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Proposed Rule

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2018 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Program Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Provider-Based Status of Indian Health Service and Tribal Facilities and Organizations; Costs Reporting and Provider Requirements; Agreement Termination Notices

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Start Preamble Start Printed Page 19796

AGENCY:

Centers for Medicare and Medicaid Services (CMS), HHS.

ACTION:

Proposed rule.

SUMMARY:

We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2018. Some of these proposed changes would implement certain statutory provisions contained in the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013, the Improving Medicare Post-Acute Care Transformation Act of 2014, the Medicare Access and CHIP Reauthorization Act of 2015, the 21st Century Cures Act, and other legislation. We also are making proposals relating to the provider-based status of Indian Health Service (IHS) and Tribal facilities and organizations and to the low-volume hospital payment adjustment for hospitals operated by the IHS or a Tribe. In addition, we are providing the proposed estimated market basket update that would apply to the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits for FY 2018. We are proposing to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2018.

In addition, we are proposing to establish new requirements or revise existing requirements for quality reporting by specific Medicare providers (acute care hospitals, PPS-exempt cancer hospitals, LTCHs, and inpatient psychiatric facilities). We also are proposing to establish new requirements or revise existing requirements for eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) participating in the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. We are proposing to update policies relating to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.

We also are proposing changes relating to transparency of accrediting organization survey reports and plans of correction of providers and suppliers; electronic signature and electronic submission of the Certification and Settlement Summary page of the Medicare cost reports; and clarification of provider disposal of assets.

DATES:

Comment Period: To be assured consideration, comments must be received at one of the addresses provided in the ADDRESSES section, no later than 5 p.m. EDT on June 13, 2017.

ADDRESSES:

In commenting, please refer to file code CMS-1677-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (no duplicates, please):

1. Electronically. You may (and we encourage you to) submit electronic comments on this regulation to http://www.regulations.gov. Follow the instructions under the “submit a comment” tab.

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1677-P, P.O. Box 8011, Baltimore, MD 21244-1850.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1677-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:

a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, please call the telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Donald Thompson, (410) 786-4487, and Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRGs, Wage Index, New Medical Service and Technology Add-On Payments, Hospital Geographic Reclassifications, Graduate Medical Education, Capital Prospective Payment, Excluded Hospitals, Sole Community Hospitals, Medicare Disproportionate Share Hospital (DSH) Payment Adjustment, Medicare-Dependent Small Rural Hospital (MDH) Program, and Low-Volume Hospital Payment Adjustment Issues.

Michele Hudson, (410) 786-4487, Mark Luxton, (410) 786-4530, and Emily Lipkin, (410) 786-3633, Long-Term Care Hospital Prospective Payment System and MS-LTC-DRG Relative Weights Issues.

Mollie Knight, (410) 786-7948, and Bridget Dickensheets, (410) 786-8670, Rebasing and Revising the Hospital Market Basket Issues.

Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital Demonstration Program Issues.Start Printed Page 19797

Jeris Smith, (410) 786-0110, Frontier Community Health Integration Project Demonstration Issues.

Lein Han, (617) 879-0129, Hospital Readmissions Reduction Program—Readmission Measures for Hospitals Issues.

Delia Houseal, (410) 786-2724, Hospital Readmissions Reduction Program—Administration Issues.

Elizabeth Bainger, (410) 786-0529, Hospital-Acquired Condition Reduction Program Issues.

Joseph Clift, (410) 786-4165, Hospital-Acquired Condition Reduction Program—Measures Issues.

Grace Im, (410) 786-0700 and James Poyer, (410) 786-2261, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing—Program Administration, Validation, and Reconsideration Issues.

Reena Duseja, (410) 786-1999 and Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality Reporting—Measures Issues Except Hospital Consumer Assessment of Healthcare Providers and Systems Issues; and Readmission Measures for Hospitals Issues.

Kim Spaulding Bush, (410) 786-3232, Hospital Value-Based Purchasing Efficiency Measures Issues.

Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality Reporting—Hospital Consumer Assessment of Healthcare Providers and Systems Measures Issues.

James Poyer, (410) 786-2261, PPS-Exempt Cancer Hospital Quality Reporting Issues.

Mary Pratt, (410) 786-6867, Long-Term Care Hospital Quality Data Reporting Issues.

Jeffrey Buck, (410) 786-0407 and Cindy Tourison (410) 786-1093, Inpatient Psychiatric Facilities Quality Data Reporting Issues.

Lisa Marie Gomez, (410) 786-1175, EHR Incentive Program Clinical Quality Measure Related Issues.

Kathleen Johnson, (410) 786-3295 and Steven Johnson (410) 786-3332, EHR Incentive Program Nonclinical Quality Measure Related Issues.

Caecilia Blondiaux, (410), 786-2190, and Ariadne Saklas, (410) 786-3322, Changes in Notice of Termination of Medicare Providers and Suppliers Issues.

Monda Shaver, (410) 786-3410, and Patricia Chmielewski, (410) 786-6899, Accrediting Organizations Survey Reporting Transparency Issues.

Kellie Shannon, (410) 786-0416, Medicare Cost Reporting and Valuation of Assets Issues.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection, generally beginning approximately 3 weeks after publication of the rule, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday through Friday of each week from 8:30 a.m. to 4:00 p.m. EST. To schedule an appointment to view public comments, phone 1-800-743-3951.

Electronic Access

This Federal Register document is available from the Federal Register online database through Federal Digital System (FDsys), a service of the U.S. Government Printing Office. This database can be accessed via the Internet at: http://www.gpo.gov/​fdsys.

Tables Available Only Through the Internet on the CMS Web Site

In the past, a majority of the tables referred to throughout this preamble and in the Addendum to the proposed rule and the final rule were published in the Federal Register as part of the annual proposed and final rules. However, beginning in FY 2012, some of the IPPS tables and LTCH PPS tables are no longer published in the Federal Register. Instead, these tables generally will be available only through the Internet. The IPPS tables for this proposed rule are available through the Internet on the CMS Web site at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled, “FY 2018 IPPS Proposed Rule Home Page” or “Acute Inpatient—Files for Download”. The LTCH PPS tables for this FY 2018 proposed rule are available through the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​LongTermCareHospitalPPS/​index.html under the list item for Regulation Number CMS-1677-P. For further details on the contents of the tables referenced in this proposed rule, we refer readers to section VI. of the Addendum to this proposed rule.

Readers who experience any problems accessing any of the tables that are posted on the CMS Web sites identified above should contact Michael Treitel at (410) 786-4552.

Acronyms

3M 3M Health Information System

AAMC Association of American Medical Colleges

ACGME Accreditation Council for Graduate Medical Education

ACoS American College of Surgeons

AHA American Hospital Association

AHIC American Health Information Community

AHIMA American Health Information Management Association

AHRQ Agency for Healthcare Research and Quality

AJCC American Joint Committee on Cancer

ALOS Average length of stay

ALTHA Acute Long-Term Hospital Association

AMA American Medical Association

AMGA American Medical Group Association

AMI Acute myocardial infarction

AO Accrediting Organizations

AOA American Osteopathic Association

APR DRG All Patient Refined Diagnosis Related Group System

APRN Advanced practice registered nurse

ARRA American Recovery and Reinvestment Act of 2009, Public Law 111-5

ASCA Administrative Simplification Compliance Act of 2002, Public Law 107-105

ASITN American Society of Interventional and Therapeutic Neuroradiology

ASPE Assistant Secretary for Planning and Evaluation (DHHS)

ATRA American Taxpayer Relief Act of 2012, Public Law 112-240

BBA Balanced Budget Act of 1997, Public Law 105-33

BBRA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Public Law 106-113

BIPA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Benefits Improvement and Protection Act of 2000, Public Law 106-554

BLS Bureau of Labor Statistics

CABG Coronary artery bypass graft [surgery]

CAH Critical access hospital

CARE [Medicare] Continuity Assessment Record & Evaluation [Instrument]

CART CMS Abstraction & Reporting Tool

CAUTI Catheter-associated urinary tract infection

CBSAs Core-based statistical areas

CC Complication or comorbidity

CCN CMS Certification Number

CCR Cost-to-charge ratio

CDAC [Medicare] Clinical Data Abstraction Center

CDAD Clostridium difficile-associated disease

CDC Centers for Disease Control and PreventionStart Printed Page 19798

CERT Comprehensive error rate testing

CDI Clostridium difficile [C. difficile] infection

CFR Code of Federal Regulations

CLABSI Central line-associated bloodstream infection

CIPI Capital input price index

CMI Case-mix index

CMS Centers for Medicare & Medicaid Services

CMSA Consolidated Metropolitan Statistical Area

COBRA Consolidated Omnibus Reconciliation Act of 1985, Public Law 99-272

COLA Cost-of-living adjustment

CoP [Hospital] condition of participation

COPD Chronic obstructive pulmonary disease

CPI Consumer price index

CQL Clinical quality language

CQM Clinical quality measure

CY Calendar year

DACA Data Accuracy and Completeness Acknowledgement

DPP Disproportionate patient percentage

DRA Deficit Reduction Act of 2005, Public Law 109-171

DRG Diagnosis-related group

DSH Disproportionate share hospital

EBRT External beam radiotherapy

ECE Extraordinary circumstances exemption

ECI Employment cost index

eCQM Electronic clinical quality measure

EDB [Medicare] Enrollment Database

EHR Electronic health record

EMR Electronic medical record

EMTALA Emergency Medical Treatment and Labor Act of 1986, Public Law 99-272

EP Eligible professional

FAH Federation of American Hospitals

FDA Food and Drug Administration

FFY Federal fiscal year

FPL Federal poverty line

FQHC Federally qualified health center

FR Federal Register

FTE Full-time equivalent

FY Fiscal year

GAF Geographic Adjustment Factor

GME Graduate medical education

HAC Hospital-acquired condition

HAI Healthcare-associated infection

HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems

HCFA Health Care Financing Administration

HCO High-cost outlier

HCP Healthcare personnel

HCRIS Hospital Cost Report Information System

HF Heart failure

HHA Home health agency

HHS Department of Health and Human Services

HICAN Health Insurance Claims Account Number

HIPAA Health Insurance Portability and Accountability Act of 1996, Public Law 104-191

HIPC Health Information Policy Council

HIS Health information system

HIT Health information technology

HMO Health maintenance organization

HPMP Hospital Payment Monitoring Program

HSA Health savings account

HSCRC [Maryland] Health Services Cost Review Commission

HSRV Hospital-specific relative value

HSRVcc Hospital-specific relative value cost center

HQA Hospital Quality Alliance

HQI Hospital Quality Initiative

HwH Hospital-within-hospital

HWR Hospital-wide readmission

ICD-9-CM International Classification of Diseases, Ninth Revision, Clinical Modification

ICD-10-CM International Classification of Diseases, Tenth Revision, Clinical Modification

ICD-10-PCS International Classification of Diseases, Tenth Revision, Procedure Coding System

ICR Information collection requirement

ICU Intensive care unit

IGI IHS Global Insight, Inc.

IHS Indian Health Service

IME Indirect medical education

IMPACT Act Improving Medicare Post-Acute Care Transformation Act of 2014, Public Law 113-185

I-O Input-Output

IOM Institute of Medicine

IPF Inpatient psychiatric facility

IPFQR Inpatient Psychiatric Facility Quality Reporting [Program]

IPPS [Acute care hospital] inpatient prospective payment system

IRF Inpatient rehabilitation facility

IQR [Hospital] Inpatient Quality Reporting

LAMCs Large area metropolitan counties

LDS Limited Data Set

LOS Length of stay

LTC-DRG Long-term care diagnosis-related group

LTCH Long-term care hospital

LTCH QRP Long-Term Care Hospital Quality Reporting Program

MA Medicare Advantage

MAC Medicare Administrative Contractor

MACRA Medicare Access and CHIP Reauthorization Act of 2015, Public Law 114-10

MAP Measure Application Partnership

MCC Major complication or comorbidity

MCE Medicare Code Editor

MCO Managed care organization

MDC Major diagnostic category

MDH Medicare-dependent, small rural hospital

MedPAC Medicare Payment Advisory Commission

MedPAR Medicare Provider Analysis and Review File

MEI Medicare Economic Index

MGCRB Medicare Geographic Classification Review Board

MIEA-TRHCA Medicare Improvements and Extension Act, Division B of the Tax Relief and Health Care Act of 2006, Public Law 109-432

MIPPA Medicare Improvements for Patients and Providers Act of 2008, Public Law 110-275

MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173

MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309

MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173

MOON Medicare Outpatient Observation Notice

MRHFP Medicare Rural Hospital Flexibility Program

MRSA Methicillin-resistant Staphylococcus aureus

MSA Metropolitan Statistical Area

MS-DRG Medicare severity diagnosis-related group

MS-LTC-DRG Medicare severity long-term care diagnosis-related group

MU Meaningful Use [EHR Incentive Program]

MUC Measure under consideration

NAICS North American Industrial Classification System

NALTH National Association of Long Term Hospitals

NCD National coverage determination

NCHS National Center for Health Statistics

NCQA National Committee for Quality Assurance

NCVHS National Committee on Vital and Health Statistics

NECMA New England County Metropolitan Areas

NHSN National Healthcare Safety Network

NOP Notice of Participation

NOTICE Act Notice of Observation Treatment and Implication for Care Eligibility Act, Public Law 114-42

NQF National Quality Forum

NQS National Quality Strategy

NTIS National Technical Information Service

NTTAA National Technology Transfer and Advancement Act of 1991, Public Law 104-113

NUBC National Uniform Billing Code

NVHRI National Voluntary Hospital Reporting Initiative

OACT [CMS’] Office of the Actuary

OBRA 86 Omnibus Budget Reconciliation Act of 1986, Public Law 99-509

OES Occupational employment statistics

OIG Office of the Inspector General

OMB [Executive] Office of Management and Budget

ONC Office of the National Coordinator for Health Information Technology

OPM [U.S.] Office of Personnel Management

OQR [Hospital] Outpatient Quality Reporting

O.R. Operating room

OSCAR Online Survey Certification and Reporting [System]

PAC Post-acute care

PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93

PCH PPS-exempt cancer hospital

PCHQR PPS-exempt cancer hospital quality reporting

PMSAs Primary metropolitan statistical areas

POA Present on admission

PPI Producer price index

PPR Potentially Preventable Readmissions

PPS Prospective payment system

PRA Paperwork Reduction Act

PRM Provider Reimbursement Manual

ProPAC Prospective Payment Assessment Commission

PRRB Provider Reimbursement Review Board

PRTFs Psychiatric residential treatment facilitiesStart Printed Page 19799

PSF Provider-Specific File

PSI Patient safety indicator

PS&R Provider Statistical and Reimbursement [System]

PQRS Physician Quality Reporting System

PUF Public use file

QDM Quality data model

QIES ASAP Quality Improvement Evaluation System Assessment Submission and Processing

QIG Quality Improvement Group [CMS]

QIO Quality Improvement Organization

QM Quality measure

QPP Quality Payment Program

QRDA Quality Reporting Document Architecture

RFA Regulatory Flexibility Act, Public Law 96-354

RHC Rural health clinic

RHQDAPU Reporting hospital quality data for annual payment update

RIM Reference information model

RNHCI Religious nonmedical health care institution

RPL Rehabilitation psychiatric long-term care (hospital)

RRC Rural referral center

RSMR Risk-standard mortality rate

RSP Risk-standardized payment

RSSR Risk-standard readmission rate

RTI Research Triangle Institute, International

RUCAs Rural-urban commuting area codes

RY Rate year

SAF Standard Analytic File

SCH Sole community hospital

SCHIP State Child Health Insurance Program

SCIP Surgical Care Improvement Project

SFY State fiscal year

SGR Sustainable Growth Rate

SIC Standard Industrial Classification

SIR Standardized infection ratio

SNF Skilled nursing facility

SNF QRP Skilled Nursing Facility Quality Reporting Program

SNF VBP Skilled Nursing Facility Value-Based Purchasing

SOCs Standard occupational classifications

SOM State Operations Manual

SRR Standardized risk ratio

SSI Surgical site infection

SSI Supplemental Security Income

SSO Short-stay outlier

SUD Substance use disorder

TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Public Law 97-248

TEP Technical expert panel

THA/TKA Total hip arthroplasty/total knee arthroplasty

TMA TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007, Public Law 110-90

TPS Total Performance Score

UHDDS Uniform hospital discharge data set

UR Utilization review

VBP [Hospital] Value Based Purchasing [Program]

VTE Venous thromboembolism

Table of Contents

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority

2. Summary of the Major Provisions

3. Summary of Costs and Benefits

B. Summary

1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)

2. Hospitals and Hospital Units Excluded From the IPPS

3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

4. Critical Access Hospitals (CAHs)

5. Payments for Graduate Medical Education (GME)

C. Summary of Provisions of Recent Legislation Proposed To Be Implemented in This Proposed Rule

1. The American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240), the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), and the 21st Century Cures Act (Pub. L. 114-255)

2. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67)

3. Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185)

4. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10)

5. The 21st Century Cures Act (Pub. L. 114-255)

D. Summary of the Provisions of This Proposed Rule

II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications and Relative Weights

A. Background

B. MS-DRG Reclassifications

C. Adoption of the MS-DRGs in FY 2008

D. Proposed FY 2018 MS-DRG Documentation and Coding Adjustment

1. Background on the Prospective MS-DRG Documentation and Coding Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90

2. Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA)

3. Proposed Adjustment for FY 2018 Required Under Section 414 of Public Law 114-10 (MACRA) and Section 15005 of Public Law 114-255

E. Refinement of the MS-DRG Relative Weight Calculation

1. Background

2. Discussion of Policy for FY 2018

F. Proposed Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for Proposed FY 2018 MS-DRG Updates

a. Conversion of MS-DRGs to the International Classification of Diseases, 10th Revision (ICD-10)

b. Basis for FY 2018 Proposed MS-DRG Updates

2. MDC 1 (Diseases and Disorders of the Nervous System)

a. Functional Quadriplegia

b. Responsive Neurostimulator (RNS©) System

c. Precerebral Occlusion or Transient Ischemic Attack With Thrombolytic

3. MDC 2 (Diseases and Disorders of the Eye: Swallowing Eye Drops (Tetrahydrozoline)

4. MDC 5 (Diseases and Disorders of the Circulatory System)

a. Percutaneous Cardiovascular Procedures and Insertion of a Radioactive Element

b. Proposed Modification of the Titles for MS-DRG 246 (Percutaneous Cardiovascular Procedures With Drug-eluting Stent With MCC or 4+ Vessels or Stents) and MS-DRG 248 (Percutaneous Cardiovascular Procedures With Non-Drug-Eluting Stent With MCC or 4+ Vessels or Stents)

c. Transcatheter Aortic Valve Replacement (TAVR) and Left Atrial Appendage Closure (LAAC)

d. Percutaneous Mitral Valve Replacement Procedures

e. Percutaneous Tricuspid Valve Repair

5. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue)

a. Total Ankle Replacement (TAR) Procedures

b. Revision of Total Ankle Replacement (TAR) Procedures

c. Magnetic Controlled Growth Rods (MAGEC® System)

d. Combined Anterior/Posterior Spinal Fusion

6. MDC 14 (Pregnancy, Childbirth and the Puerperium)

a. Vaginal Delivery and Complicating Diagnoses

b. MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis)

c. MS-DRG 782 (Other Antepartum Diagnoses Without Medical Complications)

d. Shock During or Following Labor and Delivery

7. MDC 15 (Newborns and Other Neonates With Conditions Originating in Perinatal Period): Observation and Evaluation of Newborn

8. MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs): Complication Codes

9. MDC 23 (Factors Influencing Health Status and Other Contacts With Health Services): Updates to MS-DRGs 945 and 946 (Rehabilitation With CC/MCC and Without CC/MCC, Respectively)

10. Proposed Changes to the Medicare Code Editor (MCE)

a. Age Conflict Edit

b. Sex Conflict Edit

c. Non-Covered Procedure Edit

d. Unacceptable Principal Diagnosis Edit

e. Future Enhancement

11. Proposed Changes to Surgical Hierarchies

12. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2018

a. Background of the CC List and the CC Exclusions List

b. Proposed Additions and Deletions to the Diagnosis Code Severity Levels for FY 2018

c. Principal Diagnosis Is Its Own CC or MCC

d. Proposed CC Exclusions List for FY 2018

13. Comprehensive Review of CC List for FY 2019

14. Review of Procedure Codes in MS DRGs 981 Through 983; 984 Through 986; and 987 Through 989Start Printed Page 19800

a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-DRGs 987 Through 989 Into MDCs

b. Reassignment of Procedures Among MS-DRGs 981 Through 983, 984 Through 986, and 987 Through 989

15. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems

16. Proposed Replaced Devices Offered Without Cost or With a Credit

a. Background

b. Proposed Changes for FY 2018

17. Other Proposed Policy Changes: Other Operating Room (O.R.) and Non-O.R. Issues

a. O.R. Procedures to Non-O.R. Procedures

b. Revision of Neurostimulator Generator

c. External Repair of Hymen

d. Non-O.R. Procedures in MDC 17 (Myeloproliferative Diseases and Disorders Poorly Differentiated Neoplasms)

G. Recalibration of the Proposed FY 2018 MS-DRG Relative Weights

1. Data Sources for Developing the Relative Weights

2. Methodology for Calculation of the Relative Weights

3. Development of National Average CCRs

H. Proposed Add-On Payments for New Services and Technologies for FY 2018

1. Background

2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments

3. ICD-10-PCS Section “X” Codes for Certain New Medical Services and Technologies

4. Proposal To Revise Reference to an ICD-9-CM Code in § 412.87(b)(2) of the Regulations

5. Proposed FY 2018 Status of Technologies Approved for FY 2017 Add-On Payments

a. CardioMEMSTM HF (Heart Failure) Monitoring System

b. Defitelio® (Defibrotide)

c. GORE® EXCLUDER® Iliac Branch Endoprosthesis (IBE)

d. Idarucizumab

e. Lutonix® Drug Coated Balloon PTA Catheter and In.PACTTM AdmiralTM Paclitaxel Coated Percutaneous Transluminal Angioplasty (PTA) Balloon Catheter

f. MAGEC® Spinal Bracing and Distraction System (MAGEC® Spine)

g. VistogardTM (Uridine Triacetate)

h. Blinatumomab (BLINCYTOTM Trade Brand)

6. FY 2018 Applications for New Technology Add-On Payments

a. Bezlotoxumab (ZINPLAVATM)

b. EDWARDS INTUITY EliteTM Valve System (INTUITY) and Liva Nova Perceval Valve (Perceval)

c. Ustekinumab (Stelara®)

d. KTE-C19 (Axicabtagene Ciloleucel)

e. VYXEOSTM (Cytarabine and Daunorubicin Liposome for Injection)

f. GammaTileTM

III. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals

A. Background

1. Legislative Authority

2. Core-Based Statistical Areas (CBSAs) for the Proposed FY 2018 Hospital Wage Index

3. Codes for Constituent Counties in CBSAs

B. Worksheet S-3 Wage Data for the Proposed FY 2018 Wage Index

1. Included Categories of Costs

2. Excluded Categories of Costs

3. Use of Wage Index Data by Suppliers and Providers Other Than Acute Care Hospitals Under the IPPS

C. Verification of Worksheet S-3 Wage Data

D. Method for Computing the Proposed FY 2018 Unadjusted Wage Index

1. Proposed Methodology for FY 2018

2. Clarification of Other Wage Related Costs in the Wage Index

E. Proposed Occupational Mix Adjustment to the FY 2018 Wage Index

1. Use of 2013 Occupational Mix Survey for the FY 2018 Wage Index

2. Use of the 2016 Medicare Wage Index Occupational Mix Survey for the FY 2019 Wage Index

3. Calculation of the Proposed Occupational Mix Adjustment for FY 2018

F. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2018 Occupational Mix Adjusted Wage Index

G. Proposed Application of the Rural, Imputed, and Frontier Floors

1. Proposed Rural Floor

2. Proposed Expiration of the Imputed Floor Policy

3. Proposed State Frontier Floor for FY 2018

H. Proposed FY 2018 Wage Index Tables

I. Revisions to the Wage Index Based on Hospital Redesignations and Reclassifications

1. General Policies and Effects of Reclassification and Redesignation

2. MGCRB Reclassification and Redesignation Issues for FY 2018

a. FY 2018 Reclassification Requirements and Approvals

b. Extension of PRA Information Collection Requirement Approval for MGCRB Applications

c. Proposed Deadline for Submittal of Documentation of Sole Community Hospital (SCH) and Rural Referral Center (RRC) Classification Status to the MGCRB

d. Clarification of Special Rules for SCHs and RRCs Reclassifying to Geographic Home Area

3. Redesignations Under Section 1886(d)(8)(B) of the Act

4. Proposed Changes to the 45-Day Notification Rules

J. Proposed Out-Migration Adjustment Based on Commuting Patterns of Hospital Employees

K. Reclassification From Urban to Rural Under Section 1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103

L. Clarification of Application Deadline for Rural Referral Center (RRC) Classification

M. Proposed Process for Requests for Wage Index Data Corrections

1. Process for Hospitals To Accept Wage Index Data Corrections

2. Process for Wage Index Data Corrections by CMS After the January Public Use File (PUF)

N. Proposed Labor Market Share for the Proposed FY 2018 Wage Index

IV. Proposed Rebasing and Revising of the Hospital Market Baskets for Acute Care Hospitals

A. Background

B. Rebasing and Revising the IPPS Market Basket

1. Development of Cost Categories and Weights

a. Use of Medicare Cost Report Data

b. Final Major Cost Category Computation

c. Derivation of the Detailed Cost Weights

2. Selection of Proposed Price Proxies

3. Labor-Related Share

C. Market Basket for Certain Hospitals Presently Excluded From the IPPS

D. Rebasing and Revising the Capital Input Price Index (CIPI)

V. Other Decisions and Proposed Changes to the IPPS for Operating System

A. Proposed Changes to MS-DRGs Subject to Postacute Care Transfer and MS-DRG Special Payment Policies

B. Proposed Changes in the Inpatient Hospital Updates for FY 2018 (§ 412.64(d))

1. Proposed FY 2018 Inpatient Hospital Update

2. Proposed FY 2018 Puerto Rico Hospital Update

C. Proposed Change to Volume Decrease Adjustment for Sole Community Hospitals (SCHs) and Medicare-Dependent, Small Rural Hospitals (MDHs) (§ 412.92)

1. Background

2. Proposed Changes to the Volume Decrease Adjustment Calculation Methodology for SCHs

D. Rural Referral Centers (RRCs): Proposed Annual Updates to Case-Mix Index (CMI) and Discharge Criteria (§ 412.96)

1. Case-Mix Index (CMI)

2. Discharges

E. Proposed Payment Adjustment for Low-Volume Hospitals (§ 412.101)

1. Expiration of Temporary Changes to Low-Volume Hospital Payment Policy

2. Background

3. Proposed Payment Adjustment for FY 2018 and Subsequent Fiscal Years

4. Proposed Parallel Low-Volume Hospital Payment Adjustment Regarding Hospitals Operated by the Indian Health Service (IHS) or a Tribe

F. Indirect Medical Education (IME) Payment Adjustment (§ 412.105)

G. Proposed Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) for FY 2018 (§ 412.106)

1. General Discussion

2. Eligibility for Empirically Justified Medicare DSH Payments and Uncompensated Care Payments

3. Empirically Justified Medicare DSH Payments

4. Uncompensated Care Payments

a. Proposed Calculation of Factor 1 for FY 2018

b. Proposed Calculation of Factor 2 for FY 2018

(1) BackgroundStart Printed Page 19801

(2) Proposed Methodology for Calculation of Factor 2 for FY 2018

c. Calculation of Proposed Factor 3 for FY 2018

(1) Background

(2) Proposed Data Source for FY 2018

(3) Proposed Time Period for Calculating Factor 3 for FY 2018, Including Methodology for Incorporating Worksheet S-10 Data

(4) Methodological Considerations for Calculating Factor 3

(5) Methodological Considerations for Incorporating Worksheet S-10 Data

H. Medicare-Dependent, Small Rural Hospital (MDH) Program (§ 412.108)

1. Background for the MDH Program

a. Expiration of the MDH Program

I. Hospital Readmissions Reduction Program: Proposed Updates and Changes (§§ 412.150 Through 412.154)

1. Statutory Basis for the Hospital Readmissions Reduction Program

2. Regulatory Background

3. Maintenance of Technical Specifications for Quality Measures

4. Proposed Policies for the Hospital Readmissions Reduction Program

5. Proposed Applicable Period for FY 2018

6. Proposed Calculation of Aggregate Payments for Excess Readmissions for FY 2018

7. Background and Current Payment Adjustment Methodology

a. Background

b. Current Payment Adjustment Methodology

8. Provisions for the Proposed Payment Adjustment Methodology for FY 2019: Proposed Methodology for Calculating the Proportion of Dual Eligible Patients

a. Background

b. Proposed Data Sources Used To Determine Dual Eligibility

c. Proposed Data Period Used To Define Dual Eligibility

9. Provision for the Proposed Payment Adjustment Methodology for FY 2019: Proposed Methodology for Assigning Hospitals to Peer Groups

10. Provisions for the Proposed Payment Adjustment Methodology for FY 2019: Proposed Payment Adjustment Formula Calculation Methodology

a. Background

b. Proposals

c. Analysis

11. Accounting for Social Risk Factors in the Hospital Readmissions Reduction Program

12. Extraordinary Circumstance Exception (ECE) Policy

13. Timeline for Public Reporting of Excess Readmission Ratios on Hospital Compare for the FY 2018 Payment Determination

J. Hospital Value-Based Purchasing (VBP) Program: Proposed Policy Changes

1. Background

a. Statutory Background and Overview of Past Program Years

b. FY 2018 Program Year Payment Details

2. Accounting for Social Risk Factors in the Hospital VBP Program

3. Retention and Removal of Quality Measures for the FY 2019 Program Year

a. Retention of Previously Adopted Hospital VBP Program Measures

b. Proposed Removal of the PSI 90 Measure

c. Summary of Previously Adopted Measures and Proposed Measure for Removal for the FY 2019 and FY 2020 Program Years

4. Proposed New Measures for the FY 2022 Program Year, FY 2023 Program Year, and Subsequent Years

a. Proposed New Measure for the FY 2022 Program Year and Subsequent Years: Hospital-Level, Risk-Standardized Payment Associated With a 30-Day Episode-of-Care for Pneumonia (PN Payment)

b. Proposed New Measure for the FY 2023 Program Year and Subsequent Years: Patient Safety and Adverse Events (Composite) (NQF #0531)

5. Previously Adopted and Proposed Baseline and Performance Periods

a. Background

b. Person and Community Engagement Domain

c. Efficiency and Cost Reduction Domain

d. Safety Domain

e. Clinical Care Domain

f. Summary of Previously Adopted and Proposed Baseline and Performance Periods for the FY 2019 Through FY 2023 Program Years

6. Proposed Performance Standards for the Hospital VBP Program

a. Background

b. Previously Adopted and Proposed Performance Standards for the FY 2020 Program Year

c. Previously Adopted Performance Standards for Certain Measures for the FY 2021 Program Year

d. Previously Adopted and Proposed Performance Standards for Certain Measures for the FY 2022 Program Year

e. Proposed Performance Standards for Certain Measures for the FY 2023 Program Year

7. Scoring Methodology and Data Requirements for the FY 2019 Program Year and Subsequent Years

a. Proposed Domain Weighting for the FY 2020 Program Year and Subsequent Years for Hospitals That Receive a Score on All Domains

b. Proposed Domain Weighting for the FY 2019 Program Year and Subsequent Years for Hospitals Receiving Scores on Fewer Than Four Domains

c. Minimum Numbers of Cases for Hospital VBP Program Measures for the FY 2019 Program Year and Subsequent Years

d. Weighting Measures Within the Efficiency and Cost Reduction Domain

K. Proposed Changes to the Hospital-Acquired Condition (HAC) Reduction Program

1. Background

2. Implementation of the HAC Reduction Program for FY 2018

3. Proposed Data Collection Time Periods for the FY 2020 HAC Reduction Program

4. Request for Comments on Additional Measures for Potential Future Adoption

5. Accounting for Social Risk Factors in the HAC Reduction Program

6. Request for Comments on Inclusion on Disability and Medical Complexity for CDC NHSN Measures

7. Maintenance of Technical Specifications for Quality Measures

8. Extraordinary Circumstances Exception (ECE) Policy for the HAC Reduction Program

L. Rural Community Hospital Demonstration Program

1. Introduction

2. Background

3. Provisions of the 21st Century Cures Act (Pub. L. 114-255) and Proposals for Implementation

a. Statutory Provisions

b. Proposed Terms of Continuation for Previously Participating Hospitals

c. Solicitation for Additional Participants

4. Budget Neutrality

a. Statutory Budget Neutrality Requirement

b. Methodology Used in Previous Final Rules

c. Proposed Budget Neutrality Methodology for Extension Period Authorized by the 21st Century Cures Act (Pub. L. 114-255)

d. Alternative Budget Neutrality Approach

e. Reconciling Actual and Estimated Costs of the Demonstration for Previous Years (2011, 2012, and 2013)

M. Payments for Services in Inpatient and Outpatient Settings

1. Adjustment to IPPS Rates Resulting From the 2-Midnight Policy for FY 2018

2. Eliminating Inappropriate Medicare Payment Differentials for Similar Services in the Inpatient and Outpatient Settings

N. Provider-Based Status of Indian Health Service and Tribal Facilities and Organizations

O. Request for Information Regarding Physician-Owned Hospitals

VI. Proposed Changes to the IPPS for Capital-Related Costs

A. Overview

B. Additional Provisions

1. Exception Payments

2. New Hospitals

3. Payments for Hospitals Located in Puerto Rico

C. Proposed Annual Update for FY 2018

VII. Proposed Changes for Hospitals Excluded From the IPPS

A. Proposed Rate-of-Increase in Payments To Excluded Hospitals for FY 2018

B. Proposed Revisions to Hospital-Within-Hospital Regulations

C. Critical Access Hospitals (CAHs)

1. Background

2. Frontier Community Health Integration Project (FCHIP) Demonstration

3. Physician Certification Requirement for Payment of Inpatient CAH Services Under Medicare Part A

a. Background

b. Notice Regarding Changes to Instructions for the Review of the CAH 96-Hour Certification Requirement

VIII. Proposed Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2018

A. Background of the LTCH PPS

1. Legislative and Regulatory Authority

2. Criteria for Classification as an LTCHStart Printed Page 19802

a. Classification as an LTCH

b. Hospitals Excluded From the LTCH PPS

3. Limitation on Charges to Beneficiaries

4. Administrative Simplification Compliance Act (ASCA) and Health Insurance Portability and Accountability Act (HIPAA) Compliance

B. Proposed Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2018

1. Background

2. Patient Classifications Into MS-LTC-DRGs

a. Background

b. Proposed Changes to the MS-LTC-DRGs for FY 2018

3. Development of the Proposed FY 2018 MS-LTC-DRG Relative Weights

a. General Overview of the Development of the MS-LTC-DRG Relative Weights

b. Development of the Proposed MS-LTC-DRG Relative Weights for FY 2018

c. Data

d. Hospital-Specific Relative Value (HSRV) Methodology

e. Treatment of Severity Levels in Developing the MS-LTC-DRG Relative Weights

f. Proposed Low-Volume MS-LTC-DRGs

g. Steps for Determining the Proposed FY 2018 MS-LTC-DRG Relative Weights

C. Proposed Changes to the LTCH PPS Payment Rates and Other Proposed Changes to the LTCH PPS for FY 2018

1. Overview of Development of the LTCH PPS Standard Federal Payment Rates

2. Proposed FY 2018 LTCH PPS Standard Federal Payment Rate Annual Market Basket Update

a. Overview

b. Proposed Annual Update to the LTCH PPS Standard Federal Payment Rate for FY 2018

c. Proposed Adjustment to the LTCH PPS Standard Federal Payment Rate Under the Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

d. Proposed Annual Update Under the LTCH PPS for FY 2018

D. Proposed Changes to the Short-Stay Outlier Adjustment Policy (§ 412.529)

E. Temporary Exception to the Site Neutral Payment Rate for Certain Spinal Cord Specialty Hospitals

F. Temporary Exception to the Site Neutral Payment Rate for Certain Discharges With Severe Wounds Form Certain LTCHs

G. Moratorium and Proposed Regulatory Delay of the Full Implementation of the “25-Percent” Threshold Policy” Adjustment (§ 412.538)

H. Revision to Moratorium on Increasing Beds in Existing LTCH or LTCH Satellite Locations Under the 21st Century Cures Act (Pub. L. 114-255) (§ 412.23)

I. Proposed Changes to the Average Length of Stay Criterion Under the 21st Century Cures Act (Pub. L. 114-255)

J. Change in Medicare Classification for Certain Hospitals (§ 412.23)

IX. Quality Data Reporting Requirements for Specific Providers and Suppliers

A. Hospital Inpatient Quality Reporting (IQR) Program

1. Background

a. History of the Hospital IQR Program

b. Maintenance of Technical Specifications for Quality Measures

c. Public Display of Quality Measures

d. Accounting for Social Risk Factors in the Hospital IQR Program

2. Retention of Previously Adopted Hospital IQR Program Measures for Subsequent Payment Determinations

3. Removal and Suspension of Previously Adopted Hospital IQR Program Measures

4. Previously Adopted Hospital IQR Program Measures for the FY 2019 Payment Determination and Subsequent Years

5. Considerations in Expanding and Updating of Quality Measures

6. Refinements to Existing Measures in the Hospital IQR Program for the FY 2020 Payment Determination and Subsequent Years

a. Refining Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey (NQF #0166) for the FY 2020 Payment Determination and Subsequent Years

b. Refinement of the Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Acute Ischemic Stroke Hospitalization Measure for the FY 2023 Payment Determination and Subsequent Years

c. Summary of Previously Adopted Hospital IQR Program Measures for the FY 2020 Payment Determination and Subsequent Years

7. Proposed Voluntary Hybrid Hospital-Wide Readmission Measure With Claims and Electronic Health Record Data (NQF #2879)

a. Background

b. Proposal for Voluntary Reporting of Electronic Health Record Data for the Hybrid HWR Measure (NQF #2879)

c. Data Sources

d. Outcome

e. Cohort

f. Inclusion and Exclusion Criteria

g. Risk-Adjustment

h. Calculating the Risk-Standardized Readmission Rate (RSRR)

i. Data Submission and Reporting Requirements

j. Confidential Hospital-Specific Reports

8. Proposed Changes to Policies on Reporting of eCQMs

a. Background

b. Proposed Modifications to the eCQM Reporting Requirements for the Hospital IQR Program for the CY 2017 Reporting Period/FY 2019 Payment Determination

c. Proposed Modifications to the eCQM Reporting Requirements for the Hospital IQR Program for the CY 2018 Reporting Period/FY 2020 Payment Determination

9. Possible New Quality Measures and Measure Topics for Future Years

a. Potential Inclusion of the Quality of Informed Consent Documents for Hospital-Performed, Elective Procedures Measure

b. Potential Inclusion of Four End-of-Life (EOL) Measures for Cancer Patients

c. Potential Inclusion of Two Nurse Staffing Measures

d. Potential Inclusion of Additional Electronic Clinical Quality Measures (eCQMs) in the Hospital IQR and Medicare and Medicaid EHR Incentive Programs

10. Form, Manner, and Timing of Quality Data Submission

a. Background

b. Procedural Requirements for the FY 2020 Payment Determination and Subsequent Years

c. Data Submission Requirements for Chart-Abstracted Measures

d. Proposed Changes to the Reporting and Submission Requirements for eCQMs

e. Proposed Submission Form and Method for the Proposed Voluntary Hybrid Hospital-Wide Readmission Measure With Claims and Electronic Health Record Data (NQF #2879)

f. Sampling and Case Thresholds for the FY 2020 Payment Determination and Subsequent Years

g. HCAHPS Administration and Submission Requirements for the FY 2020 Payment Determination and Subsequent Years

h. Data Submission Requirements for Structural Measures for the FY 2020 Payment Determination and Subsequent Years

i. Data Submission and Reporting Requirements for HAI Measures Reported via NHSN

11. Proposed Modifications to the Validation of Hospital IQR Program Data

a. Background

b. Proposed Changes to the Existing Processes for Validation of Hospital IQR Program eCQM Data for the FY 2020 Payment Determination and Subsequent Years

c. Proposed Modifications to the Educational Review Process for Chart-Abstracted Measures Validation

12. Data Accuracy and Completeness Acknowledgement (DACA) Requirements for the FY 2020 Payment Determination and Subsequent Years

13. Public Display Requirements for the FY 2020 Payment Determination and Subsequent Years

a. Background

b. Potential Options for Confidential and Public Reporting of Hospital IQR Measures Stratified by Patient Dual Eligibility Status

14. Reconsideration and Appeal Procedures for the FY 2020 Payment Determination and Subsequent Years

15. Proposed Change to the Hospital IQR Program Extraordinary Circumstances Exceptions (ECE) Policy

a. Background

b. Proposals To Align the Hospital IQR Program ECE Policy With Other CMS Quality Programs

B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

1. Background

2. Criteria for Removal and Retention of PCHQR Program Measures

3. Retention and Proposed Removal of Previously Finalized Quality Measures for PCHs Beginning With the FY 2020 Program YearStart Printed Page 19803

a. Background

b. Proposed Removal of Measures From the PCHQR Program Beginning With the FY 2020 Program Year

4. Proposed New Quality Measures Beginning With the FY 2020 Program Year

a. Considerations in the Selection of Quality Measures

b. Proposed New Quality Measures Beginning With the FY 2020 Program Year

c. Summary of Previously Finalized and Newly Proposed PCHQR Program Measures for the FY 2020 Program Year and Subsequent Years

5. Accounting for Social Risk Factors in the PCHQR Program

6. Possible New Quality Measure Topics for Future Years

a. Background

b. Localized Prostate Cancer: Vitality; Localized Prostate Cancer: Urinary Incontinence; Localized Prostate Cancer: Urinary Frequency; Obstruction, and/or Irritation; Localized Prostate Cancer: Sexual Function; and Localized Prostate Cancer: Bowel Function

c. 30-Day Unplanned Readmission for Cancer Patients

7. Maintenance of Technical Specifications for Quality Measures

8. Public Display Requirements

a. Background

b. Deferment of Public Display of Two Measures

9. Form, Manner, and Timing of Data Submission

a. Background

b. Proposed Reporting Requirements for the Proposed New Measures

10. Extraordinary Circumstances Exceptions (ECE) Policy Under the PCHQR Program

a. Background

b. Proposed Modification to the Exception Policy

C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

1. Background and Statutory Authority

2. General Considerations Used for Selection of Quality Measures for the LTCH QRP

a. Background

b. Accounting for Social Risk Factors in the LTCH QRP

3. Proposed Collection of Standardized Patient Assessment Data Under the LTCH QRP

a. Proposed Definition of Standardized Patient Assessment Data

b. General Considerations Used for the Selection of Proposed Standardized Patient Assessment Data

4. Policy for Retaining LTCH QRP Measures and Proposal to Apply That Policy to Standardized Patient Assessment Data

5. Policy for Adopting Changes to LTCH QRP Measures and Proposal To Apply That Policy to Standardized Patient Assessment Data

6. Quality Measures Previously Finalized for the LTCH QRP

7. LTCH QRP Quality Measures Proposed Beginning With the FY 2020 LTCH QRP

a. Proposal To Replace the Current Pressure Ulcer Quality Measure, Entitled Percent of Residents or Patients With Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), With a Modified Pressure Ulcer Measure, Entitled Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury

b. Proposed Mechanical Ventilation Process Quality Measure: Compliance With Spontaneous Breathing Trial (SBT) by Day 2 of the LTCH Stay

c. Proposed Mechanical Ventilation Outcome Quality Measure: Ventilator Liberation Rate

