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Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and 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 37990

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

We are revising 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 changes 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 changes 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 market basket update that will 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 updating 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 establishing new requirements or revising existing requirements for quality reporting by specific Medicare providers (acute care hospitals, PPS-exempt cancer hospitals, LTCHs, and inpatient psychiatric facilities). We also are establishing new requirements or revising 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 updating 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 making 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:

This final rule is effective on October 1, 2017.

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.

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.

James Poyer, (410) 786-2261, 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:

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.Start Printed Page 37991

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 final 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 Final Rule Home Page” or “Acute Inpatient—Files for Download”. The LTCH PPS tables for this FY 2018 final 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-F. For further details on the contents of the tables referenced in this final rule, we refer readers to section VI. of the Addendum to this final 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 Prevention

CEHRT Certified electronic health record technology

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, 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 groupStart Printed Page 37992

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 facilities

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 Implemented in This Final Rule

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

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

D. Issuance of Notice of Proposed Rulemaking

II. 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. FY 2018 MS-DRG Documentation and Coding AdjustmentStart Printed Page 37993

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. 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. Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for 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 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. 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. 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. Changes to Surgical Hierarchies

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

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

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

c. Principal Diagnosis Is Its Own CC or MCC

d. 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 989

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

16. Replaced Devices Offered Without Cost or With a Credit

a. Background

b. Changes for FY 2018

17. Other 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 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. 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. Revision of Reference to an ICD-9-CM Code in § 412.87(b)(2) of the Regulations

5. 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®)

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

A. Background

1. Legislative Authority

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

3. Codes for Constituent Counties in CBSAs

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

1. Methodology for FY 2018

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

E. 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 Occupational Mix Adjustment for FY 2018

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

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

1. Rural Floor

2. Expiration of the Imputed Floor Policy

3. State Frontier Floor for FY 2018

H. 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. Deadline for Submittal of Documentation of Sole Community Hospital (SCH) and Rural Referral Center (RRC) Classification Status to the MGCRBStart Printed Page 37994

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. Changes to the 45-Day Notification Rules

J. 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. 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. Labor Market Share for the FY 2018 Wage Index

IV. 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 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 Changes to the IPPS for Operating Costs

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

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

1. FY 2018 Inpatient Hospital Update

2. FY 2018 Puerto Rico Hospital Update

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

1. Background

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

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

1. Case-Mix Index (CMI)

2. Discharges

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

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

2. Background

3. Payment Adjustment for FY 2018 and Subsequent Fiscal Years

4. 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. 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. Calculation of Factor 1 for FY 2018

b. Calculation of Factor 2 for FY 2018

(1) Background

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

c. Calculation of Factor 3 for FY 2018

(1) Background

(2) Data Source for FY 2018

(3) 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: 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. Policies for the Hospital Readmissions Reduction Program

5. Applicable Period for FY 2018

6. 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 Payment Adjustment Methodology for FY 2019: Methodology for Calculating the Proportion of Dual-Eligible Patients

a. Background

b. Data Sources Used To Determine Dual Eligibility

c. Data Period Used To Define Dual Eligibility

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

10. Provisions for the Payment Adjustment Methodology for FY 2019: 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 Circumstances Exceptions (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: 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. Removal of the PSI 90 Measure

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

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

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

5. Previously Adopted and 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 Newly Finalized Baseline and Performance Periods for the FY 2019 Through FY 2023 Program Years

6. Performance Standards for the Hospital VBP Program

a. Background

b. Previously Adopted and Newly Finalized 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 Newly Finalized Performance Standards for Certain Measures for the FY 2022 Program Year

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

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

1. Background

2. Implementation of the HAC Reduction Program for FY 2018

3. Data Collection Time Periods for the FY 2020 HAC Reduction ProgramStart Printed Page 37995

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

8. Maintenance of Technical Specifications for Quality Measures

L. Rural Community Hospital Demonstration Program

1. Introduction

2. Background

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

a. Statutory Provisions

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

d. Finalized Budget Neutrality Approach

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

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

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

VI. 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. Annual Update for FY 2018

VII. Changes for Hospitals Excluded From the IPPS

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

B. Revisions to Hospital-Within-Hospital Regulations

C. Report of Adjustment (Exceptions) Payments

D. 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. 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 LTCH

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

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

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

b. Development of the 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. Low-Volume MS-LTC-DRGs

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

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

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

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

a. Overview

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

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

d. Annual Update under the LTCH PPS for FY 2018

D. 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 From Certain LTCHs

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

a. Background

b. 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. Changes to Policies on Reporting of eCQMs

a. Background

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

c. 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 ProgramsStart Printed Page 37996

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. Changes to the Reporting and Submission Requirements for eCQMs

e. Submission Form and Method for the 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. Modifications to the Validation of Hospital IQR Program Data

a. Background

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

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

a. Background

b. Alignment of 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 Removal of Previously Finalized Quality Measures for PCHs Beginning With the FY 2020 Program Year

a. Background

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

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

a. Considerations in the Selection of Quality Measures

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

c. Summary of Previously Finalized and Newly Finalized 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. Reporting Requirements for New Measures

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

a. Background

b. Modifications to the ECE 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. Collection of Standardized Patient Assessment Data Under the LTCH QRP

a. Definition of Standardized Patient Assessment Data

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

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

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

6. Quality Measures Currently Adopted for the LTCH QRP

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

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

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

c. Mechanical Ventilation Outcome Quality Measure: Ventilator Liberation Rate

8. 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. Standardized Patient Assessment Data Reporting for the LTCH QRP

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

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

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

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

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

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

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

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

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

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

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

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

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

17. 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. Considerations in Removing or Retaining Measures

3. Proposal for New Quality Measure for the FY 2020 Payment Determination and Subsequent Years—Medication Continuation following Inpatient Psychiatric DischargeStart Printed Page 37997

a. Background

b. Appropriateness for the IPFQR Program

c. Measure Calculation

d. Data Sources

e. Public Comment

4. Summary of 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. ECE Policy Modifications

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

1. Background

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

a. Background

b. 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 2017

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

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

3. 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. 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. Changes Relating to Survey and Certification Requirements

