codes describing dilation of carotid artery with drug eluting intraluminal device(s) using an open approach from MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036:

  • 037H04Z: Dilation of right common carotid artery with drug-eluting intraluminal device, open approach
  • 037J04Z: Dilation of left common carotid artery with drug-eluting intraluminal device, open approach
  • 037K04Z: Dilation of right internal carotid artery with drug-eluting intraluminal device, open approach
  • 037L04Z: Dilation of left internal carotid artery with drug-eluting intraluminal device, open approach
  • 037M04Z: Dilation of right external carotid artery with drug-eluting intraluminal device, open approach
  • 037N04Z: Dilation of left external carotid artery with drug-eluting intraluminal device, open approach

CMS further reviewed to see if any of the six codes were included in MS-DRGs outside of MDC 1. They found a total of 36 ICD-10 PCS codes for procedures describing dilation of the carotid artery with an intraluminal device with an open approach that are currently assigned to MS-DRG 252 (Other Vascular Procedures with MCC) in MDC 5 (Diseases and Disorders of the Circulatory System). Interestingly, they found 8 claims with one of these 36 ICD-10-PCS codes and a Principal Diagnosis in MDC 1 causing the claims to group to the Extensive O.R. Procedure Unrelated to Principal Diagnosis MS-DRG Group (981, 982, and 983).

CMS finalized the proposal to add the 6 codes as requested and the additional 36 ICD-10-PCS codes they identified as currently being in MDC 5 to the GROUPER logic for MS-DRGs 034, 035, 036 in MDC 1.

As an instructor told me when first learning about the MS-DRG system, this change permits cases with a Principal Diagnosis in MDC 1 to “remain in the family.”

 

MDC 3: Diseases and Disorders of Ear, Nose, and Throat

Temporomandibular Joint Replacements

A request was made to reassign ICD-10-PCS procedures 0RRC0JZ (Replacement of right temporomandibular joint with synthetic substitute, open approach), and 0RRD0JZ (Replacement of left temporomandibular joint with synthetic substitute, open approach):

  • From MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R. Procedures with and without CC/MCC, respectively)
  • To MS-DRGs 131 and 132 (Cranial and Facial Procedures with and without CC/MCC, respectively) in MDC 03.

The requestor stated that it is inaccurate for these two codes that involve the excision of the TMJ and replacement with a prosthesis to Group to MS-DRGs 133 and 134 when the codes for the TMJ excision alone (0RBC0ZZ (Excision of right temporomandibular joint, open approach) and 0RBD0ZZ (Excision of left temporomandibular joint, open approach) group to the higher weighted MS-DRGs 131 and 132.

CMS undertook a comprehensive review of all procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134. Based on data analysis and this comprehensive review, CMS Clinical Advisors supported restructuring of these MS-DRGs by assigning procedures based on clinical intensity, complexity of service and resource utilization.

CMS finalized their proposals to:  

  • Delete the three MS-DRGs groups with a two-way severity level subgroup (129 & 130, 131 & 132, and 133 & 134)
  • Create two new base MS-DRGs with a three-way severity level split:
    • MS-DRGs 140, 141, and 142 (Major head and Neck Procedures with MCC, with CC, without CC/MCC respectively), and
    • MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth, and Throat O.R. Procedures with MCC, with CC, without CC/MCC respectively).

Note, CMS refers readers to Tables 6P.2a, 6P.2b, and 6P.2.c associated with the final rule for the finalized list of procedure codes that define the logic for the finalized MS-DRGs.

 

MDC 5: Diseases and Disorders of the Circulatory System

Left Atrial Appendage Closure (LAAC)

Requests were made to create a new MS-DRG for the LAAC procedure or to map all LAAC procedures to a different MS-DRG with payment rates aligned with procedural costs.  The following table details the current corresponding MS-DRGs for the 9 ICD-10-PCS codes describing LAAC Procedures. Note that currently the procedure map to an MS-DRG based on the approach.

ICD-10-PCS CodeMS-DRGDescription
02L70CK 250-251 Occlusion of left atrial appendage with extraluminal device, open approach
02L70DK 250-251 Occlusion of left atrial appendage with intraluminal device, open approach
02L70ZK 250-251 Occlusion of left atrial appendage, open approach
02L73CK 273-274 Occlusion of left atrial appendage with extraluminal device, percutaneous approach
02L73DK 273-274 Occlusion of left atrial Appendage with intraluminal device, percutaneous approach
02L73ZK 273-274 Occlusion of left atrial appendage, percutaneous approach
02L74CK 273-274 Occlusion of left atrial appendage with extraluminal device, percutaneous endoscopic approach
02L74DK 273-274 Occlusion of left atrial appendage with intraluminal device, percutaneous endoscopic approach
02L74ZK 273-274 Occlusion of left atrial appendage, percutaneous endoscopic approach
Source: IPPS Final Rule for FY 2021

 