8. Proposed Removal of the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge From LTCHs From the LTCH QRP

9. LTCH QRP Quality Measures Under Consideration for Future Years

a. LTCH QRP Quality Measures Under Consideration for Future Years

b. IMPACT Act Measure—Possible Future Update to Measure Specifications

c. IMPACT Act Implementation Update

10. Proposed Standardized Patient Assessment Data Reporting for the LTCH QRP

a. Proposed Standardized Patient Assessment Data Reporting for the FY 2019 LTCH QRP

b. Proposed Standardized Patient Assessment Data Reporting Beginning With the FY 2020 LTCH QRP

11. Proposals Relating to the Form, Manner, and Timing of Data Submission Under the LTCH QRP

a. Proposed Start Date for Standardized Patient Assessment Data Reporting by New LTCHs

b. Proposed Mechanism for Reporting Standardized Patient Assessment Data Beginning With the FY 2019 LTCH QRP

c. Proposed Schedule for Reporting Standardized Patient Assessment Data Beginning With the FY 2019 LTCH QRP

d. Proposed Schedule for Reporting the Proposed Quality Measures Beginning With the FY 2020 LTCH QRP

e. Proposed Removal of Interrupted Stay Items From the LTCH CARE Data Set

12. Proposed Changes to Previously Codified Participation Requirements Under the LTCH QRP

13. Proposed Changes to Previously Codified Data Submission Requirements Under the LTCH QRP

14. Proposed Changes to Previously Codified Exception and Extension Requirements Under the LTCH QRP

15. Proposed Changes to Previously Codified Reconsiderations Requirements Under the LTCH QRP

16. Proposal To Apply the LTCH QRP Data Completion Thresholds to the Submission of Standardized Patient Assessment Data Beginning With the FY 2019 LTCH QRP

17. Proposals and Policies Regarding Public Display of Measure Data for the LTCH QRP

18. Mechanism for Providing Feedback Reports to LTCHs

D. Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program

1. Background

a. Statutory Authority

b. Covered Entities

c. Considerations in Selecting Quality Measures

2. Factors for Removal or Retention of IPFQR Program Measures

a. Background

b. Proposed Considerations in Removing or Retaining Measures

3. Proposed New Quality Measure for the FY 2020 Payment Determination and Subsequent Years—Medication Continuation Following Inpatient Psychiatric Discharge

a. Background

b. Appropriateness for the IPFQR Program

c. Measure Calculation

d. Data Sources

e. Public Comment

4. Summary of Proposed and Previously Finalized Measures for the FY 2020 Payment Determinations and Subsequent Years

5. Possible IPFQR Program Measures and Topics for Future Consideration

6. Public Display and Review Requirements

7. Form, Manner, and Timing of Quality Data Submission for the FY 2019 Payment Determination and Subsequent Years

a. Procedural Requirements for FY 2019 Payment Determination and Subsequent Years

b. Data Submission Requirements for the FY 2019 Payment Determination and Subsequent Years

c. Reporting Requirements for the FY 2019 Payment Determination and Subsequent Years

d. Population and Sampling

e. Data Accuracy and Completeness Acknowledgement (DACA) Requirements

8. Reconsideration and Appeals Procedures

9. Extraordinary Circumstances Exceptions (ECE) for the IPFQR Program

a. Background

b. Proposed ECE Policy Modifications

E. Clinical Quality Measurement for Eligible Hospitals and Critical Access Hospitals (CAHs) Participating in the EHR Incentive Programs

1. Background

2. Proposed Modifications to the CQM Reporting Requirements for the Medicare and Medicaid EHR Incentive Programs for CY 2017

a. Background

b. Proposed Changes to Policies Regarding Electronic Reporting of CQMs for CY 2017

3. CQM Reporting for the Medicare and Medicaid EHR Incentive Programs in 2018

a. Background

b. CQM Reporting Period for the Medicare and Medicaid EHR Incentive Programs in CY 2018

c. CQM Reporting Form and Method for the Medicare EHR Incentive Program in 2018

F. Clinical Quality Measurement for Eligible Professionals (EPs) Participating in the Medicaid EHR Incentive Program in 2017Start Printed Page 19804

1. Proposed Modifications to the CQM Reporting Period for EPs in 2017

2. Proposed Modifications to CQM Reporting Requirements for Medicaid EPs Under the Medicaid EHR Incentive Program

G. Changes to the Medicare and Medicaid EHR Incentive Programs

1. Proposed Revisions to the EHR Reporting Period in 2018

2. Significant Hardship Exception for Decertified Certified EHR Technology (CEHRT) for EPs, Eligible Hospitals, and CAHs Seeking To Avoid the Medicare Payment Adjustment

3. Ambulatory Surgical Center (ASC)-Based Eligible Professionals (EPs)

4. Certification Requirements for 2018 X. Proposed Revisions of Medicare Cost Reporting and Provider Requirements

A. Electronic Signature and Submission of the Certification and Settlement Summary Page of the Medicare Cost Report

1. Background

2. Proposed Changes Relating to Electronic Signature on the Certification and Settlement Summary Page of the Medicare Cost Report

3. Proposed Changes Relating to Electronic Submission of the Certification and Settlement Summary Page of the Medicare Cost Report

4. Clarifications Relating to the Items Required To Be Submitted by Providers With the Medicare Cost Report

a. Settlement Summary and Certification Statement

b. Removal of the Transition Period Language

5. Proposed Revisions to 42 CFR 413.24(f)(4)(iv)

B. Clarification of Limitations on the Valuation of Depreciable Assets Disposed of On or After December 1, 1997

XI. Proposed Changes Relating to Survey and Certification Requirements

A. Proposed Revisions to the Application and Re-Application Procedures for National Accrediting Organizations (AOs), Provider and Supplier Conditions, and Posting of Survey Reports and Acceptable Plans of Corrections (PoCs)

1. Background

2. Proposed Regulation Changes

B. Proposed Changes to Termination Public Notice Requirements for Certain Providers and Suppliers

1. Background

2. Basis for Proposed Changes

3. Proposed Changes to Regulations

XII. MedPAC Recommendations

XIII. Other Required Information

A. Publicly Available Data

1. CMS Wage Data Public Use File

2. CMS Occupational Mix Data Public Use File

3. Provider Occupational Mix Adjustment Factors for Each Occupational Category Public Use File

4. Other Wage Index Files

5. FY 2018 IPPS SSA/FIPS CBSA State and County Crosswalk

6. HCRIS Cost Report Data

7. Provider-Specific File

8. CMS Medicare Case-Mix Index File

9. MS-DRG Relative Weights (Also Table 5—MS-DRGs)

10. IPPS Payment Impact File

11. AOR/BOR Table

12. Prospective Payment System (PPS) Standardized File

13. Hospital Readmissions Reductions Program Supplemental File

14. Medicare Disproportionate Share Hospital (DSH) Supplemental File

B. Collection of Information Requirements

1. Statutory Requirement for Solicitation of Comments

2. ICRs for Add-On Payments for New Services and Technologies

3. ICRs for the Occupational Mix Adjustment to the Proposed FY 2018 Wage Index (Hospital Wage Index Occupational Mix Survey)

4. Hospital Applications for Geographic Reclassifications by the MGCRB

5. ICRs for Temporary Exception to the LTCH PPS Site Neutral Payment Rate for Certain Spinal Cord Specialty Hospitals

6. ICRs for the Hospital Inpatient Quality Reporting (IQR) Program

7. ICRs for PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

8. ICRs for Hospital Value-Based Purchasing (VBP) Program

9. ICRs for the Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

10. ICRs for the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program

11. ICRs for the Electronic Health Record (EHR) Incentive Programs and Meaningful Use

12. ICRs Relating to Proposed Electronic Signature and Electronic Submission of the Certification and Settlement Summary Page of Medicare Cost Reports

13. ICRs Relating to Survey and Certification Requirements

C. Request for Information on CMS Flexibilities and Efficiencies

D. Response to Public Comments

Regulation Text

Addendum—Proposed Schedule of Standardized Amounts, Update Factors, and Rate-of-Increase Percentages Effective With Cost Reporting Periods Beginning on or After October 1, 2017 and Payment Rates for LTCHs Effective With Discharges Occurring on or After October 1, 2017

I. Summary and Background

II. Proposed Changes to the Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2018

A. Calculation of the Adjusted Standardized Amount

B. Adjustments for Area Wage Levels and Cost-of-Living

C. Calculation of the Prospective Payment Rates

III. Proposed Changes to Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2018

A. Determination of Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update

B. Calculation of the Inpatient Capital-Related Prospective Payments for FY 2018

C. Capital Input Price Index

IV. Proposed Changes to Payment Rates for Excluded Hospitals: Proposed Rate-of-Increase Percentages for FY 2018

V. Proposed Changes to the Payment Rates for the LTCH PPS for FY 2018

A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2018

B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS for FY 2018

1. Background

2. Geographic Classifications (Labor Market Areas) for the LTCH PPS Standard Federal Payment Rate

3. Proposed Labor-Related Share for the LTCH PPS Standard Federal Payment Rate

4. Proposed Wage Index for FY 2018 for the LTCH PPS Standard Federal Payment Rate

5. Proposed Budget Neutrality Adjustment for Changes to the LTCH PPS Standard Federal Payment Rate Area Wage Level Adjustment

C. Proposed LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs Located in Alaska and Hawaii

D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases

E. Update to the IPPS Comparable/Equivalent Amounts to Reflect the Statutory Changes to the IPPS DSH Payment Adjustment Methodology

F. Computing the Proposed Adjusted LTCH PPS Federal Prospective Payments for FY 2018

VI. Tables Referenced in This Proposed Rule and Available Only Through the Internet on the CMS Web Site

Appendix A—Economic Analyses

I. Regulatory Impact Analysis

A. Introduction

B. Need

C. Objectives of the IPPS

D. Limitations of Our Analysis

E. Hospitals Included in and Excluded From the IPPS

F. Effects on Hospitals and Hospital Units Excluded From the IPPS

G. Quantitative Effects of the Proposed Policy Changes Under the IPPS for Operating Costs

1. Basis and Methodology of Estimates

2. Analysis of Table I

3. Impact Analysis of Table II

H. Effects of Other Proposed Policy Changes

1. Effects of Proposed Policy Relating to New Medical Service and Technology Add-On Payments

2. Effects of Proposed Changes to MS-DRGs Subject to the Postacute Care Transfer Policy and the MS-DRG Special Payment Policy

3. Effects of the Proposed Changes to the Volume Decrease Adjustment for Sole Community Hospitals (SCHs)

4. Effects of Proposed Changes to Low-Volume Hospital Payment Adjustment Policy

5. Effects of the Proposed Changes to Medicare DSH and Uncompensated Care Payments for FY 2018Start Printed Page 19805

6. Effects of Proposed Reduction Under the Hospital Readmissions Reduction Program

7. Effects of Proposed Changes Under the FY 2018 Hospital Value-Based Purchasing (VBP) Program

8. Effects of Proposed Changes to the HAC Reduction Program for FY 2018

9. Effects of Implementation of the Additional 5-Year Expansion of the Rural Community Hospital Demonstration Program

10. Effects of the Proposed Changes Relating to Provider-Based Status of Indian Health Service and Tribal Facilities and Organizations

11. Effects of the Proposed Changes Relating to Hospital-Within-Hospital Policy

12. Effects of Continued Implementation of the Frontier Community Health Integration Project (FCHIP) Demonstration

I. Effects of Proposed Changes in the Capital IPPS

1. General Considerations

2. Results

J. Effects of Proposed Payment Rate Changes and Policy Changes Under the LTCH PPS

1. Introduction and General Considerations

2. Impact on Rural Hospitals

3. Anticipated Effects of Proposed LTCH PPS Payment Rate Changes and Policy Changes

4. Effect on the Medicare Program

5. Effect on Medicare Beneficiaries

K. Effects of Proposed Requirements for Hospital Inpatient Quality Reporting (IQR) Program

L. Effects of Proposed Requirements for the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

M. Effects of Proposed Requirements for the Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

N. Effects of Proposed Updates to the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program

O. Effects of Proposed Requirements Regarding the Electronic Health Record (EHR) Incentive Programs and Meaningful Use

P. Effects of Proposed Electronic Signature and Electronic Submission of the Certification and Settlement Summary Page of Medicare Cost Reports

Q. Effects of Proposed Changes Relating to Survey and Certification Requirements

R. Effects of Clarification of Limitations on the Valuation of Depreciable Assets Disposed of on or After December 1, 1997

S. Alternatives Considered

T. Reducing Regulation and Controlling Regulatory Costs

U. Overall Conclusion

1. Acute Care Hospitals

2. LTCHs

V. Regulatory Review Costs

II. Accounting Statements and Tables

A. Acute Care Hospitals

B. LTCHs

III. Regulatory Flexibility Act (RFA) Analysis

IV. Impact on Small Rural Hospitals

V. Unfunded Mandate Reform Act (UMRA) Analysis

VI. Executive Order 13175

VII. Executive Order 12866

Appendix B: Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services

I. Background

II. Inpatient Hospital Update for FY 2018

A. Proposed FY 2018 Inpatient Hospital Update

B. Proposed Update for SCHs for FY 2018

C. Proposed FY 2018 Puerto Rico Hospital Update

D. Proposed Update for Hospitals Excluded From the IPPS

E. Proposed Update for LTCHs for FY 2018

III. Secretary's Recommendation

IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating Payments in Traditional Medicare

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority

This proposed rule would make payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. We also are making proposals relating to the provider-based status of Indian Health Service (IHS) and Tribal facilities and organizations and to the IPPS low-volume hospital payment adjustment for hospitals operated by the IHS or a Tribe. In addition, it would make payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). It also would make policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs.

We are proposing to establish new requirements or revising requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt hospitals, LTCHs, and inpatient psychiatric facilities) that are participating in Medicare. We also are proposing to establish new requirements or revise existing requirements for eligible professionals (EPs), eligible hospitals, and CAHs participating in the Medicare and Medicaid EHR Incentive Programs. We are proposing to update policies relating to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program. We also are proposing changes related to the transparency of accrediting organization survey reports and plans of correction; to allow electronic signature and electronic submission of the Certification and Settlement Summary page of the Medicare cost reports; and to clarify provider reimbursement regulations relative to the sale or scrapping of depreciable assets on or after December 1, 1997.

Under various statutory authorities, we are proposing to make changes to the Medicare IPPS, to the LTCH PPS, and to other related payment methodologies and programs for FY 2018 and subsequent fiscal years. These statutory authorities include, but are not limited to, the following:

  • Section 1886(d) of the Social Security Act (the Act), which sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires that, instead of paying for capital-related costs of inpatient hospital services on a reasonable cost basis, the Secretary use a prospective payment system (PPS).
  • Section 1886(d)(1)(B) of the Act, which specifies that certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; LTCHs; psychiatric hospitals and units; children's hospitals; cancer hospitals; long-term care neoplastic disease hospitals, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa). Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS.
  • Sections 123(a) and (c) of the BBRA (Pub. L. 106-113) and section 307(b)(1) of the BIPA (Pub. L. 106-554) (as codified under section 1886(m)(1) of the Act), which provide for the development and implementation of a prospective payment system for payment for inpatient hospital services of long-term care hospitals (LTCHs) described in section 1886(d)(1)(B)(iv) of the Act.
  • Sections 1814(l), 1820, and 1834(g) of the Act, which specify that payments are made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services and that these payments are generally based on 101 percent of reasonable cost.
  • Section 1866(k) of the Act, as added by section 3005 of the Affordable Care Act, which establishes a quality reporting program for hospitals described in section 1886(d)(1)(B)(v) of the Act, referred to as “PPS-exempt cancer hospitals.”
  • Section 1886(a)(4) of the Act, which specifies that costs of approved Start Printed Page 19806educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act.
  • Section 1886(b)(3)(B)(viii) of the Act, which requires the Secretary to reduce the applicable percentage increase that would otherwise apply to the standardized amount applicable to a subsection (d) hospital for discharges occurring in a fiscal year if the hospital does not submit data on measures in a form and manner, and at a time, specified by the Secretary.
  • Section 1886(o) of the Act, which requires the Secretary to establish a Hospital Value-Based Purchasing (VBP) Program under which value-based incentive payments are made in a fiscal year to hospitals meeting performance standards established for a performance period for such fiscal year.
  • Section 1886(p) of the Act, as added by section 3008 of the Affordable Care Act, which establishes a Hospital-Acquired Condition (HAC) Reduction Program, under which payments to applicable hospitals are adjusted to provide an incentive to reduce hospital-acquired conditions.
  • Section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act and amended by section 10309 of the Affordable Care Act and section 15002 of the 21st Century Cures Act, which establishes the “Hospital Readmissions Reduction Program.” Under the program, payments for discharges from an “applicable hospital” under section 1886(d) of the Act will be reduced to account for certain excess readmissions. Section 15002 of the 21st Century Cures Act requires the Secretary to compare cohorts of hospitals to each other in determining the extent of excess readmissions.
  • Section 1886(r) of the Act, as added by section 3133 of the Affordable Care Act, which provides for a reduction to disproportionate share hospital (DSH) payments under section 1886(d)(5)(F) of the Act and for a new uncompensated care payment to eligible hospitals. Specifically, section 1886(r) of the Act requires that, for fiscal year 2014 and each subsequent fiscal year, subsection (d) hospitals that would otherwise receive a DSH payment made under section 1886(d)(5)(F) of the Act will receive two separate payments: (1) 25 percent of the amount they previously would have received under section 1886(d)(5)(F) of the Act for DSH (“the empirically justified amount”), and (2) an additional payment for the DSH hospital's proportion of uncompensated care, determined as the product of three factors. These three factors are: (1) 75 percent of the payments that would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1 minus the percent change in the percent of individuals who are uninsured (minus 0.2 percentage points for FY 2018 through FY 2019); and (3) a hospital's uncompensated care amount relative to the uncompensated care amount of all DSH hospitals expressed as a percentage.
  • Section 1886(m)(6) of the Act, as added by section 1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67), which provided for the establishment of site neutral payment rate criteria under the LTCH PPS with implementation beginning in FY 2016.
  • Section 1886(m)(6) of the Act, as amended by section 15009 of the 21st Century Cures Act (Pub. L. 114-255), which provides for a temporary exception to the application of the site neutral payment rate under the LTCH PPS for certain spinal cord specialty hospitals for discharges in cost reporting periods beginning during FYs 2018 and 2019.
  • Section 1886(m)(6) of the Act, as amended by section 15010 of the 21st Century Cures Act (Pub. L. 114-255), which provides for a temporary exception to the application of the site neutral payment rate under the LTCH PPS for certain LTCHs with certain discharges with severe wounds occurring in cost reporting periods beginning during FY 2018.
  • Section 1886(m)(5)(D)(iv) of the Act, as added by section 1206 (c) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67), which provides for the establishment of a functional status quality measure under the LTCH QRP for change in mobility among inpatients requiring ventilator support.
  • Section 1899B of the Act, as added by the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act, Pub. L. 113-185), which imposes data reporting requirements for certain post-acute care providers, including LTCHs.

2. Summary of the Major Provisions

a. MS-DRG Documentation and Coding Adjustment

Section 631 of the American Taxpayer Relief Act (ATRA, Pub. L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for changes in MS-DRG documentation and coding that do not reflect real changes in case-mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110-90. Section 414 of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10) replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.

For FY 2018, we are proposing to make the 0.4588 percent positive adjustment to the standardized amount as required by section 414 of Public Law 114-10, as amended by section 15005 of the 21st Century Cures Act.

b. Adjustment to IPPS Rates Resulting From 2-Midnight Policy

In FY 2017, we made a permanent adjustment to the standardized amount, the hospital-specific payment rates, and the national capital Federal rate to prospectively remove the 0.2 percent reduction to the rates put in place in FY 2014 to offset the estimated increase in IPPS expenditures as a result of the 2-midnight policy. In addition, we made a temporary one-time prospective increase to the FY 2017 standardized amount, the hospital-specific payment rates, and the national capital Federal rate of 0.6 percent by including a temporary one-time factor of 1.006 in the calculation of the standardized amount, the hospital-specific payment rates, and the national capital Federal rate to address the effects of the 0.2 percent reduction to the rate for the 2-midnight policy in effect for FYs 2014, 2015, and 2016.

For FY 2018, we are including a factor of (1/1.006) in the calculation of the FY 2018 standardized amount, the hospital-specific payment rates, and the national capital Federal rate to remove the temporary one-time factor of 1.006, as established in the FY 2017 IPPS/LTCH PPS final rule.Start Printed Page 19807

c. Reduction of Hospital Payments for Excess Readmissions

We are proposing to make changes to policies for the Hospital Readmissions Reduction Program, which is established under section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act, as amended by section 10309 of the Affordable Care Act. The Hospital Readmissions Reduction Program requires a reduction to a hospital's base operating DRG payment to account for excess readmissions of selected applicable conditions. For FY 2018 and subsequent years, the reduction is based on a hospital's risk-adjusted readmission rate during a 3-year period for acute myocardial infarction (AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary disease (COPD), total hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG). In this proposed rule, we are proposing the following policies: (1) Specify applicable time period for FY 2018; (2) specify the calculation of aggregate payments for excess readmissions for FY 2018; (3) propose changes to the payment adjustment factor in accordance with the 21st Century Cures Act for FY 2019; and (4) update the Extraordinary Circumstances Exception policy.

d. Hospital Value-Based Purchasing (VBP) Program

Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year. In this proposed rule, we are proposing to remove one previously adopted measure, the PSI 90: Patient Safety for Selected Indicators measure, from the Hospital VBP Program beginning with the FY 2019 program year. We also are proposing to adopt one new measure, Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode of Care for Pneumonia, beginning with the FY 2022 program year, and to adopt a modified version of a previously adopted measure, Patient Safety and Adverse Events Composite (NQF #0531), beginning with the FY 2023 program year. In addition, we are proposing two modifications to our domain scoring policies beginning with the FY 2019 program year, and further proposing a new weighting methodology for the Efficiency and Cost Reduction domain. We also are inviting public comment on the appropriateness of accounting for social risk factors in the Hospital VBP Program, including which social risk factors should be included; and how to account for these social risk factors in the Hospital VBP Program.

e. Hospital-Acquired Condition (HAC) Reduction Program

Section 1886(p) of the Act, as added under section 3008(a) of the Affordable Care Act, establishes an incentive to hospitals to reduce the incidence of hospital-acquired conditions by requiring the Secretary to make an adjustment to payments to applicable hospitals effective for discharges beginning on October 1, 2014. This 1-percent payment reduction applies to a hospital whose ranking is in the top quartile (25 percent) of all applicable hospitals, relative to the national average, of conditions acquired during the applicable period and on all of the hospital's discharges for the specified fiscal year. In this proposed rule, we are proposing the following policies: (1) Specifying the dates of the time period used to calculate hospital performance for the FY 2020 HAC Reduction Program; (2) requesting comments on additional measures for potential future adoption; (3) requesting comments on social risk factors; (4) requesting comments on accounting for disability and medical complexity in the CDC NHSN measures in Domain 2; and (5) updating the HAC Reduction Program's Extraordinary Circumstances Exception policy.

f. DSH Payment Adjustment and Additional Payment for Uncompensated Care

Section 3133 of the Affordable Care Act modified the Medicare disproportionate share hospital (DSH) payment methodology beginning in FY 2014. Under section 1886(r) of the Act, which was added by section 3133 of the Affordable Care Act, starting in FY 2014, DSHs receive 25 percent of the amount they previously would have received under the statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remaining amount, equal to 75 percent of the amount that otherwise would have been paid as Medicare DSH payments, is paid as additional payments after the amount is reduced for changes in the percentage of individuals that are uninsured. Each Medicare DSH will receive an additional payment based on its share of the total amount of uncompensated care for all Medicare DSHs for a given time period.

In this proposed rule, we are proposing to update our estimates of the three factors used to determine uncompensated care payments for FY 2018. The statute permits the use of a data source other than the CBO estimates to determine the percent change in the rate of uninsurance as part of the calculation of Factor 2 beginning in FY 2018. We are proposing to use uninsured estimates produced by CMS' Office of the Actuary (OACT) as part of the development of the National Health Expenditure Accounts (NHEA) in the calculation of Factor 2. We also are proposing to begin incorporating data from Worksheet S-10 in the calculation of hospitals' share of uncompensated care by combining data on uncompensated care costs from the Worksheet S-10 for FY 2014 with proxy data regarding a hospital's share of low-income insured days for FYs 2012 and 2013 to determine Factor 3 for FY 2018. The proposal to continue to use data from three cost reporting periods to calculate Factor 3 would have the effect of transitioning from the use of the proxy data on low-income insured days toward use of uncompensated care data from Worksheet S-10. As part of this proposal, we are proposing a definition of uncompensated care costs consisting of the sum of charity care and bad debt and a trim methodology to address anomalous charges. We also are proposing that, for Puerto Rico hospitals and Indian Health Service and Tribal hospitals, we would substitute data regarding low-income insured days for FY 2013 for the Worksheet S-10 data from FY 2014 cost reports.

We are proposing to continue the policies that were finalized in FY 2015 to address several specific issues concerning the process and data to be employed in determining hospitals' share of uncompensated care in the case of hospital mergers. We also are proposing to continue the policies finalized in FY 2017 concerning the methodology for calculating each hospital's relative share of uncompensated care, such as combining data from multiple cost reports beginning in the same fiscal year and averaging the sum of three individual Factor 3s by the number of cost reporting periods with data. In addition, we are proposing to annualize hospital cost reports that do not span 12 months. We also are proposing to apply a scaling factor to each hospital's uncompensated care amount so that total uncompensated care payments will be consistent with the estimated amount available to make uncompensated care payments for FY 2018.Start Printed Page 19808

g. Proposed Changes to the LTCH PPS

In this proposed rule, we set forth proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2018; proposed changes to the payment methodology under the short-stay outlier (SSO) policy; proposals to implement several provisions of the 21st Century Cures Act; and a proposal to adopt a 1-year regulatory delay on the full implementation of the 25-percent threshold policy for discharges occurring in FY 2018 (that is, for the fiscal year after expiration of the current statutory moratoria under the 21st Century Cures Act, which is set to expire September 30, 2017).

h. Hospital Inpatient Quality Reporting (IQR) Program

Under section 1886(b)(3)(B)(viii) of the Act, subsection (d) hospitals are required to report data on measures selected by the Secretary for a fiscal year in order to receive the full annual percentage increase that would otherwise apply to the standardized amount applicable to discharges occurring in that fiscal year. In past years, we have established measures on which hospitals must report data and the process for submittal and validation of the data.

In this proposed rule, we are proposing to make several changes. First, we are proposing to refine two previously adopted measures. Specifically, we are proposing to update the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure by replacing the three existing questions about Pain Management with three new questions that address Communication About Pain During the Hospital Stay, beginning with the FY 2020 payment determination. In addition, we are proposing to update the stroke mortality measure to include the use of NIH Stroke Scale claims data for risk adjustment, beginning with the FY 2023 payment determination.

Second, we are proposing to adopt the Hospital-Wide All-Cause Unplanned Readmission Hybrid Measure as a voluntary measure for the CY 2018 reporting period and note that we are considering proposing this measure as a required measure as early as the CY 2021 reporting period/FY 2023 payment determination and requiring hospitals to submit the core clinical data elements and linking variables used in the measure as early as CY 2020 to support a dry run of the measure during which hospitals would receive a confidential preview of their results in 2021.

Third, we are proposing modifications of our previously finalized eCQM reporting requirements. For the CY 2017 reporting period/FY 2019 payment determination, we are proposing that hospitals would be required to select and submit six of the available eCQMs included in the Hospital IQR Program measure set and provide two, self-selected, calendar year quarters of data. For the CY 2018 reporting period/FY 2020 payment determination, we are proposing that hospitals would be required to select and submit six of the available eCQMs, and provide data for the first three calendar quarters (Q1-Q3). These modifications are being proposed in alignment with proposals for the Medicare and Medicaid EHR Incentive Programs, and would decrease the required number of eCQMs and quarters of reporting as compared with the previously finalized requirements in the FY 2017 IPPS/LTCH PPS final rule.

Fourth, we are proposing modifications to the eCQM validation process if our proposals to modify the eCQM reporting requirements for the CY 2017 reporting period/FY 2019 payment determination and CY 2018 reporting period/FY 2020 payment determination are finalized as proposed, whereby hospitals would be required to submit a reduced number of cases for eCQM data validation for the FY 2020 and FY 2021 payment determinations. In addition, we are proposing policies related to the exclusion criteria for hospital selection and the data submission requirements for participating hospitals.

Fifth, we are proposing to modify our educational review process for chart-abstracted measures for the FY 2020 payment determination and subsequent years, such that educational reviews would be offered quarterly for the first three quarters of validation. Hospitals would be allowed 30 calendar days following the date the results of validation are posted to request an educational review. Also, we are proposing that if an educational review demonstrates that the abstraction score calculated by CMS is incorrect, we would use the corrected quarterly score to compute the final confidence interval.

Sixth, we are making proposals related to our Hospital IQR Program Extraordinary Circumstances Extension or Exemptions (ECE) policy, including a change to the name of the policy to Extraordinary Circumstances Exceptions policy.

Finally, we are inviting public comment on accounting for social risk factors in the Hospital IQR Program, the confidential and potential future public reporting of clinical quality measure data stratified by patients' dual-eligible status, and the following clinical quality measures that we are considering for future inclusion in the Hospital IQR Program: (1) Quality of Informed Consent Documents for Hospital-Performed, Elective Procedures measure; (2) four End-of-Life process and outcome measures for cancer patients; (3) two nurse staffing measures; and (4) eleven newly specified electronic clinical quality measures (eCQMs).

i. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

Section 1886(m)(5) of the Act requires LTCHs to report certain quality data to CMS in order to receive their full annual update under the LTCH PPS. In this proposed rule, we are proposing to adopt one new outcome measure related to pressure ulcers and two new measures (one process and one outcome) related to ventilator weaning. We also are proposing to define the standardized patient assessment data that LTCHs must report to comply with section 1886(m)(5)(F)(ii) of the Act, as well as the requirements for the reporting of these data. Finally, we are proposing to publicly report data on four assessment-based measures and three claims-based measures.

j. Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program

For the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program, we are making several proposals. First, beginning with the FY 2020 payment determination, we are proposing the Medication Continuation following Inpatient Psychiatric Discharge measure. Second, beginning with the FY 2019 payment determination (that is, for extraordinary circumstances occurring during CY 2018), we are proposing to update the IPFQR Program's extraordinary circumstances exception (ECE) policy by: (1) Allowing designated personnel to provide their contact information and sign the ECE request in lieu of the Chief Executive Officer (CEO); (2) allowing up to 90 days after the extraordinary circumstance to submit the request; and (3) stating that we will strive to respond to requests for ECEs within 90 days of receiving these requests. Third, we are proposing to change the annual data submission period from a specific date range to a 45-day period that begins at least 30 days following the end of the collection period. Fourth, we are proposing to align our deadline for submission of a Notice of Participation (NOP) or Start Printed Page 19809program withdrawal with this proposed data submission timeframe. Finally, we are proposing factors by which we will evaluate measures for removal from the IPFQR Program. These factors align with those in use in other quality reporting programs.

3. Summary of Costs and Benefits

  • Adjustment for MS-DRG Documentation and Coding Changes. Section 414 of the MACRA replaced the single positive adjustment we intended to make in FY 2018 once the recoupment required by section 631 of the ATRA was complete with a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act (Pub. L. 114-255). For FY 2018, we are proposing to make the 0.4588 percent positive adjustment to the standardized amount as required by these provisions.
  • Adjustment to IPPS Payment Rates as a Result of the 2-Midnight Policy. The removal of the adjustment to IPPS rates resulting from the 2-midnight policy will decrease IPPS payment rates by (1/1.006) for FY 2018. The (1/1.006) is a one-time factor that will be applied to the standardized amount, the hospital-specific rates, and the national capital Federal rate for FY 2018 only.
  • Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. Under section 1886(r) of the Act (as added by section 3133 of the Affordable Care Act), DSH payments to hospitals under section 1886(d)(5)(F) of the Act are reduced and an additional payment for uncompensated care is made to eligible hospitals beginning in FY 2014. Hospitals that receive Medicare DSH payments receive 25 percent of the amount they previously would have received under the statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remainder, equal to an estimate of 75 percent of what otherwise would have been paid as Medicare DSH payments, is the basis for determining the additional payments for uncompensated care after the amount is reduced for changes in the percentage of individuals that are uninsured and additional statutory adjustments. Each hospital that receives Medicare DSH payments will receive an additional payment for uncompensated care based on its share of the total uncompensated care amount reported by Medicare DSHs. The reduction to Medicare DSH payments is not budget neutral.

For FY 2018, we are proposing that the 75 percent of what otherwise would have been paid for Medicare DSH will be adjusted to approximately 58.01 percent of the amount to reflect changes in the percentage of individuals that are uninsured and additional statutory adjustments. In other words, approximately 43.51 percent (the product of 75 percent and 58.01 percent) of our estimate of Medicare DSH payments, prior to the application of section 3133 of the Affordable Care Act, would be available to make additional payments to hospitals for their relative share of the total amount of uncompensated care.

We project that estimated Medicare DSH payments, and additional payments for uncompensated care made for FY 2018, will increase payments overall by approximately 0.8 percent as compared to the estimate of overall payments, including Medicare DSH payments and uncompensated care payments, that will be distributed in FY 2017. The additional payments have redistributive effects based on a hospital's uncompensated care amount relative to the uncompensated care amount for all hospitals that are estimated to receive Medicare DSH payments, and the calculated payment amount is not directly tied to a hospital's number of discharges.

  • Proposed Changes to the Hospital Readmissions Reduction Program. For FY 2018 and subsequent years, the reduction is based on a hospital's risk-adjusted readmission rate during a 3-year period for acute myocardial infarction (AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary disease (COPD), total hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG). Overall, in this proposed rule, we estimate that 2,591 hospitals would have their base operating DRG payments reduced by their determined proxy FY 2018 hospital-specific readmission adjustment. As a result, we estimate that the Hospital Readmissions Reduction Program would save approximately $564 million in FY 2018, an increase of approximately $27 million over the estimated FY 2017 savings.
  • Value-Based Incentive Payments Under the Hospital VBP Program. We estimate that there would be no net financial impact to the Hospital VBP Program for the FY 2018 program year in the aggregate because, by law, the amount available for value-based incentive payments under the program in a given year must be equal to the total amount of base operating MS-DRG payment amount reductions for that year, as estimated by the Secretary. The estimated amount of base operating MS-DRG payment amount reductions for the FY 2018 program year and, therefore, the estimated amount available for value-based incentive payments for FY 2018 discharges is approximately $1.9 billion.
  • Proposed Changes to the HAC Reduction Program. A hospital's Total HAC score and its ranking in comparison to other hospitals in any given year depends on several different factors. Any significant impact due to the proposed HAC Reduction Program changes for FY 2018, including which hospitals will receive the adjustment, will depend on actual experience.
  • Update to the LTCH PPS Payment Rates and Other Payment Factors. Based on the best available data for the 415 LTCHs in our database, we estimate that the proposed changes to the payment rates and factors that we are presenting in the preamble and Addendum of this proposed rule, which reflects the rolling end to the transition of the statutory application of the site neutral payment rate required by section 1886(m)(6)(A) of the Act, the proposed update to the LTCH PPS standard Federal payment rate for FY 2018, and estimated changes to the site neutral payment rate and high-cost outlier (HCO) payments would result in an estimated decrease in payments from FY 2017 of approximately $238 million.
  • Proposed Changes to the 25-Percent Threshold Policy. In this proposed rule, we estimate our proposal to adopt a 1-year regulatory delay of the full implementation of the 25-percent threshold policy for discharges occurring in FY 2018 would increase payments to LTCHs in FY 2018 by $50 million.
  • Proposed Changes to the Hospital Inpatient Quality Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that our policy proposals would result in the following changes to costs and benefits in the Hospital IQR Program compared to previously finalized requirements: (1) A cost reduction of $361,240 for the FY 2019 payment determination due to the proposed updates to the eCQM reporting requirements; (2) a total net cost reduction of $392,963 for the FY 2020 payment determination due to the proposed updates to the eCQM reporting requirements, the proposed updates to the eCQM validation procedures, and the proposed voluntary reporting of the new Hybrid Hospital-Wide Readmission measure; and (3) a total cost reduction of $70,048 for the FY 2021 payment determination due to Start Printed Page 19810the proposed updates to the eCQM validation procedures.
  • Proposed Changes Related to the LTCH QRP. In this proposed rule, we are proposing one outcome measure related to pressure ulcers and two new measures (one process and one outcome) related to ventilator weaning. We also are proposing to specify the use of the standardized patient assessment data as required under section 1899B(b)(1)(B) of the Act and policies regarding public display of measure data. Overall, the cost associated with the proposed changes to the LTCH QRP is estimated at an additional $3,187.15 per LTCH annually, or $1,357,726 for all LTCHs annually.
  • Proposed Changes to the IPFQR Program. In this proposed rule, we are proposing to adopt one claims based measure, update our ECE process, change the specification of the data submission period, align the timeframe for submission of the NOP or program withdrawal with the data submission period, and establish criteria to evaluate measures for retention or removal. We do not believe that these policies will have any impact on the IPFQR program burden.

B. Summary

1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)

Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires the Secretary to use a prospective payment system (PPS) to pay for the capital-related costs of inpatient hospital services for these “subsection (d) hospitals.” Under these PPSs, Medicare payment for hospital inpatient operating and capital-related costs is made at predetermined, specific rates for each hospital discharge. Discharges are classified according to a list of diagnosis-related groups (DRGs).

The base payment rate is comprised of a standardized amount that is divided into a labor-related share and a nonlabor-related share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located. If the hospital is located in Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-living adjustment factor. This base payment rate is multiplied by the DRG relative weight.

If the hospital treats a high percentage of certain low-income patients, it receives a percentage add-on payment applied to the DRG-adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, provides for a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients. For qualifying hospitals, the amount of this adjustment varies based on the outcome of the statutory calculations. The Affordable Care Act revised the Medicare DSH payment methodology and provides for a new additional Medicare payment that considers the amount of uncompensated care beginning on October 1, 2013.

If the hospital is training residents in an approved residency program(s), it receives a percentage add-on payment for each case paid under the IPPS, known as the indirect medical education (IME) adjustment. This percentage varies, depending on the ratio of residents to beds.

Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add-on payment, it would be inadequately paid under the regular DRG payment.

The costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments.

Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate, which is determined from their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital-specific rate based on their costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the standardized amount. SCHs are the sole source of care in their areas. Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more than 35 road miles from another hospital or that, by reason of factors such as isolated location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of hospital inpatient services reasonably available to Medicare beneficiaries. In addition, certain rural hospitals previously designated by the Secretary as essential access community hospitals are considered SCHs.

Under current law, the Medicare-dependent, small rural hospital (MDH) program is effective through FY 2017. Through and including FY 2006, an MDH received the higher of the Federal rate or the Federal rate plus 50 percent of the amount by which the Federal rate was exceeded by the higher of its FY 1982 or FY 1987 hospital-specific rate. For discharges occurring on or after October 1, 2007, but before October 1, 2017, an MDH receives the higher of the Federal rate or the Federal rate plus 75 percent of the amount by which the Federal rate is exceeded by the highest of its FY 1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major source of care for Medicare beneficiaries in their areas. Section 1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is located in a rural area, has not more than 100 beds, is not an SCH, and has a high percentage of Medicare discharges (not less than 60 percent of its inpatient days or discharges in its cost reporting year beginning in FY 1987 or in two of its three most recently settled Medicare cost reporting years).

Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient hospital services in accordance with a prospective payment system established by the Secretary. The basic methodology for determining capital prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312. Under the capital IPPS, payments are adjusted by the same DRG for the case as they are under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH, similar to the adjustments made under the operating IPPS. In addition, hospitals may receive outlier payments for those cases that have unusually high costs.

The existing regulations governing payments to hospitals under the IPPS are located in 42 CFR part 412, subparts A through M.

2. Hospitals and Hospital Units Excluded From the IPPS

Under section 1886(d)(1)(B) of the Act, as amended, certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Inpatient rehabilitation facility (IRF) hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; cancer hospitals; long-term care neoplastic Start Printed Page 19811disease hospitals (formerly LTCHs classified under section 1886(d)(1)(B)(iv)(II) of the Act and redesignated by section 15008 of Pub. L. 114-255) and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa). Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs for IRF hospitals and units, LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)). (We note that the annual updates to the LTCH PPS are now included as part of the IPPS annual update document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, cancer hospitals, hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs continue to be paid solely under a reasonable cost-based system subject to a rate-of-increase ceiling on inpatient operating costs.

The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR parts 412 and 413.

3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

The Medicare prospective payment system (PPS) for LTCHs applies to hospitals described in section 1886(d)(1)(B)(iv) of the Act effective for cost reporting periods beginning on or after October 1, 2002. The LTCH PPS was established under the authority of sections 123 of the BBRA and section 307(b) of the BIPA (as codified under section 1886(m)(1) of the Act). During the 5-year (optional) transition period, a LTCH's payment under the PPS was based on an increasing proportion of the LTCH Federal rate with a corresponding decreasing proportion based on reasonable cost principles. Effective for cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the Federal rate. Section 1206(a) of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) established the site neutral payment rate under the LTCH PPS, which made the LTCH PPS a dual rate payment system beginning in FY 2016. Under this statute, based on a rolling effective date that is linked to the date on which a given LTCH's Federal FY 2016 cost reporting period begins, LTCHs are paid for LTCH discharges at the site neutral payment rate unless the discharge meets the patient criteria for payment at the LTCH PPS standard Federal payment rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR part 412, subpart O. Beginning October 1, 2009, we issue the annual updates to the LTCH PPS in the same documents that update the IPPS (73 FR 26797 through 26798).

4. Critical Access Hospitals (CAHs)

Under sections 1814(l), 1820, and 1834(g) of the Act, payments made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are generally based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v) of the Act and existing regulations under 42 CFR part 413.

5. Payments for Graduate Medical Education (GME)

Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR part 413.

C. Summary of Provisions of Recent Legislation Proposed To Be Implemented in This Proposed Rule

1. The American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240), the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), and the 21st Century Cures Act (Pub. L. 114-255)

Section 631 of the American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require CMS to make a recoupment adjustment to the standardized amounts under section 1886(d) of the Act based upon the Secretary's estimates for discharges occurring from FYs 2014 through FY 2017 to fully offset $11 billion. Once the recoupment required under section 631 of the ATRA was completed, CMS had anticipated making a single positive adjustment in FY 2018 to offset the reductions required to recoup the $11 billion under section 631 of the ATRA. However, section 414 of the MACRA (enacted on April 16, 2015) replaced the single positive adjustment CMS intended to make in FY 2018 with a 0.5 percent positive adjustment for each of FYs 2018 through 2023. Section 15005 of the 21st Century Cures Act (Pub. L. 114-255, enacted December 13, 2016) further amended Public Law 110-90 to reduce the adjustment for FY 2018 from 0.5 percent point to 0.4588 percentage point.

2. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67)

The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) introduced new payment rules in the LTCH PPS. Under section 1206 of this law, discharges in cost reporting periods beginning on or after October 1, 2015 under the LTCH PPS will receive payment under a site neutral rate unless the discharge meets certain patient-specific criteria. In this proposed rule, we are continuing to provide clarifications to prior policy changes that implemented provisions under section 1206 of the Pathway for SGR Reform Act.

3. Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185)

The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act (Pub. L. 113-185), enacted on October 6, 2014, made a number of changes that affect the Long-Term Care Quality Reporting Program (LTCH QRP). In this proposed rule, we are proposing to continue to implement portions of section 1899B of the Act, as added by section 2 of the IMPACT Act, which, in part, requires LTCHs, among other postacute care providers, to report standardized patient assessment data, data on quality measures, and data on resource use and other measures.

4. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10)

Section 411(g) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, Pub. L. 114-10) sets the annual update under the LTCH PPS to 1.0 percent for FY 2018. In this proposed rule, consistent with this requirement, we are proposing to update Start Printed Page 19812the LTCH standard Federal payment rate by 1.0 percent for FY 2018.

The MACRA also extended the MDH program and changes to the payment adjustment for low-volume hospitals through FY 2017. In this proposed rule, we discuss the expiration of the MDH program and the expiration of the temporary changes to the low-volume hospital payment adjustment under current law.

5. The 21st Century Cures Act (Pub. L. 114-255)

The 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016, contains a number of provisions affecting payments under the LTCH PPS and the Hospital Readmissions Reduction Program and the Medicare EHR Incentive Program, which we are proposing to implement in this proposed rule:

  • Section 4002(b)(1)(A) amended section 1848(a)(7)(B) of the Act to provide that the Secretary shall exempt an eligible professional from the application of the payment adjustment under section 1848(a)(7)(A) of the Act with respect to a year, subject to annual renewal, if the Secretary determines that compliance with the requirement for being a meaningful EHR user is not possible because the certified EHR technology used by such eligible professional has been decertified under the Office of the National Coordinator for Health Information Technology's (ONC) Health IT Certification Program.
  • Section 4002(b)(2) amended section 1886(b)(3)(B)(ix)(II) of the Act to provide that the Secretary shall exempt a hospital from the application of the payment adjustment under section 1886(b)(3)(B)(ix)(I) with respect to a fiscal year, subject to annual renewal, if the Secretary determines that compliance with the requirement for being a meaningful EHR user is not possible because the certified EHR technology used by the hospital is decertified under ONC's Health IT Certification Program.
  • Section 15002, which amended section 1886(q)(3) of the Act by adding subparagraphs (D) and (E), which requires the Secretary to develop a methodology for the calculating the excess readmissions adjustment factor for the Hospital Readmissions Reduction Program based on cohorts defined by the percentage of dual eligible patients (that is, patients who are eligible for both Medicare and full-benefit Medicaid coverage) cared for by a hospital. In this proposed rule, we are proposing to implement changes to the payment adjustment factor to assess penalties based on a hospital's performance relative to other hospitals treating a similar proportion of dual eligible patients.
  • Section 15004(a), which further amended section 114(d)(7) of the MMSEA (as amended) by striking “The moratorium under paragraph (1)(A)” and inserting “[a]ny moratorium under paragraph (1)” and specified that such amendment shall take effect as if included in the enactment of section 112 of the PAMA. We are proposing to implement the exceptions to the current statutory moratorium, which is in effect through September 30, 2017, on increasing beds in an existing LTCH or an existing LTCH satellite as provided by Section 15004(a).
  • Section 15004(b), which modifies high cost outlier payments to LTCH standard Federal rate cases beginning in FY 2018.
  • Section 15006, which further amended section 114(c)(1)(A) of the MMSEA (as amended) by extending the moratorium on the full implementation of the 25-percent threshold policy through June 30, 2016, and for discharges occurring on or after October 1, 2016 and before October 1, 2017. In this proposed rule, we are implementing the moratorium on the full implementation of the 25-percent threshold policy for discharges occurring on or after October 1, 2016, through September 30, 2017, as provided by section 15006.
  • Section 15007, which amended section 1206(a)(3) of the Pathway for SGR Reform Act by extending the exclusion of Medicare Advantage plans' and site neutral payment rate discharges from the calculation of the average length-of-stay to all LTCHs, for discharges occurring in cost reporting periods beginning on or after October 1, 2015.
  • Section 15008, which provided for a change in Medicare classification for “subclause (II)” LTCHs by redesignating such hospitals from section 1886(d)(1)(B)(iv)(II) to section 1886(d)(1)(B)(vi) of the Act. In this proposed rule, we are proposing to implement the reclassification of hospitals which had previously been classified as “subclause (II)” LTCHs as their own category of IPPS-excluded hospitals as provided by the provisions of section 15008.
  • Section 15009 of Public Law 114-255, which added new subparagraph (F) to section 1886(m)(6) of the Act, providing for a temporary exception to the site neutral payment rate for certain spinal cord specialty hospitals for all discharges occurring during FYs 2018 and 2019.
  • Section 15010, which added a new subparagraph (G) to section 1886(m)(6) of the Act, to create a temporary exception to the site neutral payment rate for certain severe wound discharges from certain LTCHs during such LTCH's cost reporting period beginning during FY 2018.

Public Law 114-255 also amended section 1886(q)(3) of the Act by adding subparagraphs (D) and (E), which requires the Secretary to develop a methodology for the Hospital Readmissions Reduction Program that accounts for the percentage of dual-eligible patients (that is, patients who are eligible for both Medicare and full-benefit Medicaid coverage) cared for by a hospital. In this proposed rule, we are proposing to implement changes to the payment adjustment factor to assess penalties based on a hospital's performance relative to other hospitals treating a similar proportion of dual-eligible patients.

  • Section 16003 amended section 1848(a)(7)(D) of the Act to provide that no payment adjustment may be made under section 1848(a)(7)(A) of the Act for 2017 and 2018 in the case of an eligible professional who furnishes substantially all of his or her covered professional services in an ambulatory surgical center (ASC). Section 1848(a)(7)(D)(iii) of the Act provides that determinations of whether an eligible professional is ASC-based may be made based on the site of service as defined by the Secretary or an attestation, but shall be made without regard to any employment or billing arrangement between the eligible professional and any other supplier or provider of services. Section 1848(a)(7)(D)(iv) of the Act provides that the ASC-based exception shall no longer apply as of the first year that begins more than 3 years after the date on which the Secretary determines, through notice-and-comment rulemaking, that certified EHR technology applicable to the ASC setting is available.

D. Summary of Provisions of This Proposed Rule

In this proposed rule, we are setting forth proposed payment and policy changes to the Medicare IPPS for FY 2018 operating costs and for capital-related costs of acute care hospitals and certain hospitals and hospital units that are excluded from IPPS. In addition, we are setting forth proposed changes to the payment rates, factors, and other payment and policy-related changes to programs associated with payment rate policies under the LTCH PPS for FY 2018.Start Printed Page 19813

Below is a summary of the major changes that we are proposing to make:

1. Proposed Changes to MS-DRG Classifications and Recalibrations of Relative Weights

In section II. of the preamble of this proposed rule, we include—

  • Proposed changes to MS-DRG classifications based on our yearly review for FY 2018.
  • Proposed adjustment to the standardized amounts under section 1886(d) of the Act for FY 2018 in accordance with the amendments made to section 7(b)(1)(B) of Public Law 110-90 by section 414 of the MACRA and section 15005 of the 21st Century Cures Act.
  • Proposed recalibrations of the MS-DRG relative weights.
  • A discussion of the FY 2018 status of new technologies approved for add-on payments for FY 2017 and a presentation of our evaluation and analysis of the FY 2018 applicants for add-on payments for high-cost new medical services and technologies (including public input, as directed by Pub. L. 108-173, obtained in a town hall meeting).

2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals

In section III. of the preamble to this proposed rule, we are proposing to make revisions to the wage index for acute care hospitals and the annual update of the wage data. Specific issues addressed include, but are not limited to, the following:

  • The proposed FY 2018 wage index update using wage data from cost reporting periods beginning in FY 2014.
  • Clarification of other wage-related costs in the wage index.
  • Calculation of the proposed occupational mix adjustment for FY 2018 based on the 2013 Occupational Mix Survey.
  • Analysis and implementation of the proposed FY 2018 occupational mix adjustment to the wage index for acute care hospitals.
  • Proposed application of the rural floor and the frontier State floor and the proposed expiration of the imputed floor.
  • Proposed revisions to the wage index for acute care hospitals based on hospital redesignations and reclassifications under sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act.
  • Proposal to require documentation of SCH and RRC classification status approvals to be submitted to the MGCRB by the first business day after January 1.
  • Clarification of special rules for SCHs and RRCs reclassifying to geographic home areas.
  • Proposed changes to the 45-day notification rule.
  • The proposed adjustment to the wage index for acute care hospitals for FY 2018 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index.
  • Determination of the labor-related share for the proposed FY 2018 wage index.

3. Proposed Revising and Rebasing of Hospital Market Basket

In section IV. of this proposed rule, we are proposing to revise and rebase the hospital market baskets for acute care hospitals and update the labor-related share.

4. Other Decisions and Proposed Changes to the IPPS for Operating Costs

In section V. of the preamble of this proposed rule, we discuss proposed changes or clarifications of a number of the provisions of the regulations in 42 CFR parts 412 and 413, including the following:

  • Proposed changes to MS-DRGs subject to the postacute care transfer policy.
  • Proposed changes to the inpatient hospital update for FY 2018.
  • Proposed changes to the volume decrease adjustment for SCHs.
  • Proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.
  • Expiration of the MDH program and the temporary changes to the payment adjustment for low-volume hospitals at the end of FY 2017.
  • Proposed parallel low-volume hospital payment adjustment concerning hospitals operated by the Indian Health Service (IHS) or a Tribe.
  • The statutorily required IME adjustment factor for FY 2018.
  • Proposed changes to the methodologies for determining Medicare DSH payments and the additional payments for uncompensated care.
  • Discussion of expiration of the MDH program at the end of FY 2017 and our policy to allow MDHs to apply for SCH status in advance of the expiration of the MDH program and be paid as such under certain conditions.
  • Proposed changes to the rules for payment adjustments under the Hospital Readmissions Reduction Program based on hospital readmission measures and the process for hospital review and correction of those rates for FY 2018.
  • Proposed changes to the requirements and provision of value-based incentive payments under the Hospital Value-Based Purchasing Program.
  • Proposed requirements for payment adjustments to hospitals under the HAC Reduction Program for FY 2018.
  • Discussion of and proposals relating to the additional 5-year extension of the Rural Community Hospital Demonstration Program.
  • Proposals related to the provider-based status of IHS and Tribal facilities and organizations that would remove the regulatory date limitation that restricted the grandfathering provision to IHS or Tribal facilities and organizations furnishing services on or before April 7, 2000. We also are proposing to make a technical change to make the regulation text more consistent with our current rules that require these facilities to comply with all applicable Medicare conditions of participation that apply to the main provider.

5. Proposed FY 2018 Policy Governing the IPPS for Capital-Related Costs

In section VI. of the preamble to this proposed rule, we discuss the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2018.

6. Proposed Changes to the Payment Rates for Certain Excluded Hospitals: Rate-of-Increase Percentages

In section VII. of the preamble of this proposed rule, we discuss—

  • Proposed changes to payments to certain excluded hospitals for FY 2018.
  • Proposed policy changes relating to payments to hospitals-within-hospitals.
  • Proposed continued implementation of the Frontier Community Health Integration Project (FCHIP) Demonstration.

7. Proposed Changes to the LTCH PPS

In section VIII. of the preamble of this proposed rule, we set forth—

  • Proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2018.
  • Proposed changes to the short-stay outlier (SSO) policy.
  • Proposed 1-year regulatory delay of the full implementation of the 25-percent threshold policy for discharges occurring in FY 2018.
  • Proposed changes to implement the temporary exception to the site neutral payment rate for certain spinal cord specialty hospitals and for certain discharges with severe wounds from certain LTCHs, as provided under sections 15009 and 15010 of Public Law 114-255, respectively.Start Printed Page 19814
  • Proposed change to the average length of stay criterion to implement section 15007 of Public Law 114-255.
  • Proposed change in Medicare classification for certain hospitals to implement section 15008 of Public Law 114-255.

8. Proposed Changes Relating to Quality Data Reporting for Specific Providers and Suppliers

In section IX. of the preamble of the proposed rule, we address—

  • Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program.
  • Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program).
  • Proposed changes to the requirements under the LTCH Quality Reporting Program (LTCH QRP).
  • Proposed changes to the requirements under the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program.
  • Proposed changes to requirements pertaining to the clinical quality measurement of eligible hospitals and CAHs as well as EPs participating in the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs.

9. Proposed Changes Relating to Medicare Cost Reporting and Provider Requirements

In section X. of the preamble of this proposed rule, we present our proposals to revise the regulations to allow providers to use an electronic signature to sign the Certification and Settlement Summary page of the Medicare cost report and submit this page electronically, and clarify the rules relating to the sale or scrapping of depreciable assets disposed of on or after December 1, 1997.

10. Proposed Changes Relating to Survey and Certification Requirements

In section XI. of the preamble of this proposed rule, we present our proposals for allowing transparency in accrediting organization survey reports and plans of correction and for changing the requirement for providers to publish self-termination notices in newspapers.

11. Determining Prospective Payment Operating and Capital Rates and Rate-of-Increase Limits for Acute Care Hospitals

In section V. of the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2018 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We are proposing to establish the threshold amounts for outlier cases. In addition, we are addressing the update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2018 for certain hospitals excluded from the IPPS.

12. Determining Prospective Payment Rates for LTCHs

In the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2018 LTCH PPS standard Federal payment rate and other factors used to determine LTCH PPS payments under both the LTCH PPS standard Federal payment rate and the site neutral payment rate in FY 2018. We are proposing to establish the adjustments for wage levels, the labor-related share, the cost-of-living adjustment, and high-cost outliers, including the applicable fixed-loss amounts and the LTCH cost-to-charge ratios (CCRs) for both payment rates.

13. Impact Analysis

In Appendix A of this proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected acute care hospitals, CAHs, LTCHs, PCHs, and IPFs.

14. Recommendation of Update Factors for Operating Cost Rates of Payment for Hospital Inpatient Services

In Appendix B of this proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we are providing our recommendations of the appropriate percentage changes for FY 2018 for the following:

  • A single average standardized amount for all areas for hospital inpatient services paid under the IPPS for operating costs of acute care hospitals (and hospital-specific rates applicable to SCHs).
  • Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by certain hospitals excluded from the IPPS.
  • The LTCH PPS standard Federal payment rate and the site neutral payment rate for hospital inpatient services provided for LTCH PPS discharges.

15. Discussion of Medicare Payment Advisory Commission Recommendations

Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 15 of each year, in which MedPAC reviews and makes recommendations on Medicare payment policies. MedPAC's March 2017 recommendations concerning hospital inpatient payment policies address the update factor for hospital inpatient operating costs and capital-related costs for hospitals under the IPPS. We address these recommendations in Appendix B of this proposed rule. For further information relating specifically to the MedPAC March 2017 report or to obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit MedPAC's Web site at: http://www.medpac.gov.

II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications and Relative Weights

A. Background

Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as diagnosis-related groups (DRGs)) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore, under the IPPS, Medicare pays for inpatient hospital services on a rate per discharge basis that varies according to the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG, relative to the average resources used to treat cases in all DRGs.

Section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG classifications and relative weights at least annually to account for changes in resource consumption. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources.

B. MS-DRG Reclassifications

For general information about the MS-DRG system, including yearly reviews and changes to the MS-DRGs, we refer readers to the previous discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43764 through 43766) and the FYs 2011 through 2017 IPPS/LTCH PPS final rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR 53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; and 81 FR 56787 through 56872, respectively).Start Printed Page 19815

C. Adoption of the MS-DRGs in FY 2008

For information on the adoption of the MS-DRGs in FY 2008, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189).

D. Proposed FY 2018 MS-DRG Documentation and Coding Adjustment

1. Background on the Prospective MS-DRG Documentation and Coding Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90

In the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189), we adopted the MS-DRG patient classification system for the IPPS, effective October 1, 2007, to better recognize severity of illness in Medicare payment rates for acute care hospitals. The adoption of the MS-DRG system resulted in the expansion of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number of MS-DRGs and more fully taking into account patient severity of illness in Medicare payment rates for acute care hospitals, MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses.

In the FY 2008 IPPS final rule with comment period (72 FR 47175 through 47186), we indicated that the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for additional documentation and coding. In that final rule with comment period, we exercised our authority under section 1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget neutrality by adjusting the national standardized amount, to eliminate the estimated effect of changes in coding or classification that do not reflect real changes in case-mix. Our actuaries estimated that maintaining budget neutrality required an adjustment of −4.8 percentage points to the national standardized amount. We provided for phasing in this −4.8 percentage point adjustment over 3 years. Specifically, we established prospective documentation and coding adjustments of −1.2 percentage points for FY 2008, −1.8 percentage points for FY 2009, and −1.8 percentage points for FY 2010.

On September 29, 2007, Congress enacted the TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section 7(a) of Public Law 110-90 reduced the documentation and coding adjustment made as a result of the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to −0.6 percentage point for FY 2008 and −0.9 percentage point for FY 2009.

As discussed in prior year rulemaking, and most recently in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we implemented a series of adjustments required under sections 7(b)(1)(A) and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of FY 2008 and FY 2009 claims data. We completed these adjustments in FY 2013, but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274 through 53275) that delaying full implementation of the adjustment required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013 resulted in payments in FY 2010 through FY 2012 being overstated, and that these overpayments could not be recovered.

2. Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA)

Section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment or adjustments totaling $11 billion by FY 2017. This adjustment represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. As discussed earlier, this delay in implementation resulted in overstated payment rates in FYs 2010, 2011, and 2012. The resulting overpayments could not have been recovered under Public Law 110-90.

Similar to the adjustments authorized under section 7(b)(1)(B) of Public Law 110-90, the adjustment required under section 631 of the ATRA was a one-time recoupment of a prior overpayment, not a permanent reduction to payment rates. Therefore, we anticipated that any adjustment made to reduce payment rates in one year would eventually be offset by a positive adjustment in 2018, once the necessary amount of overpayment was recovered. However, section 414 of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, Public Law 114-10, enacted on April 16, 2015, replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percentage point positive adjustment for each of FYs 2018 through 2023. We stated in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49345) that we would address this MACRA provision in future rulemaking. However, section 15005 of the 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016, reduced the adjustment for FY 2018 from 0.5 percentage points to 0.4588 percentage points. We are addressing these provisions of MACRA and the 21st Century Cures Act in section II.D.3. of the preamble of this proposed rule.

As we stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 through 50517), our actuaries estimated that a −9.3 percentage point adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in FY 2014. It is often our practice to phase in payment rate adjustments over more than one year, in order to moderate the effect on payment rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, and after consideration of the public comments we received, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 through 50517), we implemented a −0.8 percentage point recoupment adjustment to the standardized amount in FY 2014. We estimated that if adjustments of approximately −0.8 percentage point were implemented in FYs 2014, 2015, 2016, and 2017, using standard inflation factors, the entire $11 billion would be accounted for by the end of the statutory 4-year timeline. As estimates of any future adjustments are subject to variations in total savings, we did not provide for specific adjustments for FYs 2015, 2016, or 2017 at that time.

Consistent with the approach discussed in the FY 2014 rulemaking for recouping the $11 billion required by section 631 of the ATRA, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49874) and the FY 2016 IPPS/LTCH PPS final rule (80 FR 49345), we implemented additional −0.8 percentage point recoupment adjustments to the standardized amount in FY 2015 and FY 2016, respectively. We estimated that these adjustments, combined with leaving the prior −0.8 percentage point adjustments in place, would recover up to $2 billion in FY 2015 and another $3 billion in FY 2016. When combined with the approximately $1 billion adjustment made in FY 2014, we estimated that approximately $5 to $6 billion would be left to recover under section 631 of the ATRA by the end of FY 2016.

As indicated in the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 24966), due to lower than previously estimated inpatient spending, we determined that an adjustment of −0.8 percentage point in FY 2017 would not recoup the $11 billion under section 631 of the ATRA. Start Printed Page 19816For the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785), based on the Midsession Review of the President's FY 2017 Budget, our actuaries estimated that, to the nearest tenth of a percentage point, the FY 2017 documentation and coding adjustment factor that will recoup as closely as possible $11 billion from FY 2014 through FY 2017 without exceeding this amount is −1.5 percentage points. Based on those updated estimates by the Office of the Actuary using the Midsession Review of the President's FY 2017 Budget, we made a −1.5 percentage point adjustment for FY 2017 as the final adjustment required under section 631 of the ATRA. The estimates by our actuaries related to this finalized adjustment were included in a memorandum that we made publicly available on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2017-IPPS-Final-Rule-Home-Page-Items/​FY2017-IPPS-Final-Rule-OACT.html.

3. Proposed Adjustment for FY 2018 Required Under Section 414 of Public Law 114-10 (MACRA) and Section 15005 of Public Law 114-255

As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785), once the recoupment required under section 631 of the ATRA was complete, we had anticipated making a single positive adjustment in FY 2018 to offset the reductions required to recoup the $11 billion under section 631 of the ATRA. However, section 414 of the MACRA (which was enacted on April 16, 2015) replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percentage point positive adjustment for each of FYs 2018 through 2023. In the FY 2017 rulemaking, we indicated that we would address the adjustments for FY 2018 and later fiscal years in future rulemaking. As noted previously, section 15005 of the 21st Century Cures Act (Pub. L. 114-255), which was enacted on December 13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section 631 of the ATRA and section 414 of the MACRA, to reduce the adjustment for FY 2018 from a 0.5 percentage point to a 0.4588 percentage point. We believe the directive under section 15005 of Public Law 114-255 is clear. Therefore, for FY 2018, we are proposing to implement the required +0.4588 percentage point adjustment to the standardized amount. This is a permanent adjustment to payment rates. While we are not proposing future adjustments required under section 414 of the MACRA and section 15005 of Public Law 114-255 at this time, we expect to propose positive 0.5 percentage point adjustments to the standardized amounts for FYs 2019 through 2023.

E. Refinement of the MS-DRG Relative Weight Calculation

1. Background

Beginning in FY 2007, we implemented relative weights for DRGs based on cost report data instead of charge information. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed discussion of our final policy for calculating the cost-based DRG relative weights and to the FY 2008 IPPS final rule with comment period (72 FR 47199) for information on how we blended relative weights based on the CMS DRGs and MS-DRGs. We also refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785 through 56787) for a detailed discussion of the history of changes to the number of cost centers used in calculating the DRG relative weights. Since FY 2014, we calculate the IPPS MS-DRG relative weights using 19 CCRs, which now include distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization.

2. Discussion of Policy for FY 2018

Consistent with our established policy, we calculated the proposed MS-DRG relative weights for FY 2018 using two data sources: The MedPAR file as the claims data source and the HCRIS as the cost report data source. We adjusted the charges from the claims to costs by applying the 19 national average CCRs developed from the cost reports. The description of the calculation of the proposed 19 CCRs and the proposed MS-DRG relative weights for FY 2018 is included in section II.G. of the preamble to this FY 2018 IPPS/LTCH PPS proposed rule. As we did with the FY 2017 IPPS/LTCH PPS final rule, for this proposed rule, we are providing the version of the HCRIS from which we calculated these proposed 19 CCRs on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled, “FY 2018 IPPS Proposed Rule Home Page” or “Acute Inpatient Files for Download.”

F. Proposed Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for Proposed FY 2018 MS-DRG Updates

a. Conversion of MS-DRGs to the International Classification of Diseases, 10th Revision (ICD-10)

As of October 1, 2015, providers use the International Classification of Diseases, 10th Revision (ICD-10) coding system to report diagnoses and procedures for Medicare hospital inpatient services under the MS-DRG system instead of the ICD-9-CM coding system, which was used through September 30, 2015. The ICD-10 coding system includes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for diagnosis coding and the International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as well as the Official ICD-10-CM and ICD-10-PCS Guidelines for Coding and Reporting. For a detailed discussion of the conversion of the MS-DRGs to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56787 through 56789).

b. Basis for FY 2018 Proposed MS-DRG Updates

CMS has previously encouraged input from our stakeholders concerning the annual IPPS updates when that input is made available to us by December 7 of the year prior to the next annual proposed rule update. For example, to be considered for any updates or changes in FY 2018, comments and suggestions should have been submitted by December 7, 2016. The comments that were submitted in a timely manner for FY 2018 are discussed in this section of the preamble of this proposed rule. As CMS works with the public to examine the ICD-10 claims data used for updates to the ICD-10 MS-DRGs, we would like to examine areas where the MS-DRGs can be improved. This will require additional time for us to review requests from the public to make specific updates, analyze claims data, and consider any proposed updates. Given the need for more time to carefully evaluate requests and propose updates, we are changing the deadline to request updates to MS-DRGs to November 1 of each year. This will provide an additional 5 weeks for the data analysis and review process. Interested parties should submit any comments and suggestions for FY 2019 by November 1, 2017, via the CMS MS-Start Printed Page 19817DRG Classification Change Requests Mailbox located at: MSDRGClassificationChange@cms.hhs.gov.

Following are the changes that we are proposing to the MS-DRGs for FY 2018 in this FY 2018 IPPS/LTCH PPS proposed rule. We are inviting public comments on each of the MS-DRG classification proposed changes as well as our proposals to maintain certain existing MS-DRG classifications discussed in this proposed rule. In some cases, we are proposing changes to the MS-DRG classifications based on our analysis of claims data. In other cases, we are proposing to maintain the existing MS-DRG classification based on our analysis of claims data. For this FY 2018 proposed rule, our MS-DRG analysis was based on ICD-10 claims data from the December 2016 update of the FY 2016 MedPAR file, which contains hospital bills received through September 30, 2016, for discharges occurring through September 30, 2016. In our discussion of the proposed MS-DRG reclassification changes, we referred to our analysis of claims data from the “December 2016 update of the FY 2016 MedPAR file”.

As explained in previous rulemaking (76 FR 51487), in deciding whether to propose to make further modification to the MS-DRGs for particular circumstances brought to our attention, we consider whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients represented in the MS-DRG. We evaluate patient care costs using average costs and lengths-of-stay and rely on the judgment of our clinical advisors to determine whether patients are clinically distinct or similar to other patients represented in the MS-DRG. In evaluating resource costs, we consider both the absolute and percentage differences in average costs between the cases we select for review and the remainder of cases in the MS-DRG. We also consider variation in costs within these groups; that is, whether observed average differences are consistent across patients or attributable to cases that are extreme in terms of costs or length of stay, or both. Further, we consider the number of patients who will have a given set of characteristics and generally prefer not to create a new MS-DRG unless it would include a substantial number of cases.

In our examination of the claims data, we apply the following criteria established in FY 2008 (72 FR 47169) to determine if the creation of a new complication or comorbidity (CC) or major complication or comorbidity (MCC) subgroup within a base MS-DRG is warranted:

  • A reduction in variance of costs of at least 3 percent.
  • At least 5 percent of the patients in the MS-DRG fall within the CC or MCC subgroup.
  • At least 500 cases are in the CC or MCC subgroup.
  • There is at least a 20-percent difference in average costs between subgroups.
  • There is a $2,000 difference in average costs between subgroups.

In order to warrant creation of a CC or MCC subgroup within a base MS-DRG, the subgroup must meet all five of the criteria.

2. MDC 1 (Diseases and Disorders of the Nervous System)

a. Functional Quadriplegia

We received a request to reassign cases identified by diagnosis code R53.2 (Functional quadriplegia) from MS-DRGs 052 and 053 (Spinal Disorders and Injuries with and without CC/MCC, respectively). The requestor stated that because functional quadriplegia does not involve any spinal injury or pathology, cases identified by the diagnosis code should not be assigned to MS-DRGs 052 and 053. However, the requestor did not suggest an alternative MS-DRG assignment.

Section I.C.18.f. of the FY 2017 ICD-10-CM Official Coding Guidelines addresses the coding for the diagnosis of functional quadriplegia. Section I.C.18.f. states that functional quadriplegia (described by diagnosis code R53.2) is the lack of ability to use one's limbs or to ambulate due to extreme debility. The condition is not associated with neurologic deficit or injury, and diagnosis code R53.2 should not be used to identify cases of neurologic quadriplegia. In addition, the Guidelines state that the diagnosis code should only be assigned if functional quadriplegia is specifically documented by a physician in the medical record, and the diagnosis of functional quadriplegia is not associated with a neurologic deficit or injury. A physician may document the diagnosis of functional quadriplegia as occurring with a variety of conditions.

We examined claims data from the December 2016 update of the FY 2016 MedPAR file on cases reporting diagnosis code R53.2 in MS-DRGs 052 and 053. Our findings are shown in the table below.

Cases Reporting Functional Quadriplegia in MS-DRGs 052 and 053

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 052—All cases8655.4$10,247
MS-DRG 052—Cases reporting diagnosis code R53.2634.96,420
MS-DRG 053—All cases2393.36,326
MS-DRG 053—Cases reporting diagnosis code R53.2163.32,318

As shown in the table above, for MS-DRG 052, there were a total of 865 cases with an average length of stay of 5.4 days and average costs of $10,247. Of the 865 cases in MS-DRG 052, there were 63 cases that reported a principal diagnosis of functional quadriplegia, with an average length of stay of 4.9 days and average costs of $6,420. For MS-DRG 053, there were a total of 239 cases, with an average length of stay of 3.3 days and average costs of $6,326. Of the 239 cases in MS-DRG 053, there were 16 cases that reported a principal diagnosis of functional quadriplegia, with an average length of stay of 3.3 days and average costs of $2,318.

To address the request to reassign cases reporting a diagnosis of functional quadriplegia to a different MS-DRG, we reviewed the data for a total of 79 cases (63 cases in MS-DRG 052 and 16 cases in MS-DRG 053) that reported a principal diagnosis of functional quadriplegia in MS-DRGs 052 and 053. As shown in the table above, our data analysis demonstrates that the average costs for these 79 cases are lower than the average costs of all cases in MS-DRGs 052 and 053 ($6,420 compared to $10,247 for all cases in MS-DRG 052, and $2,318 compared to $6,326 for all cases in MS-DRG 053), and the average Start Printed Page 19818lengths of stay are shorter for cases reporting a diagnosis of functional quadriplegia in MS-DRG 052 (4.9 days compared to 5.4 days for all cases in MS-DRG 052), but equal for cases in MS-DRG 053 (3.3 days for cases reporting a diagnosis of functional quadriplegia and for all cases).

Our clinical advisors reviewed this issue and agreed that a diagnosis of functional quadriplegia does not involve a spinal disorder or injury, and may be associated with, or the result of, a variety of underlying conditions. Our clinical advisors also agreed that it is not clinically appropriate to include cases reporting a diagnosis of functional quadriplegia within MS-DRGs 052 and 053 because these cases do not involve a spinal disorder or injury. Therefore, given the fact that functional quadriplegia can be the result of a variety of other conditions, we reviewed the MS-DRGs in order to identify a more appropriate placement for cases reporting this diagnosis. Our clinical advisors recommended assigning cases representing a diagnosis of functional quadriplegia from MS-DRGs 052 and 053 to MS-DRGs 091, 092, and 093 (Other Disorders of Nervous System with MCC, with CC, and without CC/MCC, respectively). Within each MDC, there are MS-DRGs that describe a variety of other conditions that do not have the clinical characteristics of the more specific MS-DRGs. In this case, MS-DRGs 091, 092, and 093 describe a variety of other disorders of the nervous system that are not clinically similar in characteristics to the disorders described by MS-DRGs 052 and 053. Our clinical advisors believe that MS-DRGs 091, 092, and 093 are more appropriate MS-DRG assignments for cases representing a diagnosis of functional quadriplegia.

We examined claims data from the December 2016 update of the FY 2016 MedPAR file on cases in MS-DRGs 091, 092, and 093. Our findings are shown in the table below.

Cases in MS-DRGs 091, 092, and 093

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 091—All cases12,6075.6$10,815
MS-DRG 092—All cases19,3923.96,706
MS-DRG 093—All cases8,1202.75,253

As shown in the table above, for MS-DRG 091, there were a total of 12,607 cases, with an average length of stay of 5.6 days and average costs of $10,815. For MS-DRG 092, there were a total of 19,392 cases, with an average length of stay of 3.9 days and average costs of $6,706. For MS-DRG 093, there were a total of 8,120 cases, with an average length of stay of 2.7 days and average costs of $5,253. As stated earlier, of the 865 total cases in MS-DRG 052, there were 63 cases that reported a principal diagnosis of functional quadriplegia, with an average length of stay of 4.9 days and average costs of $6,420. Of the 239 total cases in MS-DRG 053, there were 16 cases that reported a principal diagnosis of functional quadriplegia, with an average length of stay of 3.3 days and average costs of $2,318. The average lengths-of-stay for cases reporting a diagnosis of functional quadriplegia in MS-DRGs 052 and 053 are similar to the average lengths of stay for cases found in MS-DRGs 091, 092 and 093 (4.9 days and 3.3 days for cases in MS-DRGs 052 and 053, respectively, compared to 5.6 days, 3.9 days, and 2.7 days, respectively, for cases in MS-DRGs 091, 092, and 093). The average costs for cases reporting a diagnosis of functional quadriplegia in MS-DRGs 052 and 053 are $6,420 and $2,318, respectively, compared to $10,815, $6,706, and $5,253 for all cases in MS-DRGs 091, 092, and 093. The average costs for cases reporting a diagnosis of functional quadriplegia in MS-DRG 053 are lower than the average costs for all cases in MS-DRG 093 without a CC or MCC ($2,318 compared to $5,253, respectively). The average costs for cases reporting a diagnosis of functional quadriplegia in MS-DRG 052 are $6,420, which is lower than the average costs of $10,815 for all cases in MS-DRG 091, but close to the average costs of $6,706 for all cases in MS-DRG 092. While we acknowledge that the average costs for cases reporting a diagnosis of functional quadriplegia are lower than those cases within MS-DRGs 091, 092, and 093, as stated earlier, the average costs of cases reporting a diagnosis of functional quadriplegia also are lower than the average costs of all cases in MS-DRGs 052 and 053 where these cases are currently assigned.

Our clinical advisors reviewed the clinical issues as well as the claims data for MS-DRGs 052, 053, 091, 092, and 093. As a result of this review, they recommended that cases reporting a diagnosis of functional quadriplegia be reassigned from MS-DRGs 052 and 053 to MS-DRGs 091, 092, and 093 because the current MS-DRG assignment is not clinically appropriate. Our clinical advisors stated that reassigning these cases to MS-DRGs 091, 092, and 093 is more appropriate because this set of MS-DRGs includes a variety of nervous system disorders that are not appropriately classified to more specific MS-DRGs within MDC 1. Therefore, we are proposing to reassign cases identified by diagnosis code R53.2 from MS-DRGs 052 and 053 to MS-DRGs 091, 092, and 093 for FY 2018.

We are inviting public comments on our proposal.

b. Responsive Neurostimulator (RNS©) System

We received a request to modify the MS-DRG assignment for cases involving the use of the RNS© neurostimulator, a cranially implanted neurostimulator that is a treatment option for persons diagnosed with medically intractable epilepsy. Cases involving the use of the RNS© neurostimulator are assigned to MS-DRG 023 (Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemo Implant) and MS-DRG 024 (Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) without MCC).

Cases involving the use of the RNS© neurostimulator generator and leads are captured within the descriptions of four ICD-10-PCS codes. ICD-10-PCS code 0NH00NZ (Insertion of neurostimulator generator into skull, open approach) captures the use of the neurostimulator generator, and the other three ICD-10-PCS codes, 00H00MZ (Insertion of neurostimulator lead into brain, open approach), 00H03MZ (Insertion of neurostimulator lead into brain, percutaneous approach), and 00H04MZ (Insertion of neurostimulator lead into brain, percutaneous endoscopic approach) describe the insertions of the leads, depending on the approach used. The combination of an ICD-10-PCS Start Printed Page 19819code capturing the use of the generator and another ICD-10-PCS code describing the specific approach used to insert the leads would capture the performance of the entire procedure.

The requestor stated that the RNS© neurostimulator received FDA pre-market approval on November 14, 2013, and is the first and only FDA-approved device used to provide responsive stimulation directly to the seizure onset zone in the brain. The RNS© neurostimulator includes a cranially implanted programmable neurostimulator connected to one or two depth and/or subdural cortical strip leads that are surgically placed in or on the brain at the seizure focus. The neurostimulator and leads are typically implanted during a single acute inpatient hospital procedure at a Comprehensive Epilepsy Center (CEC). The implanted neurostimulator continuously monitors brain electrical activity and is programmed by a physician to detect abnormal patterns of electrical activity that the physician believes may lead to seizures (epileptiform activity). In response to the detection of epileptiform activity, the device delivers brief, mild electrical pulses (responsive stimulation) to one or two epileptic foci. Detection and stimulation parameters are adjusted noninvasively by the physician to optimize control of epileptic seizures for each patient.

As the neurostimulator monitors brain activity, electrocorticograms (ECoGs) recorded immediately before and after certain events are stored for later review by the physician. The physician reviews the stored recordings to see the detections and the effects of stimulation. The physician can reprogram the neurostimulator at an in-person office appointment to change detection and stimulation settings based on this information, as well as review the patient's seizures.

The RNS© neurostimulator was approved for new technology add-on payments for FY 2015 and FY 2016, and new technology add-on payments were discontinued for FY 2017. The new technology add-on payment application was discussed in the FY 2015 IPPS/LTCH PPS proposed and final rules (79 FR 28051 through 28054 and 79 FR 49946 through 49950, respectively), the FY 2016 IPPS/LTCH PPS proposed and final rules (80 FR 24427 through 24448 and 80 FR 49442 through 49443, respectively), and the FY 2017 IPPS/LTCH PPS proposed and final rules (81 FR 25036 through 25037 and 81 FR 56882 through 56884, respectively).

The requestor suggested the following three options for MS-DRG assignment updates for cases involving the RNS© neurostimulator:

  • Create new MS-DRGs for cases involving the use of the RNS© neurostimulator. The requestor suggested MS-DRG XXX (Cranially Implanted Neurostimulators with MCC) and MS-DRG XXX (Cranially Implanted Neurostimulators without MCC) as possible MS-DRG titles. The requestor acknowledged that the number of cases assigned to this MS-DRG would be low, but anticipated that the number of cases would increase in the future.
  • Reassign cases involving the use of the RNS© neurostimulator to MS-DRGs 020 and 021 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage with MCC, with CC, respectively) and update the MS-DRG logic and titles. The requestor asked CMS to reassign all cases involving the use of the RNS© neurostimulator that currently map to MS-DRG 023 (Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis with MCC or Chemo Implant) to MS-DRG 20, and change the title of MS-DRG 20 to “Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage or Cranially Implanted Neurostimulator with MCC.” In addition, the requestor asked CMS to reassign all cases involving the use of the RNS© neurostimulator that currently map to MS-DRG 024 (Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis without MCC) to MS-DRG 021, and change the title of MS-DRG 021 to “Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage with CC or Cranially Implanted Neurostimulator without MCC”. The requestor believed that the majority of cases involving the use of the RNS© neurostimulator that map to MS-DRG 024 do not include a secondary diagnosis that is classified as a CC, and the average cost of cases involving the use of the RNS© neurostimulator without a CC is significantly higher than the average cost of all cases in MS-DRG 022 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage without CC/MCC). Therefore, the requestor stated that it would not be adequate to assign cases involving the use of the RNS© neurostimulator without a CC to MS-DRG 022.
  • Reassign cases involving the use of the RNS© neurostimulator to other higher paying MS-DRGs that would provide adequate payment.

The requestor stated that it had analyzed data from two sources, which demonstrated that the average cost of cases involving the use of the RNS© neurostimulator was higher than the average cost of all cases in MS-DRGs 023 and 024 (the current MS-DRGs for cases involving the use of the RNS© neurostimulator). The requestor indicated that the data used for its analysis was obtained from hospitals performing the procedure, as well as from the FY 2015 MedPAR file.

The requestor also asked that CMS examine the cases representing cranially implanted neurostimulators and leads that were inserted for the treatment of epilepsy. The requestor pointed out that neurostimulators also are used in the treatment of movement disorders such as Parkinson's disease, essential tremor, or dystonia. The requestor asked that CMS identify those cases with a principal diagnosis of epilepsy, and identified the following ICD-10-CM codes that it believed were representative of potential epilepsy cases.

ICD-10-CM codeICD-10-CM code title
G40.001Localization-related (focal) (partial) idiopathic epilepsy and epileptic syndromes with seizures of localized onset, not intractable, with status epilepticus.
G40.009Localization-related (focal) (partial) idiopathic epilepsy and epileptic syndromes with seizures of localized onset, not intractable, without status epilepticus.
G40.011Localization-related (focal) (partial) idiopathic epilepsy and epileptic syndromes with seizures of localized onset, intractable, with status epilepticus.
G40.019Localization-related (focal) (partial) idiopathic epilepsy and epileptic syndromes with seizures of localized onset, intractable, without status epilepticus.
G40.101Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with simple partial seizures, not intractable, with status epilepticus.
G40.119Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with simple partial seizures, intractable, without status epilepticus.
Start Printed Page 19820
G40.201Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with complex partial seizures, not intractable, with status epilepticus.
G40.209Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with complex partial seizures, not intractable, without status epilepticus.
G40.211Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with complex partial seizures, intractable, with status epilepticus.
G40.219Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with complex partial seizures, intractable, without status epilepticus.
G40.301Generalized idiopathic epilepsy and epileptic syndromes, not intractable, with status epilepticus.
G40.309Generalized idiopathic epilepsy and epileptic syndromes, not intractable, without status epilepticus.
G40.311Generalized idiopathic epilepsy and epileptic syndromes, intractable, with status epilepticus.
G40.319Generalized idiopathic epilepsy and epileptic syndromes, intractable, without status epilepticus.
G40.401Other generalized epilepsy and epileptic syndromes, not intractable, with status epilepticus.
G40.409Other generalized epilepsy and epileptic syndromes, not intractable, without status epilepticus.
G40.411Other generalized epilepsy and epileptic syndromes, intractable, with status epilepticus.
G40.419Other generalized epilepsy and epileptic syndromes, intractable, without status epilepticus.
G40.501Epileptic seizures related to external causes, not intractable, with status epilepticus.
G40.509Epileptic seizures related to external causes, not intractable, without status epilepticus.
G40.801Other epilepsy, not intractable, with status epilepticus.
G40.802Other epilepsy, not intractable, without status epilepticus.
G40.803Other epilepsy, intractable, with status epilepticus.
G40.804Other epilepsy, intractable, without status epilepticus.
G40.811Lennox-Gastaut syndrome, not intractable, with status epilepticus.
G40.812Lennox-Gastaut syndrome, not intractable, without status epilepticus.
G40.813Lennox-Gastaut syndrome, intractable, with status epilepticus.
G40.814Lennox-Gastaut syndrome, intractable, without status epilepticus.
G40.821Epileptic spasms, not intractable, with status epilepticus.
G40.822Epileptic spasms, not intractable, without status epilepticus.
G40.823Epileptic spasms, intractable, with status epilepticus.
G40.824Epileptic spasms, intractable, without status epilepticus.
G40.89Other seizures.
G40.901Epilepsy, unspecified, not intractable, with status epilepticus.
G40.909Epilepsy, unspecified, not intractable, without status epilepticus.
G40.911Epilepsy, unspecified, intractable, with status epilepticus.
G40.919Epilepsy, unspecified, intractable, without status epilepticus.

MS-DRGs 023 and 024 contain a number of cases representing neurostimulator generator and lead code combinations that are captured under a list referred to as “Major Device Implant.” The neurostimulator generators on this list are inserted into the skull, as well as into the subcutaneous areas of the chest, back, or abdomen. The leads are all inserted into the brain. The RNS© neurostimulator generators are inserted into the skull and the leads are inserted into the brain. The following three ICD-10-PCS code combinations capture the use of the RNS© neurostimulator and leads that would determine an assignment of a case to MS-DRGs 023 and 024, as shown in the “Major Device Implant” list:

  • 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H00MZ (Insertion of neurostimulator lead into brain, open approach);
  • 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H03MZ (Insertion of neurostimulator lead into brain, percutaneous approach); and
  • 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H04MZ (Insertion of neurostimulator lead into brain, percutaneous endoscopic approach).