A. 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)

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

1. Background

2. Basis for Changes

3. Changes to Regulations

XII. MedPAC Recommendations

XIII. Other Required Information

A. Publicly Available Data

B. Collection of Information Requirements

1. Statutory Requirement for Solicitation of Comments

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

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

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

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

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

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

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

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

10. ICRs Relating to Changes in Public Notices of Terminations

Regulation Text

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

V. Updates to the Payment Rates for the LTCH PPS for FY 2018

A. LTCH PPS Standard Federal Payment Rate for FY 2018

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

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

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

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

D. 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 Adjusted LTCH PPS Federal Prospective Payments for FY 2018

VI. Tables Referenced in this Final Rule and Available 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 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 Policy ChangesStart Printed Page 37998

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

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

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

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

5. Effects of the Changes to Medicare DSH and Uncompensated Care Payments for FY 2018

6. Effects of Reduction Under the Hospital Readmissions Reduction Program

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

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

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

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

I. Effects of Changes in the Capital IPPS

1. General Considerations

2. Results

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

1. Introduction and General Considerations

2. Impact on Rural Hospitals

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

4. Effect on the Medicare Program

5. Effect on Medicare Beneficiaries

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

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

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

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

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

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

Q. Effects of 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. FY 2018 Inpatient Hospital Update

B. Update for SCHs for FY 2018

C. FY 2018 Puerto Rico Hospital Update

D. Update for Hospitals Excluded from the IPPS

E. 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 final rule makes 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 changes 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 makes 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 makes policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs.

We are establishing 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 establishing new requirements or revising existing requirements for eligible professionals (EPs), eligible hospitals, and CAHs participating in the Medicare and Medicaid EHR Incentive Programs. We are updating 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 making 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 making 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; extended neoplastic disease care hospitals (previously referred to as “long-term care neoplastic disease hospitals” and renamed in this final rule), 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 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.Start Printed Page 37999
  • 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 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.
  • 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 point 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(c) 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 section 2(a) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act, Pub. L. 113-185), which provides for the establishment of data reporting 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 of 2012 (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 of 2015 (MACRA) (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 making 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 Start Printed Page 380002018 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.

c. Reduction of Hospital Payments for Excess Readmissions

We are making 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 final rule, we are establishing the following policies: (1) Specify applicable time period for FY 2018; (2) specifying the calculation of aggregate payments for excess readmissions for FY 2018; (3) making changes to the payment adjustment factor in accordance with the 21st Century Cures Act for FY 2019; and (4) updating the Extraordinary Circumstances Exceptions 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 final rule, we are removing 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 adopting 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 adopting 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 making two modifications to our domain scoring policies beginning with the FY 2019 program year, and further establishing a new weighting methodology for the measures within the Efficiency and Cost Reduction domain. We also are addressing public comment submitted in response to our comment solicitation on whether and how to account for 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 final rule, we are establishing the following policies: (1) Specifying the data collection time periods for the FY 2020 HAC Reduction Program; and (2) updating the Extraordinary Circumstances Exception policy for the HAC Reduction Program. In this final rule, we also are responding to comments received regarding: (1) Additional measures and potential future adoption; (2) accounting for social risk factors; and (3) the inclusion of disability and medical complexity for the CDC NHSN measures.

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 final rule, we are updating 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 using 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 beginning to incorporate 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. We will continue to use data from three cost reporting periods to calculate Factor 3, which will gradually incorporate uncompensated care data from Worksheet S-10 into the calculation of Factor 3. As part of this policy, we are including a definition of uncompensated care costs consisting of the sum of charity care and bad debt and a trim methodology to address aberrant cost-to-charge ratios (CCRs) as well as potentially aberrant uncompensated care costs that exceed a threshold of 50 percent of total operating costs. We also are providing that, for Puerto Rico hospitals, Indian Health Service and Tribal hospitals, and all-inclusive rate providers, we will substitute data regarding low-income insured days for FY 2013 for the Worksheet S-10 data from FY 2014 cost reports.

We are continuing 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 continuing 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 annualizing hospital cost reports that do not span 12 months. We also are applying 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 Start Printed Page 38001uncompensated care payments for FY 2018.

g. Changes to the LTCH PPS

In this final rule, we set forth changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2018; changes to the payment methodology under the short-stay outlier (SSO) policy; implementation of several provisions of the 21st Century Cures Act; and the adoption of 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 final rule, we are finalizing several changes. First, we are refining two previously adopted measures. Specifically, we are finalizing an update to 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 with modification that public reporting would be delayed. In addition, we are finalizing an update to the stroke mortality measure to include the use of NIH Stroke Scale claims data for risk adjustment, beginning with the FY 2023 payment determination. We also are adopting the Hospital-Wide All-Cause Unplanned Readmission Hybrid Measure as a voluntary measure for the CY 2018 reporting period.

In addition, we are finalizing a modified, reduced policy for eCQM reporting as compared to our proposals. For both the CY 2017 reporting period/FY 2019 payment determination and CY 2018 reporting period/FY 2020 payment determination, we are finalizing that hospitals will be required to select and submit four of the available eCQMs included in the Hospital IQR Program measure set and provide one self-selected, calendar year quarter of data. We are also modifying our eCQM certification requirements such that for the CY 2018 reporting period hospitals will be able to use: (1) The 2014 Edition of CERHT, (2) the 2015 Edition of CEHRT, or (3) a combination of both the 2014 and 2015 Editions of CEHRT. In addition, we are finalizing the following policies: (1) For the CY 2017 reporting period/FY 2019 payment determination and the CY 2018 reporting period/FY 2020 payment determination, a hospital using EHR technology certified to the 2014 or 2015 Edition, but for which such EHR technology is not certified to all 15 available eCQMs available to report, will be required to have its EHR technology certified to all 15 eCQMs that are available to report in the Hospital IQR Program; (2) for the CY 2017 reporting period/FY 2019 payment determination, hospitals will be required to use the most recent version of the eCQM electronic specifications (namely, the Spring 2016 version of the eCQM specifications and any applicable addenda); (3) for the CY 2018 reporting period/FY 2020 payment determination, hospitals will be required to use the most recent version of the eCQM electronic specifications (namely, the Spring 2017 version of the eCQM specifications and any applicable addenda); and (5) hospitals' EHR technology certified to all 15 eCQMs would not need to be recertified each time it is updated to a more recent version of the eCQMs. These policies are being made in alignment with the CQM electronic reporting policies for the Medicare and Medicaid EHR Incentive Programs, and will 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.