CMS finalized their proposal to reassign the ICD-10-PCS procedure codes for an open approach to MS-DRGs 273 and 274. “Clinical advisors stated this reassignment would allow all LAAC procedures to be grouped to the same MS-DRGs and improve clinical coherence.” The following table highlights the difference in R.W. and GMLOS for FY 2021 for the four MS-DRGs as well the MS-DRG title changes for MS-DRGs 273 and 274:

MS-DRGMS-DRG DescriptionR.W.GMLOS
250 Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC 2.5228 3.7
251 Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC 1.6598 2.1
273 Percutaneous and other Intracardiac Procedures with MCC 3.8372 4.3
274 Percutaneous and Other Intracardiac Procedures without MCC 3.2854 1.6
Table 5. – List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay – FY 2021 Final Rule

Insertion of Cardiac Contractility Modulation Device

A request was made to review the MS-DRG assignment for cases identifying patients receiving a cardiac contractility modulation (CCM) device system for CHF. “CCM is indicated for patients with moderate to severe heart failure resulting from either ischemic or non-ischemic cardiomyopathy. CCM utilizes electrical signals which are intended to enhance the strength of the heart and overall cardiac performance. CCM delivery device systems consist of a programmable implantable pulse generator (IPG) and three leads which are implanted in the heart. One lead is implanted into the right atrium and the other two leads are inserted into the right ventricle.”

Reasons for this request:

  • MS-DRGs 222, 223, 224, 225, 226, and 227 (Cardiac Defibrillator Implant with and without Cardiac Catheterization with and without AMI/HF/Shock with and without MCC, respectively include “code pairs” describing the insertion of contractility modulation devices.
  • Currently, GROUPER logic requires the combination of the CCM device codes and a left ventricular lead to map to this group of MS-DRGs.
  • Per the requestor, a CCM device is contraindicated in patients with a left ventricular lead. Consequently, no case involving insertion of the CCM system can be appropriately mapped to this group of MS-DRGs.
  • Currently, CCM system insertion maps to MS-DRG 245 (AICD Generator Procedures).
  • Requester noted to date this procedure has been performed on an outpatient bases but expects that some Medicare patients will receive CCM devices as an inpatient.

CMS analysis found that the ICD-10-PCS procedure code combinations for right ventricular and/or right atrial lead insertion with insertion of CCM devices were inadvertently excluded from this group of MS-DRGs as a result of replicating the ICD-9 based MS-DRGs.

CMS has finalized the following two proposals:

  • Add 24 ICD-10-PCS code combinations for CCM devices to this group of MS-DRGs, and
  • Delete 12 clinically invalid code combinations from the GROUPER logic of this MS-DRG group describing the insertion of CCM device and the insertion of a cardiac lead into the left ventricle.

 

MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

Hip and Knee Joint Replacements

A requestor recommended restructuring MS-DRGs for total joint arthroplasty that utilize oxidized zirconium bearing surface implants in total hip and total knee replacements. They went on to offer three options for restructuring the MS-DRGs.

Based on the request and lengthy data analysis by CMS, CMS proposed and has finalized two new MS-DRGs for hip replacements due to a hip fracture.  The following table highlights the difference in R.W. and GMLOS for FY 2021:

MS-DRGMS-DRG DescriptionR.W.GMLOS
469 Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement 3.0844 3.1
470 Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC 1.8999 1.8
New MS-DRG 521 Hip Replacement with Principal Diagnosis of Hip Fracture with MCC 3.0634 6.2
New MS-DRG 522 Hip Replacement with Principal Diagnosis of Hip Fracture without MCC 2.1891 4.1
Table 5. – List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay – FY 2021 Final Rule

Impact on the Comprehensive Care for Joint Replacement (CJR) Model

In the proposed rule CMS acknowledged that the CJR model includes episodes triggered by MS-DRG 469 with hip fracture and MS-DRG 470 with hip fracture. Given the proposal for new MS-DRGs for hip fracture, CMS requested comments on the effect this proposal would have on the CJR model and whether to incorporate the new MS-DRGs into the model if finalized.

CMS notes in the Final Rule that “an interim final rule published in April 6, 2020 extended the CJR model through March 31, 2021, in light of the COVID-19 pandemic, to ensure the continuity of the CJR model operations in participant hospitals during the public health emergency so that we did not create any additional disruptions to the standard of care procedures hospitals have in place during this challenging time. Because the model will continue until at least March 31, 2021, we intend to adopt a policy in the CJR final rule that incorporates MS-DRG 521 and MS-DRG 522 into the CJR model as of the effective date of these new MS-DRGs. We believe such an approach would avoid disruption to the model for the remainder of PY5 (as extended) and thereafter, if our proposal to extend the CJR model to December 31, 2023 is finalized.”

 

MDC 11: Diseases and Disorders of the Kidney and Urinary Tract

Kidney Transplants

Currently, Kidney Transplants group to MS-DRG 652 (Kidney Transplant) in MDC 11. There was a request to re-designate kidney transplants as Pre-MDC MS-DRGs similar to other organ transplants. CMS analysis found that all kidney transplants in MS-DRGs 981 and 982 reported a principal diagnosis in MDC 5 (Diseases and Disorders of the Circulatory System).