We examined claims data from the December 2016 update of the FY 2016 MedPAR file for all cases representing the use of a neurostimulator in MS-DRGs 023 and 024 listed under the “Major Device Implant” list. As requested, we also examined the cases represented by the three neurostimulator code combinations, which capture the use of the RNS© neurostimulator that are a subset of the cases listed on the “Major Device Implant” list using the code combinations listed above, and that had a principal diagnosis of epilepsy from the list supplied by the requestor. The following tables show our findings for those cases in MS-DRGs 023 and 024 as well as findings for cases in MS-DRGs 020 and 021.

MS-DRGs 023 and 024

[Neurostimulator Cases]

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 023—All cases6,72310.9$39,014
MS-DRG 023—Cases with neurostimulators (Major Device Implant list cases)216.748,821
MS-DRG 023—Cases with neurostimulator generators inserted into skull (includes cases involving the use of the RNS© neurostimulator) and cases with a principal diagnosis of epilepsy78.063,365
MS-DRG 024—All cases2,2755.527,574
Start Printed Page 19821
MS-DRG 024—Cases with neurostimulators (Major Device Implant list cases)3942.131,669
MS-DRG 024—Cases with neurostimulator generators inserted into skull (includes cases involving the use of the RNS© neurostimulator) and cases with a principal diagnosis of epilepsy544.351,041

Cases in MS-DRGs 020 and 021

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 020—All cases1,37216.7$72,926
MS-DRG 021—All cases33613.554,385

As shown by the table above, for MS-DRG 023, we identified a total of 6,723 cases, with an average length of stay of 10.9 days and average costs of $39,014. Of the 6,723 cases in MS-DRG 023, there were 21 cases representing the implantation of any type of neurostimulator generator with an average length of stay of 6.7 days, and average costs of $48,821. Of the 21 neurostimulator generator cases, there were 7 cases with the neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy with an average length of stay of 8.0 days and average costs of $63,365. For MS-DRG 024, we identified a total of 2,275 cases, with an average length of stay of 5.5 days and average costs of $27,574. Of the 2,275 cases in MS-DRG 024, there were 394 cases representing the implantation of any type of neurostimulator generator with an average length of stay of 2.1 days and average costs of $31,669. Of the 394 neurostimulator generator cases, there were 54 cases with the neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy with an average length of stay of 4.3 days and average costs of $51,041.

There were only 61 cases involving the use of the RNS© neurostimulator with a principal diagnosis of epilepsy in MS-DRGs 023 and 024 (7 and 54, respectively). Our clinical advisors reviewed this issue, and agreed that this number of cases is too small on which to base a rationale for creating a new MS-DRG. Basing a new MS-DRG on such a small number of cases (61) could lead to distortion in the relative payment weights for the MS-DRG because several expensive cases could impact the overall relative payment weight. Having larger clinical cohesive groups within an MS-DRG provides greater stability for annual updates to the relative payment weights.

We also examined the possibility of reassigning cases involving the use of the RNS© neurostimulator to MS-DRGs 020 and 021. As the table above shows, for MS-DRG 020, there were a total of 1,372 cases with an average length of stay of 16.7 days and average costs of $72,926. For MS-DRG 021, there were a total of 336 cases with an average length of stay of 13.5 days and average costs of $54,385. The cases in MS-DRG 023 with neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy have average costs that are $9,561 lower than that for all cases in MS-DRG 020 ($63,365 compared to $72,926), and the average length of stay is 8.7 days shorter (8.0 days compared to 16.7 days). We do not believe these data support reassigning the cases in MS-DRG 023 with neurostimulator generators inserted into the skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy to MS-DRG 020. While the cases in MS-DRG 024 with neurostimulator generators inserted into the skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy have average costs that are similar to the average costs of cases in MS-DRG 021 ($51,041 compared to $54,385), they have an average length of stay that is 9.2 days shorter (4.3 days compared to 13.5 days). Our clinical advisors reviewed the clinical issues and the claims data, and did not support reassigning the cases with neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy from MS-DRGs 023 and 024 to MS-DRGs 020 and 021. Our clinical advisors pointed out that the cases in MS-DRGs 020 and 021 have a principal diagnosis of a hemorrhage. The RNS© neurostimulator generators are not used to treat patients with diagnosis of a hemorrhage. Therefore, our clinical advisors stated that it was inappropriate to reassign cases representing a principal diagnosis of epilepsy to an MS-DRG that contains cases that represent the treatment of intracranial hemorrhage. They also stated that the differences in average length of stay and average costs support this recommendation.

We then explored alternative MS-DRG assignments, as was requested. We noted that the 7 cases with the neurostimulator generators inserted into the skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy had an average length of stay of 8.0 days and average costs of $63,365, as compared to the 6,723 cases in MS-DRG 023 that had an average length of stay of 10.9 days and average costs of $39,014. While these neurostimulator cases had average costs that were $24,351 higher than the average costs of all cases in MS-DRG 023, there were only a total of 7 cases. There may have been other factors contributing to the higher costs. We noted that the 54 cases with the neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy in MS-DRG 024 had average costs of $51,041 and an average length of stay of 4.3 days, compared to average costs of $27,574 and average length of stay of 5.5 days for all cases in MS-DRG 024. By reassigning all cases with the neurostimulator generators inserted into the skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy to MS DRG 023, even if there is not a MCC Start Printed Page 19822present, the cases would receive higher payment. The average costs of MS-DRG 023 were $39,014, compared to the average costs of $51,041 for the cases with the neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy in MS-DRG 024. Our clinical advisors reviewed the clinical issues and the claims data, and supported the recommendation to reassign the cases with the neurostimulator generators inserted into skull (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy to MS-DRG 023, even if there is not a MCC reported. Therefore, we are proposing to reassign all cases with a principal diagnosis of epilepsy from the epilepsy diagnosis list provided earlier, and one of the following ICD-10-PCS code combinations capturing cases with the neurostimulator generators inserted into the skull (including cases involving the use of the RNS© neurostimulator), to MS-DRG 023, even if there is no MCC reported:

  • 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H00MZ (Insertion of neurostimulator lead into brain, open approach);
  • 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H03MZ (Insertion of neurostimulator lead into brain, percutaneous approach); and
  • 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H04MZ (Insertion of neurostimulator lead into brain, percutaneous endoscopic approach).

We also are proposing to change the title of MS-DRG 023 from “Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemo Implant” to “Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator” to reflect the proposed modifications to MS-DRG assignments.

We are inviting public comments on our proposals.

c. Precerebral Occlusion or Transient Ischemic Attack With Thrombolytic

We received a request to add the ICD-10-CM diagnosis codes currently assigned to MS-DRGs 067 and 068 (Nonspecific CVA and Precerebral Occlusion without Infarction with MCC and without MCC, respectively) and the ICD-10-CM diagnosis codes currently assigned to MS-DRG 069 (Transient Ischemia) to the GROUPER logic for MS-DRGs 061, 062, and 063 (Acute Ischemic Stroke with Use of Thrombolytic Agent with MCC, with CC, and without CC/MCC, respectively) when those conditions are sequenced as the principal diagnosis and reported with an ICD-10-PCS procedure code describing use of a thrombolytic agent (for example, tPA).

The ICD-10-CM diagnosis codes displayed in the table below identify the conditions that are assigned to MS-DRGs 067 and 068 when reported as a principal diagnosis.

ICD-10-CM codeCode description
I65.01Occlusion and stenosis of right vertebral artery.
I65.02Occlusion and stenosis of left vertebral artery.
I65.03Occlusion and stenosis of bilateral vertebral arteries.
I65.09Occlusion and stenosis of unspecified vertebral artery.
I65.1Occlusion and stenosis of basilar artery.
I65.21Occlusion and stenosis of right carotid artery.
I65.22Occlusion and stenosis of left carotid artery.
I65.23Occlusion and stenosis of bilateral carotid arteries.
I65.29Occlusion and stenosis of unspecified carotid artery.
I65.8Occlusion and stenosis of other precerebral arteries.
I65.9Occlusion and stenosis of unspecified precerebral artery.
I66.01Occlusion and stenosis of right middle cerebral artery.
I66.02Occlusion and stenosis of left middle cerebral artery.
I66.03Occlusion and stenosis of bilateral middle cerebral arteries.
I66.09Occlusion and stenosis of unspecified middle cerebral artery.
I66.11Occlusion and stenosis of right anterior cerebral artery.
I66.12Occlusion and stenosis of left anterior cerebral artery.
I66.13Occlusion and stenosis of bilateral anterior cerebral arteries.
I66.19Occlusion and stenosis of unspecified anterior cerebral artery.
I66.21Occlusion and stenosis of right posterior cerebral artery.
I66.22Occlusion and stenosis of left posterior cerebral artery.
I66.23Occlusion and stenosis of bilateral posterior cerebral arteries.
I66.29Occlusion and stenosis of unspecified posterior cerebral artery.
I66.3Occlusion and stenosis of cerebellar arteries.
I66.8Occlusion and stenosis of other cerebral arteries.
I66.9Occlusion and stenosis of unspecified cerebral artery.

The ICD-10-CM diagnosis codes displayed in the table below identify the conditions that are assigned to MS-DRG 069 when reported as a principal diagnosis.

ICD-10-CM codeCode description
G45.0Vertebro-basilar artery syndrome.
G45.1Carotid artery syndrome (hemispheric).
G45.2Multiple and bilateral precerebral artery syndromes.
G45.8Other transient cerebral ischemic attacks and related syndromes.
G45.9Transient cerebral ischemic attack, unspecified.
Start Printed Page 19823
G46.0Middle cerebral artery syndrome.
G46.1Anterior cerebral artery syndrome.
G46.2Posterior cerebral artery syndrome.
I67.81Acute cerebrovascular insufficiency.
I67.82Cerebral ischemia.
I67.841Reversible cerebrovascular vasoconstriction syndrome.
I67.848Other cerebrovascular vasospasm and vasoconstriction.
I67.89Other cerebrovascular disease.

The ICD-10-PCS procedure codes displayed in the table below describe use of a thrombolytic agent. These procedure codes are designated as non-O.R. procedure codes affecting the MS-DRG assignment for MS-DRGs 061, 062, and 063.

ICD-10-PCS codeCode description
3E03017Introduction of other thrombolytic into peripheral vein, open approach.
3E03317Introduction of other thrombolytic into peripheral vein, percutaneous approach.
3E04017Introduction of other thrombolytic into central vein, open approach.
3E04317Introduction of other thrombolytic into central vein, percutaneous approach.
3E05017Introduction of other thrombolytic into peripheral artery, open approach.
3E05317Introduction of other thrombolytic into peripheral artery, percutaneous approach.
3E06017Introduction of other thrombolytic into central artery, open approach.
3E06317Introduction of other thrombolytic into central artery, percutaneous approach.
3E08017Introduction of other thrombolytic into heart, open approach.
3E08317Introduction of other thrombolytic into heart, percutaneous approach.

At the onset of stroke symptoms, tPA must be given within 3 hours (or up to 4.5 hours for certain eligible patients) in an attempt to dissolve a clot and improve blood flow to the specific area affected in the brain. If, upon receiving the tPA, the stroke symptoms completely resolve within 24 hours and imaging studies (if performed) are negative, the patient has suffered what is clinically defined as a transient ischemic attack, not a stroke. According to the requestor, the current MS-DRG assignments do not account for this subset of patients who were successfully treated with tPA to prevent a stroke.

In addition, the requestor expressed concerns regarding documentation and quality of the data. For example, the requestor noted that the terms “stroke-in-evolution” and “aborted stroke” may be documented as a “workaround” for a patient exhibiting symptoms of a stroke who receives tPA and, regardless of the outcome, would result in assignment to MS-DRG 061, 062, or 063. Therefore, in cases where the patient's stroke symptoms completely resolved upon receiving tPA and the patient clinically suffered a precerebral occlusion or transient ischemia, this documentation practice is incorrectly labeling these patients as having had a stroke and ultimately leading to inaccurate data.

We analyzed claims data from the December 2016 update of the FY 2016 MedPAR file for MS-DRGs 061, 062, and 063. Our findings are shown in the tables below.

MS-DRGs for Acute Ischemic Stroke With Use of Thrombolytic Agent

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 061—All cases4,5286.4$20,270
MS-DRG 062—All cases8,6004.214,124
MS-DRG 063—All cases1,8593.011,898

Our analysis also consisted of claims data for MS-DRGs 067 and 068 when reported with a procedure code describing the use of tPA. As shown in the table below, the total number of cases reported in MS-DRG 067 was 811, with an average length of stay of 4.8 days and average costs of $10,248. There were 9 cases in MS-DRG 067 with a precerebral occlusion receiving tPA, with an average length of stay of 5.2 days and average costs of $20,156. The total number of cases reported in MS-DRG 068 was 3,809, with an average length of stay of 2.8 days and average costs of $6,555. There were 33 cases in MS-DRG 068 with a precerebral occlusion receiving tPA, with an average length of stay of 4.3 days and average costs of $13,814.

MS-DRGs for Precerebral Occlusion With Use of Thrombolytic Agent

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 067—All cases8114.8$10,248
MS-DRG 067—Cases with tPA95.220,156
MS-DRG 068—All cases3,8092.86,555
Start Printed Page 19824
MS-DRG 068—Cases with tPA334.313,814

We recognize that while the volume of cases for patients with a diagnosis of precerebral occlusion receiving tPA in MS-DRGs 067 and 068 is relatively low, the average length of stay is longer, and the average costs for this subset of patients is approximately twice the amount of the average costs in comparison to all cases in MS-DRGs 067 and 068.

We then analyzed claims data for cases in MS-DRG 069 when reported with a procedure code describing the use of tPA. As shown in the table below, the total number of cases reported in MS-DRG 069 was 50,633, with an average length of stay of 2.5 days and average costs of $5,518. There were 554 cases of transient ischemia receiving tPA, with an average length of stay of 3.2 days and average costs of $12,481.

MS-DRG for Transient Ischemia With Use of Thrombolytic Agent

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 069—All cases50,6332.5$5,518
MS-DRG 069—Cases with tPA5543.212,481

Similar to the findings for MS-DRGs 067 and 068, the number of cases for transient ischemia receiving tPA in MS-DRG 069 was relatively low in comparison to all the cases in the MS-DRG, with a longer average length of stay and approximately twice the amount of average costs in comparison to all cases in MS-DRG 069.

The results of analysis of the data and the advice of our clinical advisors support adding the ICD-10-CM diagnosis codes in MS-DRGs 067, 068, and 069 to the list of principal diagnoses in MS-DRGs 061, 062, and 063 to better account for this subset of patients who were successfully treated with tPA to prevent a stroke, to identify the increasing use of thrombolytics at the onset of symptoms of a stroke, to further encourage appropriate physician documentation for a precerebral occlusion or transient ischemic attack when patients are treated with tPA, and to reflect more appropriate payment for the resources involved in evaluating and treating these patients. We believe this approach will improve accuracy of the data and assist in addressing the concern that facilities may be reporting incorrect diagnoses for this subset of patients.

Therefore, for FY 2018, we are proposing to add the ICD-10-CM diagnosis codes listed earlier in this section that are currently assigned to MS-DRGs 067 and 068 and the ICD-10-CM diagnosis codes currently assigned to MS-DRG 069 to the GROUPER logic for MS-DRGs 061, 062, and 063 when those conditions are sequenced as the principal diagnosis and reported with an ICD-10-PCS procedure code describing use of a thrombolytic agent (for example, tPA). We are inviting public comments on our proposal.

We also are proposing to retitle MS-DRGs 061, 062, and 063 as “Ischemic Stroke, Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent with MCC, with CC and without CC/MCC”, respectively, and to retitle MS-DRG 069 as “Transient Ischemia without Thrombolytic”. We are inviting public comments on our proposals.

3. MDC 2 (Diseases and Disorders of the Eye: Swallowing Eye Drops (Tetrahydrozoline)

We received a request to reassign the following ICD-10-CM diagnosis codes that capture swallowing eye drops from MS-DRGs 124 and 125 (Other Disorders of the Eye with and without MCC, respectively) to MS-DRGs 917 and 918 (Poisoning and Toxic Effects of Drugs with and without MCC, respectively). The requestor described a case where a patient was treated following swallowing eye drops, specifically Tetrahydrozoline, which the provider considers to be a poisoning, not a disorder of the eye.

  • T49.5X1A (Poisoning by ophthalmological drugs and preparations, accidental (unintentional), initial encounter);
  • T49.5X2A (Poisoning by ophthalmological drugs and preparations, intentional self-harm, initial encounter);
  • T49.5X3A (Poisoning by ophthalmological drugs and preparations, assault, initial encounter); and
  • T49.5X4A (Poisoning by ophthalmological drugs and preparations, undetermined, initial encounter).

We agree with the requestor that the four diagnosis codes describe a poisoning, not a disorder of the eye. We examined claims data for cases in MS-DRGs 124 and 125 from the December 2016 update of the FY 2016 MedPAR file. Our findings are shown in the table below.

MS-DRG 124 and 125 Cases

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 124—All cases8744.8$8,826
MS-DRG 124—Cases reporting poisoning by ophthalmological drugs and preparations code12.03,007
MS-DRG 125—All cases3,2053.35,565
MS-DRG 125—Cases reporting poisoning by ophthalmological drugs and preparations code12.01,446
Start Printed Page 19825

As shown in the table above, there were only 2 cases of poisoning by ophthalmological drugs and preparations—1 case in MS-DRG 124 with an average length of stay of 2 days and average costs of $3,007 and 1 case in MS-DRG 125 with an average length of stay of 2 days and average costs of $1,446. The case of poisoning by ophthalmological drugs and preparations in MS-DRG 124 had a shorter average length of stay than the average length of stay for all cases in MS-DRG 124 (2.0 days compared to 4.8 days) and lower average costs than the average costs for all cases in MS-DRG 124 ($3,007 compared to $8,826). The case of poisoning by ophthalmological drugs and preparations in MS-DRG 125 also had a shorter average length of stay than the average length of stay for all cases in MS-DRG 125 (2.0 days compared to 3.3 days) and lower average costs than the average costs for all cases in MS-DRG 125 ($1,446 compared to $5,565).

We also examined claims data on cases reported in MS-DRGs 917 and 918 from the December 2016 update of the FY 2016 MedPAR file. Our findings are shown in the table below.

MS-DRGs 917 and 918 Cases

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 917—All cases32,3814.8$9,882
MS-DRG 918—All cases24,0613.05,326

As shown in the table above, the 2 cases of poisoning by ophthalmological drugs and preparations also had shorter average lengths of stay than the average length of stay for all cases in MS-DRGs 917 and 918 (2.0 days compared to 4.8 days in MS-DRG 917 and 2.0 days compared to 3.0 days in MS-DRG 918). The average costs also were lower for the 2 cases of poisoning by ophthalmological drugs and preparations than the average costs for all cases in MS-DRGs 917 and 918 ($3,007 compared to $9,882 for all cases in MS-DRG 917 and $1,446 compared to $5,326 for all cases in MS-DRG 918). Therefore, cases with this type of poisoning had lower average lengths of stay and lower average costs than all other cases assigned to MS-DRGs 124 and 125 and cases in MS-DRGs 917 and 918 where poisonings are assigned.

Because the codes clearly capture a poisoning and not an eye disorder, we believe that these codes are more appropriately assigned to MS-DRGs 917 and 918 where other poisonings are assigned. Our clinical advisors also reviewed this issue and agreed that the codes should be moved from MS-DRGs 124 and 125 to MS-DRGs 917 and 918 because they clearly capture a poisoning and not a disorder of the eye. Because MS-DRGs 917 and 918 contain cases with multiple types of poisonings, it is expected that some types of poisoning cases will have longer lengths of stay and greater average costs than other types of poisoning cases. Therefore, we are proposing to reassign the following ICD-10-CM diagnosis codes from MS-DRGs 124 and 125 to MS-DRGs 917 and 918 for FY 2018: T49.5X1A; T49.5X2A; T49.5X3A; and T49.5X4A.

We are inviting public comments on our proposal.

4. MDC 5 (Diseases and Disorders of the Circulatory System)

a. Percutaneous Cardiovascular Procedures and Insertion of a Radioactive Element

Currently, under ICD-10-PCS, the logic for MS-DRG 246 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Vessels or Stents), MS-DRG 247 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent without MCC), MS-DRG 248 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Vessels or Stents), and MS-DRG 249 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent without MCC) includes six procedure codes that describe the insertion of a radioactive element. When any of these six procedure codes are reported without the reporting of a percutaneous cardiovascular procedure code, they are assigned to MS-DRG 264 (Other Circulatory System O.R. Procedures). The six specific procedure codes are shown in the table below.

ICD-10-PCS codeCode description
0WHC01ZInsertion of radioactive element into mediastinum, open approach.
0WHC31ZInsertion of radioactive element into mediastinum, percutaneous approach.
0WHC41ZInsertion of radioactive element into mediastinum, percutaneous endoscopic approach.
0WHD01ZInsertion of radioactive element into pericardial cavity, open approach.
0WHD31ZInsertion of radioactive element into pericardial cavity, percutaneous approach.
0WHD41ZInsertion of radioactive element into pericardial cavity, percutaneous endoscopic approach.

Unlike procedures involving the insertion of stents, none of the procedures described by the procedure codes listed above are performed in conjunction with a percutaneous cardiovascular procedure, and two of the six procedures described by these procedure codes (ICD-10-PCS codes 0WHC01Z and 0WHD01Z) are not performed using a percutaneous approach, but rather describe an open approach to performing the specific procedure. Our clinical advisors agreed that these procedures should not be used to classify cases within MS-DRGs 246 through 249 because they are not performed in conjunction with a percutaneous cardiovascular procedure. Furthermore, the indications for the insertion of a radioactive element typically involve a diagnosis of cancer, whereas the indications for the insertion of a coronary artery stent typically involve a diagnosis of coronary artery disease.

We conducted an analysis for the six procedures described by these procedure codes by reviewing the claims data for MS-DRGs 246 through 249 from the December 2016 update of Start Printed Page 19826the FY 2016 MedPAR file. We did not find any cases where any one of the six procedure codes listed above was reported. As noted earlier, when any of these six procedure codes are reported without the reporting of a percutaneous cardiovascular procedure code, the case is assigned to MS-DRG 264. Therefore, our clinical advisors also agreed that it would be more appropriate to remove these six procedure codes from MS-DRGs 246 through 249, but maintain their current assignment in MS-DRG 264. Based on our analysis and the advice from our clinical advisors, for FY 2018, we are proposing to remove ICD-10-PCS procedure codes 0WHC01Z, 0WHC31Z, 0WHC41Z, 0WHD01Z, 0WHD31Z, and 0WHD41Z from MS-DRGs 246 through 249, but maintain their current assignment in MS-DRG 264.

We are inviting public comments on our proposal to remove the six procedure codes listed above from MS-DRGs 246 through 249. We also are inviting public comments on our proposal to maintain their current assignment in MS-DRG 264.

b. Proposed Modification of the Titles for MS-DRG 246 (Percutaneous Cardiovascular Procedures With Drug-Eluting Stent With MCC or 4+ Vessels or Stents) and MS-DRG 248 (Percutaneous Cardiovascular Procedures With Non-Drug-Eluting Stent with MCC or 4+ Vessels or Stents)

We are proposing to revise the titles for MS-DRGs 246 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Vessels or Stents) and MS-DRG 248 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Vessels or Stents) to better reflect the ICD-10-PCS terminology of “arteries” versus “vessels” as used in the procedure code titles within the classification. Specifically, we are proposing to revise the title of MS-DRG 246 to “Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Arteries or Stents”. We are proposing to revise the title of MS-DRG 248 to “Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents”. We are inviting public comments on our proposals.

c. Transcatheter Aortic Valve Replacement (TAVR) and Left Atrial Appendage Closure (LAAC)

We received a request to create new MS-DRGs for cases involving transcatheter aortic valve replacement (TAVR) and left atrial appendage closure (LAAC) procedures when performed in combination in the same operative episode. The requestor stated that there are both clinical and financial advantages for the patient when performing concomitant procedures. For example, the requestor indicated that the clinical advantages for the patient may include single exposure to anesthesia and a reduction in overall procedure time, while the financial advantages may include lower cost-sharing. The requestor further believed that a single hospitalization for these concomitant procedures could be cost-effective for various providers and payers.

TAVR is indicated and approved as a treatment option for patients diagnosed with symptomatic aortic stenosis who are not surgical candidates for traditional open surgical techniques. Cases involving TAVR procedures are assigned to MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with MCC and without MCC, respectively), and are identified by the following ICD-10-PCS procedure codes shown in the table below.

ICD-10-PCS codeCode description
02RF37ZReplacement of aortic valve with autologous tissue substitute, percutaneous approach.
02RF38ZReplacement of aortic valve with zooplastic tissue, percutaneous approach.
02RF3JZReplacement of aortic valve with synthetic substitute, percutaneous approach.
02RF3KZReplacement of aortic valve with nonautologous tissue substitute, percutaneous approach.
02RF37HReplacement of aortic valve with autologous tissue substitute, transapical, percutaneous approach.
02RF38HReplacement of aortic valve with zooplastic tissue, transapical, percutaneous approach.
02RF3JHReplacement of aortic valve with synthetic substitute, transapical, percutaneous approach.
02RF3KHReplacement of aortic valve with nonautologous tissue substitute, transapical, percutaneous approach.

LAAC is indicated and approved as a treatment option for patients diagnosed with atrial fibrillation. Cases involving LAAC procedures are assigned to MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with MCC and without MCC, respectively), and are identified by ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach).

The requestor suggested that the structure of the possible new MS-DRGs for TAVR procedures performed in combination with LAAC procedures could be modeled similar to the structure of MS-DRGs 266 and 267. While contemplating creation of the new MS-DRGs, the requestor asked CMS to also consider subdividing the possible new MS-DRGs into two severity levels and title them as follows:

  • Suggested MS-DRG 26x (Endovascular Cardiac Valve Replacement with LAAC with MCC); and
  • Suggested MS-DRG 26x (Endovascular Cardiac Valve Replacement with LAAC without MCC).

We analyzed claims data from the December 2016 update of the FY 2016 MedPAR file for MS-DRGs 266 and 267 and identified the cases reporting TAVR procedures with and without an LAAC procedure. As shown in the table below, the data findings show that the total number of cases reported in MS-DRG 266 was 9,949, with an average length of stay of 7.2 days and average costs of $56,762. There were 9,872 cases involving a TAVR procedure, with an average length of stay of 7.2 days and average costs of $56,628. There was only one case identified in MS-DRG 266 where both a TAVR and an LAAC procedure were reported. This case had an average length of stay of 21.0 days and average costs of $60,226. For MS-DRG 267, the total number of cases found was 13,290, with an average length of stay of 3.5 days and average costs of $45,297. There were 13,245 cases involving a TAVR procedure, with an average length of stay of 3.5 days and average costs of $45,302. There were no cases identified in MS-DRG 267 where both a TAVR and an LAAC procedure were reported.Start Printed Page 19827

MS-DRGs for TAVR Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 266—All cases9,9497.2$56,762
MS-DRG 266—Cases with TAVR9,8727.256,628
MS-DRG 266—Cases TAVR and LAAC121.060,226
MS-DRG 267—All cases13,2903.545,297
MS-DRG 267—Cases with TAVR13,2453.545,302
MS-DRG 267—Cases TAVR and LAAC000

We then analyzed claims data in MS-DRGs 273 and 274 for cases reporting an LAAC procedure. As shown in the table below, the data findings show that the total number of cases reported in MS-DRG 273 was 6,541, with an average length of stay of 7.7 days and average costs of $26,042. There were 179 cases involving an LAAC procedure, with an average length of stay of 3.6 days and average costs of $30,131. For MS-DRG 274, the total number of cases found was 14,441, with an average length of stay of 3.0 days and average costs of $20,267. There were 2,428 cases involving an LAAC procedure, with an average length of stay of 1.2 days and average costs of $26,213.

MS-DRGs for LAAC Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 273—All cases6,5417.7$26,042
MS-DRG 273—Cases with LAAC1793.630,131
MS-DRG 274—All cases14,4413.020,267
MS-DRG 274—Cases with LAAC2,4281.226,213

The analysis of claims data for MS-DRGs 266, 267, 273, and 274 and input from our clinical advisors do not support creating new MS-DRGs for TAVR and LAAC procedures when performed in combination in the same operative episode. We found only one case in MS-DRG 266 where both a TAVR and an LAAC procedure were reported and the claims data for cases reporting an LAAC procedure in MS-DRGs 273 and 274 support their current assignment. Our clinical advisors agreed the current MS-DRG assignments are appropriate for each respective procedure.

Therefore, we are not proposing to create new MS-DRGs for cases involving TAVR and LAAC procedures when performed in combination in the same operative episode. We are inviting public comments on our proposal to maintain the current MS-DRG structure for TAVR procedures in MS-DRGs 266 and 267, as well as the current MS-DRG structure for LAAC procedures in MS-DRGs 273 and 274.

d. Percutaneous Mitral Valve Replacement Procedures

We received a request to reassign four ICD-10-PCS procedure codes that describe percutaneous mitral valve replacement procedures from MS-DRGs 216 through 221 (Cardiac Valve and Other Major Cardiothoracic Procedures with and without Cardiac Catheterization with MCC, with CC and without CC/MCC, respectively) to MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with MCC and without MCC, respectively). The requestor indicated that there are inconsistencies in the current GROUPER logic for endovascular cardiac valve replacement procedures. Specifically, the requestor stated that the procedure codes that describe both the percutaneous approach and the transapical, percutaneous approach for the aortic and pulmonary valves are included in MS-DRGs 266 and 267. However, for the mitral valve, the GROUPER logic only includes the procedure codes that describe the transapical, percutaneous approach.

The requestor also stated that when MS-DRGs 266 and 267 were created, the intent was to include percutaneous replacement procedures for all cardiac valves. Therefore, the requestor recommended that CMS reassign the four ICD-10-PCS procedure codes shown in the table below that describe mitral valve replacement procedures, performed with the percutaneous approach from MS-DRGs 216 through 221 to MS-DRGs 266 and 267 to more appropriately group these procedures within the MS-DRG structure.

ICD-10-PCS procedure codeCode description
02RG37ZReplacement of mitral valve with autologous tissue substitute, percutaneous approach.
02RG38ZReplacement of mitral valve with zooplastic tissue, percutaneous approach.
02RG3JZReplacement of mitral valve with synthetic substitute, percutaneous approach.
02RG3KZReplacement of mitral valve with nonautologous tissue substitute, percutaneous approach.

We agree with the requestor regarding the intent of the creation of MS-DRGs 266 and 267. As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49890 through 49893), MS-DRGs 266 and 267 were created to uniquely classify the subset of high-risk cases representing patients who undergo a cardiac valve replacement procedure Start Printed Page 19828performed by a percutaneous (endovascular) approach. As such, we agree that all cardiac valve replacement procedures should be grouped within the same MS-DRG. In FY 2015, under the ICD-9-CM classification, there was not a specific procedure code for a percutaneous mitral valve replacement procedure. Therefore, when we converted from the ICD-9 based MS-DRGs to the ICD-10 MS-DRGs, there was not a code available from which to replicate. We refer the reader to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49890 through 49893) for a detailed discussion on the initial request to create new MS-DRGs for endovascular cardiac valve replacement procedures, as well as the FY 2016 IPPS/LTCH PPS final rule (80 FR 49354 through 49358) and the FY 2017 IPPS/LTCH PPS final rule (81 FR 56787 through 56790) for a detailed discussion of the conversion to ICD-10 MS-DRGs, including our analysis of claims data and the need to accurately replicate the ICD-9-CM based MS-DRGs.

The requestor also noted that a proposal was discussed at the September 13-14, 2016 ICD-10 Coordination and Maintenance Committee meeting involving the creation of procedure codes that describe percutaneous tricuspid valve replacement procedures and, if finalized, these new procedure codes would also be assigned to MS-DRGs 266 and 267.

As shown in the table below and in Table 6B.—New Procedure Codes, which is associated with this proposed rule and available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html, there are eight new procedure codes that describe tricuspid valve replacement procedures performed with percutaneous and transapical types of percutaneous approaches that will be effective October 1, 2017.

ICD-10-PCS procedure codeCode description
02RJ37HReplacement of tricuspid valve with autologous tissue substitute, transapical, percutaneous approach.
02RJ37ZReplacement of tricuspid valve with autologous tissue substitute, percutaneous approach.
02RJ38HReplacement of tricuspid valve with zooplastic tissue, transapical, percutaneous approach.
02RJ38ZReplacement of tricuspid valve with zooplastic tissue, percutaneous approach.
02RJ3JHReplacement of tricuspid valve with synthetic substitute, transapical, percutaneous approach.
02RJ3JZReplacement of tricuspid valve with synthetic substitute, percutaneous approach.
02RJ3KHReplacement of tricuspid valve with nonautologous tissue substitute, transapical, percutaneous approach.
02RJ3KZReplacement of tricuspid valve with nonautologous tissue substitute, percutaneous approach.

We agree with the requestor and believe that, in addition to the four procedure codes that describe the percutaneous mitral valve replacement procedures listed earlier in this section, the eight codes that describe percutaneous and transapical types of percutaneous tricuspid valve replacement procedures also should be grouped with the other endovascular cardiac valve replacement procedures. Therefore, we are proposing to reassign the four percutaneous mitral valve replacement procedures described by the procedure codes listed in the table above from MS-DRGs 216 through 221 to MS-DRGs 266 and 267. In addition, we are proposing to assign the eight new procedure codes (also listed in a separate table above) that describe percutaneous and transapical, percutaneous tricuspid valve replacement procedures to MS-DRGs 266 and 267.

We are inviting public comments on our proposals.

e. Percutaneous Tricuspid Valve Repair

We received a request to reassign cases reporting ICD-10-PCS procedure code 02UJ3JZ (Supplement tricuspid valve with synthetic substitute, percutaneous approach) from MS-DRGs 216 through 221 (Cardiac Valve and Other Major Cardiothoracic Procedures with and without Cardiac Catheterization with MCC, with CC and without CC/MCC, respectively) to MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with MCC and without MCC, respectively). According to the requestor, reassigning cases involving these procedures would more appropriately align the cohesiveness with other clinically similar procedures, such as percutaneous mitral valve repair (for example, procedures involving the Mitraclip) described by procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach), which are assigned to MS-DRGs 228 and 229.

The requestor noted that the FORMA Tricuspid Transcatheter Repair System (herein after referred to as the FORMA system) is currently in clinical trials in the United States, Europe, and Canada, but has not received FDA approval. However, the FORMA system is presently available for compassionate use purposes. The FORMA system technology is indicated for use in the treatment of patients diagnosed with tricuspid regurgitation and occupies the regurgitant area of the affected valve, providing a surface for native leaflet coaptation. The requestor stated that the technology offers a viable alternative treatment using traditional tricuspid valve surgery. According to the requestor, the technology consists of a rail and a spacer, and the procedure to insert the device involves fluoroscopic imaging guidance.

We analyzed claims data from the December 2016 update of the FY 2016 MedPAR file for MS-DRGs 216 through 221 for cases reporting procedure code 02UJ3JZ (Supplement tricuspid valve with synthetic substitute, percutaneous approach). Our findings are shown in the following table.

MS-DRGs for Cardiac Valve and Other Major Cardiothoracic Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 216—All cases9,13914.4$68,304
MS-DRG 216—Cases with percutaneous tricuspid valve repair15.014,954
MS-DRG 217—All cases3,5368.945,857
MS-DRG 217—Cases with percutaneous tricuspid valve repair13.016,234
Start Printed Page 19829
MS-DRG 218—All cases4985.941,274
MS-DRG 218—Cases with percutaneous tricuspid valve repair000
MS-DRG 219—All cases16,01111.154,519
MS-DRG 219—Cases with percutaneous tricuspid valve repair69.058,075
MS-DRG 220—All cases18,4766.837,506
MS-DRG 220—Cases with percutaneous tricuspid valve repair15.090,155
MS-DRG 221—All cases3,5475.033,606
MS-DRG 221—Cases with percutaneous tricuspid valve repair000

We also analyzed claims data for MS-DRGs 228 and 229. Our findings are shown in the following table below.

MS-DRGs for Other Cardiothoracic Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 228—All cases3,4669.8$47,435
MS-DRG 229—All cases4,5534.933,347

The claims data show that there were very few cases reported for performing a percutaneous tricuspid valve repair procedure in MS-DRGs 216 through 221. Of the 6 cases found in MS-DRG 219, with average costs of $58,075, the average cost of these cases aligned with the average cost of all cases in the MS-DRG assignment ($54,519). The data analysis and our clinical advisors do not support reassigning cases reporting procedure code 02UJ3JZ to MS-DRGs 228 and 229. The current MS-DRG assignment for percutaneous tricuspid valve repair procedures to MS-DRGs 216 through 221 is clinically coherent with the other percutaneous procedures performed on the heart valves that are currently assigned to these MS-DRGs. Percutaneous repair of the aortic, pulmonary and tricuspid valves utilizing various tissue substitutes (autologous, nonautologous, zooplastic, and synthetic) are assigned to MS-DRGs 216 through 221. The exception is the percutaneous mitral valve repair, which, as the requestor pointed out, is assigned to MS-DRGs 228 and 229 as discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56809 through 56813). Our clinical advisors also agreed that the limited number of cases reported in MS-DRGs 216 through 221 does not warrant reassignment.

As a result of our review and the input from our clinical advisors, we are not proposing to reassign cases reporting procedure code 02UJ3JZ from MS-DRGs 216 through 221 to MS-DRGs 228 and 229.

We are inviting public comments on our proposal to maintain the current MS-DRG assignment for cases reporting procedure code 02UJ3JZ.

5. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue)

a. Total Ankle Replacement (TAR) Procedures

For FY 2018, we again received two requests for the reassignment of total ankle replacement (TAR) procedures to a different MS-DRG. TAR procedures are currently assigned to MS-DRGs 469 and 470 (Major Joint Replacement or Reattachment of Lower Extremity with and without MCC, respectively). This topic was discussed previously in the FY 2015 IPPS/LTCH PPS proposed and final rules (79 FR 28013 through 28015 and 79 FR 49896 through 49899, respectively) and in the FY 2017 IPPS/LTCH PPS proposed and final rules (81 FR 24989 through 24990 and 81 FR 56814 through 56816, respectively). For FY 2015 and FY 2017, we did not change the MS-DRG assignment for TAR procedures. The requestors indicated that TAR procedures are currently assigned to MS-DRGs 469 and 470, to which total hip replacement and total knee replacement procedures also are assigned. The requestors stated that there are significant clinical and cost differences among these procedures, which results in underpayment for TAR procedures. The requestors asked CMS to examine claims data for the following six ICD-10-PCS codes within MS-DRGs 469 and 470:

  • 0SRF0J9 (Replacement of right ankle joint with synthetic substitute, cemented, open approach);
  • 0SRF0JA (Replacement of right ankle joint with synthetic substitute, uncemented, open approach);
  • 0SRF0JZ (Replacement of right ankle joint with synthetic substitute, open approach);
  • 0SRG0J9 (Replacement of left ankle joint with synthetic substitute, cemented, open approach);
  • 0SRG0JA (Replacement of left ankle joint with synthetic substitute, uncemented, open approach); and
  • 0SRG0JZ (Replacement of left ankle joint with synthetic substitute, open approach).

The requestors recommended that, if the claims data show a disparity in costs between TAR procedures and total hip and knee replacement procedures, the TAR procedures be reassigned to a more appropriate MS-DRG.

The requestors also stated that total ankle replacement is a complicated surgery that involves the replacement of the damaged parts of the three bones that comprise the ankle joint, as compared to the two bones in hip and knee replacement procedures. Furthermore, as the smallest weight-bearing large joint in the body, the requestors stated that TAR procedures demand a complexity of implant device design, engineering, and manufacture to exacting functional specifications that is vastly different from that of total hip and knee replacement devices. One of the requestors stated that the ankle region typically has poorer circulation and thinner soft tissue coverage than the Start Printed Page 19830hip and knee, leading to a higher risk of wound complications and infection that may be more challenging and expensive to treat. In addition, this requestor stated that the unique anatomical characteristics and function of the ankle joint require a specialized surgical skill set, operative technique, and level of operating room resource utilization that is vastly dissimilar from that of total hip and knee replacement procedures.

We examined claims data from the December 2016 update of the FY 2016 MedPAR file on reported cases of TAR procedures in MS-DRGs 469 and 470. Our findings are shown in the table below.

Total Ankle Replacements Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 469—All cases25,7786.7$22,139
MS-DRG 469—Cases reporting TAR procedure codes314.623,828
MS-DRG 470—All cases461,5532.714,751
MS-DRG 470—Cases reporting TAR procedure codes2,1141.920,862

As shown in the table above, for MS-DRG 469, there were a total of 25,778 cases, with an average length of stay of 6.7 days and average costs of $22,139. Of the 25,778 cases in MS-DRG 469, there were 31 cases reporting a TAR procedure, with an average length of stay of 4.6 days and average costs of $23,828. For MS-DRG 470, there were a total of 461,553 cases, with an average length of stay of 2.7 days and average costs of $14,751. Of the 461,553 cases in MS-DRG 470, there were 2,114 cases reporting a TAR procedure, with an average length of stay of 1.9 days and average costs of $20,862. As mentioned earlier, there were only 31 TAR procedure cases in MS-DRG 469, and these cases had average costs of $1,689 higher than the average costs of all cases within MS-DRG 469. The relatively small number of cases may have been impacted by other factors. Several expensive cases could impact the average costs for a very small number of patients. We also note that the average length of stay for the TAR procedure cases was 4.6 days, as compared to 6.7 days for all cases within MS-DRG 469. The 2,114 TAR procedure cases in MS-DRG 470 had average costs that were $6,111 higher than the average costs of all cases in MS-DRG 470 ($20,862 compared to $14,751 for all cases). The data support reassigning all of the TAR procedures to MS-DRG 469, even when there is no MCC reported. While the average costs of the TAR procedures in MS-DRG 470 are lower than the average costs for all cases in MS-DRG 469 ($20,862 compared to $22,139), the average costs are much closer to the average costs of TAR procedure cases in MS-DRG 470.

Our clinical advisors reviewed this clinical issue and the claims data, and agreed that it is clinically appropriate to reassign all of the TAR procedure cases from MS-DRG 470 to MS-DRG 469, even when there is no MCC reported. The claims data support the fact that these cases require more resources than other cases assigned to MS-DRG 470. Therefore, we are proposing to reassign the following TAR procedure codes from MS-DRG 470 to MS-DRG 469, even if there is no MCC reported: 0SRF0J9; 0SRF0JA; 0SRF0JZ; 0SRG0J9; 0SRG0JA; and 0SRG0JZ for FY 2018.

We are proposing to change the titles of MS-DRGs 469 and 470 to the following to reflect these proposed MS-DRG reassignments:

  • Proposed retitle of MS-DRG 469: “Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement”; and
  • Proposed retitle of MS-DRG 470: “Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC.”

We are inviting public comments on our proposals.

b. Revision of Total Ankle Replacement (TAR) Procedures

We received two requests to modify the MS-DRG assignment for revision of total ankle replacement (TAR) procedures, which are assigned to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). This topic was discussed in the FY 2015 IPPS/LTCH PPS proposed and final rules (79 FR 28013 through 28015 and 79 FR 49896 through 49899, respectively) and in the FY 2017 IPPS/LTCH PPS proposed and final rules (81 FR 24992 through 24993 and 81 FR 56819 through 56820, respectively). For FY 2015 and FY 2017, we did not change the MS-DRG assignment for revision of TAR procedures.