Furthermore, we are finalizing our policies for the eCQM data validation process, whereby we will select eight cases per quarter (the number of quarters required will vary by specific FY payment determination) to complete eCQM validation for the FY 2020 payment determination and subsequent years. In addition, for the FY 2020 payment determination and subsequent years, we are establishing policies related to the exclusion criteria for hospital and case selection, and the data submission requirements for participating hospitals. For the FY 2021 payment determination and subsequent years, we are finalizing our proposal to extend our previously finalized medical record submission policy for eCQM validation requiring submission of at least 75 percent of sampled eCQM measure medical records in a timely and complete manner. Also, we are: (1) Formalizing our educational review process for chart-abstracted measures for the FY 2020 payment determination and subsequent years, and (2) finalizing that we will use this process to correct quarterly scores for any of the first 3 quarters of validation in order to compute the final confidence interval.

Moreover, we are establishing policies related to our Hospital IQR Program Extraordinary Circumstances Extension or Exemptions policy, including a change to the name of the policy to Extraordinary Circumstances Exceptions (ECE) policy and updates to 42 CFR 412.140(c)(2) to reflect our ECE policy. Finally, we responded to our solicitation of 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) 11 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 final rule, we are adopting one new outcome measure related to pressure ulcers and two new measures (one process and one outcome) related to ventilator weaning. We also are defining the certain 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 will 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 policy changes. First, beginning with the FY 2019 payment determination (that is, for extraordinary circumstances occurring during CY 2018), we are updating the IPFQR Program's extraordinary circumstances Start Printed Page 38002exceptions (ECE) policy by: (1) Allowing designated personnel to provide their contact information and sign the ECE request in lieu of the requesting IPF's 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 ECE requests within 90 days of receiving them. Second, we are changing 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. Third, we are aligning our deadlines for submission of a Notice of Participation (NOP) or program withdrawal with this data submission timeframe. Finally, we are establishing factors by which we will evaluate measures for removal from or retention under the IPFQR Program. These factors align with those in use in other quality reporting programs.

We are not finalizing our proposal to adopt the Medication Continuation following Inpatient Psychiatric Discharge measure for FY 2020 payment determination and subsequent years.

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 making 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 providing 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, will 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 0.6 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.

  • 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 final rule, we estimate that 2,591 hospitals will 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 will 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 will 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.
  • 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 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 changes to the payment rates and factors that we are presenting in the preamble and Addendum of this final 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 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 will result in an estimated decrease in payments from FY 2017 of approximately $195 million.
  • Changes to the 25-Percent Threshold Policy. In this final rule, we estimate our adoption of a 1-year regulatory delay of the full implementation of the 25-percent threshold policy for discharges occurring in FY 2018 will increase payments to LTCHs in FY 2018 by $70 million.
  • Changes to the Hospital Inpatient Quality Reporting (IQR) Program. Across 3,300 IPPS hospitals, we Start Printed Page 38003estimate that our finalized requirements for the Hospital IQR Program will result in the following changes to costs and benefits in this program compared to previously finalized requirements: (1) A cost reduction of $613,864 for the FY 2019 payment determination due to the updates to the eCQM reporting requirements; (2) a total net cost reduction of $866,277 for the FY 2020 payment determination due to the updates to the eCQM reporting requirements, the updates to the eCQM validation procedures, and the voluntary reporting of the new Hybrid Hospital-Wide Readmission measure; and (3) a total cost reduction of $255,104 for the FY 2021 payment determination due to the updates to the eCQM validation procedures.
  • Changes Related to the LTCH QRP. In this final rule, we are adopting one outcome measure related to pressure ulcers and two new measures (one process and one outcome) related to ventilator weaning. We also are specifying the use of certain 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 changes to the LTCH QRP is estimated at a reduction of $893.14 per LTCH annually or $380,480 for all LTCHs.
  • Changes to the IPFQR Program. In this final rule, we are not adopting the one claims-based measure we proposed. However, we are updating our ECE process; changing the specification of the data submission period; aligning the timeframe for submission of the NOP or program withdrawal with the data submission period; and establishing factors 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 Start Printed Page 38004for 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; extended neoplastic disease care hospitals (referred to as “long-term care neoplastic disease hospitals” in the proposed rule and renamed for this final rule, which were 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 included along with the IPPS annual update in this 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 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 Implemented in This Final Rule

1. The American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240), the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (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 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 final rule, we are continuing to update certain policies 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 Start Printed Page 38005Quality Reporting Program (LTCH QRP). In this final rule, we are continuing to implement portions of section 1899B of the Act, as added by section 2(a) 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 final rule, consistent with this requirement, we are updating the LTCH standard Federal payment rate by 1.0 percent for FY 2018.

The MACRA also extended the MDH program and temporary changes to the payment adjustment for low-volume hospitals through FY 2017. In this final 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, the Hospital Readmissions Reduction Program and the Medicare EHR Incentive Program, which we are implementing in this final 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 final rule, we are implementing 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 implementing 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 final 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 for 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 final rule, we are implementing 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 such LTCH's cost reporting periods that begin 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.
  • 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. Issuance of a Notice of Proposed Rulemaking

In the proposed rule that appeared in the Federal Register on April 28, 2017 (82 FR 19796), we set 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 set forth proposed changes to the payment rates, factors, and other payment and policy-related changes to programs Start Printed Page 38006associated with payment rate policies under the LTCH PPS for FY 2018.

Below is a summary of the major changes that we proposed to make.