Instead of proposing a move to a Pre-MDC MS-DRG, CMS proposed and has now finalized an alternate option “to modify the GROUPER logic for MS-DRG 652 by allowing the presence of a procedure code describing transplantation of the kidney to determine the MS-DRG assignment independent of the MDC of the principal diagnosis in most instances.”

Of note, CMS discussed in the proposed rule how the Pre-MDCs came into existence and that the proposal for kidney transplant procedure code to determine the MS-DRG assignment represent a “first step in investigating” how they may consider shifting transplants out of Pre-MDCs as their clinical advisors have noted that while once considered as being very resource intensive, “treatment practices have shifted since the inception of Pre-MDCs.”

Kidney Transplants and Dialysis during an Inpatient Stay

An additional request was made to create a new MS-DRG for kidney transplant cases where a patient receives dialysis during the inpatient stay and after the date of the transplant. The following three ICD-10-PCS procedure codes identify the performance of hemodialysis:

  • 5A1D70Z: Performance of urinary filtration, intermittent, less than 6 hours per day
  • 5A1D80Z: Performance of urinary filtration, prolonged intermittent, 6-18 hours per day
  • 5A1D90Z: Performance of urinary filtration, continuous, greater than 18 hours per day

CMS indicated in the proposed rule that they believe that creating separate MS-DRGs when hemodialysis is performed either before or after a kidney transplant or simultaneous pancreas/kidney transplant “would appropriately address the differential in resource consumption consistent with the President’s Executive Order on Advancing American Kidney Health (see https://www.whitehouse.gov/presidential-actions/executive-order-advancing-american-kidney-health/).”

CMS has finalized the proposed three new MS-DRGs:

  • Pre-MDC MS-DRG 019 (Simultaneous Pancreas/Kidney Transplant with Hemodialysis) for cases describing the performance of hemodialysis during an admission where the patient received a simultaneous pancreas/kidney transplant, and
  • MS-DRGs 650 and 651 (Kidney Transplant with Hemodialysis with MCC and without MCC respectively) for cases describing the performance of hemodialysis in an admission where the patient received a kidney transplant in MDC 11.

As part of the logic for the new MS-DRGs, CMS finalized their proposal to change the designation of the above hemodialysis codes from non-O.R. procedures to non-O.R. procedures affecting the MS-DRG.

 

MDC 17: Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms

Inferior Vena Cava Filters

A requestor noted that currently when the procedure code describing the placement of an inferior vena cava (IVC) filter (06H03DZ – Insertion of intraluminal device into inferior vena cava, percutaneous approach) is also reported with the codes describing the introduction of a high dose chemotherapy agent or report a chemotherapy principal diagnosis with a secondary diagnosis describing acute leukemia, the cases are assigned to a lower weighted MS-DRG group than when the IVC filter code is not on the claim.

CMS noted in the proposed rule that “our clinical advisors believe that, given the similarity in factors such as complexity, resource utilization, and lack of a requirement for anesthesia administration between all procedures describing insertion of a device into the inferior vena cava, it would be more appropriate to designate these three ICD-10-PCS codes describing the insertion of an intraluminal device into the inferior vena cava as Non-O.R. procedures. Therefore, we are proposing to remove ICD-10-PCS procedure codes 06H00DZ, 06H03DZ, and 06H04DZ from the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under this proposal, these procedures would no longer impact MS-DRG assignment.”

In the Final Rule, CMS clinical advisors concurred with commenters “that while the procedure to insert an IVC filter is not surgical in nature, procedures describing the insertion of an intraluminal device into the inferior vena cava performed via an open or percutaneous endoscopic approach could require greater resources than a procedure describing insertion of an intraluminal device into the inferior vena cave performed via a percutaneous approach.”

For this reason, CMS has indicated they will further examine relevant clinical factors and similarities in resource consumption between procedures describing the insertion of an intraluminal device into the inferior vena cava performed via an open or a percutaneous endoscopic approach.”

CMS finalized the following proposals for FY 2021: 

  • ICD-10-PCD procedure code 06H03DZ designation is changing from O.R. to non-O.R. procedure, and
  • For now, ICD-10-PCS procedures codes 06H00DX and 06H04DZ will maintain the O.R. designation and continue to impact MS-DRG assignment.

 

Moving Forward

The FY 2021 IPPS Final Rule is scheduled to be published in the Federal Register on September 18, 2020. Until then, you can access the display copy available on the FY 2021 IPPS Final Rule Home Page and watch for additional articles in the Wednesday@One.

 

Resources:

FY 2021 IPPS Final Rule Home Page on CMS website: https://www.cms.gov/medicare/acute-inpatient-pps/fy-2021-ipps-final-rule-home-page#1735

CMS Fact Sheet: Fiscal Year (FY) 2021 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Final Rule (CMS-1735-F): https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2021-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-acute-0

 

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics 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 is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Risk Assessment (CRA) Tool. 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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