The requestors asked that CMS examine the following eight ICD-10-PCS codes for revision of TAR procedures, which are assigned to MS-DRGs 515, 516, and 517:

  • 0SWF0JZ (Revision of synthetic substitute in right ankle joint, open approach);
  • 0SWF3JZ (Revision of synthetic substitute in right ankle joint, percutaneous approach);
  • 0SWF4JZ (Revision of synthetic substitute in right ankle joint, percutaneous endoscopic approach);
  • 0SWFXJZ (Revision of synthetic substitute in right ankle joint, external approach);
  • 0SWG0JZ (Revision of synthetic substitute in left ankle joint, open approach);
  • 0SWG3JZ (Revision of synthetic substitute in left ankle joint, percutaneous approach);
  • 0SWG4JZ (Revision of synthetic substitute in left ankle joint, percutaneous endoscopic approach); and
  • 0SWGXJZ (Revision of synthetic substitute in left ankle joint, external approach).

One requestor stated that these ICD-10-PCS codes more specifically identify the revision of TAR procedures than the prior ICD-9-CM codes. Specifically, ICD-9-CM code 81.59 (Revision of joint replacement of lower extremity, not elsewhere classified) was an unspecified code, which included toe and foot joint revision procedures in addition to revision of TAR procedures. The requestor stated that claims data reporting these ICD-10-PCS codes would allow CMS to better identify revisions of TAR procedures, and determine if the procedures are assigned to the appropriate MS-DRGs.

One requestor suggested the following three options for MS-DRG assignments:

  • Assign the ICD-10-PCS ankle revision procedure codes to MS-DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively), and rename MS-DRGs 466, 467, and 468 as “Revision of Hip, Knee or Ankle with MCC, with CC, and without CC/MCC”, respectively);Start Printed Page 19831
  • Assign the ICD-10-PCS ankle revision procedure codes to MS-DRG 469 (Major Joint Replacement or Reattachment of Lower Extremity with MCC) to more appropriately recognize higher hospital procedure costs associated with revision of TAR procedures; or
  • Establish a new MS-DRG for the assignment of revision of TAR procedures.

The other requestor asked that CMS consider reassigning revision of TAR procedures to MS-DRGs that better address the cost-to-payment differential, such as MS-DRGs 466, 467, and 468.

We examined claims data from the December 2016 update of the FY 2016 MedPAR file on reported cases of revision of TAR procedures, as well as cases assigned to MS-DRGs 466, 467, 468, and MS-DRG 469. Our findings are shown in the tables below.

Revisions of Joint Replacements Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 515—All cases5,0388.0$20,562
MS-DRG 515—Cases reporting revision of total ankle replacement procedure codes000
MS-DRG 516—All cases13,2764.813,524
MS-DRG 516—Cases reporting revision of total ankle replacement procedure codes22.511,400
MS-DRG 517—All cases13,3302.810,003
MS-DRG 517—Cases reporting revision of total ankle replacement procedure codes41.57,423

Cases in MS-DRGs 466, 467, 468, and 469

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 466—All cases3,8868.4$33,720
MS-DRG 467—All cases19,1454.224,609
MS-DRG 468—All cases16,5292.720,208
MS-DRG 469—All cases25,7786.722,139

As shown in the tables above, there were only 6 cases representing revisions of TAR procedures with no cases in MS-DRG 515, two cases in MS-DRG 516, and four cases in MS-DRG 517. The limited number of six cases does not justify the creation of a new MS-DRG for the assignment of revision of TAR procedures. Our data analysis demonstrates that the average length of stay for the revision of TAR procedures was lower than that for all cases in MS-DRG 516 (2.5 days compared to 4.8 days), and the average costs were lower ($11,400 compared to $13,524). The average length of stay for the revision of TAR procedures also was lower than that for all cases in MS-DRG 517 (1.5 days compared to 2.8 days), and the average costs were lower ($7,423 compared to $10,003). The data do not support reassigning the cases from MS-DRGs 515, 516, and 517.

Furthermore, the average length of stay and average costs of cases in MS-DRGs 466, 467, 468, and 469 are significantly higher than those for the revision of TAR procedures in MS-DRG 516 and 517. The average length of stay for all cases in MS-DRGs 466, 467, 468, and 469 is 8.4, 4.2, 2.7, and 6.7 days, respectively, compared to the average length of stay of 2.5 and 1.5 days for cases representing revision of TAR procedures in MS-DRGs 516 and 517, respectively. The average costs for all cases in MS-DRGs 466, 467, 468, and 469 are $33,720, $24,609, $20,208, and $22,139, respectively, compared to the average costs of $11,400 and $7,423 for cases representing revision of TAR procedures in MS-DRGs 516 and 517, respectively. Therefore, the data do not support reassigning the cases to MS-DRGs 466, 467, 468, or 469.

Our clinical advisors reviewed the clinical issue and the claims data and agreed that the revision of TAR procedures are appropriately assigned to MS-DRGs 515, 516, and 517, along with other procedures that describe revisions of joint replacements of the lower extremities, including the foot and toe. Our clinical advisors did not support reassigning these cases to MS-DRGs 466, 467, 468, or 469, or creating a new MS-DRG. Therefore, based on the findings of our analysis of claims data and the advice of our clinical advisors, we are proposing to maintain the current MS-DRG assignment for revision of TAR procedures within MS-DRGs 515, 516, and 517 for FY 2018.

We are inviting public comments on our proposal.

c. Magnetic Controlled Growth Rods (MAGEC® System)

We received a request to add six ICD-10-PCS procedure codes that describe the use of magnetically controlled growth rods for the treatment of early onset scoliosis (MAGEC® System) to MS-DRGs 456, 457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC or without CC/MCC, respectively). The MAGEC® System was discussed in the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 25040 through 25042) and final rule (81 FR 56888 through 56891) as a new technology add-on payment application. The application was approved for FY 2017 new technology add-on payments, effective with discharges occurring on and after October 1, 2016. The request for new procedure codes to identify the MAGEC® System technology was discussed at the March 9-10, 2016 ICD-10 Coordination and Maintenance Committee meeting. Six new procedure codes were approved, effective October 1, 2016, and were displayed in Table 6B.—New Procedure Codes associated with the FY 2017 IPPS/LTCH PPS final rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2017-IPPS-Final-Rule-Home-Page.html. These six procedure codes are currently assigned to MS-DRGs 518, 519, and 520 (Back and Neck Procedure Except Spinal Fusion with MCC or Disc Device/Neurostimulator, with CC, or without CC/MCC, respectively) and are shown in the table below.Start Printed Page 19832

ICD-10-PCS codeCode description
XNS0032Reposition of lumbar vertebra using magnetically controlled growth rod(s), open approach, new technology group 2.
XNS0432Reposition of lumbar vertebra using magnetically controlled growth rod(s), percutaneous endoscopic approach, new technology group 2.
XNS3032Reposition of cervical vertebra using magnetically controlled growth rod(s), open approach, new technology group 2.
XNS3432Reposition of cervical vertebra using magnetically controlled growth rod(s), percutaneous endoscopic approach, new technology group 2.
XNS4032Reposition of thoracic vertebra using magnetically controlled growth rod(s), open approach, new technology group 2.
XNS4432Reposition of thoracic vertebra using magnetically controlled growth rod(s), percutaneous endoscopic approach, new technology group 2.

According to the requestor, adding these six procedure codes will allow these cases to group to MS-DRGs that more accurately reflect the diagnosis of early onset scoliosis for which the MAGEC® System is indicated. In addition, the requestor stated that because this technology is utilized on a small subset of patients with approximately 2,500 cases per year, adding these procedure codes to MS-DRGs 456, 457, and 458 would have little impact.

Because these six procedure codes shown in the table above were effective as of October 1, 2016, there are no MedPAR claims data available to analyze. More importantly, we note that cases are assigned to MS-DRGs 456, 457, and 458 when an actual spinal fusion procedure is performed. Our clinical advisors agree that use of the MAGEC® System's magnetically controlled growth rods technology alone does not constitute a spinal fusion. Therefore, because there are no claims data available at this time and based on the advice of our clinical advisors, we are not proposing to add the six procedure codes to MS-DRGs 456, 457, or 458. If a spinal fusion procedure is performed along with the procedure to insert the MAGEC® System's magnetically controlled growth rods, it would be appropriate to report that a spinal fusion was performed and the case would be assigned to one of the spinal fusion MS-DRGs.

We are inviting public comments on our proposal to maintain the current GROUPER logic for cases assigned to MS-DRGs 456, 457, and 458 and not add the six procedure codes describing the use of the MAGEC® System magnetically controlled growth rods. We also are inviting public comments on our proposal to maintain the assignment of the six procedure codes in MS-DRGs 518, 519, and 520.

d. Combined Anterior/Posterior Spinal Fusion

It was brought to our attention that 7 of the 10 new ICD-10-PCS procedure codes describing fusion using a nanotextured surface interbody fusion device were not added to the appropriate GROUPER logic list for MS-DRGs 453, 454, and 455 (Combined Anterior/Posterior Spinal Fusion with MCC, with CC and without CC/MCC, respectively), effective October 1, 2016. The logic for MS-DRGs 453, 454, and 455 is comprised of two lists: An anterior spinal fusion list and a posterior spinal fusion list. Assignment to one of the combined spinal fusion MS-DRGs requires that a code from each list be reported.

The seven new ICD-10-PCS procedure codes currently included in the posterior spinal fusion list for MS-DRGs 453, 454, and 455 are shown in the table below.

ICD-10-PCS codeCode description
XRG6092Fusion of thoracic vertebral joint using nanotextured surface interbody fusion device, open approach, new technology group 2.
XRG7092Fusion of 2 to 7 thoracic vertebral joints using nanotextured surface interbody fusion device, open approach, new technology group 2.
XRG8092Fusion of 8 or more thoracic vertebral joints using nanotextured surface interbody fusion device, open approach, new technology group 2.
XRGA092Fusion of thoracolumbar vertebral joint using nanotextured surface interbody fusion device, open approach, new technology group 2.
XRGB092Fusion of lumbar vertebral joint using nanotextured surface interbody fusion device, open approach, new technology group 2.
XRGC092Fusion of 2 or more lumbar vertebral joints using nanotextured surface interbody fusion device, open approach, new technology group 2.
XRGD092Fusion of lumbosacral joint using nanotextured surface interbody fusion device, open approach, new technology group 2.

We note that the remaining three new procedure codes are accurately reflected in the anterior spinal fusion list; that is, ICD-10-PCS code XRG1092 (Fusion of cervical vertebral joint using nanotextured surface interbody fusion device, open approach, new technology group 2); ICD-10-PCS code XRG2092 (Fusion of 2 or more cervical vertebral joints using nanotextured surface interbody fusion device, open approach, new technology group 2); and ICD-10-PCS code XRG4092 (Fusion of cervicothoracic vertebral joint using nanotextured surface interbody fusion device, open approach, new technology group 2).

The seven procedure codes currently included in the posterior spinal fusion list describe an anterior spinal fusion by use of the interbody fusion device. In an interbody fusion, the anterior column of the spine is being fused. The results of our review of these procedure codes discussed below and the advice of our clinical advisors support moving the seven procedure codes from the posterior spinal fusion list to the anterior spinal fusion list in the GROUPER logic for MS-DRGs 453, 454, and 455. This will improve clinical accuracy and allow appropriate assignment to these MS-DRGs when both an anterior and posterior spinal fusion is performed.

During our review of the spinal fusion codes using a nanotextured surface interbody fusion device in MS-DRGs 453, 454, and 455, we identified 149 additional procedure codes that should be moved from the posterior spinal fusion list to the anterior spinal fusion Start Printed Page 19833list. These codes describe spinal fusion of the anterior column with a posterior approach. As mentioned earlier, the logic for MS-DRGs 453, 454, and 455 is dependent upon a code from the anterior spinal fusion list and a code from the posterior spinal fusion list. Spinal fusion codes involving the anterior column should be included on the anterior spinal fusion list only. We are proposing to move the 149 ICD-10-PCS procedure codes listed in Table 6P.3a. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) from the posterior spinal fusion list to the anterior spinal fusion list in MS-DRGs 453, 454, and 455.

In addition, we also identified 33 ICD-10-PCS procedure codes in the posterior spinal fusion list in MS-DRGs 453, 454, and 455 that describe an interbody fusion device in the posterior column and, therefore, are not considered clinically valid spinal fusion procedures. These procedure codes are shown in the table below.

ICD-10-PCS codeCode description
0RG00A1Fusion of occipital-cervical joint with interbody fusion device, posterior approach, posterior column, open approach.
0RG03A1Fusion of occipital-cervical joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG04A1Fusion of occipital-cervical joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RG10A1Fusion of cervical vertebral joint with interbody fusion device, posterior approach, posterior column, open approach.
0RG13A1Fusion of cervical vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG14A1Fusion of cervical vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RG20A1Fusion of 2 or more cervical vertebral joints with interbody fusion device, posterior approach, posterior column, open approach.
0RG23A1Fusion of 2 or more cervical vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG24A1Fusion of 2 or more cervical vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RG40A1Fusion of cervicothoracic vertebral joint with interbody fusion device, posterior approach, posterior column, open approach.
0RG43A1Fusion of cervicothoracic vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG44A1Fusion of cervicothoracic vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RG60A1Fusion of thoracic vertebral joint with interbody fusion device, posterior approach, posterior column, open approach.
0RG63A1Fusion of thoracic vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG64A1Fusion of thoracic vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RG70A1Fusion of 2 to 7 thoracic vertebral joints with interbody fusion device, posterior approach, posterior column, open approach.
0RG73A1Fusion of 2 to 7 thoracic vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG74A1Fusion of 2 to 7 thoracic vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RG80A1Fusion of 8 or more thoracic vertebral joints with interbody fusion device, posterior approach, posterior column, open approach.
0RG83A1Fusion of 8 or more thoracic vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RG84A1Fusion of 8 or more thoracic vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0RGA0A1Fusion of thoracolumbar vertebral joint with interbody fusion device, posterior approach, posterior column, open approach.
0RGA3A1Fusion of thoracolumbar vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0RGA4A1Fusion of thoracolumbar vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0SG00A1Fusion of lumbar vertebral joint with interbody fusion device, posterior approach, posterior column, open approach.
0SG03A1Fusion of lumbar vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0SG04A1Fusion of lumbar vertebral joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0SG10A1Fusion of 2 or more lumbar vertebral joints with interbody fusion device, posterior approach, posterior column, open approach.
0SG13A1Fusion of 2 or more lumbar vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0SG14A1Fusion of 2 or more lumbar vertebral joints with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.
0SG30A1Fusion of lumbosacral joint with interbody fusion device, posterior approach, posterior column, open approach.
0SG33A1Fusion of lumbosacral joint with interbody fusion device, posterior approach, posterior column, percutaneous approach.
0SG34A1Fusion of lumbosacral joint with interbody fusion device, posterior approach, posterior column, percutaneous endoscopic approach.

We are proposing to delete these 33 procedure codes from MS-DRGs 453, 454, and 455 for FY 2018. We also note that some of the above listed codes also may be included in the logic for MS-DRGs 456, 457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC or without Start Printed Page 19834CC/MCC, respectively), MS-DRGs 459 and 460 (Spinal Fusion Except Cervical with MCC and without MCC, respectively), and MS-DRGs 471, 472, and 473 (Cervical Spinal Fusion with MCC, with CC and without CC/MCC, respectively). Therefore, we are proposing to delete the 33 procedure codes from the logic for those spinal fusion MS-DRGs as well. In addition, we are proposing to delete the 33 procedure codes from the ICD-10-PCS classification as shown in Table 6D.—Invalid Procedure Codes associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html).

In summary, we are inviting public comments on our proposal to move the seven procedure codes describing spinal fusion using a nanotextured surface interbody fusion device from the posterior spinal fusion list to the anterior spinal fusion list in the GROUPER logic for MS-DRGs 453, 454, and 455. We also are inviting public comments on our proposal to move the 149 procedure codes describing spinal fusion of the anterior column with a posterior approach from the posterior spinal fusion list to the anterior spinal fusion list in the GROUPER logic for MS-DRGs 453, 454, and 455. In addition, we are inviting public comments on our proposal to delete the 33 procedure codes describing spinal fusion of the posterior column with an interbody fusion device from MS-DRGs 453, 454, 455, 456, 457, 458, 459, 460, 471, 472, and 473, as well as from the ICD-10-PCS classification.

6. MDC 14 (Pregnancy, Childbirth and the Puerperium)

a. Vaginal Delivery and Complicating Diagnoses

In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56854), we noted that the code list as displayed in the ICD-10 MS-DRG Version 33 Definitions Manual for MS-DRG 774 (Vaginal Delivery with Complicating Diagnoses) required further analysis to clarify what constitutes a vaginal delivery to satisfy the ICD-10 MS-DRG logic. We stated our plans to conduct further analysis of the diagnosis code lists in MS-DRG 774 for FY 2018.

We believe that the Version 34 Definitions Manual and GROUPER logic for MS-DRG 774 continue to require additional analysis to determine how best to classify a vaginal delivery. For example, under MS-DRG 774, the Definitions Manual currently states that three conditions must be met, the first of which is a vaginal delivery. To satisfy this first condition, codes that describe conditions or circumstances from among three lists of codes must be reported. The first list is comprised of ICD-10-CM diagnosis codes that may be reported as a principal diagnosis or a secondary diagnosis. These diagnosis codes describe conditions in which it is assumed that a vaginal delivery has occurred. The second list of codes is a list of ICD-10-PCS procedure codes that also describe circumstances in which it is assumed that a vaginal delivery occurred. The third list of codes identifies diagnoses describing the outcome of the delivery. Therefore, if any code from one of those three lists is reported, the first condition (vaginal delivery) is considered to be met for assignment to MS-DRG 774.

Our continued concern with the first list of ICD-10-CM diagnosis codes as currently displayed in the Definitions Manual under the first condition is that not all of the conditions necessarily reflect that a vaginal delivery occurred. Several of the diagnosis codes listed could also reflect that a cesarean delivery occurred. For example, ICD-10-CM diagnosis code O10.02 (Pre-existing essential hypertension complicating childbirth) does not specify that a vaginal delivery took place; yet it is included in the list of conditions that may be reported as a principal diagnosis or a secondary diagnosis in the GROUPER logic for a vaginal delivery. The reporting of this code also could be appropriate for a delivery that occurred by cesarean section.

As noted earlier, the second list of codes for the first condition are comprised of ICD-10-PCS procedure codes. While we agree that the current list of procedure codes in MS-DRG 774 may appropriately describe that a vaginal delivery occurred, we also believe this list could be improved and warrants closer review.

The third list of codes for the first condition in MS-DRG 774 includes conditions describing the outcome of the delivery that would be reported as secondary diagnoses. Similar to concerns with the first list of codes, we believe the conditions do not necessarily reflect that a vaginal delivery occurred because they also can be reported on claims where a cesarean delivery occurred.

For the second condition in MS-DRG 774 to be met, diagnosis codes that are identified as a complicating diagnosis from among two lists may be reported. The first list is comprised of ICD-10-CM diagnosis codes that may be reported as a principal or secondary diagnosis. The second list is comprised of ICD-10-CM diagnosis codes that may be reported as a secondary diagnosis. Currently, there is only one code listed under the secondary diagnosis list. We have concerns with these lists and what is classified as a complicating diagnosis when reviewing the code lists for this and other MS-DRGs that use that logic in MDC 14.

For the third condition in MS-DRG 774 to be met, a limited set of O.R. procedures, including both extensive and nonextensive procedures, are listed. We have concerns with this third condition as being needed to satisfy the logic for a vaginal delivery MS-DRG.

In summary, the MS-DRG logic involving a vaginal delivery under MDC 14 is technically complex as a result of the requirements that must be met to satisfy assignment to the affected MS-DRGs. Upon review and discussion, our clinical advisors recommended, and we agree, that we should solicit public comments on further refinement to the following four MS-DRGs related to vaginal delivery: MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C); MS-DRG 768 (Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C); MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis); and MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis).

In addition, our clinical advisors agreed that we should solicit public comments on further refinement to the conditions defined as a complicating diagnosis in MS-DRG 774 and MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications).

Therefore, we are soliciting public comments on which diagnosis or procedure codes, or both, should be considered in the logic to identify a vaginal delivery and which diagnosis codes should be considered in the logic to identify a complicating diagnosis. As MS-DRGs 767, 768, 774, 775, and 781 incorporate one or both aspects (vaginal delivery or complicating diagnosis), public comments that we receive from this solicitation will be helpful in determining what proposed revisions to the current logic should be made. We will review public comments received in response to this solicitation as we continue to evaluate these areas under MDC 14 and, if warranted, we would propose refinements for FY 2019. We are requesting that all comments be directed to the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov by November 1, 2017.Start Printed Page 19835

b. MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis)

The logic for MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis) currently includes a list of diagnoses that are considered inappropriate for reporting as a principal diagnosis on an inpatient hospital claim. In other words, these conditions would reasonably be expected not to necessitate an inpatient admission. Examples of these diagnosis codes include what are referred to as the “Supervision of pregnancy” codes, as well as pregnancy, maternal care and fetal related codes with an “unspecified trimester”. We refer the reader to the ICD-10 Version 34 Definitions Manual which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2017-IPPS-Final-Rule-Home-Page-Items/​FY2017-IPPS-Final-Rule-Data-Files.html?​DLPage=​1&​DLEntries=​10&​DLSort=​0&​DLSortDir=​ascending for the complete list of diagnosis codes in MS-DRG 998 under MDC 14.

In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56840 through 56841), there was discussion regarding the supervision of “high-risk” pregnancy codes, including elderly primigravida and multigravida specifically, with regard to removing them from the Unacceptable principal diagnosis edit code list in the Medicare Code Editor (MCE). After consultation with the staff at the CDC's NCHS, we learned that the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting were updated to explain appropriate coding for this set of codes. As a result, the codes describing supervision of high-risk pregnancy (and other supervision of pregnancy codes) remained on the Unacceptable principal diagnosis edit code list in the MCE. Therefore, the MCE code edit is consistent with the logic of MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis) for these supervision of pregnancy codes.

However, as a result of our review and consultation with our clinical advisors regarding the “unspecified trimester” codes in MS-DRG 998, we have determined that there are more appropriate MS-DRG assignments for this set of codes. Although it may seem unlikely that a patient would be admitted and ultimately discharged or transferred without the caregiver or medical personnel having any further knowledge of the exact trimester, it is conceivable that a situation may present itself. For example, the pregnant patient may be from out of town or unable to communicate effectively. The fact that the specific trimester is not known or documented does not preclude the resources required to care for the patient with the particular diagnosis.

Therefore, as shown in Table 6P.3b. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html), we are proposing to remove the 314 ICD-10-CM diagnosis codes identified with “unspecified trimester” from MS-DRG 998 and reassign them to the MS-DRGs in which their counterparts (first trimester, second trimester, or third trimester) are currently assigned as specified in Column C. This would enable more appropriate MS-DRG assignments and payment for these cases. We are inviting public comments on our proposal.

c. MS-DRG 782 (Other Antepartum Diagnoses Without Medical Complications)

The following three ICD-10-CM diagnosis codes are currently on the principal diagnosis list for the MS-DRG 782 (Other Antepartum Diagnoses without Medical Complications) logic.

ICD-10-CM codeCode description
O09.41Supervision of pregnancy with grand multiparity, first trimester.
O09.42Supervision of pregnancy with grand multiparity, second trimester.
O09.43Supervision of pregnancy with grand multiparity, third trimester.

It was brought to our attention that these codes also are included in the MCE Unacceptable principal diagnosis code edit list. As discussed earlier in section II.F.6.b. of the preamble of this proposed rule, the supervision of pregnancy codes are accurately reflected in the MCE code edit list for Unacceptable principal diagnosis. Therefore, it is not appropriate to include the three above listed codes in MS-DRG 782.

We are proposing to remove the three codes describing supervision of pregnancy from MS-DRG 782 and reassign them to MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis) to reflect a more appropriate MS-DRG assignment. We are inviting public comments on our proposal.

d. Shock During or Following Labor and Delivery

We received a request to review ICD-10-CM diagnosis code O75.1 (Shock during or following labor and delivery), which is currently assigned to MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis), MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C), and MS-DRG 768 (Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C).

The requestor provided an example of a patient that delivered at Hospital A and was transferred to Hospital B for specialized care related to the diagnosis of shock. The claim for Hospital B resulted in assignment to a delivery MS-DRG, despite the fact that a delivery did not occur during that hospitalization. The requestor noted that, by not reporting the diagnosis code for shock, the claim grouped to a postpartum MS-DRG and recommended that we evaluate the issue further.

Our analysis initially involved reviewing the GROUPER logic for MS-DRGs 774, 767 and 768. As discussed earlier in section II.F.14.a. of the preamble of this proposed rule, the GROUPER logic for classification and assignment to MS-DRG 774 requires that three conditions must be met, the first of which is a vaginal delivery. Similar GROUPER logic applies for assignment to MS-DRGs 767 and 768, except that only two conditions must be met, with the first condition being a vaginal delivery. For each of these three MS-DRGs, to satisfy the first condition, one code that describes a condition or circumstance from among the three separate lists of codes must be reported. The first list is comprised of ICD-10-CM diagnosis codes that may be reported as a principal or secondary diagnosis. These diagnosis codes describe conditions in which it is assumed that a vaginal delivery has occurred. Among this first list is ICD-10-CM diagnosis code O75.1, which is included in the GROUPER logic for MS-DRGs 774, 767 and 768 (under the first condition—vaginal delivery). We refer readers to the ICD-10 MS-DRG Version 34 Definitions Manual located via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientStart Printed Page 19836PPS/​FY2017-IPPS-Final-Rule-Home-Page-Items/​FY2017-IPPS-Final-Rule-Data-Files.html?​DLPage=​1&​DLEntries=​10&​DLSort=​0&​DLSortDir=​ascending for documentation of the GROUPER logic associated with these MS-DRGs.

In addition, in MS-DRG 774, to satisfy the second condition, diagnosis codes that are identified as a complicating diagnosis from among two lists may be reported. The first list is comprised of ICD-10-CM diagnosis codes that may be reported as a principal or secondary diagnosis. The second list is comprised of ICD-10-CM diagnosis codes that may be reported as a secondary diagnosis. Currently, there is only one code listed under the secondary diagnosis list.

Next, our analysis involved reviewing the GROUPER logic for assignment to post-partum MS-DRG 769 (Postpartum and Post Abortion Diagnoses with Major Procedure) and MS-DRG 776 (Postpartum and Post Abortion Diagnoses without O.R. Procedure). The GROUPER logic for these postpartum MS-DRGs requires that a principal diagnosis be reported from a list of several conditions, such as those following pregnancy, those complicating the puerperium, conditions that occurred during or following delivery and conditions associated with lactation disorders. For assignment to MS-DRG 769, the GROUPER logic also requires that a major procedure be reported in addition to a principal diagnosis from the list of conditions.

As a result of our analysis, we agree with the requestor that ICD-10-CM diagnosis code O75.1 should be added to the GROUPER logic for assignment to the postpartum MS-DRGs. This diagnosis code is consistent with other diagnosis codes structured within the GROUPER logic for assignment to MS-DRGs 769 and 776, and clearly represents a post-partum diagnosis with the terminology “during or following labor and delivery” in the title. We believe that adding this diagnosis code to the postpartum MS-DRGs will enable more appropriate MS-DRG assignment for cases where a delivery did not occur.

Therefore, we are proposing the following:

  • Removing ICD-10-CM diagnosis code O75.1 from the list of principal or secondary diagnosis under the first condition—vaginal delivery GROUPER logic in MS-DRGs 774, 767, and 768;
  • Moving ICD-10-CM diagnosis code O75.1 from the list of principal or secondary diagnosis under the second condition—complicating diagnosis for MS-DRG 774 to the secondary diagnosis list only; and
  • Adding ICD-10-CM diagnosis code O75.1 to the principal diagnosis list GROUPER logic in MS-DRGs 769 and 776.

We are inviting public comments on our proposals.

7. MDC 15 (Newborns and Other Neonates With Conditions Originating in Perinatal Period): Observation and Evaluation of Newborn

We received a request to add the ICD-10-CM diagnosis codes describing observation and evaluation of newborns for suspected conditions that are ruled out to MS-DRG 795 (Normal Newborn). The 14 diagnosis codes describing observation and evaluation of newborn for suspected conditions ruled out are displayed in the table below.

ICD-10-CM codeCode description
Z05.0Observation and evaluation of newborn for suspected cardiac condition ruled out.
Z05.1Observation and evaluation of newborn for suspected infectious condition ruled out.
Z05.2Observation and evaluation of newborn for suspected neurological condition ruled out.
Z05.3Observation and evaluation of newborn for suspected respiratory condition ruled out.
Z05.41Observation and evaluation of newborn for suspected genetic condition ruled out.
Z05.42Observation and evaluation of newborn for suspected metabolic condition ruled out.
Z05.43Observation and evaluation of newborn for suspected immunologic condition ruled out.
Z05.5Observation and evaluation of newborn for suspected gastrointestinal condition ruled out.
Z05.6Observation and evaluation of newborn for suspected genitourinary condition ruled out.
Z05.71Observation and evaluation of newborn for suspected skin and subcutaneous tissue condition ruled out.
Z05.72Observation and evaluation of newborn for suspected musculoskeletal condition ruled out.
Z05.73Observation and evaluation of newborn for suspected connective tissue condition ruled out.
Z05.8Observation and evaluation of newborn for other specified suspected condition ruled out.
Z05.9Observation and evaluation of newborn for unspecified suspected condition ruled out.

The requestor expressed concern that currently when one of these ruled out codes is added to a newborn encounter with a principal diagnosis described by ICD-10-CM code Z38.00 (Single liveborn infant, delivered vaginally), the case is assigned to MS-DRG 794 (Neonate with Other Significant Problems). The requestor stated that this assignment appears to be in error and that the assignment should instead be to MS-DRG 795 (Normal Newborn).

We reviewed Section I.C.16.b. of the 2017 ICD-10-CM Official Guidelines for Coding and Reporting which includes the following instructions for the diagnosis codes listed in the table above:

  • Assign a code from category Z05 (Observation and evaluation of newborns and infants for suspected conditions ruled out) to identify those instances when a healthy newborn is evaluated for a suspected condition that is determined after study not to be present. Do not use a code from category Z05 when the patient has identified signs or symptoms of a suspected problem; in such cases code the sign or symptom.
  • A code from category Z05 may also be assigned as a principal or first-listed code for readmissions or encounters when the code from category Z38 code no longer applies. Codes from category Z05 are for use only for healthy newborns and infants for which no condition after study is found to be present.
  • A code from category Z05 is to be used as a secondary code after the code from category Z38, Liveborn infants according to place of birth and type of delivery.

After review of the guidelines and discussion with our clinical advisors, we agree with the requestor that the assignment of these codes to MS-DRG 794 is not accurate because the assignment incorrectly labels the newborns as having a significant problem when the condition does not truly exist. We and our clinical advisors also agree that the above list of diagnosis codes should be added to MS-DRG 795. Therefore, we are proposing to add the 14 diagnosis codes describing observation and evaluation of newborns for suspected conditions that are ruled out listed in the table above to the GROUPER logic for MS-DRG 795. We are inviting public comments on our proposals.Start Printed Page 19837

8. MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs): Complication Codes

We received a request to examine the ICD-10-CM diagnosis codes in the T85.8-series of codes that describe other specified complications of internal prosthetic devices, implants and grafts, not elsewhere classified and their respective MS-DRG assignments. According to the requestor, the 7th character values in this series of codes impact the MS-DRG assignment under MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) and MDC 23 (Factors Influencing Health Status & Other Contacts with Health Services) that have resulted in inconsistencies (that is, shifts) between the MS-DRG assignments under Version 33 and Version 34 of the ICD-10 MS-DRGs.

Under ICD-10-CM, diagnosis codes in the range of S00 through T88 require a 7th character value of “A-” initial encounter, “D-” subsequent encounter, or “S-” sequela to identify if the patient is undergoing active treatment for a condition. For complication codes, active treatment refers to treatment for the condition described by the code, even though it may be related to an earlier precipitating problem.

The requestor suggested that the following list of diagnosis codes with the 7th character “A” (initial encounter) may have been inadvertently assigned to the GROUPER logic in the list of diagnoses (Assignment of Diagnosis Codes) under MDC 23 because when one of these diagnosis codes was reported with an O.R. procedure, the requestor found claims grouping to MS-DRG 939, 940, or 941 (O.R. Procedures with Diagnoses of Other Contact with Health Services with MCC, with CC and without CC/MCC, respectively) that had previously grouped to MDC 21 under Version 33 of the ICD-10 MS-DRGs. The requestor also suggested these codes may have been inadvertently assigned to the GROUPER logic list of principal diagnoses for MS-DRGs 949 and 950 (Aftercare with CC/MCC and without CC/MCC, respectively) under MDC 23 because it found claims that grouped to these MS-DRGs (949 and 950) when one of the following diagnosis codes was reported as a principal diagnosis that had previously grouped to MDC 21 under Version 33 of the ICD-10 MS-DRGs.

ICD-10-CM diagnosis codeCode description
T85.818AEmbolism due to other internal prosthetic devices, implants and grafts, initial encounter.
T85.828AFibrosis due to other internal prosthetic devices, implants and grafts, initial encounter.
T85.838AHemorrhage due to other internal prosthetic devices, implants and grafts, initial encounter.
T85.848APain due to other internal prosthetic devices, implants and grafts, initial encounter.
T85.858AStenosis due to other internal prosthetic devices, implants and grafts, initial encounter.
T85.868AThrombosis due to other internal prosthetic devices, implants and grafts, initial encounter.
T85.898AOther specified complication of other internal prosthetic devices, implants and grafts, initial encounter.

The requestor believed that the above list of diagnosis codes with the 7th character “A” (initial encounter) would be more appropriately assigned under MDC 21 to MS-DRGs 919, 920, and 921 (Complications of Treatment with MCC, with CC and without CC/MCC, respectively), according to its review of the 2017 Official Coding Guidelines for use of the 7th character and assignment of other diagnoses of associated complications of care. The requestor also noted that these codes were new, effective October 1, 2016 (FY 2017), and the predecessor codes grouped to MS-DRGs 919, 920, and 921 in MDC 21 under Version 33 of the ICD-10 MS-DRGs in FY 2016.

In addition, the requestor suggested that the following list of diagnosis codes with the 7th character “D” (subsequent encounter) may have been inadvertently assigned to the GROUPER logic list of principal diagnoses for MS-DRG 919, 920, or 921 in MDC 21. The requestor noted that these codes were new, effective October 1, 2016 (FY 2017), and the predecessor codes grouped to MS-DRGs 949 and 950 (Aftercare with CC/MCC and without CC/MCC, respectively) in MDC 23 under Version 33 of the ICD-10 MS-DRGs in FY 2016.

ICD-10-CM diagnosis codeCode description
T85.810DEmbolism due to nervous system prosthetic devices, implants and grafts, subsequent encounter.
T85.820DFibrosis due to nervous system prosthetic devices, implants and grafts, subsequent encounter.
T85.830DHemorrhage due to nervous system prosthetic devices, implants and grafts, subsequent encounter.
T85.840DPain due to nervous system prosthetic devices, implants and grafts, subsequent encounter.
T85.850DStenosis due to nervous system prosthetic devices, implants and grafts, subsequent encounter.
T85.860DThrombosis due to nervous system prosthetic devices, implants and grafts, subsequent encounter.
T85.890DOther specified complication of nervous system prosthetic devices, implants and grafts, subsequent encounter.

The requestor also suggested that the following list of additional diagnosis codes with the 7th character “D” (subsequent encounter) may have been inadvertently assigned to the GROUPER logic list of principal diagnoses for MS-DRGs 922 and 923 (Other Injury, Poisoning and Toxic Effect with MCC and without MCC, respectively) also under MDC 21. The requestor noted these codes were also new, effective October 1, 2016 (FY 2017) and that the predecessor codes grouped to MS-DRGs 949 and 950 in MDC 23 under Version 33 of the ICD-10 MS-DRGs in FY 2016.

ICD-10-CM diagnosis codeCode description
T85.818DEmbolism due to other internal prosthetic devices, implants and grafts, subsequent encounter.
T85.828DFibrosis due to other internal prosthetic devices, implants and grafts, subsequent encounter.
T85.838DHemorrhage due to other internal prosthetic devices, implants and grafts, subsequent encounter.
Start Printed Page 19838
T85.848DPain due to other internal prosthetic devices, implants and grafts, subsequent encounter.
T85.858DStenosis due to other internal prosthetic devices, implants and grafts, subsequent encounter.
T85.868DThrombosis due to other internal prosthetic devices, implants and grafts, subsequent encounter.
T85.898DOther specified complication of other internal prosthetic devices, implants and grafts, subsequent encounter.

The requestor believed that the lists of diagnosis codes above with 7th character “D” (subsequent encounter) would be more appropriately assigned to MS-DRGs 949 and 950 under MDC 23, according to its review of the 2017 Official Coding Guidelines for use of the 7th character and assignment of other diagnoses of associated complications of care.

We ran test cases to determine if we could duplicate the requestor's findings with regard to the shifts in MS-DRG assignment between Version 33 and Version 34 of the ICD-10 MS-DRGs. Results of our review were consistent with the requestor's findings. We found that the T85.8-series of diagnosis codes with the 7th character of “A” (initial encounter) and 7th character of “D” (subsequent encounter) were inadvertently assigned to the incorrect MDC for Version 34 of the ICD-10 MS-DRGs, which led to inconsistencies (MS-DRG shifts) when compared to Version 33 of the ICD-10 MS-DRGs. Our analysis also included review of all of the diagnosis codes in the T85.8- series and their current MDC and MS-DRG assignments, as well as review of the 2017 Official Coding Guidelines for use of the 7th character and assignment of other diagnoses of associated complications of care. Based on the results of our review, we agree with the requestor's findings.

In addition, we identified the following list of diagnosis codes with the 7th character “S” (sequela) that appear to have been inadvertently assigned to MS-DRGs 949 and 950 in MDC 23 rather than MDC 21 in MS-DRGs 922 and 923 (Other Injury, Poisoning and Toxic Effect with MCC and without MCC, respectively).

ICD-10-CM diagnosis codeCode description
T85.810SEmbolism due to nervous system prosthetic devices, implants and grafts, sequela.
T85.820SFibrosis due to nervous system prosthetic devices, implants and grafts, sequela.
T85.830SHemorrhage due to nervous system prosthetic devices, implants and grafts, sequela.
T85.840SPain due to nervous system prosthetic devices, implants and grafts, sequela.
T85.850SStenosis due to nervous system prosthetic devices, implants and grafts, sequela.
T85.860SThrombosis due to nervous system prosthetic devices, implants and grafts, sequela.
T85.890SOther specified complication of nervous system prosthetic devices, implants and grafts, sequela.

We are inviting public comment on our proposals to (1) reassign the ICD-10-CM diagnosis codes with the 7th character “A” (initial encounter) from MS-DRGs 949 and 950 in MDC 23 to MS-DRGs 919, 920 and 921 in MDC 21; (2) reassign the ICD-10-CM diagnosis codes with the 7th character “D” (subsequent encounter) from MS-DRGs 919, 920, 921, 922, and 923 in MDC 21 to MS-DRGs 949 and 950 in MDC 23; and (3) reassign the ICD-10-CM diagnosis codes with the 7th character “S” (sequela) from MS-DRGs 949 and 950 in MDC 23 to MS-DRGs 922 and 923 in MDC 21 for FY 2018. The table below displays the current Version 34 MDC and MS-DRG assignments and the proposed Version 35 MDC and MS-DRG assignments that we are seeking public comment on for the respective ICD-10-CM diagnosis codes.

ICD-10-CM codeCode descriptionCurrent V34 MDCCurrent V34 MS-DRGProposed V35 MDCProposed V35 MS-DRG
T85.810DEmbolism due to nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.810SEmbolism due to nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.818AEmbolism due to other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
T85.818DEmbolism due to other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950
T85.820DFibrosis due to nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.820SFibrosis due to nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.828AFibrosis due to other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
T85.828DFibrosis due to other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950
T85.830DHemorrhage due to nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.830SHemorrhage due to nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.838AHemorrhage due to other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
Start Printed Page 19839
T85.838DHemorrhage due to other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950
T85.840DPain due to nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.840SPain due to nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.848APain due to other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
T85.848DPain due to other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950
T85.850DStenosis due to nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.850SStenosis due to nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.858AStenosis due to other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
T85.858DStenosis due to other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950
T85.860DThrombosis due to nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.860SThrombosis due to nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.868AThrombosis due to other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
T85.868DThrombosis due to other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950
T85.890DOther specified complication of nervous system prosthetic devices, implants and grafts, subsequent encounter21919, 920, 92123949, 950
T85.890SOther specified complication of nervous system prosthetic devices, implants and grafts, sequela23949, 95021922, 923
T85.898AOther specified complication of other internal prosthetic devices, implants and grafts, initial encounter23949, 95021919, 920, 921
T85.898DOther specified complication of other internal prosthetic devices, implants and grafts, subsequent encounter21922, 92323949, 950

9. MDC 23 (Factors Influencing Health Status and Other Contacts With Health Services): Updates to MS-DRGs 945 and 946 (Rehabilitation With CC/MCC and Without CC/MCC, Respectively)

In FY 2016, we received requests to modify the MS-DRG assignment for MS-DRGs 945 and 946 (Rehabilitation with CC/MCC and without CC/MCC, respectively). This issue was addressed in the FY 2017 IPPS/LTCH PPS proposed and final rules (81 FR 24998 through 25000 and 81 FR 56826 through 56831). For FY 2017, we did not change the MS-DRG assignments for MS-DRGs 945 and 946.

We did not receive a request to address this issue as part of this FY 2018 IPPS/LTCH PPS proposed rule or suggestions on how to update the MS-DRGs 945 and 946 logic. However, we did refer the FY 2016 requests for a new ICD-10-CM diagnosis code to the Centers for Disease Control and Prevention (CDC) for consideration at a future meeting of the ICD-10 Coordination and Maintenance Committee. CDC has the lead on updating and maintaining ICD-10-CM codes. CDC did not address the issue at the September 13-14, 2016 ICD-10 Coordination and Maintenance Committee meeting. When the topic was not addressed at the September 13-14, 2016 ICD-10 Coordination and Maintenance Committee meeting, we asked CDC to address the code request at the March 7-8, 2017 meeting of the ICD-10 Coordination and Maintenance Committee. The topic was on the agenda for the March 7-8, 2017 ICD-10 Coordination and Maintenance Committee meeting. The deadline for providing comments on proposals considered at this meeting was April 7, 2017. Any new codes approved after this meeting which will be implemented on October 1, 2017 will be posted on the CMS Web site at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​index.html and on the CDC Web site at: http://www.cdc.gov/​nchs/​icd/​icd10.html in June 2017. New codes also will be included in the FY 2018 IPPS/LTCH PPS final rule.

As addressed in the FY 2017 IPPS/LTCH PPS final rule, the ICD-9-CM MS-DRGs used ICD-9-CM codes reported as the principal diagnosis that clearly identified an encounter for rehabilitation services, such as diagnosis codes V57.89 (Care involving other specified rehabilitation procedure) and V57.9 (Care involving unspecified rehabilitation procedure), and these codes were not included in ICD-10-CM. Given this lack of ICD-10-CM codes to indicate that the reason for the encounter was for rehabilitation, the ICD-10 MS-DRG logic could not reflect the logic of the ICD-9-CM MS-DRGs. Commenters on the final rule recommended that CDC create new diagnosis codes for these concepts in ICD-10-CM so that the MS-DRG logic could be updated to more closely reflect that of the ICD-9-CM MS-DRGs.