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

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

  • 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 recalibration 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 the proposed rule, we proposed 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 Rebasing and Revising of Hospital Market Basket

In section IV. of the proposed rule, we proposed 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 the proposed rule, we discussed 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 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 proposed 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 the proposed rule, we discussed 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 the proposed rule, we discussed—

  • 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 the 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 38007
  • 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 addressed—

  • 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 the proposed rule, we presented 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 the 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 the 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 proposed to establish the threshold amounts for outlier cases. In addition, we addressed 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 the 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 proposed 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 the 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 the proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provided 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 addressed these recommendations in Appendix B of the 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. 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).

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 Start Printed Page 38008with comment period (72 FR 47140 through 47189).

D. 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 (Public Law 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 final 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. For 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 Start Printed Page 38009that, 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. 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19816) for FY 2018, we proposed to implement the required +0.4588 percentage point adjustment to the standardized amount. This is a permanent adjustment to payment rates. While we did not propose future adjustments required under section 414 of the MACRA and section 15005 of Public Law 114-255 at that time, we stated in the proposed rule that we expect to propose positive 0.5 percentage point adjustments to the standardized amounts for FYs 2019 through 2023.

Comment: Several commenters reiterated their disagreement with the −1.5 percentage point adjustment that CMS made for FY 2017 under section 631 of the ATRA, which exceeded the estimated adjustment of approximately −0.8 percentage point described in the FY 2014 IPPS/LTCH PPS rulemaking. Commenters contended that, as a result, hospitals would be left with a larger permanent cut than Congress intended following the enactment of MACRA. They asserted that CMS' proposal to apply a 0.4588 percent positive adjustment for FY 2018 misinterprets the relevant statutory authority, and urged CMS to align with their view of Congress' intent by restoring an additional +0.7 percentage point adjustment to the standardized amount in FY 2018; that is, the difference between the −1.5 percentage point adjustment made in FY 2017 and the initial estimate of −0.8 percentage point discussed in the FY 2014 IPPS/LTCH PPS rulemaking. Commenters also urged CMS to use its discretion under section 1886(d)(5)(I) of the Act to increase the FY 2018 adjustment by 0.7 percentage point. Other commenters requested that, despite current law, CMS ensure that adjustments totaling the full 3.9 percentage points withheld under section 631 of the ATRA be returned.

Response: As discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56783 through 56785), CMS completed the $11 billion recoupment required under section 631 of the ATRA. We continue to disagree that section 414 of the MACRA was intended to augment or limit our separate obligation under the ATRA to fully offset $11 billion by FY 2017, as we discussed in response to comments in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56784). Moreover, as we discussed in the FY 2018 IPPS/LTCH PPS proposed rule, we believe the directive regarding the applicable adjustment for FY 2018 is clear. While we had anticipated making a positive adjustment in FY 2018 to offset the reductions required to recoup the $11 billion under section 631 of the ATRA, section 414 of the MACRA requires that we not make the single positive adjustment we intended to make in FY 2018 but instead make a 0.5 percentage point positive adjustment for each of FYs 2018 through 2023. As noted by the commenters, and discussed in the FY 2017 IPPS/LTCH PPS final rule, by phasing in a total positive adjustment of only 3.0 percentage points, section 414 of the MACRA would not fully restore even the 3.2 percentage point adjustment originally estimated by CMS in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515). Finally, Public Law 114-255, which further reduced the positive adjustment required for FY 2018 from 0.5 percentage point to 0.4588 percentage point, was enacted on December 13, 2016, after CMS proposed and finalized the −1.5 percentage point adjustment as the final adjustment required under section 631 of the ATRA in the FY 2017 rulemaking.

After consideration of the public comments we received, we are finalizing the +0.4588 percentage point adjustment to the standardized amount for FY 2018, as required under section 15005 of Public Law 114-255.

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 final 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 19 CCRs and the MS-DRG relative weights for FY 2018 is included in section II.G. of the preamble to this FY 2018 IPPS/LTCH PPS final rule. As we did with the FY 2018 IPPS/LTCH PPS proposed rule, we are providing the version of the HCRIS from which we calculated these 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 Start Printed Page 38010left side of the screen titled, “FY 2018 IPPS Final Rule Home Page” or “Acute Inpatient Files for Download.”

Comment: One commenter recommended that CMS work with stakeholders to update cost reporting instructions and improve the accuracy and validity of the national average CCRs. The commenter expressed concern that the differences between hospitals' use of nonstandard cost center codes and CMS' procedures for mapping and rolling up nonstandard codes to the standard cost centers will continue to result in invalid CCRs and inaccurate payments. The commenter stressed the need for flexibility in cost reporting, to accommodate any new or unique services that certain hospitals may provide, which may not be easily captured through the cost reporting software. Finally, the commenter again recommended, as it had done in response to prior IPPS rules, that CMS pay particular attention to data used for CT scan and MRI cost centers; the commenter believed that the hospital payment rates established by CMS from the CT scan and MRI CCRs simply do not correlate with resources used for these capital-intensive services.

Response: We received a similar public comment last year and responded to it in the FY 2017 IPPS/LTCH PPS final rule. We refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56787) for our response to these issues. We note that we will continue to explore ways in which we can improve the accuracy of the cost report data and calculated CCRs used in the cost estimation process.

Comment: One commenter requested that CMS use a single diagnostic radiology CCR to set weights, rather than using the separate CT and MRI cost centers. The commenter requested that if CMS maintains the separate CT and MRI cost centers, CMS should not include cost reports from hospitals that use the “square foot” allocation methodology. The commenter provided an analysis to support its assertion that the CCRs for CT and MRI are incorrect and are inappropriately reducing payments under the IPPS. The commenter indicated that the charge-compression hypothesis has been shown to be false with the use of the separate CT and MRI cost centers. The commenter discussed problems with cost allocation to the CT and MRI cost centers. The commenter referenced discussions in prior IPPS/LTCH PPS rules about this issue. The commenter acknowledged that CMS did not include a specific proposal in the FY 2018 proposed rule regarding this issue.

Response: As the commenter noted, we did not make any proposals for FY 2018 relating to the number of cost centers used to calculate the relative weights. As noted previously and discussed in detail in prior rulemaking, we have calculated the IPPS MS-DRG relative weights using 19 CCRs, including distinct CCRs for MRIs and CT scans, since FY 2014. We refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785) for a detailed discussion of the basis for establishing these 19 CCRs. We further note that in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50518 through 50523), we presented data analyses using distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. As we noted, we will continue to explore ways in which we can improve the accuracy of the cost report data and calculated CCRs used in the cost estimation process.

F. Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for 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 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 final 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. As discussed in the proposed rule, 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-DRG Classification Change Requests Mailbox located at: MSDRGClassificationChange@cms.hhs.gov.

Following are the changes that we proposed to the MS-DRGs for FY 2018 in the FY 2018 IPPS/LTCH PPS proposed rule. We invited 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 the proposed rule. In some cases, we proposed changes to the MS-DRG classifications based on our analysis of claims data. In other cases, we proposed to maintain the existing MS-DRG classification based on our analysis of claims data. For the 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”.

In this FY 2018 IPPS/LTCH PPS final rule, we summarize the public comments we received on our proposals, present our responses, and state our final policies. For this FY 2018 final rule, we performed limited additional MS-DRG analysis of claims data. Therefore, all of the data analysis is based on 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, except where specifically noted that it is based on the Start Printed Page 38011March 2017 update of the FY 2016 MedPAR file, which contains hospital bills received through March 31, 2017, for discharges occurring through September 30, 2016.

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.

Comment: Several commenters expressed concern regarding the use of ICD-10 claims data for proposed updates to the FY 2018 ICD-10 MS-DRGs Version 35 and in recalibrating the proposed FY 2018 MS-DRG relative weights. Commenters reported that the proposed relative weights for certain MS-DRGs had large reductions when compared to the current FY 2017 ICD-10 MS-DRG Version 34 relative weights. Specifically, commenters noted that MS-DRG 215 (Other Heart Assist System Implant) appeared to have the largest decrease by approximately 35% although it was not the subject of a new proposal in the FY 2018 IPPS/LTCH PPS proposed rule. According to the commenters, the proposed reductions for certain relative weights are a direct result of the transition from ICD-9 to ICD-10 coded claims data that was utilized in setting the proposed FY 2018 MS-DRG relative weights. The commenters stated that, if finalized as proposed, these reductions could limit access to the necessary services for Medicare beneficiaries and urged CMS to consider phasing in these significant fluctuations that they asserted cause instability of the weights and hinder providers in their ability to project anticipated payment rates. Many commenters also recommended that CMS limit the percentage by which an MS-DRG's relative weight can be reduced.

Commenters also believed that the fluctuations in the proposed relative weights do not appear to be consistent with the deliberate approach CMS has taken to ensure a smooth transition from ICD-9 to ICD-10. The commenters noted that, in the past, CMS has appropriately recognized and made efforts to maintain stability within the IPPS during the transition, such as providing several versions of the ICD-10 MS-DRG Grouper for review, contracting for studies to evaluate the impact of converting the MS-DRGs to ICD-10 and assembling various public meetings. The commenters also noted that CMS has observed broader principles in prior rulemaking with regard to payment stability such as during the transition from charge-based weights to cost-based weights in FY 2007 and the conversion of the CMS DRGs to MS-DRGs in FY 2008. Consistent with those past policy refinements and the steps taken to mitigate fluctuations potentially affecting IPPS payment, commenters requested that CMS once again exercise its authority to do so. We refer readers to section II.G. of the preamble of this FY 2018 IPPS/LTCH PPS final rule for further discussion regarding recalibration of the FY 2018 MS-DRG relative weights, including our response to comments requesting a transition period for substantial reductions in relative weights in order to facilitate payment stability.

As stated above, commenters noted that MS-DRG 215 (Other Heart Assist System Implant) appeared to have the largest decrease by approximately 35% although it was not the subject of a new proposal in the FY 2018 IPPS/LTCH PPS proposed rule. We received multiple comments stating that the American Hospital Association published Coding Clinic advice that changed coding guidance for external heart assist devices and that this will result in higher-cost patients with more ICU days and increased lengths of stay that are assigned to MS-DRG 215 in FY 2018. The commenters noted there will be a substantial difference in coding for this patient population that is not reflected in the current cost data used to set the FY 2018 payment rates and a commenter urged CMS to revise the structure of MS-DRG 215 as an alternative option to address the decrease in the FY 2018 proposed relative weight for this MS-DRG. According to the commenter, restructuring this MS-DRG would more accurately reflect the resources required for cases that will be assigned to this MS-DRG in FY 2018 and is consistent with the agency's continuing efforts to ensure accurate replication between the ICD-9 and ICD-10 based MS-DRGs.

The commenter noted that currently, patients who receive heart assist devices may be assigned to the Pre-MDC MS-DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System) or MS-DRG 215 (Other Heart Assist System Implant). The commenter asserted that the transition from using ICD-9 codes to ICD-10 codes as the basis for MS-DRG assignment has been impacted by the significant increase in the number of codes relevant to the assignment of a MS-DRG because ICD-10 is more granular. This commenter recommended that CMS revise the assignments for the ICD-10 procedure codes grouping to MS-DRG 215 to accurately replicate the logic used to assign ICD-9 procedure codes to MS-DRG 215.

An example of how the MS-DRG assignment has been impacted by the transition to ICD-10 was provided by the commenter who noted that under the ICD-9 based MS-DRGs, procedure code 37.62 (Insertion of temporary non-implantable extracorporeal circulatory assist device) was reported for both the insertion and removal of an external heart assist device and was assigned to MS-DRG 215. However, under ICD-10, two codes are required, one for the insertion and one for the removal of the device where the logic for the combination of those two codes results in assignment to Pre-MDC MS-DRGs 001 and 002 (Heart transplant or Implant of Heart Assist System). Start Printed Page 38012Another example offered by the commenter included ICD-9 procedure code 37.63 (Repair of heart assist system) where, under ICD-10, these cases could be reported with a code describing revision of an external heart assist device or these cases could be reported with a combination of codes, one for the removal and one for the revision of an external heart assist device. The commenter suggested that the combinations of insertion and removal codes and the combinations of removal and revision codes be reassigned from the Pre-MDC MS-DRGs 001 and 002 to MS-DRG 215 to accurately replicate the logic that was used in the ICD-9 based MS-DRGs.

The commenter performed its own analysis of MS-DRG 215 using the FY 2016 MedPAR data and noted that its findings indicated there was a decrease in the volume of procedures involving a repair or revision of a heart assist system device and an increase in the number of insertion or implantation of heart assist system devices when compared to the FY 2015 MedPAR data. The commenter's findings also indicated that there was a decrease in the average total standardized charges, as well as a decrease in the severity of illness of the patients grouping to this MS-DRG in FY 2016 compared to FY 2015. For example, the commenter noted that its analysis showed approximately 95 percent of insertion or implant of heart assist system cases also reported a secondary diagnosis of an MCC in FY 2015; however, this number dropped to 84 percent in FY 2016. Additionally, the commenter reported that approximately 73 percent of the revision of heart assist system cases also reported a secondary diagnosis of an MCC in FY 2015; however, this number dropped to 67 percent in FY 2016. The commenter stated that the clinical and usage changes for these devices do not account for this dramatic 1-year reversal.

Response: We agree with the commenter that under the ICD-9 based MS-DRGs, procedure code 37.62 (Insertion of temporary non-implantable extracorporeal circulatory assist device) was reported for both the insertion and removal of an external heart assist device and was assigned to MS-DRG 215. We also agree with the commenter that, under ICD-10, two codes are currently required to describe this same procedure, one for the insertion and one for the removal of the device where the logic for the combination of those two codes results in assignment to Pre-MDC MS-DRGs 001 and 002 (Heart transplant or Implant of Heart Assist System). Lastly, we agree with the example offered by the commenter that included ICD-9 procedure code 37.63 (Repair of heart assist system) where under ICD-10, these cases could be reported with a code describing revision of a heart assist device or these cases could be reported with a combination of codes, one for the removal and one for the revision of a heart assist device.

We also are aware that the American Hospital Association published Coding Clinic advice that clarified coding and reporting for certain external heart assist devices due to the technology being approved for new indications. We point out that coding advice is issued independently from payment policy. That is, in our annual IPPS rulemaking, in considering updates to the MS-DRGs, it is typically not our process to analyze changes in published coding advice. We generally do not make proposals for MS-DRG reclassification changes in the absence of data and clinical input from our clinical advisors.

In response to the commenters' request to ensure accurate replication between the ICD-9 and ICD-10 based MS-DRGs for external heart assist devices in conjunction with the public comments requesting that we maintain stability in the MS-DRG relative payment weights, we note that, for FY 2018 and beyond, we are no longer replicating the ICD-9 MS-DRGs. As stated in the FY 2018 IPPS/LTCH PPS proposed rule and this final rule, we are using ICD-10 coded claims data for the first time to propose changes to the ICD-10 MS-DRG classifications and to compute the relative weights. Therefore, our proposals and final policies for FY 2018 are based only on the ICD-10 claims data from the FY 2016 MedPAR file. However, similar to our efforts in identifying areas where improvements could be made to better account for severity of illness and resource utilization during the transition from the CMS DRGs to the MS-DRGs, we are making concerted efforts to continue refining the ICD-10 MS-DRGs after transitioning from the ICD-9 MS-DRGs.

We appreciate the commenters' acknowledgement of our efforts to maintain stability within the IPPS during the transition period to ICD-10 as noted above. We also acknowledge and appreciate the analysis that was conducted by the commenter for MS-DRG 215. We believe it is important to be able to fully evaluate the effects and the impact of restructuring any MS-DRGs for which all heart assist system procedures are currently assigned under ICD-10. As part of this evaluation, we believe it would be advantageous to consider additional ICD-10 coded claims data as well as changes in a hospital's case-mix (for example, patient characteristics) to determine if the patients undergoing a heart assist system procedure or a combination of heart assist system procedures demonstrate a greater severity of illness and/or increased treatment difficulty as a result of the surgical approach that is used (for example, open, percutaneous, percutaneous endoscopic, among others). Finally, consultation with our clinical advisors is also important to properly analyze the appropriateness of any modifications to the MS-DRGs where a heart assist device is currently assigned.

Therefore, in response to the public comments received, we are planning to review for FY 2019 the current ICD-10 logic for Pre-MDC MS-DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively), MS-DRG 215 (Other Heart Assist System Implant) and MS-DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with and without MCC, respectively) where procedures involving the heart assist devices are currently assigned. We refer the reader to the ICD-10 MS-DRG Definitions Manual version 34, 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 complete documentation of the GROUPER logic for Pre-MDC MS-DRGs 001 and 002, MS-DRG 215, and MS-DRGs 268 and 269. We also encourage the public to submit any comments on restructuring the MS-DRGs for heart assist system procedures to the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov by November 1, 2017.

As previously stated, we are making concerted efforts to continue refining the ICD-10 MS-DRGs after transitioning from the ICD-9 MS-DRGs. We believe that it is important to include the Pre-MDC MS-DRGs and the other MS-DRGs comprised of heart assist system procedures as part of our comprehensive review of each MDC and the corresponding MS-DRGs assigned to them. After consideration of the public comments we received, we are maintaining the current structure of MS-DRG 215 for FY 2018, under the ICD-10 MS-DRGs Version 35.

We are making the FY 2018 ICD-10 MS-DRG GROUPER and Medicare Code Editor (MCE) Software Version 35 available to the public on our CMS Web Start Printed Page 38013site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html through the FY 2018 IPPS Final Rule Home Page.

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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19817 through 19818), 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 lengths 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).

As we discussed in the proposed rule, 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. We stated in the proposed rule that 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
Start Printed Page 38014
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. We stated in the proposed rule that 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. We stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19817 through 19818), we proposed 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 invited public comments on our proposal.