If new ICD-10-CM codes are created for encounter for rehabilitation services, we would address any updates to MS-DRGs 945 and 946 utilizing these new codes in future rulemaking. In the meantime, we welcome other specific recommendations on how to update MS-DRGs 945 and 946. We are sharing the following data on these MS-DRGs from the MedPAR file.Start Printed Page 19840

FY 2015 MS-DRGs with ICD-9-CM codesNumber of casesAverage length of stayAverage cost
MS-DRG 9453,99110.3$8,242
MS-DRG 9461,1848.07,322
FY 2016 MS-DRGs with ICD-10-CM codesNumber of casesAverage length of stayAverage cost
MS-DRG 94567110.8$7,814
MS-DRG 9461577.37,672

As shown by the tables above, there was a decrease of 3,320 MS-DRG 945 cases (from 3,991 to 671) from FY 2015, when claims were submitted with ICD-9-CM codes, to FY 2016 when ICD-10 codes were submitted. There was a decrease of 1,027 MS-DRG 946 cases (from 1,184 to 157) from FY 2015 to FY 2016. The average length of stay increased 0.5 days (from 10.3 to 10.8 days) for MS-DRG 945 and decreased 0.7 days (from 8.0 to 7.3 days) for MS-DRG 946. The average costs decreased by $428 (from $8,242 to $7,814) for MS-DRG 945 cases and increased by $350 (from $7,322 to $7,672) for MS-DRG 946 cases. The number of cases was significantly lower in FY 2016 compared to FY 2015. However, the difference in average length of stay and average costs did not show large changes.

We also examined possible MS-DRGs where these cases may have been assigned in FY 2016 based on increases in the number of claims. Because there is not a diagnosis code that could be reported as a principal diagnosis, which would indicate if the admissions were for rehabilitation services, we are unable to determine if these were cases admitted for rehabilitation that moved from MS-DRGs 945 and 946 because of the lack of a code for encounter for rehabilitation, or if there was simply a change in the number of cases. The following tables show our findings for MS-DRG 056 (Degenerative Nervous System Disorders with MCC); MS-DRG 057 (Degenerative Nervous System Disorders without MCC); MS-DRG 079 (Hypertensive Encephalopathy without CC/MCC); MS DRG 083 (Traumatic Stupor & Coma, Coma >1 Hour with CC); MS-DRG 084 (Traumatic Stupor & Coma, Coma >1 Hour without CC/MCC); MS-DRG 092 (Other Disorders of Nervous System with MCC); and MS-DRG 093 (Other Disorders of Nervous System without CC/MCC).

FY 2015 MS-DRGs with ICD-9-CM codesNumber of casesAverage length of stayAverage cost
MS-DRG 0569,5487.3$12,606
MS-DRG 05725,6525.17,918
MS-DRG 0796182.75,212
MS-DRG 0832,5164.39,446
MS-DRG 0841,9552.86,824
MS-DRG 09212,6435.711,158
MS-DRG 0937,9282.85,182
FY 2016 MS-DRGs with ICD-10-CM codesNumber of casesAverage length of stayAverage cost
MS-DRG 05610,8177.6$12,930
MS-DRG 05728,3365.37,902
MS-DRG 0791,2332.75,579
MS-DRG 0834,0586.29,134
MS-DRG 0843,0162.76,508
MS-DRG 09219,3923.96,706
MS-DRG 0938,1202.75,253

As shown by the tables above, some of the MS-DRGs that show the largest increase in number of cases do not show significant changes in the average length of stay or average costs. For instance, MS-DRG 079 cases doubled from FY 2015 to FY 2016 (from 618 to 1,233). However, the average length of stay did not change from 2.7 days and the average costs increased only $367 (from $5,212 to $5,579). MS-DRG 083 cases increased by 1,542 (from 2,516 to 4,058) with a 1.9 day increase in the average length of stay (from 4.3 to 6.2 days); however, the average costs decreased only $312 (from $9,446 to $9,134). There were large changes for MS-DRG 092 with cases increasing by 6,749 (from 12,643 to 19,392), the average length of stay decreasing by 1.8 days (from 5.7 to 3.9) and the average costs decreasing by $4,452 (from $11,158 to $6,706). Once again, it is not possible to determine if any changes are a result of the impact of not having a code for the encounter for rehabilitation services to report as a principal diagnosis, or if other factors such as changes in types of patient admissions were involved.

Given the lack of a diagnosis code to capture the principal diagnosis of encounter for rehabilitation, we are unable to update MS-DRG 945 or MS-DRG 946 to better identify those cases in which patients are admitted for rehabilitation services. If the CDC creates a new code, we will consider proposing updates to MS-DRGs 945 and 946 in the future.

We are inviting public comments on our proposal not to update MS-DRGs 945 and 946 for FY 2018.

10. Proposed Changes to the Medicare Code Editor (MCE)

The Medicare Code Editor (MCE) is a software program that detects and reports errors in the coding of Medicare Start Printed Page 19841claims data. Patient diagnoses, procedure(s), and demographic information are entered into the Medicare claims processing systems and are subjected to a series of automated screens. The MCE screens are designed to identify cases that require further review before classification into an MS-DRG.

As discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56831 through 56844), we made available the FY 2017 ICD-10 MCE Version 34 manual file and an ICD-9-CM MCE Version 34.0A manual file (for analysis purposes only). The links to these MCE manual files, along with the links to purchase the mainframe and computer software for the MCE Version 34 (and ICD-10 MS-DRGs) are posted on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html through the FY 2017 IPPS Final Rule Home Page.

For this FY 2018 IPPS/LTCH PPS proposed rule, below we address the MCE requests we received by the December 7, 2016 deadline. We also discuss the proposals we are making based on our internal review and analysis.

a. Age Conflict Edit

In the MCE, the Age Conflict edit exists to detect inconsistencies between a patient's age and any diagnosis on the patient's record; for example, a 5-year-old patient with benign prostatic hypertrophy or a 78-year-old patient coded with a delivery. In these cases, the diagnosis is clinically and virtually impossible for a patient of the stated age. Therefore, either the diagnosis or the age is presumed to be incorrect. Currently, in the MCE, the following four age diagnosis categories appear under the Age Conflict edit and are listed in the manual and written in the software program:

  • Perinatal/Newborn—Age of 0 years only; a subset of diagnoses which will only occur during the perinatal or newborn period of age 0 (for example, tetanus neonatorum, health examination for newborn under 8 days old).
  • Pediatric—Age is 0 to 17 years inclusive (for example, Reye's syndrome, routine child health examination).
  • Maternity—Age range is 12 to 55 years inclusive (for example, diabetes in pregnancy, antepartum pulmonary complication).
  • Adult—Age range is 15 to 124 years inclusive (for example, senile delirium, mature cataract).

We received a request to provide clarification regarding the overlapping age ranges (0 to 17 years and 15 to 124 years) in the Pediatric and Adult categories under the Age Conflict edit. The requestor questioned which diagnosis code would be most appropriate to identify when a general or routine health examination is performed on patients who are within the age range of 15 to 17 years. The specific ICD-10-CM diagnosis codes that the requestor inquired about related to a child or to an adult encounter for a health examination are displayed in the table below.

ICD-10-CM codeCode description
Z00.00Encounter for general adult medical examination without abnormal findings.
Z00.01Encounter for general adult medical examination with abnormal findings.
Z00.121Encounter for routine child health examination with abnormal findings.
Z00.129Encounter for routine child health examination without abnormal findings.

The age ranges defined within the Age Conflict edits were established with the implementation of the IPPS. The adult age range includes the minimum age of 15 years for those patients who are declared emancipated minors. We note that, historically, we have not provided coding advice in rulemaking with respect to policy. We collaborate with the American Hospital Association (AHA) through the Coding Clinic for ICD-10-CM and ICD-10-PCS to promote proper coding. We recommend that the requestor and other interested parties submit any questions pertaining to correct coding practices for this specific issue to the AHA.

(1) Perinatal/Newborn Diagnosis Category

Under the ICD-10 MCE, the Perinatal/Newborn Diagnosis category under the Age Conflict edit considers the age of 0 years only; a subset of diagnoses which will only occur during the perinatal or newborn period of age 0 to be inclusive. This includes conditions that have their origin in the fetal or perinatal period (before birth through the first 28 days after birth) even if morbidity occurs later. For that reason, the diagnosis codes on this Age Conflict edit list would be expected to apply to conditions or disorders specific to that age group only.

In the ICD-10-CM classification, there are two diagnosis codes that describe conditions as occurring during infancy and the neonatal period that are currently not on the Perinatal/Newborn Diagnosis category edit code list. We consulted with staff at the Centers for Disease Control's (CDC's) National Center for Health Statistics (NCHS) because NCHS has the lead responsibility for the ICD-10-CM diagnosis codes. The NCHS' staff confirmed that, although diagnosis codes D80.7 (Transient hypogammaglobulinemia of infancy) and diagnosis code E71.511 (Neonatal adrenoleukodystrophy) do occur during infancy and the neonatal period, both conditions can last beyond the 28-day timeframe which is used to define the perinatal/newborn period. These diagnosis codes are not intended to be restricted for assignment to newborn patients. Therefore, we are proposing to not add these two diagnosis codes to the Perinatal/Newborn Diagnosis category under the Age Conflict edit. We are inviting public comments on our proposal.

(2) Pediatric Diagnosis Category

Under the ICD-10 MCE, the Pediatric diagnosis category under the Age Conflict edit considers the age range of 0 to 17 years inclusive. For that reason, the diagnosis codes on this Age Conflict edit list would be expected to apply to conditions or disorders specific to that age group only.

The ICD-10-CM diagnosis code list for the Pediatric diagnosis category under the Age Conflict edit currently includes a diagnosis code pertaining to dandruff that is not intended to apply to pediatric patients only. We consulted with staff at the Centers for Disease Control's (CDC's) National Center for Health Statistics (NCHS) because NCHS has the lead responsibility for the ICD-10-CM diagnosis codes. The NCHS' staff confirmed that, although diagnosis code L21.0 (Seborrhea capitis) has an inclusion term of “Cradle cap,” the description of the diagnosis code is not intended to be restricted for assignment of pediatric patients. Therefore, we are proposing to remove diagnosis code L21.0 from the list of diagnosis codes for the Pediatric diagnosis category under the Age Conflict edit. We are inviting public comments on our proposal.Start Printed Page 19842

(3) Maternity Diagnoses

Under the ICD-10 MCE, the Maternity diagnosis category under the Age Conflict edit considers the age range of 12 to 55 years inclusive. For that reason, the ICD-10-CM diagnosis codes on this Age Conflict edit list would be expected to apply to conditions or disorders specific to that age group only.

As discussed in section II.F.12. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes lists the new ICD-10-CM diagnosis codes that have been approved to date, which will become effective with discharges occurring on and after October 1, 2017. Included on this list are a number of diagnosis codes associated with pregnancy and maternal care that we believe are appropriate to add to the list of diagnosis codes for the Maternity diagnoses category under the Age Conflict edit. We refer readers to Table 6P.1a. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for a review of the ICD-10-CM diagnosis codes that we are proposing to add to the Age Conflict edit list. We are inviting public comments on our proposal.

b. Sex Conflict Edit

In the MCE, the Sex Conflict edit detects inconsistencies between a patient's sex and any diagnosis or procedure on the patient's record; for example, a male patient with cervical cancer (diagnosis) or a female patient with a prostatectomy (procedure). In both instances, the indicated diagnosis or the procedure conflicts with the stated sex of the patient. Therefore, the patient's diagnosis, procedure, or sex is presumed to be incorrect.

(1) Diagnoses for Males Only Edit

We received a request to review the following ICD-10-CM diagnosis codes pertaining to conditions associated with males for possible inclusion on the list of diagnosis codes for the Diagnoses for Males Only edit.

ICD-10-CM codeCode description
B37.42Candidal balanitis.
N35.011Post-traumatic bulbous urethral stricture.
N35.012Post-traumatic membranous urethral stricture.
N35.013Post-traumatic anterior urethral stricture.
N35.112Postinfective bulbous urethral stricture, not elsewhere classified.
N35.113Postinfective membranous urethral stricture, not elsewhere classified.
N35.114Postinfective anterior urethral stricture, not elsewhere classified.
N99.115Postprocedural fossa navicularis urethral stricture.

We agree with the requestor that diagnosis code B37.42 describes a condition that is applicable only to males. Balanitis is the inflammation of the glans (rounded head) of the penis. We also agree that the diagnosis codes listed above that align under subcategory N35.01 (Post-traumatic urethral stricture, male) and subcategory N35.11 (Postinfection urethral stricture, not elsewhere classified, male) are appropriate to add to the list of diagnosis codes for the Diagnoses for Males Only edit because these diagnosis codes include specific terminology that is applicable only to males. Further, we agree that diagnosis code N99.115 is appropriate to add to the list of diagnosis codes for the Diagnoses for Males Only edit because subcategory N99.11 (Postprocedural urethral stricture, male) includes specific terminology that is applicable to males only as well. Therefore, we are proposing to add the ICD-10-CM diagnosis codes listed in the table above to the list of diagnosis codes for the Diagnoses for Males Only edit.

We also are proposing to remove ICD-10-CM diagnosis code Q64.0 (Epispadias) from the list of diagnosis codes for the Diagnoses for Males Only edit because this rare, congenital condition involving the opening of the urethra can occur in both males and females.

In addition, as discussed in section II.F.12. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes lists the new ICD-10-CM diagnosis codes that have been approved to date, which will become effective with discharges occurring on and after October 1, 2017. Included on this list are a number of diagnosis codes associated with male body parts that we believe are appropriate to add to the list of diagnosis codes for the Diagnoses for Males Only category under the Sex Conflict edit. We refer readers to Table 6P.1b. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for a review of the ICD-10-CM diagnosis codes that we are proposing to add to the list of diagnosis codes for the Diagnoses for Males Only category.

We are inviting public comments on our proposals.

(2) Diagnoses for Females Only

We received a request to review the following ICD-10-CM diagnosis codes for possible removal from the list of diagnosis codes for the Diagnoses for Females Only edit.

ICD-10-CM codeCode description
F52.6Dyspareunia not due to a substance or known physiological condition.
J84.81Lymphangioleiomyomatosis.
R97.1Elevated cancer antigen 125 [CA 125].

The requestor noted that, in the ICD-10-CM classification, the term “Dyspareunia” (painful sexual intercourse) has specified codes for males and females located in the Alphabetic Index to Diseases for Reporting Physiological Dyspareunia. However, the indexing for diagnosis code F52.6 (Dyspareunia not due to a substance or known physiological condition) specifies that it is not due to a physiological condition and the entry is not gender specific. According to the requestor, while the condition is most often associated with female sexual dysfunction, there is a subset of males who also suffer from this condition.Start Printed Page 19843

In addition, the requestor stated that diagnosis code J84.81 (Lymphangioleiomyomatosis) describes a rare form of lung disease believed to occur more often in patients with tuberous sclerosis complex (TSC), a disorder due to genetic mutation. Although the condition is described as being exclusive to women, unique cases for men with TSC have also been reported.

Lastly, the requestor indicated that diagnosis code R97.1 (Elevated cancer antigen 125 [CA 125]) describes the tumor marker that commonly identifies ovarian cancer cells in women. However, the requestor stated that high levels have also been demonstrated in men (and women) with lung cancer as well.

We reviewed ICD-10-CM diagnosis codes F52.6, J84.81, and R97.1, and we agree with the requestor that Dyspareunia, not due to a physiological condition, can also occur in males. We also agree that the condition of Lymphangioleiomyomatosis and Elevated CA 125 levels can be found in males. Therefore, we are proposing to remove these three diagnosis codes from the list of diagnosis codes for the Diagnoses for Females Only edit. We are inviting public comments on our proposals.

In addition, we are proposing to add new diagnosis code Z40.03 (Encounter for prophylactic removal of fallopian tube(s)) to the list of diagnosis codes for the Diagnoses for Females Only edit. Currently, diagnosis code Z40.02 (Encounter for prophylactic removal of ovary) is on the edit's code list; therefore, inclusion of new diagnosis code Z40.03 would be consistent. We refer readers to Table 6A.—New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for the list of new ICD-10-CM diagnosis codes finalized to date. We are inviting public comments on our proposal.

c. Non-Covered Procedure Edit: Gender Reassignment Surgery

In the MCE, the Non-Covered Procedure edit identifies procedures for which Medicare does not provide payment. Payment is not provided due to specific criteria that are established in the National Coverage Determination (NCD) process. We refer readers to the Web site at: https://www.cms.gov/​Medicare/​Coverage/​DeterminationProcess/​howtorequestanNCD.html for additional information on this process. In addition, there are procedures that would normally not be paid by Medicare but, due to the presence of certain diagnoses, are paid.

We issued instructions on June 27, 2014, as a one-time notification, Pub. 100-03, Transmittal 169, Change Request 8825, effective May 30, 2014, announcing to MACs the invalidation of National Coverage Determination (NCD) 140.3 for Transsexual Surgery. As a result, MACs determined coverage on a case-by-case basis. The transmittal is available via the Internet on the CMS Web site at: https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​Transmittals/​2014-Transmittals-Items/​R169NCD.html?​DLPage=​1&​DLEntries=​10&​DLFilter=​Transsexual&​DLSort=​1&​DLSortDir=​ascending.

It was brought to our attention that the ICD-10-PCS procedure codes shown in the table below are currently included on the list of procedure codes for the Non-Covered Procedure edit. As a result, when one of these procedure codes is reported on a claim, the edit for Non-Covered Procedure is triggered and claims are not able to process correctly.

ICD-10-CM codeCode description
0W4M070Creation of vagina in male perineum with autologous tissue substitute, open approach.
0W4M0J0Creation of vagina in male perineum with synthetic substitute, open approach.
0W4M0K0Creation of vagina in male perineum with nonautologous tissue substitute, open approach.
0W4M0Z0Creation of vagina in male perineum, open approach.
0W4N071Creation of penis in female perineum with autologous tissue substitute, open approach.
0W4N0J1Creation of penis in female perineum with synthetic substitute, open approach.
0W4N0K1Creation of penis in female perineum with nonautologous tissue substitute, open approach.
0W4N0Z1Creation of penis in female perineum, open approach.

Therefore, we are proposing to remove the ICD-10-PCS procedure codes included in the table above from the list of procedure codes for the Non-Covered Procedure edit to help resolve claims processing issues associated with the reporting of these procedure codes. We are inviting public comments on our proposal.

d. Unacceptable Principal Diagnosis Edit

In the MCE, there are select codes that describe a circumstance that influences an individual's health status, but does not actually describe a current illness or injury. There also are codes that are not specific manifestations but may be due to an underlying cause. These codes are considered unacceptable as a principal diagnosis. In limited situations, there are a few codes on the MCE Unacceptable Principal Diagnosis edit code list that are considered “acceptable” when a specified secondary diagnosis is also coded and reported on the claim.

(1) Bacterial and Viral Infectious Agents (B95 Through B97)

We examined ICD-10-CM diagnosis codes in Chapter 1 (Certain Infectious and Parasitic Diseases) of the Classification Manual that fall within the range of three code categories for “Bacterial and Viral Infectious Agents” (B95 through B97). The instructional note provided at this section states that these categories are provided for use as supplementary or additional codes to identify the infectious agent(s) in diseases classified elsewhere.

We identified 45 ICD-10-CM diagnosis codes within the range of these code categories for “Bacterial and Viral Infectious Agents” (B95 through B97) that, as a result of the instructional note, are not appropriate to report as a principal diagnosis. We are proposing to add the 45 ICD-10-CM diagnosis codes shown in Table 6P.1c. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(2) Mental Disorders Due to Known Physiological Conditions (F01 Through F09)

We examined ICD-10-CM diagnosis codes in Chapter 5 (Mental and Behavioral Disorders) of the Classification Manual that fall within the range of nine code categories for “Mental Disorders Due to Known Start Printed Page 19844Physiological Conditions” (F01 through F09). The instructional note provided at this section states that this block comprises a range of mental disorders grouped together on the basis of their having in common a demonstrable etiology in cerebral disease, brain injury, or other insult leading to cerebral dysfunction. The dysfunction may be primary, as in diseases, injuries, and insults that affect the brain directly and selectively; or secondary, as in systemic diseases and disorders that attack the brain only as one of the multiple organs or systems of the body that are involved.

We identified 21 ICD-10-CM diagnosis codes that fall within the range of these code categories for “Mental Disorders Due to Known Physiological Conditions” (F01 through F09). Of these nine code categories, seven have a “Code first the underlying physiological condition” note. For example, at code category F01-Vascular dementia, the note reads, “Code first the underlying physiological condition or sequelae of cerebrovascular disease.” There are a total of 19 diagnosis codes that fall under these 7 code categories with a “Code first” note and, therefore, are not appropriate to report as a principal diagnosis. Therefore, we are proposing to add the 19 ICD-10-CM diagnosis codes shown in Table 6P.1d. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(3) Other Obstetric Conditions, Not Elsewhere Classified (O94 Through O9A)

We examined ICD-10-CM diagnosis codes in Chapter 15 (Pregnancy, Childbirth and the Puerperium) of the Classification Manual that fall within the range of four code categories for “Other Obstetric Conditions, Not Elsewhere Classified” (O94 through O9A). The instructional note provided at this section under category O94 states that “this category is to be used to indicate conditions in O00 through O77, O85 through O94 and O98 through O9A as the cause of late effects. The sequelae include conditions specified as such, or as late effects, which may occur at any time after the puerperium. Code first condition resulting from (sequela) of complication of pregnancy, childbirth, and the puerperium.”

We identified one ICD-10-CM diagnosis code within the range of these code categories for “Other Obstetric Conditions, Not Elsewhere Classified” (O94 through O9A) that, as a result of the instructional note, is not appropriate to report as a principal diagnosis because that code identifies the cause of the late effect. This ICD-10-CM diagnosis code is O94 (Sequelae of complication of pregnancy, childbirth, and the puerperium). We are proposing to add ICD-10-CM diagnosis code O94 to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(4) Symptoms and Signs Involving Cognition, Perception, Emotional State and Behavior (R40 Through R46)

We examined ICD-10-CM diagnosis codes in Chapter 18 (Symptoms, Signs and Abnormal Findings) of the Classification Manual that fall within the range of code categories for “Symptoms and Signs Involving Cognition, Perception, Emotional State and Behavior” (R40 through R46), specifically under code category R40—Somnolence, stupor and coma. At subcategory R40.2—Coma, there is an instructional note, which states “Code first any associated: Fracture of skull (S02.-); Intracranial injury (S06.-).”

We identified 96 ICD-10-CM diagnosis codes under this subcategory that, as a result of the instructional note, are not appropriate to report as a principal diagnosis. We are proposing to add the 96 ICD-10-CM diagnosis codes shown in Table 6P.1e. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(5) General Symptoms and Signs (R50 Through R69)

We examined ICD-10-CM diagnosis codes in Chapter 18 (Symptoms, Signs and Abnormal Findings) of the Classification Manual that fall within the range of code categories for “General Symptoms and Signs” (R50 through R69), specifically, at code category R65—Symptoms and signs associated with systemic inflammation and infection. There is an instructional note at subcategory R65.1—Systemic inflammatory response syndrome (SIRS) of non-infectious origin, which states “Code first underlying condition, such as: Heatstroke (T67.0); Injury and trauma (S00-T88).” There is also an instructional note at subcategory R65.2—Severe sepsis, which states “Code first underlying infection, such as:” and provides a list of examples.

We identified four ICD-10-CM diagnosis codes in these subcategories that, as a result of the instructional notes described above, are not appropriate to report as a principal diagnosis. These four ICD-10-CM codes are shown in the table below.

ICD-10-CM codeCode description
R65.10Systemic inflammatory response syndrome (SIRS) of non-infectious origin without acute organ dysfunction.
R65.11Systemic inflammatory response syndrome (SIRS) of non-infectious origin with acute organ dysfunction.
R65.20Severe sepsis without septic shock.
R65.21Severe sepsis with septic shock.

We are proposing to add the four ICD-10-CM diagnosis codes shown in the table above to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(6) Poisoning by, Adverse Effects of, and Underdosing of Drugs, Medicaments and Biological Substances (T36 Through T50)

We examined ICD-10-CM diagnosis codes in Chapter 19 (Injury and Poisoning) of the Classification Manual that fall within the range of code categories for “Poisoning by, Adverse Effects of and Underdosing of Drugs, Medicaments and Biological Substances” (T36 through T50). The instructional note provided at this section states “Code first, for adverse effects, the nature of the adverse effect, such as:” and provides a list of examples. In addition, the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting at Section I.C.19.e.5.c., state that “Codes for underdosing should never be assigned as principal or first-listed codes.”Start Printed Page 19845

We identified 996 ICD-10-CM diagnosis codes that, as a result of the instructional note for adverse effects and the guideline for reporting diagnosis codes for underdosing, are not appropriate to report as a principal diagnosis. We are proposing to add the 996 ICD-10-CM diagnosis codes shown in Table 6P.1f. associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(7) Complications of Surgical and Medical Care, Not Elsewhere Classified (T80 Through T88)

We examined ICD-10-CM diagnosis codes in Chapter 19 (Injury and Poisoning) of the Classification Manual that fall within the range of code categories for “Complications of Surgical and Medical Care, Not Elsewhere Classified” (T80 through T88), specifically, at code category T81—Complications of procedures, not elsewhere classified. There is an instructional note at subcategory T81.12x—Postprocedural septic shock, which states, “Code first underlying infection.”

We identified two ICD-10-CM diagnosis codes in this subcategory that, as a result of the instructional note, are not appropriate to report as a principal diagnosis. These two ICD-10-CM codes are shown in the table below.

ICD-10-CM codeCode description
T81.12XDPostprocedural septic shock, subsequent encounter.
T81.12XSPostprocedural septic shock, sequela.

We are proposing to add the two ICD-10-CM diagnosis codes shown in the table above to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(8) Persons Encountering Health Services for Examinations (Z00 Through Z13)

We examined ICD-10-CM diagnosis codes in Chapter 21 (Factors Influencing Health Status) of the Classification Manual that fall within the range of code categories for “Persons Encountering Health Services for Examinations” (Z00 through Z13), specifically, at code category Z00—Encounter for general examination without complaint, suspected or reported diagnosis. The FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting at Section I.C.21.c.16., state that the following ICD-10-CM Z-codes/categories may only be reported as the principal/first-listed diagnosis, except when there are multiple encounters on the same day and the medical records for the encounters are combined:

  • Z00 (Encounter for general examination without complaint, suspected or reported diagnosis); except Z00.6 (Encounter for examination for normal comparison and control in clinical research program).

Therefore, diagnosis code Z00.6 should not be reported as a principal/first-listed diagnosis. We are proposing to add ICD-10-CM diagnosis code Z00.6 to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

To address a separate issue, we are proposing to remove the diagnosis codes under category Z05 (Encounter for observation and examination of newborn for suspected diseases and conditions ruled out) from the list of codes for the Unacceptable Principal Diagnosis edit. The FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting at Section I.C.16.b. state the following:

  • Assign a code from category Z05, Observation and evaluation of newborns and infants for suspected conditions ruled out, to identify those instances when a healthy newborn is evaluated for a suspected condition that is determined after study not to be present. Do not use a code from category Z05 when the patient has identified signs or symptoms of a suspected problem; in such cases code the sign or symptom.
  • A code from category Z05 may also be assigned as a principal or first-listed code for readmissions or encounters when the code from category Z38 no longer applies. Codes from category Z05 are for use only for healthy newborns and infants for which no condition after study is found to be present.
  • A code from category Z05 is to be used as a secondary code after the code from category Z38, Liveborn infants according to place of birth and type of delivery.

Therefore, the ICD-10-CM diagnosis codes under category Z05 are allowed to be reported as a principal diagnosis. We are proposing to remove the 14 ICD-10-CM diagnosis codes shown in the table below from the list of codes for the Unacceptable Principal Diagnosis edit.

ICD-10-CM codeCode description
Z05.0Observation and evaluation of newborn for suspected cardiac condition ruled out.
Z05.1Observation and evaluation of newborn for suspected infectious condition ruled out.
Z05.2Observation and evaluation of newborn for suspected neurological condition ruled out.
Z05.3Observation and evaluation of newborn for suspected respiratory condition ruled out.
Z05.41Observation and evaluation of newborn for suspected genetic condition ruled out.
Z05.42Observation and evaluation of newborn for suspected metabolic condition ruled out.
Z05.43Observation and evaluation of newborn for suspected immunologic condition ruled out.
Z05.5Observation and evaluation of newborn for suspected gastrointestinal condition ruled out.
Z05.6Observation and evaluation of newborn for suspected genitourinary condition ruled out.
Z05.71Observation and evaluation of newborn for suspected skin and subcutaneous tissue condition ruled out.
Z05.72Observation and evaluation of newborn for suspected musculoskeletal condition ruled out.
Z05.73Observation and evaluation of newborn for suspected connective tissue condition ruled out.
Z05.8Observation and evaluation of newborn for other specified suspected condition ruled out.
Z05.9Observation and evaluation of newborn for unspecified suspected condition ruled out.
Start Printed Page 19846

We are inviting public comments on our proposal.

(9) Encounters for Other Specific Health Care (Z40 Through Z53)

We examined ICD-10-CM diagnosis codes in Chapter 21 (Factors Influencing Health Status) of the Classification Manual that fall within the range of code categories for “Encounters for Other Specific Health Care” (Z40 through Z53), specifically, at code category Z52—Donors of organs and tissues. The FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting at Section I.C.21.c.16. state that the following Z-codes/categories may only be reported as the principal/first-listed diagnosis, except when there are multiple encounters on the same day and the medical records for the encounters are combined:

  • Z52 (Donors of organs and tissues); except Z52.9 (Donor of unspecified organ or tissue).

Therefore, ICD-10-CM diagnosis code Z52.9 should not be reported as a principal/first-listed diagnosis. We are proposing to add ICD-10-CM diagnosis code Z52.9 to the list of codes for the Unacceptable Principal Diagnosis edit. We are inviting public comments on our proposal.

(10) Persons Encountering Health Services in Other Circumstances (Z69 Through Z76)

We examined ICD-10-CM diagnosis codes in Chapter 21 (Factors Influencing Health Status) of the Classification Manual that fall within the range of code categories for “Persons Encountering Health Services in Other Circumstances” (Z69 through Z76), specifically, at subcategory Z71.8—Other specified counseling. Consistent with ICD-10-CM diagnosis codes Z71.81 (Spiritual or religious counseling) and Z71.89 (Other specified counseling), we are proposing to add new diagnosis code Z71.82 (Exercise counseling) to the list of codes for the Unacceptable Principal Diagnosis edit. We refer readers to Table 6A.—New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for the list of new ICD-10-CM diagnosis codes finalized to date. We are inviting public comments on our proposal.

(11) Persons With Potential Health Hazards Related to Family and Personal History and Certain Conditions Influencing Health Status (Z77 Through Z99)

We examined ICD-10-CM diagnosis codes in Chapter 21 (Factors Influencing Health Status) of the Classification Manual that fall within the range of code categories for “Persons with Potential Health Hazards Related to Family and Personal History and Certain Conditions Influencing Health Status” (Z77 through Z99), specifically, at code category Z91.8—Other specified personal risk factors, not elsewhere classified. Consistent with ICD-10-CM diagnosis codes Z91.81 (History of falling), Z91.82 (Personal history of military deployment), and Z91.89 (Other specified personal risk factors, not elsewhere classified), we are proposing to add new ICD-10-CM diagnosis codes Z91.841 (Risk for dental caries, low), Z91.842 (Risk for dental caries, moderate), Z91.843 (Risk for dental caries, high), and Z91.849 (Unspecified risk for dental caries) to the list of codes for the Unacceptable Principal Diagnosis edit. We refer readers to Table 6A.—New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for the list of new ICD-10-CM diagnosis codes finalized to date. We are inviting public comments on our proposal.

e. Future Enhancement

Similar to our discussion in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56843 through 56844), with the implementation of ICD-10, it is clear that there are several new concepts in the classification. Looking ahead to the needs and uses of coded data as the data continue to evolve from the reporting, collection, processing, coverage, payment and analysis aspects, we believe the need to ensure the accuracy of the coded data becomes increasingly significant.

The purpose of the MCE is to ensure that errors and inconsistencies in the coded data are recognized during Medicare claims processing. As we continue to evaluate the purpose and function of the MCE with respect to ICD-10, we encourage public input for future discussion. As we discussed in the FY 2017 IPPS/LTCH PPS final rule, we recognize a need to further examine the current list of edits and the definitions of those edits. We encourage public comments on whether there are additional concerns with the current edits, including specific edits or language that should be removed or revised, edits that should be combined, or new edits that should be added to assist in detecting errors or inaccuracies in the coded data.

11. Proposed Changes to Surgical Hierarchies

Some inpatient stays entail multiple surgical procedures, each one of which, occurring by itself, could result in assignment of the case to a different MS-DRG within the MDC to which the principal diagnosis is assigned. Therefore, it is necessary to have a decision rule within the GROUPER by which these cases are assigned to a single MS-DRG. The surgical hierarchy, an ordering of surgical classes from most resource-intensive to least resource-intensive, performs that function. Application of this hierarchy ensures that cases involving multiple surgical procedures are assigned to the MS-DRG associated with the most resource-intensive surgical class.

Because the relative resource intensity of surgical classes can shift as a function of MS-DRG reclassification and recalibrations, for FY 2018, we reviewed the surgical hierarchy of each MDC, as we have for previous reclassifications and recalibrations, to determine if the ordering of classes coincides with the intensity of resource utilization.

A surgical class can be composed of one or more MS-DRGs. For example, in MDC 11, the surgical class “kidney transplant” consists of a single MS-DRG (MS-DRG 652) and the class “major bladder procedures” consists of three MS-DRGs (MS-DRGs 653, 654, and 655). Consequently, in many cases, the surgical hierarchy has an impact on more than one MS-DRG. The methodology for determining the most resource-intensive surgical class involves weighting the average resources for each MS-DRG by frequency to determine the weighted average resources for each surgical class. For example, assume surgical class A includes MS-DRGs 001 and 002 and surgical class B includes MS-DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG 001 are higher than that of MS-DRG 003, but the average costs of MS-DRGs 004 and 005 are higher than the average costs of MS-DRG 002. To determine whether surgical class A should be higher or lower than surgical class B in the surgical hierarchy, we would weigh the average costs of each MS-DRG in the class by frequency (that is, by the number of cases in the MS-DRG) to determine average resource Start Printed Page 19847consumption for the surgical class. The surgical classes would then be ordered from the class with the highest average resource utilization to that with the lowest, with the exception of “other O.R. procedures” as discussed in this rule.

This methodology may occasionally result in assignment of a case involving multiple procedures to the lower-weighted MS-DRG (in the highest, most resource-intensive surgical class) of the available alternatives. However, given that the logic underlying the surgical hierarchy provides that the GROUPER search for the procedure in the most resource-intensive surgical class, in cases involving multiple procedures, this result is sometimes unavoidable.

We note that, notwithstanding the foregoing discussion, there are a few instances when a surgical class with a lower average cost is ordered above a surgical class with a higher average cost. For example, the “other O.R. procedures” surgical class is uniformly ordered last in the surgical hierarchy of each MDC in which it occurs, regardless of the fact that the average costs for the MS-DRG or MS-DRGs in that surgical class may be higher than those for other surgical classes in the MDC. The “other O.R. procedures” class is a group of procedures that are only infrequently related to the diagnoses in the MDC, but are still occasionally performed on patients with cases assigned to the MDC with these diagnoses. Therefore, assignment to these surgical classes should only occur if no other surgical class more closely related to the diagnoses in the MDC is appropriate.

A second example occurs when the difference between the average costs for two surgical classes is very small. We have found that small differences generally do not warrant reordering of the hierarchy because, as a result of reassigning cases on the basis of the hierarchy change, the average costs are likely to shift such that the higher-ordered surgical class has lower average costs than the class ordered below it.

We received a request to examine a case involving the principal procedure for excision of pituitary gland (ICD-10-PCS code 0GB00ZZ Excision of pituitary gland, open approach) with a secondary procedure for harvesting of a fat graft (ICD-10-PCS code 0JB80ZZ Excision of abdomen subcutaneous tissue and fascia, open approach) to treat a condition of pituitary adenoma (ICD-10-CM diagnosis code D35.2 (Benign neoplasm of pituitary gland)) and the resulting sella turcica defect. The requestor noted that when the procedure code for harvesting of the fat graft is reported on the claim, the case currently groups to MS-DRGs 622, 623, and 624 (Skin Grafts and Wound Debridement for Endocrine, Nutritional, and Metabolic Disorders with MCC, with CC and without CC/MCC, respectively). However, when the procedure code for harvesting of the fat graft is not reported on the claim, the case groups to MS-DRGs 614 and 615 (Adrenal and Pituitary Procedures with CC/MCC and without CC/MCC, respectively), which appears to be a more appropriate assignment. The requester expressed concern regarding the procedure code for harvesting of the fat graft in the secondary position driving the MS-DRG assignment versus the principal procedure of the excision of pituitary gland.

We analyzed the codes provided by the requestor in the GROUPER to determine if we could duplicate the requestor's findings. The findings from our analysis were consistent with the requestor's findings. Our clinical advisors reviewed this issue and agreed that it should be the procedure code for excision of the pituitary gland that is used to determine the MS-DRG assignment in this scenario and not the harvesting of the fat graft procedure code.

Therefore, in this FY 2018 IPPS/LTCH PPS proposed rule, we are proposing to move MS-DRGs 614 and 615 above MS-DRGs 622, 623, and 624 in the surgical hierarchy to enable more appropriate MS-DRG assignment for these types of cases.

We are inviting public comments on our proposal.

12. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2018

a. Background of the CC List and the CC Exclusions List

Under the IPPS MS-DRG classification system, we have developed a standard list of diagnoses that are considered CCs. Historically, we developed this list using physician panels that classified each diagnosis code based on whether the diagnosis, when present as a secondary condition, would be considered a substantial complication or comorbidity. A substantial complication or comorbidity was defined as a condition that, because of its presence with a specific principal diagnosis, would cause an increase in the length-of-stay by at least 1 day in at least 75 percent of the patients. However, depending on the principal diagnosis of the patient, some diagnoses on the basic list of complications and comorbidities may be excluded if they are closely related to the principal diagnosis. In FY 2008, we evaluated each diagnosis code to determine its impact on resource use and to determine the most appropriate CC subclassification (non-CC, CC, or MCC) assignment. We refer readers to sections II.D.2. and 3. of the preamble of the FY 2008 IPPS final rule with comment period for a discussion of the refinement of CCs in relation to the MS-DRGs we adopted for FY 2008 (72 FR 47152 through 47171).

b. Proposed Additions and Deletions to the Diagnosis Code Severity Levels for FY 2018

The following tables identifying the proposed additions and deletions to the MCC severity levels list and the proposed additions and deletions to the CC severity levels list for FY 2018 are available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

Table 6I.1—Proposed Additions to the MCC List—FY 2018;

Table 6I.2—Proposed Deletions to the MCC List—FY 2018;

Table 6J.1—Proposed Additions to the CC List—FY 2018; and

Table 6J.2—Proposed Deletions to the CC List—FY 2018.

We are inviting public comments on our proposed severity level designations for the diagnosis codes listed in Table 6I.1. and Table 6J.1. We note that, for Table 6I.2. and Table 6J.2., the proposed deletions are a result of code expansions. Therefore, the diagnosis codes on these lists are no longer valid codes, effective FY 2018. For example, diagnosis code O00.10 (Tubal pregnancy without intrauterine pregnancy) is a current CC for FY 2017 under Version 34 of the ICD-10 MS-DRGs. Effective FY 2018, under Version 35 of the ICD-10 MS-DRGs, this single code has been expanded into three diagnosis codes to include laterality (left/right) and an unspecified option with the addition of a sixth character. Therefore, diagnosis code O00.10 is included in Table 6J.2. for deletion from the CC list because it is no longer a valid code in FY 2018.

c. Principal Diagnosis Is Its Own CC or MCC

CMS' initial goal in developing the ICD-10 MS-DRGs was to ensure that a patient case was assigned to the same MS-DRG, regardless of whether the patient record was to be coded in ICD-9-CM or ICD-10. When certain ICD-10-CM combination codes are reported as a principal diagnosis, it implies that a CC or MCC is present. This occurs as a result of evaluating the cluster of ICD-Start Printed Page 198489-CM codes that would have been coded on an ICD-9-CM record. If one of the ICD-9-CM codes in the cluster was a CC or an MCC, the single ICD-10-CM combination code used as a principal diagnosis also must imply that the CC or MCC is present.

The ICD-10-CM diagnosis codes to which this logic applies are included in Appendix J of the ICD-10 MS-DRG Version 34 Definitions Manual (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2017-IPPS-Final-Rule-Home-Page-Items/​FY2017-IPPS-Final-Rule-Data-Files.html?​DLPage=​1&​DLfxsp0;​Entries=​10&​DLSort=​0&​DLSortDir=​ascending). Appendix J includes two lists: Part 1 is the list of principal diagnosis codes where the ICD-10-CM code is its own MCC. Part 2 is the list of principal diagnosis codes where the ICD-10-CM code is its own CC. Part 1 of Appendix J corresponds to Table 6L.—Principal Diagnosis Is Its Own MCC List, and Part 2 of Appendix J corresponds to Table 6M.—Principal Diagnosis Is Its Own CC List.

We received a request to add the ICD-10-CM diagnosis codes for acute myocardial infarction, decompensated heart failure and specified forms of shock, which are currently designated as a CC or an MCC when reported as a secondary diagnosis, to Table 6L.—Principal Diagnosis Is Its Own MCC List. According to the requestor, the addition of these codes to the list is necessary for bundled payment initiatives and so that facilities that accept these patients in transfer have resources to care for them.

The purpose of the Principal Diagnosis Is Its Own CC or MCC Lists was to ensure consistent MS-DRG assignment between the ICD-9-CM and ICD-10 MS-DRGs due to the clusters and combination codes. There are a number of other ICD-10-CM combination codes that, due to their prior designation as a CC or an MCC when reported as a secondary diagnosis, are not on either of these lists. Having multiple lists for CC and MCC diagnoses when reported as a principal and/or secondary diagnosis may not provide an accurate representation of resource utilization for the MS-DRGs. As discussed in further detail below, we have plans to conduct a comprehensive review of the CC and MCC lists for FY 2019. We believe the results of that review will help to inform the future of these lists.

Therefore, we are not proposing to add the ICD-10-CM diagnosis codes for acute myocardial infarction, decompensated heart failure and specified forms of shock to Table 6L.—Principal Diagnosis Is Its Own MCC List. In addition, we are not proposing any changes to Table 6L.—Principal Diagnosis Is Its Own MCC List and Table 6M.—Principal Diagnosis Is Its Own CC List. We are inviting public comments on our proposal to maintain the existing lists of principal diagnosis codes in Tables 6L. and 6M for FY 2018.

d. Proposed CC Exclusions List for FY 2018

In the September 1, 1987 final notice (52 FR 33143) concerning changes to the DRG classification system, we modified the GROUPER logic so that certain diagnoses included on the standard list of CCs would not be considered valid CCs in combination with a particular principal diagnosis. We created the CC Exclusions List for the following reasons: (1) To preclude coding of CCs for closely related conditions; (2) to preclude duplicative or inconsistent coding from being treated as CCs; and (3) to ensure that cases are appropriately classified between the complicated and uncomplicated DRGs in a pair. As previously indicated, we developed a list of diagnoses, using physician panels, to include those diagnoses that, when present as a secondary condition, would be considered a substantial complication or comorbidity.

In previous years, we made changes to the list of CCs, either by adding new CCs or deleting CCs already on the list.