Comment: Several commenters supported CMS' statement that diagnosis code R53.2 does not belong in MS-DRGs 052 and 053 because this condition does not involve a spinal disorder or injury. The commenters supported reassigning the code from MS-DRGs 052 and 053. However, one commenter suggested that instead of assigning diagnosis code R53.2 to MS DRGs 091, 092, and 093 (Other Disorders of Nervous System with MCC, with CC, and without CC/MCC, respectively) for FY 2018, CMS instead reassign it to MS-DRGs 947 and 948 (Signs and Symptoms with MCC and without MCC, respectively). The commenter stated that the ICD-10-CM code for functional quadriplegia, R53.2, is located in Chapter 18, Symptoms, Signs and Abnormal Findings because it can be the result of a variety of underlying conditions. Therefore, the commenter believed it was not appropriate to classify this diagnosis as a nervous system disorder. The commenter pointed out that other codes in ICD-10-CM category R53 are assigned to MS-DRGs 947 and 948. Therefore, the commenter believed that it was appropriate to reassign code R53.2 from MS-DRGs 052 and 053 to MS-DRGs 947 and 948.

Response: We agree with the commenter that diagnosis code R53.2 is located in Chapter 18, Symptoms, Signs and Abnormal Findings because it can be the result of a variety of underlying conditions. We also agree that this code cannot be labeled as a nervous system disorder. Therefore, we agree that there is merit in reassigning diagnosis code R53.2 where other codes in category R53 are assigned in MS-DRGs 947 and 948. We examined claims data from the December 2016 update of the FY 2016 MedPAR file on cases in MS-DRGs 947 and 948. Our findings are shown in the table below.

Cases in MS-DRGs 947 and 948

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 947-All cases10,7994.7$8,225
MS-DRG 948-All cases36,1233.35,494

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. This compares to all cases in MS-DRG 947 which had an average length of stay of 4.7 days and average costs of $8,225. Therefore, the average length of stay for functional quadriprlegia cases in MS-DRG 052 was 0.2 days longer and the average costs Start Printed Page 38015were $1,805 lower than all cases in MS-DRG 947. 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. This compares to all cases in MS-DRG 948 which had an average length of stay of 3.3 days and average costs of $5,494. Therefore, the average length of stay for functional quadriprlegia cases in MS-DRG 053 is the same as all cases in MS-DRG 948 and the average costs are $3,176 lower than all cases in MS-DRG 948. The average costs of functional quadriplegia cases are lower than all cases in MS-DRGs 091, 092, and 093 as well as in MS-DRGs 947 and 948. The average length of stay of functional quadriplegia cases are similar to those in MS-DRGs 947 and 948. We agree with the commenter that the more appropriate MS-DRG assignment would be MS-DRGs 947 and 948 because these MS-DRGs capture similar symptom codes.

Our clinical advisors reviewed this clinical issue along with the claims data for MS-DRGs 947 and 948. Our clinical advisors agree that because diagnosis code R53.2 is a symptom code that could be the result of a variety of underlying conditions, it would not be appropriate to assign it to nervous system MS-DRGs such as MS DRGs 091, 092, and 093 as we proposed. Our clinical advisors agreed with the commenter that this symptom code should be assigned to MS-DRGs 947 and 948 where other symptom codes are assigned.

After consideration of the public comments that we received and the advice of our clinical advisors, we are finalizing the assignment of code R53.2 (Functional quadriplegia) to MS-DRGs 947 and 948 (Signs and Symptoms with MCC and without MCC, respectively).

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 code 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. 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 Start Printed Page 38016without 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.
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 Start Printed Page 38017RNS© 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).

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19818 through 19822), 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
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). As we stated in the proposed rule, 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 stated in the proposed rule that 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 Start Printed Page 38018diagnosis 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, as we discussed in the proposed rule, 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 present, 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19818 through 19822), we proposed 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 proposed 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 invited public comments on our proposals.

Comment: Commenters supported CMS' proposal to reassign cases with insertion of a neurostimulator generator and a principal diagnosis of epilepsy to MS-DRG 023. The commenters also agreed with the proposed change in the title of MS-DRG 023. The commenters stated that the updates were necessary for Comprehensive Epilepsy Centers to be able to offer the RNS© neurostimulator. One commenter who supported this MS-DRG update recommended that codes in subcategories G40.A and G40.B be included in the list of epilepsy diagnosis codes classified to MS-DRG 023 because these subcategory codes are also epilepsy codes.

Response: We appreciate the commenters' support for our recommendations. We identified the following list of epilepsy codes that are included under categories G40.A and G40.B.

  • G40.A01 Absence epileptic syndrome, not intractable, with status epilepticus
  • G40.A09 Absence epileptic syndrome, not intractable, without status epilepticus
  • G40.A11 Absence epileptic syndrome, intractable, with status epilepticus
  • G40.A19 Absence epileptic syndrome, intractable, without status epilepticus
  • G40.B01 Juvenile myoclonic epilepsy, not intractable, with status epilepticus
  • G40.B09 Juvenile myoclonic epilepsy, not intractable, without status epilepticus
  • G40.B11 Juvenile myoclonic epilepsy, intractable, with status epilepticus
  • G40.B19 Juvenile myoclonic epilepsy, intractable, without status epilepticus

We agree that the codes listed above are also epilepsy codes and should be added to the list of epilepsy codes assigned to MS-DRG 023 because they also capture a type of epilepsy. Our clinical advisors reviewed this issue and agree with adding the additional epilepsy codes.

For FY 2018, the complete list of epilepsy codes assigned to MS-DRG 023 under our finalized policy is as follows:

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.
Start Printed Page 38019
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.
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.A01Absence epileptic syndrome, not intractable, with status epilepticus.
G40.A09Absence epileptic syndrome, not intractable, without status epilepticus.
G40.A11Absence epileptic syndrome, intractable, with status epilepticus.
G40.A19Absence epileptic syndrome, intractable, without status epilepticus.
G40.B01Juvenile myoclonic epilepsy, not intractable, with status epilepticus.
G40.B09Juvenile myoclonic epilepsy, not intractable, without status epilepticus.
G40.B11Juvenile myoclonic epilepsy, intractable, with status epilepticus.
G40.B19Juvenile myoclonic epilepsy, 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.