In the May 19, 1987 proposed notice (52 FR 18877) and the September 1, 1987 final notice (52 FR 33154), we explained that the excluded secondary diagnoses were established using the following five principles:

  • Chronic and acute manifestations of the same condition should not be considered CCs for one another;
  • Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis codes for the same condition should not be considered CCs for one another;
  • Codes for the same condition that cannot coexist, such as partial/total, unilateral/bilateral, obstructed/unobstructed, and benign/malignant, should not be considered CCs for one another;
  • Codes for the same condition in anatomically proximal sites should not be considered CCs for one another; and
  • Closely related conditions should not be considered CCs for one another.

The creation of the CC Exclusions List was a major project involving hundreds of codes. We have continued to review the remaining CCs to identify additional exclusions and to remove diagnoses from the master list that have been shown not to meet the definition of a CC. We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541 through 50544) for detailed information regarding revisions that were made to the CC and CC Exclusion Lists under the ICD-9-CM MS-DRGs.

For FY 2018, we are proposing changes to the ICD-10 MS-DRGs Version 35 CC Exclusion List. Therefore, we have developed Table 6G.1.—Proposed Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2018; Table 6G.2.—Proposed Principal Diagnosis Order Additions to the CC Exclusions List—FY 2018; Table 6H.1.—Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2018; and Table 6H.2.—Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2018. Each of these principal diagnosis codes for which there is a CC exclusion is shown in Table 6G.2. with an asterisk and the conditions that will not count as a CC are provided in an indented column immediately following the affected principal diagnosis. Beginning with discharges on or after October 1 of each year, the indented diagnoses are not recognized by the GROUPER as valid CCs for the asterisked principal diagnoses. Tables 6G. and 6H. associated with this proposed rule are available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

To identify new, revised and deleted diagnosis and procedure codes, for FY 2018, we have developed Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, Table 6D.—Invalid Procedure Codes, Table 6E.—Revised Diagnosis Code Titles, and Table 6F.—Revised Procedure Code Titles for this proposed rule.

These tables are not published in the Addendum to this proposed rule but are available via the Internet on the CMS Web site at: (https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html as described in section VI. of the Addendum to this proposed rule. As discussed in section II.F.15. of the preamble of this proposed rule, the code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules. We are inviting public comments on the MDC and MS-DRG assignments for the new Start Printed Page 19849diagnosis and procedure codes as set forth in Table 6A.—New Diagnosis Codes and Table 6B.—New Procedure Codes. In addition, we are inviting public comments on the proposed severity level designations for the new diagnosis codes as set forth in Table 6A. and the proposed O.R. status for the new procedure codes as set forth in Table 6B.

13. Comprehensive Review of CC List for FY 2019

In the FY 2008 IPPS final rule (72 FR 47153 through 47175), we discussed our efforts to better recognize severity of illness which began with a comprehensive review of the CC list and, ultimately, the implementation of the MS-DRGs. Similar to the analysis that was performed at that time, we are providing the public with notice of our plans to conduct a comprehensive review of the CC and MCC lists for FY 2019.

As a result of the time that has elapsed since that review and changes to how inpatient care is currently delivered, we plan to analyze if further refinements to these lists are warranted. For example, over the past several years, there has been a steady increase in the proportion of cases grouping to the MS-DRGs with an MCC severity level than had previously occurred. Our evaluation will assist in determining if the conditions designated as an MCC continue to represent significant increases in resource utilization that support the MCC designation.

We currently utilize a statistical algorithm to determine the impact on resource use of each secondary diagnosis. Each diagnosis for which Medicare data are available is evaluated to determine its impact on resource use and to determine the most appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to make this determination, the average costs for each subset of cases is compared to the expected costs for cases in that subset. The following format is used to evaluate each diagnosis:

CodeDiagnosisCnt1C1Cnt2C2Cnt3C3

Count (Cnt) is the number of patients in each subset and C1, C2, and C3 are a measure of the impact on resource use of patients in each of the subsets. The C1, C2, and C3 values are a measure of the ratio of average costs for patients with these conditions to the expected average costs across all cases. The C1 value reflects a patient with no other secondary diagnosis or with all other secondary diagnoses that are non-CCs. The C2 value reflects a patient with at least one other secondary diagnosis that is a CC but none that is an MCC. The C3 value reflects a patient with at least one other secondary diagnosis that is an MCC. A value close to 1.0 in the C1 field would suggest that the code produces the same expected value as a non-CC diagnosis. That is, average costs for the case are similar to the expected average costs for that subset and the diagnosis is not expected to increase resource usage. A higher value in the C1 (or C2 and C3) field suggests more resource usage is associated with the diagnosis and an increased likelihood that it is more like a CC or major CC than a non-CC. Thus, a value close to 2.0 suggests the condition is more like a CC than a non-CC but not as significant in resource usage as an MCC. A value close to 3.0 suggests the condition is expected to consume resources more similar to an MCC than a CC or non-CC. For example, a C1 value of 1.8 for a secondary diagnosis means that for the subset of patients who have the secondary diagnosis and have either no other secondary diagnosis present, or all the other secondary diagnoses present are non-CCs, the impact on resource use of the secondary diagnoses is greater than the expected value for a non-CC by an amount equal to 80 percent of the difference between the expected value of a CC and a non-CC (that is, the impact on resource use of the secondary diagnosis is closer to a CC than a non-CC).

We are inviting public comments regarding other possible ways we can incorporate meaningful indicators of clinical severity.

14. Review of Procedure Codes in MS DRGs 981 Through 983; 984 Through 986; and 987 Through 989

Each year, we review cases assigned to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively); MS-DRGs 984, 985, and 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively); and MS-DRGs 987, 988, and 989 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to determine whether it would be appropriate to change the procedures assigned among these MS-DRGs. MS-DRGs 981 through 983, 984 through 986, and 987 through 989 are reserved for those cases in which none of the O.R. procedures performed are related to the principal diagnosis. These MS-DRGs are intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group.

Under the ICD-10 MS-DRGs Version 34, MS-DRGs 984 through 986 are assigned when one or more of the procedures described by ICD-10-PCS codes in Table 6P.2. that is associated with this FY 2018 proposed rule (which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) are performed and are unrelated to the principal diagnosis. All remaining O.R. procedures are assigned to MS-DRGs 981 through 983 and 987 through 989, with MS-DRGs 987 through 989 assigned to those discharges in which the only procedures performed are nonextensive procedures that are unrelated to the principal diagnosis.

We refer the reader to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56847 through 56848) for a discussion of the movement and redesignation of procedure codes from MS-DRGs 984 through 986 related to the transition of the ICD-10 MS-DRGs.

Our review of MedPAR claims data showed that there are no cases that merited movement or should logically be reassigned from ICD-10 MS-DRGs 984 through 986 to any of the other MDCs for FY 2018. Therefore, for FY 2018, we are not proposing to change the procedures assigned among these MS-DRGs. We are inviting public comments on our proposal to maintain the current structure of these MS-DRGs.

a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-DRGs 987 Through 989 Into MDCs

We annually conduct a review of procedures producing assignment to MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-DRGs 987 through 989 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) on the basis of volume, by procedure, to see if it would be appropriate to move procedure codes out of these MS-DRGs Start Printed Page 19850into one of the surgical MS-DRGs for the MDC into which the principal diagnosis falls. The data are arrayed in two ways for comparison purposes. We look at a frequency count of each major operative procedure code. We also compare procedures across MDCs by volume of procedure codes within each MDC.

We identify those procedures occurring in conjunction with certain principal diagnoses with sufficient frequency to justify adding them to one of the surgical MS-DRGs for the MDC in which the diagnosis falls. Upon review of the claims data from the December 2016 update of the FY 2016 MedPAR file, we did not find any cases that merited movement or that should logically be assigned to any of the other MDCs. Therefore, for FY 2018, we are not proposing to remove any procedures from MS-DRGs 981 through 983 or MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC into which the principal diagnosis is assigned. We are inviting public comments on our proposal to maintain the current structure of these MS-DRGs.

b. Reassignment of Procedures Among MS-DRGs 981 Through 983, 984 Through 986, and 987 Through 989

We also review the list of ICD-10-PCS procedures that, when in combination with their principal diagnosis code, result in assignment to MS-DRGs 981 through 983, 984 through 986, or 987 through 989, to ascertain whether any of those procedures should be reassigned from one of those three groups of MS-DRGs to another of the three groups of MS-DRGs based on average costs and the length of stay. We look at the data for trends such as shifts in treatment practice or reporting practice that would make the resulting MS-DRG assignment illogical. If we find these shifts, we would propose to move cases to keep the MS-DRGs clinically similar or to provide payment for the cases in a similar manner. Generally, we move only those procedures for which we have an adequate number of discharges to analyze the data.

Based on the results of our review of the December 2016 update of the FY 2016 MedPAR file, we are proposing to reassign the procedure codes currently assigned to MS-DRGs 984 through 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively) to MS-DRGs 987 through 989 (Non-extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively). As shown in the table below, we found a total of 1,001 cases in MS-DRGs 984 through 986 with an average length-of-stay of 7.5 days and average costs of $16,539. In MS-DRGs 987 through 989, we found a total of 17,772 cases, with an average length of stay of 7.5 days and average costs of $16,193.

O.R. Procedures Unrelated to Principal Diagnosis

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRGs 984, 985 and 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively)1,0017.5$16,539
MS-DRGs 987, 988 and 989 (Non-extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively)17,7727.516,193

The claims data demonstrate that it is no longer necessary to maintain a separate set of MS-DRGs specifically for the prostatic O.R. procedures. The average length of stay of 7.5 days is identical in both sets of MS-DRGs and the average costs are very similar with a difference of only $346. Our clinical advisors reviewed the data and support movement of these 1,001 cases into the nonextensive O.R. procedures MS-DRGs. They noted that treatment practices have shifted since the inception of the prostatic O.R. procedures grouping and the average costs are in alignment.

Therefore, for FY 2018, we are proposing to reassign the prostatic O.R. procedure codes from MS-DRGs 984 through 986 to MS-DRGs 987 through 989 and to delete MS-DRGs 984, 985 and 986 because they would no longer be needed as a result of this proposed movement. We are inviting public comments on our proposals.

15. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems

In September 1985, the ICD-9-CM Coordination and Maintenance Committee was formed. This is a Federal interdepartmental committee, co-chaired by the National Center for Health Statistics (NCHS), the Centers for Disease Control and Prevention, and CMS, charged with maintaining and updating the ICD-9-CM system. The final update to ICD-9-CM codes was made on October 1, 2013. Thereafter, the name of the Committee was changed to the ICD-10 Coordination and Maintenance Committee, effective with the March 19-20, 2014 meeting. The ICD-10 Coordination and Maintenance Committee addresses updates to the ICD-10-CM and ICD-10-PCS coding systems. The Committee is jointly responsible for approving coding changes, and developing errata, addenda, and other modifications to the coding systems to reflect newly developed procedures and technologies and newly identified diseases. The Committee is also responsible for promoting the use of Federal and non-Federal educational programs and other communication techniques with a view toward standardizing coding applications and upgrading the quality of the classification system.

The official list of ICD-9-CM diagnosis and procedure codes by fiscal year can be found on the CMS Web site at: http://cms.hhs.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​codes.html. The official list of ICD-10-CM and ICD-10-PCS codes can be found on the CMS Web site at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​index.html.

The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM diagnosis codes included in the Tabular List and Alphabetic Index for Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-9-CM procedure codes included in the Tabular List and Alphabetic Index for Procedures.

The Committee encourages participation in the previously mentioned process by health-related organizations. In this regard, the Committee holds public meetings for discussion of educational issues and proposed coding changes. These meetings provide an opportunity for representatives of recognized organizations in the coding field, such as the American Health Information Management Association (AHIMA), the American Hospital Association (AHA), and various physician specialty groups, as well as individual physicians, health information management professionals, and other members of the public, to Start Printed Page 19851contribute ideas on coding matters. After considering the opinions expressed at the public meetings and in writing, the Committee formulates recommendations, which then must be approved by the agencies.

The Committee presented proposals for coding changes for implementation in FY 2018 at a public meeting held on September 13-14, 2016, and finalized the coding changes after consideration of comments received at the meetings and in writing by November 13, 2016.

The Committee held its 2017 meeting on March 7-8, 2017. The deadline for submitting comments on these code proposals was April 7, 2017. It was announced at this meeting that any new ICD-10-CM/PCS codes for which there was consensus of public support and for which complete tabular and indexing changes would be made by May 2017 would be included in the October 1, 2017 update to ICD-10-CM/ICD-10-PCS. As discussed in earlier sections of the preamble of this proposed rule, there are new, revised, and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that are captured in Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, Table 6D.—Invalid Procedure Codes, Table 6E.—Revised Diagnosis Code Titles, and Table 6F.—Revised Procedure Code Titles for this proposed rule, which are available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Because of the length of these tables, they are not published in the Addendum to this proposed rule. Rather, they are available via the Internet as discussed in section VI. of the Addendum to this proposed rule.

Live Webcast recordings of the discussions of procedure codes at the Committee's September 13-14, 2016 meeting and March 7-8, 2017 meeting can be obtained from the CMS Web site at: http://cms.hhs.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​index.html?​redirect=​/​icd9ProviderDiagnosticCodes/​03_​meetings.asp. The minutes of the discussions of diagnosis codes at the September 13-14, 2016 meeting and March 7-8, 2017 meeting can be found at: http://www.cdc.gov/​nchs/​icd/​icd10cm_​maintenance.html. These Web sites also provide detailed information about the Committee, including information on requesting a new code, attending a Committee meeting, and timeline requirements and meeting dates.

We encourage commenters to address suggestions on coding issues involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-10 Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo Road, Hyattsville, MD 20782. Comments may be sent by Email to: nchsicd10@cdc.gov.

Questions and comments concerning the procedure codes should be addressed to: Patricia Brooks, Co-Chairperson, ICD-10 Coordination and Maintenance Committee, CMS, Center for Medicare Management, Hospital and Ambulatory Policy Group, Division of Acute Care, C4-08-06, 7500 Security Boulevard, Baltimore, MD 21244-1850. Comments may be sent by Email to: ICDProcedureCodeRequest@cms.hhs.gov.

In the September 7, 2001 final rule implementing the IPPS new technology add-on payments (66 FR 46906), we indicated we would attempt to include proposals for procedure codes that would describe new technology discussed and approved at the Spring meeting as part of the code revisions effective the following October.

Section 503(a) of Public Law 108-173 included a requirement for updating diagnosis and procedure codes twice a year instead of a single update on October 1 of each year. This requirement was included as part of the amendments to the Act relating to recognition of new technology under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act by adding a clause (vii) which states that the Secretary shall provide for the addition of new diagnosis and procedure codes on April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis-related group classification) until the fiscal year that begins after such date. This requirement improves the recognition of new technologies under the IPPS system by providing information on these new technologies at an earlier date. Data will be available 6 months earlier than would be possible with updates occurring only once a year on October 1.

While section 1886(d)(5)(K)(vii) of the Act states that the addition of new diagnosis and procedure codes on April 1 of each year shall not require the Secretary to adjust the payment, or DRG classification, under section 1886(d) of the Act until the fiscal year that begins after such date, we have to update the DRG software and other systems in order to recognize and accept the new codes. We also publicize the code changes and the need for a mid-year systems update by providers to identify the new codes. Hospitals also have to obtain the new code books and encoder updates, and make other system changes in order to identify and report the new codes.

The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance Committee holds its meetings in the spring and fall in order to update the codes and the applicable payment and reporting systems by October 1 of each year. Items are placed on the agenda for the Committee meeting if the request is received at least 2 months prior to the meeting. This requirement allows time for staff to review and research the coding issues and prepare material for discussion at the meeting. It also allows time for the topic to be publicized in meeting announcements in the Federal Register as well as on the CMS Web site. Final decisions on code title revisions are currently made by March 1 so that these titles can be included in the IPPS proposed rule. A complete addendum describing details of all diagnosis and procedure coding changes, both tabular and index, is published on the CMS and NCHS Web sites in June of each year. Publishers of coding books and software use this information to modify their products that are used by health care providers. This 5-month time period has proved to be necessary for hospitals and other providers to update their systems.

A discussion of this timeline and the need for changes are included in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance Committee Meeting minutes. The public agreed that there was a need to hold the fall meetings earlier, in September or October, in order to meet the new implementation dates. The public provided comment that additional time would be needed to update hospital systems and obtain new code books and coding software. There was considerable concern expressed about the impact this new April update would have on providers.

In the FY 2005 IPPS final rule, we implemented section 1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law 108-173, by developing a mechanism for approving, in time for the April update, diagnosis and procedure code revisions needed to describe new technologies and medical services for purposes of the new technology add-on payment process. We also established the following process for making these determinations. Topics considered during the Fall ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting are considered for an April 1 update if a strong and convincing case is made by the requester at the Committee's public meeting. The request must identify the reason why a new code is needed in April for purposes of the new Start Printed Page 19852technology process. The participants at the meeting and those reviewing the Committee meeting summary report are provided the opportunity to comment on this expedited request. All other topics are considered for the October 1 update. Participants at the Committee meeting are encouraged to comment on all such requests. There were no requests approved for an expedited April l, 2017 implementation of a code at the September 13-14, 2016 Committee meeting. Therefore, there were no new codes implemented on April 1, 2017.

ICD-9-CM addendum and code title information is published on the CMS Web site at: http://www.cms.hhs.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​index.html?​redirect=​/​icd9ProviderDiagnosticCodes/​01overview.asp#TopofPage. ICD-10-CM and ICD-10-PCS addendum and code title information is published on the CMS Web site at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​index.html. Information on ICD-10-CM diagnosis codes, along with the Official ICD-10-CM Coding Guidelines, can also be found on the CDC Web site at: http://www.cdc.gov/​nchs/​icd/​icd10.htm. Information on new, revised, and deleted ICD-10-CM/ICD-10-PCS codes is also provided to the AHA for publication in the Coding Clinic for ICD-10. AHA also distributes information to publishers and software vendors.

CMS also sends copies of all ICD-10-CM and ICD-10-PCS coding changes to its Medicare contractors for use in updating their systems and providing education to providers.

The code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules.

The following chart shows the number of ICD-10-CM and ICD-10-PCS codes and code changes since FY 2016 when ICD-10 was implemented.

Total Number of Codes and Changes in Total Number of Codes per Fiscal Year ICD-10-CM and ICD-10-PCS Codes

Fiscal yearNumberChange
FY 2016:
ICD-10-CM69,823
ICD-10-PCS71,974
FY 2017:
ICD-10-CM71,486+1,663
ICD-10-PCS75,789+3,815
FY 2018:
ICD-10-CM71,772+286
ICD-10-PCS78,299+2,510

As mentioned previously, the public is provided the opportunity to comment on any requests for new diagnosis or procedure codes discussed at the ICD-10 Coordination and Maintenance Committee meeting.

At the September 12-13, 2016 and March 7-8, 2017 Committee meetings, we discussed any requests we had received for new ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that were to be implemented on October 1, 2017. We invited public comments on any code requests discussed at the September 12-13, 2016 and March 7-8, 2017 Committee meetings for implementation as part of the October 1, 2017 update. The deadline for commenting on code proposals discussed at the September 12-13, 2016 Committee meeting was November 13, 2016. The deadline for commenting on code proposals discussed at the March 7-8, 2017 Committee meeting was April 7, 2017.

16. Proposed Replaced Devices Offered Without Cost or With a Credit

a. Background

In the FY 2008 IPPS final rule with comment period (72 FR 47246 through 47251), we discussed the topic of Medicare payment for devices that are replaced without cost or where credit for a replaced device is furnished to the hospital. We implemented a policy to reduce a hospital's IPPS payment for certain MS-DRGs where the implantation of a device that has been recalled determined the base MS-DRG assignment. At that time, we specified that we will reduce a hospital's IPPS payment for those MS-DRGs where the hospital received a credit for a replaced device equal to 50 percent or more of the cost of the device.

In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through 51557), we clarified this policy to state that the policy applies if the hospital received a credit equal to 50 percent or more of the cost of the replacement device and issued instructions to hospitals accordingly.

b. Proposed Changes for FY 2018

For FY 2018, we are not proposing to add any MS-DRGs to the policy for replaced devices offered without cost or with a credit. We are proposing to continue to include the existing MS-DRGs currently subject to the policy as displayed in the table below.

MDCMS-DRGMS-DRG title
Pre-MDC001Heart Transplant or Implant of Heart Assist System with MCC.
Pre-MDC002Heart Transplant or Implant of Heart Assist System without MCC.
1023Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis with MCC or Chemo Implant.
1024Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis without MCC.
1025Craniotomy & Endovascular Intracranial Procedures with MCC.
1026Craniotomy & Endovascular Intracranial Procedures with CC.
1027Craniotomy & Endovascular Intracranial Procedures without CC/MCC.
1040Peripheral, Cranial Nerve & Other Nervous System Procedures with MCC.
1041Peripheral, Cranial Nerve & Other Nervous System Procedures with CC or Peripheral Neurostimulator.
1042Peripheral, Cranial Nerve & Other Nervous System Procedures without CC/MCC.
3129Major Head & Neck Procedures with CC/MCC or Major Device.
3130Major Head & Neck Procedures without CC/MCC.
5215Other Heart Assist System Implant.
5216Cardiac Valve & Other Major Cardiothoracic Procedure with Cardiac Catheterization with MCC.
5217Cardiac Valve & Other Major Cardiothoracic Procedure with Cardiac Catheterization with CC.
5218Cardiac Valve & Other Major Cardiothoracic Procedure with Cardiac Catheterization without CC/MCC.
5219Cardiac Valve & Other Major Cardiothoracic Procedure without Cardiac Catheterization with MCC.
Start Printed Page 19853
5220Cardiac Valve & Other Major Cardiothoracic Procedure without Cardiac Catheterization with CC.
5221Cardiac Valve & Other Major Cardiothoracic Procedure without Cardiac Catheterization without CC/MCC.
5222Cardiac Defibrillator Implant with Cardiac Catheterization with AMI/Heart Failure/Shock with MCC.
5223Cardiac Defibrillator Implant with Cardiac Catheterization with AMI/Heart Failure/Shock without MCC.
5224Cardiac Defibrillator Implant with Cardiac Catheterization without AMI/Heart Failure/Shock with MCC.
5225Cardiac Defibrillator Implant with Cardiac Catheterization without AMI/Heart Failure/Shock without MCC.
5226Cardiac Defibrillator Implant without Cardiac Catheterization with MCC.
5227Cardiac Defibrillator Implant without Cardiac Catheterization without MCC.
5242Permanent Cardiac Pacemaker Implant with MCC.
5243Permanent Cardiac Pacemaker Implant with CC.
5244Permanent Cardiac Pacemaker Implant without CC/MCC.
5245AICD Generator Procedures.
5258Cardiac Pacemaker Device Replacement with MCC.
5259Cardiac Pacemaker Device Replacement without MCC.
5260Cardiac Pacemaker Revision Except Device Replacement with MCC.
5261Cardiac Pacemaker Revision Except Device Replacement with CC.
5262Cardiac Pacemaker Revision Except Device Replacement without CC/MCC.
5265AICD Lead Procedures.
5266Endovascular Cardiac Valve Replacement with MCC.
5267Endovascular Cardiac Valve Replacement without MCC.
5268Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC.
5269Aortic and Heart Assist Procedures Except Pulsation Balloon without MCC.
5270Other Major Cardiovascular Procedures with MCC.
5271Other Major Cardiovascular Procedures with CC.
5272Other Major Cardiovascular Procedures without CC/MCC.
8461Bilateral or Multiple Major Joint Procedures Of Lower Extremity with MCC.
8462Bilateral or Multiple Major Joint Procedures of Lower Extremity without MCC.
8466Revision of Hip or Knee Replacement with MCC.
8467Revision of Hip or Knee Replacement with CC.
8468Revision of Hip or Knee Replacement without CC/MCC.
8469Major Joint Replacement or Reattachment of Lower Extremity with MCC.
8470Major Joint Replacement or Reattachment of Lower Extremity without MCC.

We are soliciting public comments on our proposal to continue to include the existing MS-DRGs currently subject to the policy for replaced devices offered without cost or with credit and to not add any additional MS-DRGs to the policy. We note that, as discussed in section II.F.2.b. and in section II.F.5.a. of the preamble of this proposed rule, we are proposing to revise the titles for MS-DRG 023 and MS-DRGs 469 and 470. We refer readers to those discussions of the specific proposed MS-DRG titles. The final list of MS-DRGs subject to the payment policy for devices provided at no cost or with a credit for FY 2018 will be listed in the FY 2018 IPPS/LTCH PPS final rule, as well as issued to providers through guidance and instructions in the form of a Change Request (CR).

17. Other Policy Changes: Other Operating Room (O.R.) and Non-O.R. Issues

a. O.R. Procedures to Non-O.R. Procedures

For this FY 2018 IPPS/LTCH PPS proposed rule, we continued our efforts to address the recommendations for consideration that we received in response to some of the proposals set forth in the FY 2017 IPPS/LTCH PPS proposed rule pertaining to changing the designation of ICD-10-PCS procedure codes from O.R. procedures to non-O.R. procedures. As we stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56871), we received requests and recommendations for over 800 procedure codes that we were not able to fully evaluate and finalize for FY 2017. We discuss these requests and recommendations below.

We also are addressing separate requests that we received regarding changing the designation of specific ICD-10-PCS procedure codes. For each group summarized below, the detailed lists of procedure are shown in Tables 6P.4a. through 6P.4p. (Proposed ICD-10-CM and ICD-10-PCS Code Designations, MCE and MS-DRG Changes—FY 2018) associated with this proposed rule (which are available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html).

(1) Percutaneous/Diagnostic Drainage

One commenter identified 135 ICD-10-PCS procedure codes describing procedures involving percutaneous diagnostic and therapeutic drainage of central nervous system, vascular and other body sites that generally would not require the resources of an operating room and can be performed at the bedside. The list includes procedure codes that describe procedures involving drainage with or without placement of a drainage device. We agree with the commenter. Therefore, we are proposing that the 135 ICD-10-PCS procedure codes listed in Table 6P.4a. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(2) Percutaneous Insertion of Intraluminal or Monitoring Device

One commenter identified 28 ICD-10-PCS procedure codes describing procedures involving the percutaneous insertion of intraluminal and monitoring devices into central nervous system and other cardiovascular body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 28 ICD-10-Start Printed Page 19854PCS procedure codes listed in Table 6P.4b. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(3) Percutaneous Removal of Drainage, Infusion, Intraluminal or Monitoring Device

One commenter identified 22 ICD-10-PCS procedure codes that describe procedures involving the percutaneous removal of drainage, infusion, intraluminal and monitoring devices from central nervous system and other vascular body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 22 ICD-10-PCS procedure codes listed in Table 6P.4c. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(4) External Removal of Cardiac or Neurostimulator Lead

One commenter identified four ICD-10-PCS procedure codes that describe procedures involving the external removal of cardiac leads from the heart and neurostimulator leads from central nervous system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These four ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
00P6XMZRemoval of neurostimulator lead from cerebral ventricle, external approach.
00PEXMZRemoval of neurostimulator lead from cranial nerve, external approach.
01PYXMZRemoval of neurostimulator lead from peripheral nerve, external approach.
02PAXMZRemoval of cardiac lead from heart, external approach.

We agree with the commenter. Therefore, we are proposing that the four ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(5) Percutaneous Revision of Drainage, Infusion, Intraluminal or Monitoring Device

One commenter identified 28 ICD-10-PCS procedure codes that describe procedures involving the percutaneous revision of drainage, infusion, intraluminal and monitoring devices for vascular and heart and great vessel body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 28 ICD-10-PCS procedure codes listed in Table 6P.4d. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(6) Percutaneous Destruction

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving the percutaneous destruction of retina body parts that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
085E3ZZDestruction of right retina, percutaneous approach.
085F3ZZDestruction of left retina, percutaneous approach.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(7) External/Diagnostic Drainage

One commenter identified 20 ICD-10-PCS procedure codes that describe procedures involving external drainage for structures of the eye that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 20 ICD-10-PCS procedure codes listed in Table 6P.4e. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(8) External Extirpation

One commenter identified four ICD-10-PCS procedure codes that describe procedures involving external extirpation of matter from eye structures that generally would not require the resources of an operating room and can be performed at the bedside. These four ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
08C0XZZExtirpation of matter from right eye, external approach.
08C1XZZExtirpation of matter from left eye, external approach.
08CSXZZExtirpation of matter from right conjunctiva, external approach.
08CTXZZExtirpation of matter from left conjunctiva, external approach.
Start Printed Page 19855

We agree with the commenter. Therefore, we are proposing that the four ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(9) External Removal of Radioactive Element or Synthetic Substitute

One commenter identified three ICD-10-PCS procedure codes that describe procedures involving the external removal of radioactive or synthetic substitutes from the eye that generally would not require the resources of an operating room and can be performed at the bedside. These three ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
08P0X1ZRemoval of radioactive element from right eye, external approach.
08P0XJZRemoval of synthetic substitute from right eye, external approach.
08P1XJZRemoval of synthetic substitute from left eye, external approach.

We agree with the commenter. Therefore, we are proposing that the three ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(10) Endoscopic/Transorifice Diagnostic Drainage

One commenter identified eight ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) drainage of ear structures that generally would not require the resources of an operating room and can be performed at the bedside. These eight ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
09977ZXDrainage of right tympanic membrane, via natural or artificial opening, diagnostic.
09978ZXDrainage of right tympanic membrane, via natural or artificial opening endoscopic, diagnostic.
09987ZXDrainage of left tympanic membrane, via natural or artificial opening, diagnostic.
09988ZXDrainage of left tympanic membrane, via natural or artificial opening endoscopic, diagnostic.
099F7ZXDrainage of right eustachian tube, via natural or artificial opening, diagnostic.
099F8ZXDrainage of right eustachian tube, via natural or artificial opening endoscopic, diagnostic.
099G7ZXDrainage of left eustachian tube, via natural or artificial opening, diagnostic.
099G8ZXDrainage of left eustachian tube, via natural or artificial opening endoscopic, diagnostic.

We agree with the commenter. Therefore, we are proposing that the eight ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(11) External Release

One commenter identified four ICD-10-PCS procedure codes that describe procedures involving the external release of ear structures that generally would not require the resources of an operating room and can be performed at the bedside. These four ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
09N0XZZRelease right external ear, external approach.
09N1XZZRelease left external ear, external approach.
09N3XZZRelease right external auditory canal, external approach.
09N4XZZRelease left external auditory canal, external approach.

We agree with the commenter. Therefore, we are proposing that the four ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(12) External Repair

One commenter identified three ICD-10-PCS procedure codes that describe procedures involving the external repair of body parts that generally would not require the resources of an operating room and can be performed at the bedside. These three ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
09QKXZZRepair nose, external approach.
0CQ4XZZRepair buccal mucosa, external approach.
0CQ7XZZRepair tongue, external approach.

We agree with the commenter. Therefore, we are proposing that the three ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(13) Endoscopic/Transorifice Destruction

One commenter identified eight ICD-10-PCS procedure codes that describe procedures involving the endoscopic/transorifice destruction of respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These eight ICD-10-PCS codes are shown in the table below.Start Printed Page 19856

ICD-10-PCS codeCode description
0B538ZZDestruction of right main bronchus, via natural or artificial opening endoscopic.
0B548ZZDestruction of right upper lobe bronchus, via natural or artificial opening endoscopic.
0B558ZZDestruction of right middle lobe bronchus, via natural or artificial opening endoscopic.
0B568ZZDestruction of right lower lobe bronchus, via natural or artificial opening endoscopic.
0B578ZZDestruction of left main bronchus, via natural or artificial opening endoscopic.
0B588ZZDestruction of left upper lobe bronchus, via natural or artificial opening endoscopic.
0B598ZZDestruction of lingula bronchus, via natural or artificial opening endoscopic.
0B5B8ZZDestruction of left lower lobe bronchus, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the eight ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(14) Endoscopic/Transorifice Drainage

One commenter identified 40 ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) drainage of respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 40 ICD-10-PCS procedure codes listed in Table 6P.4f. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(15) Endoscopic/Transorifice Extirpation

One commenter identified nine ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice extirpation of matter from respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These nine ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0BCC8ZZExtirpation of matter from right upper lung lobe, via natural or artificial opening endoscopic.
0BCD8ZZExtirpation of matter from right middle lung lobe, via natural or artificial opening endoscopic.
0BCF8ZZExtirpation of matter from right lower lung lobe, via natural or artificial opening endoscopic.
0BCG8ZZExtirpation of matter from left upper lung lobe, via natural or artificial opening endoscopic.
0BCH8ZZExtirpation of matter from lung lingula, via natural or artificial opening endoscopic.
0BCJ8ZZExtirpation of matter from left lower lung lobe, via natural or artificial opening endoscopic.
0BCK8ZZExtirpation of matter from right lung, via natural or artificial opening endoscopic.
0BCL8ZZExtirpation of matter from left lung, via natural or artificial opening endoscopic.
0BCM8ZZExtirpation of matter from bilateral lungs, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the nine ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(16) Endoscopic/Transorifice Fragmentation

One commenter identified 16 ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice fragmentation of respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These 16 ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0BF37ZZFragmentation in right main bronchus, via natural or artificial opening.
0BF38ZZFragmentation in right main bronchus, via natural or artificial opening endoscopic.
0BF47ZZFragmentation in right upper lobe bronchus, via natural or artificial opening.
0BF48ZZFragmentation in right upper lobe bronchus, via natural or artificial opening endoscopic.
0BF57ZZFragmentation in right middle lobe bronchus, via natural or artificial opening.
0BF58ZZFragmentation in right middle lobe bronchus, via natural or artificial opening endoscopic.
0BF67ZZFragmentation in right lower lobe bronchus, via natural or artificial opening.
0BF68ZZFragmentation in right lower lobe bronchus, via natural or artificial opening endoscopic.
0BF77ZZFragmentation in left main bronchus, via natural or artificial opening.
0BF78ZZFragmentation in left main bronchus, via natural or artificial opening endoscopic.
0BF87ZZFragmentation in left upper lobe bronchus, via natural or artificial opening.
0BF88ZZFragmentation in left upper lobe bronchus, via natural or artificial opening endoscopic.
0BF97ZZFragmentation in lingula bronchus, via natural or artificial opening.
0BF98ZZFragmentation in lingula bronchus, via natural or artificial opening endoscopic.
0BFB7ZZFragmentation in left lower lobe bronchus, via natural or artificial opening.
0BFB8ZZFragmentation in left lower lobe bronchus, via natural or artificial opening endoscopic.
Start Printed Page 19857

We agree with the commenter. Therefore, we are proposing that the 16 ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(17) Endoscopic/Transorifice Insertion of Intraluminal Device

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving an endoscopic/transorifice (via natural or artificial opening) insertion of intraluminal devices into respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0BH17DZInsertion of intraluminal device into trachea, via natural or artificial opening.
0BH18DZInsertion of intraluminal device into trachea, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated non-O.R. procedures. We are inviting public comments on our proposal.

(18) Endoscopic/Transorifice Removal of Radioactive Element

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving the endoscopic/transorifice removal of radioactive elements from respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0BPK71ZRemoval of radioactive element from right lung, via natural or artificial opening.
0BPK81ZRemoval of radioactive element from right lung, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(19) Endoscopic/Transorifice Revision of Drainage, Infusion, Intraluminal or Monitoring Device

One commenter identified 18 ICD-10-PCS procedure codes that describe procedures involving the revision of drainage, infusion, intraluminal, or monitoring devices from respiratory system body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 18 ICD-10-PCS procedure codes listed in Table 6P.4g. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(20) Endoscopic/Transorifice Excision

One commenter identified one ICD-10-PCS procedure code that describes the procedure involving endoscopic/transorifice (via natural or artificial opening) excision of the digestive system body parts that generally would not require the resources of an operating room and can be performed at the bedside. This code is 0DBQ8ZZ (Excision of anus, via natural or artificial opening endoscopic. We agree with the commenter. Therefore, we are proposing that ICD-10-PCS procedure code 0DBQ8ZZ be designated as a non-O.R. procedure. We are inviting public comments on our proposal.

(21) Endoscopic/Transorifice Insertion

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving the endoscopic/transorifice (via natural or artificial opening) insertion of intraluminal device into the stomach that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0DH67DZInsertion of intraluminal device into stomach, via natural or artificial opening.
0DH68DZInsertion of intraluminal device into stomach, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(22) Endoscopic/Transorifice Removal

One commenter identified six ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) removal of feeding devices that generally would not require the resources of an operating room and can be performed at the bedside. These six ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0DP07UZRemoval of feeding device from upper intestinal tract, via natural or artificial opening.
0DP08UZRemoval of feeding device from upper intestinal tract, via natural or artificial opening endoscopic.
0DP67UZRemoval of feeding device from stomach, via natural or artificial opening.
0DP68UZRemoval of feeding device from stomach, via natural or artificial opening endoscopic.
0DPD7UZRemoval of feeding device from lower intestinal tract, via natural or artificial opening
Start Printed Page 19858
0DPD8UZRemoval of feeding device from lower intestinal tract, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the six ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(23) External Reposition

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving external reposition of gastrointestinal body parts that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0DS5XZZReposition esophagus, external approach.
0DSQXZZReposition anus, external approach.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(24) Endoscopic/Transorifice Drainage

One commenter identified eight ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) drainage of hepatobiliary system and pancreatic body parts that generally would not require the resources of an operating room and can be performed at the bedside. These eight ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0F9580ZDrainage of right hepatic duct with drainage device, via natural or artificial opening endoscopic.
0F958ZZDrainage of right hepatic duct, via natural or artificial opening endoscopic.
0F9680ZDrainage of left hepatic duct with drainage device, via natural or artificial opening endoscopic.
0F968ZZDrainage of left hepatic duct, via natural or artificial opening endoscopic.
0F9880ZDrainage of cystic duct with drainage device, via natural or artificial opening endoscopic.
0F988ZZDrainage of cystic duct, via natural or artificial opening endoscopic.
0F9D8ZZDrainage of pancreatic duct, via natural or artificial opening endoscopic.
0F9F8ZZDrainage of accessory pancreatic duct, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the eight ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(25) Endoscopic/Transorifice Fragmentation

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) fragmentation of hepatobiliary system and pancreatic body parts that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0FFD8ZZFragmentation in pancreatic duct, via natural or artificial opening endoscopic.
0FFF8ZZFragmentation in accessory pancreatic duct, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(26) Percutaneous Alteration

One commenter identified three ICD-10-PCS procedure codes that describe procedures involving percutaneous alteration of the breast that generally would not require the resources of an operating room and can be performed at the bedside. These three ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0H0T3JZAlteration of right breast with synthetic substitute, percutaneous approach.
0H0U3JZAlteration of left breast with synthetic substitute, percutaneous approach.
0H0V3JZAlteration of bilateral breast with synthetic substitute, percutaneous approach.
Start Printed Page 19859

We agree with the commenter. Therefore, we are proposing that the three ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(27) External Division and Excision of Skin

One commenter identified 41 ICD-10-PCS procedure codes that describe procedures involving external division and excision of the skin for body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 41 ICD-10-PCS procedure codes listed in Table 6P.4h. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(28) External Excision of Breast

One commenter identified six ICD-10-PCS procedure codes that describe procedures involving external excision of the breast that they believed would generally not require the resources of an operating room and can be performed at the bedside. These six ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0HBTXZZExcision of right breast, external approach.
0HBUXZZExcision of left breast, external approach.
0HBVXZZExcision of bilateral breast, external approach.
0HBWXZZExcision of right nipple, external approach.
0HBXXZZExcision of left nipple, external approach.
0HBYXZZExcision of supernumerary breast, external approach.

We disagree with the commenter because these procedure codes describe various types of surgery performed on the breast or nipple (for example, partial mastectomy) that would typically involve the use of general anesthesia. Therefore, we are proposing that the six ICD-10-PCS procedure codes shown in the table above remain designated as O.R. procedures. We are inviting public comments on our proposal.

(29) Percutaneous Supplement

One commenter identified three ICD-10-PCS procedure codes that describe procedures involving percutaneous supplement of the breast with synthetic substitute that generally would not require the resources of an operating room and can be performed at the bedside. These three ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0HUT3JZSupplement right breast with synthetic substitute, percutaneous approach.
0HUU3JZSupplement left breast with synthetic substitute, percutaneous approach.
0HUV3JZSupplement bilateral breast with synthetic substitute, percutaneous approach.

We agree with the commenter. Therefore, we are proposing that the three ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(30) Open Drainage

One commenter identified 25 ICD-10-PCS procedure codes that describe procedures involving open drainage of subcutaneous tissue and fascia body parts that generally would not require the resources of an operating room and can be performed at the bedside. The list includes procedure codes for drainage with or without placement of a drainage device. We agree with the commenter. Therefore, we are proposing that the 25 ICD-10-PCS procedure codes listed in Table 6P.4i. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(31) Percutaneous Drainage

One commenter identified two ICD-10-PCS procedure codes that describe procedures involving percutaneous drainage of subcutaneous tissue and fascia body parts that generally would not require the resources of an operating room and can be performed at the bedside. These two ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0J9J3ZZDrainage of right hand subcutaneous tissue and fascia, percutaneous approach.
0J9K3ZZDrainage of left hand subcutaneous tissue and fascia, percutaneous approach.

We agree with the commenter. Therefore, we are proposing that the two ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(32) Percutaneous Extraction

One commenter identified 22 ICD-10-PCS procedure codes that describe procedures involving percutaneous extraction of subcutaneous tissue and fascia body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 22 ICD-10-PCS procedure codes listed in Table 6P.4j. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be Start Printed Page 19860designated as non-O.R. procedures. We are inviting public comments on our proposal.

(33) Open Extraction

One commenter identified 22 ICD-10-PCS procedure codes that describe procedures involving open extraction of subcutaneous tissue and fascia body parts that the commenter believed would generally not require the resources of an operating room and can be performed at the bedside. We disagree with the commenter because these codes describe procedures that utilize an open approach and are being performed on the skin and subcutaneous tissue. Depending on the medical reason for the open extraction, the procedures may require an O.R. setting. Therefore, we are proposing that the 22 ICD-10-PCS procedure codes listed in Table 6P.4k. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) remain designated as O.R. procedures. We are inviting public comments on our proposal.

(34) Percutaneous and Open Repair

One commenter identified 44 ICD-10-PCS procedure codes that describe procedures involving percutaneous and open repair of subcutaneous tissue and fascia body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 44 ICD-10-PCS procedure codes listed in Table 6P.4l. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(35) External Release

One commenter identified 28 ICD-10-PCS procedure codes that describe procedures involving external release of bursa and ligament body parts that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 28 ICD-10-PCS procedure codes listed in Table 6P.4m. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(36) External Repair

One commenter identified 135 ICD-10-PCS procedure codes that describe procedures involving external repair of various bones and joints. We believe that these procedures generally would not be performed in the operating room. We are proposing that the 135 ICD-10-PCS procedure codes listed in Table 6P.4n. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(37) External Reposition

One commenter identified 14 ICD-10-PCS procedure codes that describe procedures involving external reposition of various bones. These 14 ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0NS0XZZReposition skull, external approach.
0NS1XZZReposition right frontal bone, external approach.
0NS2XZZReposition left frontal bone, external approach.
0NS3XZZReposition right parietal bone, external approach.
0NS4XZZReposition left parietal bone, external approach.
0NS5XZZReposition right temporal bone, external approach.
0NS6XZZReposition left temporal bone, external approach.
0NS7XZZReposition right occipital bone, external approach.
0NS8XZZReposition left occipital bone, external approach.
0PS3XZZReposition cervical vertebra, external approach.
0PS4XZZReposition thoracic vertebra, external approach.
0QS0XZZReposition lumbar vertebra, external approach.
0QS1XZZReposition sacrum, external approach.
0QSSXZZReposition coccyx, external approach.

We believe that these procedures generally would not be performed in the operating room. Therefore, we are proposing that the 14 ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(38) Endoscopic/Transorifice Dilation

One commenter identified eight ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) dilation of urinary system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These eight ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0T767ZZDilation of right ureter, via natural or artificial opening.
0T768ZZDilation of right ureter, via natural or artificial opening endoscopic.
0T777ZZDilation of left ureter, via natural or artificial opening.
0T778ZZDilation of left ureter, via natural or artificial opening endoscopic.
0T7B7DZDilation of bladder with intraluminal device, via natural or artificial opening.
0T7B7ZZDilation of bladder, via natural or artificial opening.
0T7B8DZDilation of bladder with intraluminal device, via natural or artificial opening endoscopic.
Start Printed Page 19861
0T7B8ZZDilation of bladder, via natural or artificial opening endoscopic.

We agree with the commenter. Therefore, we are proposing that the eight ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(39) Endoscopic/Transorifice Excision

One commenter identified three ICD-10-PCS procedure codes that describe procedures involving endoscopic/transorifice (via natural or artificial opening) excision of urinary system body parts that the commenter believed would generally not require the resources of an operating room and can be performed at the bedside. These three ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0TBD7ZZExcision of urethra, via natural or artificial opening.
0TBD8ZZExcision of urethra, via natural or artificial opening endoscopic.
0TBDXZZExcision of urethra, external approach.

We disagree with the commenter because, depending on the medical reason for the excision, the procedures may require an O.R. setting. Therefore, we are proposing that the three ICD-10-PCS procedure codes shown in the table above remain designated as O.R. procedures. We are inviting public comments on our proposal.

(40) External/Transorifice Repair

One commenter identified three ICD-10-PCS procedure codes that describe procedures involving external and transorifice (via natural or artificial opening) repair of the vagina body part that generally would not require the resources of an operating room and can be performed at the bedside. These three ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
0UQG7ZZRepair vagina, via natural or artificial opening.
0UQGXZZRepair vagina, external approach.
0UQMXZZRepair vulva, external approach.

We agree with the commenter. Therefore, we are proposing that these three ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(41) Percutaneous Transfusion

One commenter identified 20 ICD-10-PCS procedure codes that describe procedures involving percutaneous transfusion of bone marrow and stem cells that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 20 ICD-10-PCS procedure codes listed in Table 6P.4o. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(42) External/Percutaneous/Transorifice Introduction

One commenter identified 51 ICD-10-PCS procedure codes that describe procedures involving external, percutaneous and transorifice (via natural or artificial opening) introduction of substances that generally would not require the resources of an operating room and can be performed at the bedside. We agree with the commenter. Therefore, we are proposing that the 51 ICD-10-PCS procedure codes listed in Table 6P.4p. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(43) Percutaneous/Diagnostic and Endoscopic/Transorifice Irrigation, Measurement and Monitoring

One commenter identified 15 ICD-10-PCS procedure codes that describe procedures involving percutaneous/diagnostic and endoscopic/transorifice (via natural or artificial opening) irrigation, measurement and monitoring of structures, pressures and flow that generally would not require the resources of an operating room and can be performed at the bedside. These 15 ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
3E1N38XIrrigation of male reproductive using irrigating substance, percutaneous approach, diagnostic.
3E1N38ZIrrigation of male reproductive using irrigating substance, percutaneous approach.
3E1N78XIrrigation of male reproductive using irrigating substance, via natural or artificial opening, diagnostic.
3E1N78ZIrrigation of male reproductive using irrigating substance, via natural or artificial opening.
3E1N88XIrrigation of male reproductive using irrigating substance, via natural or artificial opening endoscopic, diagnostic.
3E1N88ZIrrigation of male reproductive using irrigating substance, via natural or artificial opening endoscopic.
4A0635ZMeasurement of lymphatic flow, percutaneous approach.
4A063BZMeasurement of lymphatic pressure, percutaneous approach.
4A0C35ZMeasurement of biliary flow, percutaneous approach.
Start Printed Page 19862
4A0C3BZMeasurement of biliary pressure, percutaneous approach.
4A0C75ZMeasurement of biliary flow, via natural or artificial opening.
4A0C7BZMeasurement of biliary pressure, via natural or artificial opening.
4A0C85ZMeasurement of biliary flow, via natural or artificial opening endoscopic.
4A1635ZMonitoring of lymphatic flow, percutaneous approach.
4A163BZMonitoring of lymphatic pressure, percutaneous approach.

We agree with the commenter. Therefore, we are proposing that the 15 ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(44) Imaging

One commenter identified six ICD-10-PCS procedure codes that describe procedures involving imaging with contrast of hepatobiliary system body parts that generally would not require the resources of an operating room and can be performed at the bedside. These six ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
BF030ZZPlain radiography of gallbladder and bile ducts using high osmolar contrast.
BF031ZZPlain radiography of gallbladder and bile ducts using low osmolar contrast.
BF03YZZPlain radiography of gallbladder and bile ducts using other contrast.
BF0C0ZZPlain radiography of hepatobiliary system, all using high osmolar contrast.
BF0C1ZZPlain radiography of hepatobiliary system, all using low osmolar contrast.
BF0CYZZPlain radiography of hepatobiliary system, all using other contrast.

We agree with the commenter. Therefore, we are proposing that the six ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

(45) Prosthetics

One commenter identified five ICD-10-PCS procedure codes that describe procedures involving the fitting and use of prosthetics and assistive devices that would not require the resources of an operating room. These five ICD-10-PCS codes are shown in the table below.

ICD-10-PCS codeCode description
F0DZ8ZZProsthesis device fitting.
F0DZ9EZAssistive, adaptive, supportive or protective devices device fitting using orthosis.
F0DZ9FZAssistive, adaptive, supportive or protective devices device fitting using assistive, adaptive, supportive or protective equipment.
F0DZ9UZAssistive, adaptive, supportive or protective devices device fitting using prosthesis.
F0DZ9ZZAssistive, adaptive, supportive or protective devices device fitting.

We agree with the commenter. Therefore, we are proposing that the five ICD-10-PCS procedure codes shown in the table above be designated as non-O.R. procedures. We are inviting public comments on our proposal.

b. Revision of Neurostimulator Generator

We received a request to review three ICD-10-PCS procedure codes that describe procedures for revision of a neurostimulator generator that are currently designated as O.R. procedures and assigned to MS-DRGs 252, 253 and 254 (Other Vascular Procedures with MCC, with CC and without CC/MCC, respectively). The three codes are 0JWT0MZ (Revision of stimulator generator in trunk subcutaneous tissue and fascia, open approach), 0JWT3MZ (Revision of stimulator generator in trunk subcutaneous tissue and fascia, percutaneous approach), and 0JWTXMZ (Revision of stimulator generator in trunk subcutaneous tissue and fascia, external approach).

The requester expressed concern with the MS-DRG assignments and noted that although these codes are used to report revision of a carotid sinus stimulator pulse generator and appropriately assigned to MS-DRGs 252, 253 and 254 in MDC 5 (Diseases and Disorders of the Circulatory System), they also are very frequently used for the revision of the more common (for example, gastric, intracranial, sacral and spinal) neurostimulator generators that would generally not require the resources of an operating room.

The requestor also stated that the indication for revision of a neurostimulator generator is typically due to a complication, which would be reflected in a complication code such as ICD-10-CM diagnosis code T85.734A (Infection and inflammatory reaction due to implanted electronic neurostimulator, generator, initial encounter) or T85.890A (Other specified complication of nervous system prosthetic devices, implants and grafts, initial encounter). Because both of these diagnosis codes are assigned to MDC 1 (Diseases and Disorders of the Nervous System), when either code is reported in combination with one of the three procedure codes that describe revision of neurostimulator generator codes (currently assigned to MDC 5), the resulting MS-DRG assignment is to MS-DRGs 981, 982 and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively).

The requestor presented the following three options for consideration.

  • Reclassify the ICD-10-PCS procedure codes from O.R. Procedures to non-O.R. procedures that affect MS-DRG assignment only in MDC 5. The requestor stated that, under this option, the procedure codes would continue to appropriately group to MDC 5 when representing cases involving carotid Start Printed Page 19863sinus stimulators and the other types of neurostimulator cases would appropriately group to medical MS-DRGs.
  • Add the ICD-10-PCS procedure codes to MDC 1, such as to MS-DRGs 040, 041 and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC, with CC or Peripheral Neurostimulator and without CC/MCC, respectively) under MDC 1. The requestor stated that this option would resolve the inconsistency between a revision of a carotid sinus stimulator generator being classified as an O.R. procedure, while the other comparable procedures involving a revision of a regular neurostimulator generator are not. The requestor also stated that this option would preclude cases being assigned to MS-DRGs 981 through 983.
  • Stop classifying the ICD-10-PCS procedure codes as O.R. procedures entirely. The requestor stated that, under this option, all cases would then group to medical MS-DRGs, regardless of the type of neurostimulator generator.

We analyzed claims data for the three revision of neurostimulator generator procedure codes from the December 2016 update of the FY 2016 MedPAR file and identified cases under MDC 1 (Diseases and Disorders of the Nervous System) in MS-DRGs 025, 026, and 027 (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC and without CC/MCC, respectively); MS-DRGs 029 and 030 (Spinal Procedures with CC or Neurostimulators and Spinal Procedures without CC/MCC), respectively); and MS-DRGs 041 and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures with CC or Peripheral Neurostimulator and without CC/MCC, respectively). We also identified cases in MS-DRGs 982 and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with CC and without CC/MCC, respectively). Lastly, we identified cases under MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 252, 253 and 254 (Other Vascular Procedures with MCC, with CC and without CC/MCC, respectively). Our findings are shown in the table below.

MS-DRGs for Revision of Neurostimulator Generator

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 025—All cases18,4429.1$29,984
MS-DRG 025—Cases with revision of neurostimulator generator112.073,716
MS-DRG 026—All cases8,4155.621,557
MS-DRG 026—Cases with revision of neurostimulator generator16.04,537
MS-DRG 027—All cases10,0892.917,320
MS-DRG 027—Cases with revision of neurostimulator generator41.813,906
MS-DRG 029—All cases3,1925.923,145
MS-DRG 029—Cases with revision of neurostimulator generator63.532,799
MS-DRG 030—All cases1,9332.914,901
MS-DRG 030—Cases with revision of neurostimulator generator112.218,294
MS-DRG 041—All cases5,1545.516,633
MS-DRG 041—Cases with revision of neurostimulator generator11.014,145
MS-DRG 042—All cases2,0993.213,725
MS-DRG 042—Cases with revision of neurostimulator generator22.028,587
MS-DRG 982—All cases15,2166.617,341
MS-DRG 982—Cases with revision of neurostimulator generator113.015,336
MS-DRG 983—All cases3,5083.211,627
MS-DRG 983—Cases with revision of neurostimulator generator94.219,951
MS-DRG 252—All cases33,8177.623,384
MS-DRG 252—Cases with revision of neurostimulator generator17.018,740
MS-DRG 253—All cases27,4565.518,519
MS-DRG 253—Cases with revision of neurostimulator generator72.419,078
MS-DRG 254—All cases13,0362.913,253
MS-DRG 254—Cases with revision of neurostimulator generator33.011,981

As shown in the table above, the overall volume of cases reporting revision of neurostimulator generator is low, with a total of only 57 cases found across all of the MS-DRGs reviewed. The average length of stay for these cases reporting revision of neurostimulator generators is, in most cases, consistent with the average length of stay for all cases in the respective MS-DRG, with the majority having an average length of stay below the average length of stay of all cases in the respective MS-DRG. Finally, the average costs for cases reporting revision of neurostimulator generator reflect a wide range, with a low of $4,537 in MS-DRG 026 to a high of $73,716 in MS-DRG 025. It is clear that, for MS-DRG 025 where the average costs of all cases were $29,984 and the average costs of the one case reporting revision of a neurostimulator generator was $73,716, this is an atypical case. It is also clear from the data that there were other procedures reported on the claims where a procedure code for a revision of a neurostimulator generator was assigned due to the various MS-DRG assignments.

After review of the claims data and discussion with our clinical advisors, we agree with and support the requestor's first option—to reclassify the three ICD-10-PCS procedure codes for revision of neurostimulator generators from O.R. procedures to non-O.R. procedures that affect the assignment for MS-DRGs 252, 253 and 254 to account for the subset of patients undergoing revision of a carotid sinus neurostimulator generator specifically. In cases where one of the more common (for example, gastric, intracranial, sacral and spinal) neurostimulator generators are undergoing revision, in the absence of another O.R. procedure, these cases would group to a medical MS-DRG. We are inviting public comments on our proposal.

c. External Repair of Hymen

We received a request to examine ICD-10-PCS procedure code 0UQKXZZ (Repair Hymen, External Approach). This procedure code is currently designated as an O.R. procedure in MS-DRGs 746 and 747 (Vagina, Cervix and Vulva Procedures with CC/MCC and without CC/MCC, respectively) under Start Printed Page 19864MDC 13. The requestor provided examples and expressed concern that procedure code 0UQKXZZ was assigned to MS-DRG 987 (Non-Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC) when reported on a maternal delivery claim. The requestor noted that when a similar code was reported with an external approach (for example, procedure code 0UQMXZZ (Repair vulva, external approach)), the case was appropriately assigned to MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis). The requestor stated that the physician documentation was simply more specific to the location of the repair and this should not affect assignment to one of the MS-DRGs for vaginal delivery.

We reviewed claims data involving the examples provided by the requestor involving ICD-10-PCS procedure code 0UQKXZZ (Repair hymen, external approach). Our clinical advisors agree with the requestor that reporting of this procedure code should not affect assignment to one of the MS-DRGs for vaginal delivery. As discussed earlier in section II.F.15.a. of the preamble of this proposed rule, we are proposing to change the designation for a number of procedure codes from O.R. procedures to non-O.R. procedures. Included in that proposal are ICD-10-PCS procedure codes 0UQGXZZ (Repair vagina, external approach) and 0UQMXZZ (Repair vulva, external approach). Consistent with the change in designation for these procedure codes, we also are proposing to designate ICD-10-PCS procedure code 0UQKXZZ (Repair hymen, external approach) as a non-O.R. procedure. The procedure by itself would generally not require the resources of an operating room. If the procedure is performed following a vaginal delivery, it is the vaginal delivery procedure code 10E0XZZ (Delivery of products of conception) that determines the MS-DRG assignment because this code is designated as a non-O.R. procedure affecting the MS-DRG.

Therefore, we are proposing to change the designation of ICD-10-PCS procedure code 0UQKXZZ (Repair hymen, external approach) to a non-O.R. procedure. This redesignation will enable more appropriate MS-DRG assignment for these cases by eliminating erroneous assignment to MS-DRGs 987 through 989. We are inviting public comments on our proposal.

d. Non-O.R. Procedures in MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms)

Under MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms), there are 11 surgical MS-DRGs. Of these 11 surgical MS-DRGs, there are 5 MS-DRGs containing GROUPER logic that includes ICD-10-PCS procedure codes designated as O.R. procedures as well as non-O.R. procedures that affect the MS-DRG. These five MS-DRGs are MS-DRGs 823, 824, and 825 (Lymphoma and Non-Acute Leukemia with Other O.R. Procedure with MCC, with CC and without CC/MCC, respectively) and MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other O.R. Procedure with CC/MCC and without CC/MCC, respectively). We refer the reader to the ICD-10 Version 34 MS-DRG Definitions Manual which is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2017-IPPS-Final-Rule-Home-Page-Items/​FY2017-IPPS-Final-Rule-Data-Files.html?​DLPage=​1&​DLEntries=​10&​DLSort=​0&​DLSortDir=​ascending for the complete list of ICD-10-PCS procedure codes assigned to these five MS-DRGs under MDC 17.

We reviewed the list of 244 ICD-10-PCS non-O.R. procedure codes currently assigned to these 5 MS-DRGs. Of these 244 procedure codes, we determined that 55 of the procedure codes do not warrant being designated as non-O.R. procedures that affect these MS-DRGs because they describe procedures that would generally not require a greater intensity of resources for facilities to manage the cases included in the definition (logic) of these MS-DRGs. Therefore, we are proposing that the 55 ICD-10-PCS procedure codes listed in Table 6P.3c. associated with this proposed rule (which is available via the Internet on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) be removed from the logic for MS-DRGs 823, 824, 825, 829 and 830 as non-O.R. procedures affecting the MS-DRG. We also are proposing to revise the titles for these five MS-DRGs by deleting the reference to “O.R.” in the title. Specifically, we are proposing to revise the titles for MS-DRGs 823, 824, and 825 to “Lymphoma and Non-Acute Leukemia with Other Procedure with MCC, with CC and without CC/MCC”, respectively and we are proposing to revise the titles for MS-DRGs 829 and 830 to “Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedure with CC/MCC and without CC/MCC”, respectively. We are inviting public comments on our proposals.

G. Recalibration of the Proposed FY 2018 MS-DRG Relative Weights

1. Data Sources for Developing the Proposed Relative Weights

In developing the proposed FY 2018 system of weights, we used two data sources: Claims data and cost report data. As in previous years, the claims data source is the MedPAR file. This file is based on fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2016 MedPAR data used in this proposed rule include discharges occurring on October 1, 2015, through September 30, 2016, based on bills received by CMS through December 31, 2016, from all hospitals subject to the IPPS and short-term, acute care hospitals in Maryland (which at that time were under a waiver from the IPPS). The FY 2016 MedPAR file used in calculating the proposed relative weights includes data for approximately 9,607,103 Medicare discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in a Medicare Advantage managed care plan are excluded from this analysis. These discharges are excluded when the MedPAR “GHO Paid” indicator field on the claim record is equal to “1” or when the MedPAR DRG payment field, which represents the total payment for the claim, is equal to the MedPAR “Indirect Medical Education (IME)” payment field, indicating that the claim was an “IME only” claim submitted by a teaching hospital on behalf of a beneficiary enrolled in a Medicare Advantage managed care plan. In addition, the December 31, 2016 update of the FY 2016 MedPAR file complies with version 5010 of the X12 HIPAA Transaction and Code Set Standards, and includes a variable called “claim type.” Claim type “60” indicates that the claim was an inpatient claim paid as fee-for-service. Claim types “61,” “62,” “63,” and “64” relate to encounter claims, Medicare Advantage IME claims, and HMO no-pay claims. Therefore, the calculation of the proposed relative weights for FY 2018 also excludes claims with claim type values not equal to “60.” The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. We note that the proposed FY 2018 relative weights are based on the ICD-Start Printed Page 1986510-CM diagnoses and ICD-10-PCS procedure codes from the FY 2016 MedPAR claims data, grouped through the ICD-10 version of the proposed FY 2018 GROUPER (Version 35).

The second data source used in the cost-based relative weighting methodology is the Medicare cost report data files from the HCRIS. Normally, we use the HCRIS dataset that is 3 years prior to the IPPS fiscal year. Specifically, we used cost report data from the December 31, 2016 update of the FY 2015 HCRIS for calculating the proposed FY 2018 cost-based relative weights.

2. Methodology for Calculation of the Proposed Relative Weights

As we explain in section II.E.2. of the preamble of this proposed rule, we calculated the proposed FY 2018 relative weights based on 19 CCRs, as we did for FY 2017. The methodology we are proposing to use to calculate the FY 2018 MS-DRG cost-based relative weights based on claims data in the FY 2016 MedPAR file and data from the FY 2015 Medicare cost reports is as follows. We note that we have provided additional precision in our description of the methodology for FY 2018.

  • To the extent possible, all the claims were regrouped using the proposed FY 2018 MS-DRG classifications discussed in sections II.B. and II.F. of the preamble of this proposed rule.
  • The transplant cases that were used to establish the proposed relative weights for heart and heart-lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare-approved transplant centers that have cases in the FY 2016 MedPAR file. (Medicare coverage for heart, heart-lung, liver and/or intestinal, and lung transplants is limited to those facilities that have received approval from CMS as transplant centers.)
  • Organ acquisition costs for kidney, heart, heart-lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis. Because these acquisition costs are paid separately from the prospective payment rate, it is necessary to subtract the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average cost for each MS-DRG and before eliminating statistical outliers.
  • Claims with total charges or total lengths of stay less than or equal to zero were deleted. Claims that had an amount in the total charge field that differed by more than $30.00 from the sum of the routine day charges, intensive care charges, pharmacy charges, implantable devices charges, supplies and equipment charges, therapy services charges, operating room charges, cardiology charges, laboratory charges, radiology charges, other service charges, labor and delivery charges, inhalation therapy charges, emergency room charges, blood and blood products charges, anesthesia charges, cardiac catheterization charges, CT scan charges, and MRI charges were also deleted.
  • At least 92.2 percent of the providers in the MedPAR file had charges for 14 of the 19 cost centers. All claims of providers that did not have charges greater than zero for at least 14 of the 19 cost centers were deleted. In other words, a provider must have no more than five blank cost centers. If a provider did not have charges greater than zero in more than five cost centers, the claims for the provider were deleted.
  • Statistical outliers were eliminated by removing all cases that were beyond 3.0 standard deviations from the geometric mean of the log distribution of both the total charges per case and the total charges per day for each MS-DRG.
  • Effective October 1, 2008, because hospital inpatient claims include a POA indicator field for each diagnosis present on the claim, only for purposes of relative weight-setting, the POA indicator field was reset to “Y” for “Yes” for all claims that otherwise have an “N” (No) or a “U” (documentation insufficient to determine if the condition was present at the time of inpatient admission) in the POA field.

Under current payment policy, the presence of specific HAC codes, as indicated by the POA field values, can generate a lower payment for the claim. Specifically, if the particular condition is present on admission (that is, a “Y” indicator is associated with the diagnosis on the claim), it is not a HAC, and the hospital is paid for the higher severity (and, therefore, the higher weighted MS-DRG). If the particular condition is not present on admission (that is, an “N” indicator is associated with the diagnosis on the claim) and there are no other complicating conditions, the DRG GROUPER assigns the claim to a lower severity (and, therefore, the lower weighted MS-DRG) as a penalty for allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy goals of encouraging quality care and generates program savings, it presents an issue for the relative weight-setting process. Because cases identified as HACs are likely to be more complex than similar cases that are not identified as HACs, the charges associated with HAC cases are likely to be higher as well. Therefore, if the higher charges of these HAC claims are grouped into lower severity MS-DRGs prior to the relative weight-setting process, the relative weights of these particular MS-DRGs would become artificially inflated, potentially skewing the relative weights. In addition, we want to protect the integrity of the budget neutrality process by ensuring that, in estimating payments, no increase to the standardized amount occurs as a result of lower overall payments in a previous year that stem from using weights and case-mix that are based on lower severity MS-DRG assignments. If this would occur, the anticipated cost savings from the HAC policy would be lost.

To avoid these problems, we reset the POA indicator field to “Y” only for relative weight-setting purposes for all claims that otherwise have an “N” or a “U” in the POA field. This resetting “forced” the more costly HAC claims into the higher severity MS-DRGs as appropriate, and the relative weights calculated for each MS-DRG more closely reflect the true costs of those cases.

In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013 and subsequent fiscal years, we finalized a policy to treat hospitals that participate in the Bundled Payments for Care Improvement (BPCI) initiative the same as prior fiscal years for the IPPS payment modeling and ratesetting process without regard to hospitals' participation within these bundled payment models (that is, as if hospitals were not participating in those models under the BPCI initiative). The BPCI initiative, developed under the authority of section 3021 of the Affordable Care Act (codified at section 1115A of the Act), is comprised of four broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care. Under the BPCI initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care. For FY 2018, we are are proposing to continue to include all applicable data from subsection (d) hospitals participating in BPCI Models 1, 2, and 4 in our IPPS payment modeling and ratesetting calculations. We refer readers to the FY 2013 IPPS/LTCH PPS final rule for a complete discussion on our final policy for the treatment of hospitals participating in the BPCI initiative in our ratesetting process. For additional information on Start Printed Page 19866the BPCI initiative, we refer readers to the CMS' Center for Medicare and Medicaid Innovation's Web site at: http://innovation.cms.gov/​initiatives/​Bundled-Payments/​index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/LTCH PPS final rule (77 FR 53341 through 53343).

The charges for each of the 19 cost groups for each claim were standardized to remove the effects of differences in proposed area wage levels, IME and DSH payments, and for hospitals located in Alaska and Hawaii, the applicable proposed cost-of-living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in proposed geographic adjustment factors, cost-of-living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS-DRG for each of the 19 cost groups so that each MS-DRG had 19 standardized charge totals. Statistical outliers were then removed. These charges were then adjusted to cost by applying the proposed national average CCRs developed from the FY 2015 cost report data.

The 19 cost centers that we used in the proposed relative weight calculation are shown in the following table. The table shows the lines on the cost report and the corresponding revenue codes that we used to create the proposed 19 national cost center CCRs. If stakeholders have comments about the groupings in this table, we may consider those comments as we finalize our policy.

Cost center group name (19 total)MedPAR charge fieldRevenue codes contained in MedPAR charge fieldCost report line descriptionCost from HCRIS (Worksheet C, Part 1, Column 5 and line number) Form CMS-2552-10Charges from HCRIS (Worksheet C, Part 1, Column 6 & 7 and line number) Form CMS-2552-10Medicare charges from HCRIS (Worksheet D-3, Column & line number) Form CMS-2552-10
Routine DaysPrivate Room Charges011X and 014XAdults & Pediatrics (General Routine Care)C_1_C5_30C_1_C6_30D3_HOS_C2_30
Semi-Private Room Charges012X, 013X and 016X-0″CCRs>>X
Ward Charges015X
Intensive DaysIntensive Care Charges020XIntensive Care UnitC_1_C5_31C_1_C6_31D3_HOS_C2_31
Coronary Care Charges021XCoronary Care UnitC_1_C5_32C_1_C6_32D3_HOS_C2_32
Burn Intensive Care UnitC_1_C5_33C_1_C6_33D3_HOS_C2_33
Surgical Intensive Care UnitC_1_C5_34C_1_C6_34D3_HOS_C2_34
Other Special Care UnitC_1_C5_35C_1_C6_35D3_HOS_C2_35
DrugsPharmacy Charges025X, 026X and 063XIntravenous TherapyC_1_C5_64C_1_C6_64D3_HOS_C2_64
C_1_C7_64
Drugs Charged to PatientC_1_C5_73C_1_C6_73D3_HOS_C2_73
C_1_C7_73
Supplies and EquipmentMedical/Surgical Supply Charges0270, 0271, 0272, 0273, 0274, 0277, 0279, and 0621, 0622, 0623Medical Supplies Charged to PatientsC_1_C5_71C_1_C6_71D3_HOS_C2_71
C_1_C7_71
Durable Medical Equipment Charges0290, 0291, 0292 and 0294-0299DME-RentedC_1_C5_96C_1_C6_96D3_HOS_C2_96
C_1_C7_96
Used Durable Medical Charges0293DME-SoldC_1_C5_97C_1_C6_97D3_HOS_C2_97
C_1_C7_97
Implantable Devices0275, 0276, 0278, 0624Implantable Devices Charged to PatientsC_1_C5_72C_1_C6_72D3_HOS_C2_72
C_1_C7_72
Therapy ServicesPhysical Therapy Charges042XPhysical TherapyC_1_C5_66C_1_C6_66D3_HOS_C2_66
C_1_C7_66
Occupational Therapy Charges043XOccupational TherapyC_1_C5_67C_1_C6_67D3_HOS_C2_67
C_1_C7_67
Speech Pathology Charges044X and 047XSpeech PathologyC_1_C5_68C_1_C6_68D3_HOS_C2_68
C_1_C7_68
Inhalation TherapyInhalation Therapy Charges041X and 046XRespiratory TherapyC_1_C5_65C_1_C6_65D3_HOS_C2_65
C_1_C7_65
Operating RoomOperating Room Charges036XOperating RoomC_1_C5_50C_1_C6_50D3_HOS_C2_50
C_1_C7_50
071XRecovery RoomC_1_C5_51C_1_C6_51D3_HOS_C2_51
C_1_C7_51
Labor & DeliveryOperating Room Charges072XDelivery Room and Labor RoomC_1_C5_52C_1_C6_52D3_HOS_C2_52
C_1_C7_52
AnesthesiaAnesthesia Charges037XAnesthesiologyC_1_C5_53C_1_C6_53D3_HOS_C2_53
C_1_C7_53
CardiologyCardiology Charges048X and 073XElectrocardiologyC_1_C5_69C_1_C6_69D3_HOS_C2_69
C_1_C7_69
Start Printed Page 19867
Cardiac Catheterization0481Cardiac CatheterizationC_1_C5_59C_1_C6_59D3_HOS_C2_59
C_1_C7_59
LaboratoryLaboratory Charges030X, 031X, and 075XLaboratoryC_1_C5_60C_1_C6_60D3_HOS_C2_60
C_1_C7_60
PBP Clinic Laboratory ServicesC_1_C5_61C_1_C6_61D3_HOS_C2_61
C_1_C7_61
074X, 086XElectroencephalographyC_1_C5_70C_1_C6_70D3_HOS_C2_70
C_1_C7_70
RadiologyRadiology Charges032X, 040XRadiology—DiagnosticC_1_C5_54C_1_C6_54D3_HOS_C2_54
C_1_C7_54
028x, 0331, 0332, 0333, 0335, 0339, 0342Radiology—TherapeuticC_1_C5_55C_1_C6_55D3_HOS_C2_55
0343 and 344RadioisotopeC_1_C5_56C_1_C6_56D3_HOS_C2_56
C_1_C7_56
Computed Tomography (CT) ScanCT Scan Charges035XComputed Tomography (CT) ScanC_1_C5_57C_1_C6_57D3_HOS_C2_57
C_1_C7_57
Magnetic Resonance Imaging (MRI)MRI Charges061XMagnetic Resonance Imaging (MRI)C_1_C5_58C_1_C6_58D3_HOS_C2_58
C_1_C7_58
Emergency RoomEmergency Room Charges045xEmergencyC_1_C5_91C_1_C6_91D3_HOS_C2_91
C_1_C7_91
Blood and Blood ProductsBlood Charges038xWhole Blood & Packed Red Blood CellsC_1_C5_62C_1_C6_62D3_HOS_C2_62
C_1_C7_62
Blood Storage/Processing039xBlood Storing, Processing, & TransfusingC_1_C5_63C_1_C6_63D3_HOS_C2_63
C_1_C7_63
Other ServicesOther Service Charge0002-0099, 022X, 023X, 024X,052X,053X
055X-060X, 064X-070X, 076X-078X, 090X-095X and 099X
Renal Dialysis0800XRenal DialysisC_1_C5_74C_1_C6_74D3_HOS_C2_74
ESRD Revenue Setting Charges080X and 082X-088XC_1_C7_74
Home Program DialysisC_1_C5_94C_1_C6_94D3_HOS_C2_94
C_1_C7_94
Outpatient Service Charges049XASC (Non Distinct Part)C_1_C5_75C_1_C6_75D3_HOS_C2_75
Lithotripsy Charge079XC_1_C7_75
Other AncillaryC_1_C5_76C_1_C6_76D3_HOS_C2_76
C_1_C7_76
Clinic Visit Charges051XClinicC_1_C5_90C_1_C6_90D3_HOS_C2_90
C_1_C7_90
Observation bedsC_1_C5_92.01C_1_C6_92.01D3_HOS_C2_92.01
C_1_C7_92.01
Professional Fees Charges096X, 097X, and 098XOther Outpatient ServicesC_1_C5_93C_1_C6_93D3_HOS_C2_93
C_1_C7_93
Ambulance Charges054XAmbulanceC_1_C5_95C_1_C6_95D3_HOS_C2_95
C_1_C7_95
Rural Health ClinicC_1_C5_88C_1_C6_88D3_HOS_C2_88
C_1_C7_88
FQHCC_1_C5_89C_1_C6_89D3_HOS_C2_89
C_1_C7_89

3. Development of Proposed National Average CCRs

We developed the proposed national average CCRs as follows:

Using the FY 2015 cost report data, we removed CAHs, Indian Health Service hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland because we include their charges in our claims database. We then created CCRs for each provider for each cost center (see prior table for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the Start Printed Page 19868purpose of trimming the data. We then took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-3 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare-specific charges for each line item from Worksheet D-3. Once each hospital's Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs.

After we multiplied the total charges for each MS-DRG in each of the 19 cost centers by the corresponding national average CCR, we summed the 19 “costs” across each MS-DRG to produce a total standardized cost for the MS-DRG. The average standardized cost for each MS-DRG was then computed as the total standardized cost for the MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The average cost for each MS-DRG was then divided by the national average standardized cost per case to determine the proposed relative weight.

The proposed FY 2018 cost-based relative weights were then normalized by a proposed adjustment factor of 1.736047 so that the average case weight after recalibration was equal to the average case weight before recalibration. The proposed normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.

The proposed 19 national average CCRs for FY 2018 are as follows:

GroupCCR
Routine Days0.449
Intensive Days0.375
Drugs0.197
Supplies & Equipment0.300
Implantable Devices0.327
Therapy Services0.314
Laboratory0.116
Operating Room0.186
Cardiology0.108
Cardiac Catheterization0.115
Radiology0.149
MRIs0.077
CT Scans0.037
Emergency Room0.166
Blood and Blood Products0.309
Other Services0.352
Labor & Delivery0.363
Inhalation Therapy0.163
Anesthesia0.080

Since FY 2009, the relative weights have been based on 100 percent cost weights based on our MS-DRG grouping system.

When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We are proposing to use that same case threshold in recalibrating the MS-DRG relative weights for FY 2018. Using data from the FY 2016 MedPAR file, there were 10 MS-DRGs that contain fewer than 10 cases. For FY 2018, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for these low-volume MS-DRGs, we are proposing to compute proposed relative weights for the low-volume MS-DRGs by adjusting their final FY 2017 relative weights by the percentage change in the average weight of the cases in other MS-DRGs. The crosswalk table is shown:

Low-volume MS-DRGMS-DRG titleCrosswalk to MS-DRG
016Autologous bone marrow transplant w CC/MCCFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
017Autologous bone marrow transplant w/o CC/MCCFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
789Neonates, Died or Transferred to Another Acute Care FacilityFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
790Extreme Immaturity or Respiratory Distress Syndrome, NeonateFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
791Prematurity with Major ProblemsFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
792Prematurity without Major ProblemsFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
793Full-Term Neonate with Major ProblemsFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
794Neonate with Other Significant ProblemsFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
795Normal NewbornFinal FY 2017 relative weight (adjusted by percent change in average weight of the cases in other MS-DRGs).

We are inviting public comments on our proposals.

H. Proposed Add-On Payments for New Services and Technologies for FY 2018

1. Background

Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as “new technologies”) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that a new medical service or technology may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate. We note that, beginning with discharges occurring in FY 2008, CMS transitioned from CMS-DRGs to MS-DRGs.

The regulations at 42 CFR 412.87 implement these provisions and specify three criteria for a new medical service or technology to receive the additional payment: (1) The medical service or technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise Start Printed Page 19869applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies. Below we highlight some of the major statutory and regulatory provisions relevant to the new technology add-on payment criteria, as well as other information. For a complete discussion on the new technology add-on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51572 through 51574).

Under the first criterion, as reflected in § 412.87(b)(2), a specific medical service or technology will be considered “new” for purposes of new medical service or technology add-on payments until such time as Medicare data are available to fully reflect the cost of the technology in the MS-DRG weights through recalibration. We note that we do not consider a service or technology to be new if it is substantially similar to one or more existing technologies. That is, even if a technology receives a new FDA approval or clearance, it may not necessarily be considered “new” for purposes of new technology add-on payments if it is “substantially similar” to a technology that was approved or cleared by FDA and has been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814), we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically: (1) Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a product is assigned to the same or a different MS-DRG; and (3) whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered “new” for purposes of new technology add-on payments. For a detailed discussion of the criteria for substantial similarity, we refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 47352), and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814).

Under the second criterion, § 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the MS-DRG prospective payment rate otherwise applicable to discharges involving the new medical service or technology must be assessed for adequacy. Under the cost criterion, consistent with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess the adequacy of payment for a new technology paid under the applicable MS-DRG prospective payment rate, we evaluate whether the charges for cases involving the new technology exceed certain threshold amounts. Table 10 that was released with the FY 2017 IPPS/LTCH PPS final rule contains the final thresholds that we used to evaluate applications for new medical service and new technology add-on payments for FY 2018. We refer readers to the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2017-IPPS-Final-Rule-Home-Page-Items/​FY2017-IPPS-Final-Rule-Tables.html to download and view Table 10.

In the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed the issue of whether the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims information that providers submit with applications for new medical service and new technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this issue.

Under the third criterion, § 412.87(b)(1) of our existing regulations provides that a new technology is an appropriate candidate for an additional payment when it represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. For example, a new technology represents a substantial clinical improvement when it reduces mortality, decreases the number of hospitalizations or physician visits, or reduces recovery time compared to the technologies previously available. (We refer readers to the September 7, 2001 final rule for a more detailed discussion of this criterion (66 FR 46902).)

The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. Under § 412.88, if the costs of the discharge (determined by applying cost-to-charge ratios (CCRs) as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 50 percent of the estimated costs of the new technology or medical service (if the estimated costs for the case including the new technology or medical service exceed Medicare's payment); or (2) 50 percent of the difference between the full DRG payment and the hospital's estimated cost for the case. Unless the discharge qualifies for an outlier payment, the additional Medicare payment is limited to the full MS-DRG payment plus 50 percent of the estimated costs of the new technology or new medical service.

Section 503(d)(2) of Public Law 108-173 provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, in accordance with section 503(d)(2) of Public Law 108-173, add-on payments for new medical services or technologies for FY 2005 and later years have not been subjected to budget neutrality.

In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulations at § 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. We amended § 412.87(c) to specify that all applicants for new technology add-on payments must have FDA approval or clearance for their new medical service or technology by July 1 of each year prior to the beginning of the fiscal year that the application is being considered.

The Council on Technology and Innovation (CTI) at CMS oversees the agency's cross-cutting priority on coordinating coverage, coding and payment processes for Medicare with respect to new technologies and procedures, including new drug therapies, as well as promoting the exchange of information on new technologies and medical services between CMS and other entities. The CTI, composed of senior CMS staff and clinicians, was established under section 942(a) of Public Law 108-173. The Council is co-chaired by the Director of the Center for Clinical Standards and Quality (CCSQ) and the Director of the Center for Medicare Start Printed Page 19870(CM), who is also designated as the CTI's Executive Coordinator.

The specific processes for coverage, coding, and payment are implemented by CM, CCSQ, and the local Medicare Administrative Contractors (MACs) (in the case of local coverage and payment decisions). The CTI supplements, rather than replaces, these processes by working to assure that all of these activities reflect the agency-wide priority to promote high-quality, innovative care. At the same time, the CTI also works to streamline, accelerate, and improve coordination of these processes to ensure that they remain up to date as new issues arise. To achieve its goals, the CTI works to streamline and create a more transparent coding and payment process, improve the quality of medical decisions, and speed patient access to effective new treatments. It is also dedicated to supporting better decisions by patients and doctors in using Medicare-covered services through the promotion of better evidence development, which is critical for improving the quality of care for Medicare beneficiaries.

To improve the understanding of CMS' processes for coverage, coding, and payment and how to access them, the CTI has developed an “Innovator's Guide” to these processes. The intent is to consolidate this information, much of which is already available in a variety of CMS documents and in various places on the CMS Web site, in a user-friendly format. This guide was published in 2010 and is available on the CMS Web site at: http://www.cms.gov/​CouncilonTechInnov/​Downloads/​InnovatorsGuide5_​10_​10.pdf.

As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we invite any product developers or manufacturers of new medical services or technologies to contact the agency early in the process of product development if they have questions or concerns about the evidence that would be needed later in the development process for the agency's coverage decisions for Medicare.

The CTI aims to provide useful information on its activities and initiatives to stakeholders, including Medicare beneficiaries, advocates, medical product manufacturers, providers, and health policy experts. Stakeholders with further questions about Medicare's coverage, coding, and payment processes, or who want further guidance about how they can navigate these processes, can contact the CTI at CTI@cms.hhs.gov.

We note that applicants for add-on payments for new medical services or technologies for FY 2019 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement, along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Complete application information, along with final deadlines for submitting a full application, will be posted as it becomes available on the CMS Web site at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​newtech.html. To allow interested parties to identify the new medical services or technologies under review before the publication of the proposed rule for FY 2019, the CMS Web site also will post the tracking forms completed by each applicant.

2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments

Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of Public Law 108-173, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement or advancement. The process for evaluating new medical service and technology applications requires the Secretary to—

  • Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries;
  • Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending;
  • Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement; and
  • Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS.

In order to provide an opportunity for public input regarding add-on payments for new medical services and technologies for FY 2018 prior to publication of the FY 2018 IPPS/LTCH PPS proposed rule, we published a notice in the Federal Register on November 9, 2016 (81 FR 78814), and held a town hall meeting at the CMS Headquarters Office in Baltimore, MD, on February 14, 2017. In the announcement notice for the meeting, we stated that the opinions and presentations provided during the meeting would assist us in our evaluations of applications by allowing public discussion of the substantial clinical improvement criterion for each of the FY 2018 new medical service and technology add-on payment applications before the publication of the FY 2018 IPPS/LTCH PPS proposed rule.

Approximately 66 individuals registered to attend the town hall meeting in person, while additional individuals listened over an open telephone line. We also live-streamed the town hall meeting and posted the town hall on the CMS YouTube Web page at: https://www.youtube.com/​watch?​v=​9niqfxXe4oA&​t=​217s . We considered each applicant's presentation made at the town hall meeting, as well as written comments submitted on the applications that were received by the due date of February 24, 2017, in our evaluation of the new technology add-on payment applications for FY 2018 in this proposed rule.

In response to the published notice and the February 14, 2017 New Technology Town Hall meeting, we received written comments regarding the applications for FY 2018 new technology add-on payments. We note that we do not summarize comments that are unrelated to the “substantial clinical improvement” criterion. As explained above and in the Federal Register notice announcing the New Technology Town Hall meeting (81 FR78814 through 78816), the purpose of the meeting was specifically to discuss the substantial clinical improvement criterion in regard to pending new technology add-on payment applications for FY 2018. Therefore, we are not summarizing these comments in this proposed rule. We summarize below a general comment that does not relate to a specific application for FY 2018 new technology add-on payments. We also summarize comments regarding individual applications, or, if applicable, indicate that there were no comments received in section II.H.5. of the preamble of this proposed rule at the end of each discussion of the individual applications.Start Printed Page 19871

Comment: One commenter recommended that CMS: (1) Prohibit local MACs from denying coverage and add-on payments for new medical services or technologies approved by the Secretary; and (2) broaden the criteria applied in making substantial clinical improvement determinations to require, in addition to existing criteria, that the Secretary consider whether the new technology or medical service meets one or more of the following criteria: (a) Results in a reduction of the length of a hospital stay; (b) improves patient quality of life; (c) creates long-term clinical efficiencies in treatment; (d) addresses patient-centered objectives as defined by the Secretary; or (e) meets such other criteria as the Secretary may specify.

Response: We appreciate the commenter's comments and will consider them in future rulemaking.

3. ICD-10-PCS Section “X” Codes for Certain New Medical Services and Technologies

As discussed in the FY 2016 IPPS/LTCH final rule (80 FR 49434), the ICD-10-PCS includes a new section containing the new Section “X” codes, which began being used with discharges occurring on or after October 1, 2015. Decisions regarding changes to ICD-10-PCS Section “X” codes will be handled in the same manner as the decisions for all of the other ICD-10-PCS cod