After consideration of the public comments that we received, we are finalizing our proposal to reassign all cases with a principal diagnosis of epilepsy from the epilepsy diagnosis list provided above, 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 finalizing our proposed change to 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 modifications to MS-DRG assignments.

c. Precerebral Occlusion or Transient Ischemic Attack with Thrombolytic

We received a request to add the ICD-10-CM diagnosis codes currently Start Printed Page 38020assigned 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.
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.
Start Printed Page 38021
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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19822 through 19824), 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
MS-DRG 068—Cases with tPA334.313,814

As we stated in the proposed rule, 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 Start Printed Page 38022stay and approximately twice the amount of average costs in comparison to all cases in MS-DRG 069.

We stated in the proposed rule that 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 stated that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19824), for FY 2018, we proposed 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 invited public comments on our proposal.

We also proposed 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 invited public comments on our proposals.

Comment: Several commenters supported the proposal to modify the GROUPER logic for MS-DRGs 061, 062, and 063 to better account for the subset of patients who are treated successfully with tPA at the onset of stroke symptoms. The commenters agreed that this change will encourage appropriate physician documentation for a precerebral occlusion or transient ischemic attack when patients are treated with tPA and that it will more accurately reflect proper payment for stroke care. Commenters also agreed with retitling MS-DRGs 061, 062, 063 and 069. One commenter who supported the proposals also suggested that CMS consider developing new MS-DRGs in the future to specifically distinguish acute ischemic strokes from precerebral occlusions and transient ischemia, with and without thrombolytics, with and without MCC/CC, respectively.

Response: We appreciate the commenters' support. As additional ICD-10 claims data become available, we will continue to welcome input from the public and consider further modifications to the ICD-10 MS-DRGs if warranted.

After consideration of the public comments that we received, we are finalizing our proposal 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 also are finalizing our proposal 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” effective October 1, 2017 for the ICD-10 MS-DRGs Version 35.

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).

As stated in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19824 through 19825), 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

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 Start Printed Page 38023drugs 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 stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19824 through 19825), we proposed 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 invited public comments on our proposal.

Comment: Several commenters supported CMS' proposal to reassign four poisoning codes from MS-DRGs 124 and 125 to MS-DRGs 917 and 918. The commenters stated that the proposal was reasonable considering the information provided.

Response: We appreciate the commenters' support for our proposal.

After consideration of the public comments that we received, we are finalizing our proposal 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.

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. We stated in the proposed rule that 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 the FY 2016 MedPAR file. We did not find any cases where any one of the six Start Printed Page 38024procedure 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, as we discussed in the proposed rule, 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19825 through 19826), for FY 2018, we proposed 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 invited public comments on our proposal to remove the six procedure codes listed above from MS-DRGs 246 through 249. We also invited public comments on our proposal to maintain their current assignment in MS-DRG 264.

Comment: Commenters supported the proposal to remove the six procedure codes describing insertion of radioactive element into the mediastinum and insertion of radioactive element into the pericardial cavity from MS-DRGs 246 through 249 and to maintain their assignment in MS-DRG 264.

Response: We appreciate the commenters' support.

Comment: One commenter noted that CMS did not discuss how we identified the listed procedure codes or why CMS believes these procedure codes were assigned to MS-DRGs 246 through 249 erroneously. However, the commenter also agreed with the proposal to remove the six procedure codes describing insertion of radioactive element into the mediastinum and insertion of radioactive element into the pericardial cavity from MS-DRGs 246 through 249 and to maintain their assignment in MS-DRG 264. The commenter acknowledged that eliminating erroneous assignments that may have occurred as a result of the transition to ICD-10 is important and requires ongoing efforts.

Response: We appreciate the commenter's support. In response to the comment regarding how these procedure codes were identified, as discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19825), we recognized the fact that two of the six procedure codes describing insertion of radioactive element (0WHC01Z and 0WHD01Z) are not performed using a percutaneous approach, but rather described an open approach to performing the specific procedure and their assignment was to a group of “percutaneous” cardiovascular procedure MS-DRGs. Because the comparable translation of these procedure codes under ICD-9-CM, procedure code 92.27 (Implantation or insertion of radioactive element) did not specify an approach, all comparable ICD-10-PCS translations of the ICD-9-CM code were automatically replicated to the same ICD-10 MS-DRGs during the transition. We agree with the commenter that eliminating erroneous assignments that may have occurred as a result of the transition to ICD-10 is important and requires ongoing efforts.

After consideration of the public comments that we received, we are finalizing our proposal to remove ICD-10-PCS procedure codes 0WHC01Z, 0WHC31Z, 0WHC41Z, 0WHD01Z, 0WHD31Z, and 0WHD41Z from MS-DRGs 246 through 249, and maintain their current assignment in MS-DRG 264 effective October 1, 2017 for ICD-10 MS-DRGs Version 35.

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)

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19826), we proposed 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 proposed to revise the title of MS-DRG 246 to “Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Arteries or Stents”. We proposed 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 invited public comments on our proposals.

Comment: Commenters agreed with the proposal to update the titles for MS-DRG 246 and MS-DRG 248 to better reflect the ICD-10-PCS terminology of “arteries” versus “vessels” as used in the procedure code titles within the classification. One commenter noted that this change adds specificity and makes sense anatomically because percutaneous coronary intervention procedures are performed in arteries, which are a type of vessel.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to revise the titles for MS-DRGs 246 and MS-DRG 248. We are finalizing the title of MS-DRG 246 to “Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Arteries or Stents” and the title of MS-DRG 248 to “Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents” effective October 1, 2017 for ICD-10 MS-DRGs Version 35.

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.Start Printed Page 38025

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).

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19826 through 19827), 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.

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

We stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19827), we Start Printed Page 38026did not propose to create new MS-DRGs for cases involving TAVR and LAAC procedures when performed in combination in the same operative episode. We invited 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.

Comment: Commenters supported the proposal to maintain the current MS-DRG structure for TAVR and LAAC procedures when performed in combination in the same operative episode.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing 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 effective October 1, 2017 for ICD-10 MS-DRGs Version 35.

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 stated in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19827 through 19828) that 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 performed 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 the proposed rule and this final 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.
Start Printed Page 38027

We stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19827 through 19828), we proposed 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 proposed 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 invited public comments on our proposals.

Comment: Many commenters supported the proposal to reassign the four percutaneous mitral valve replacement procedures from MS-DRGs 216 through 221 to MS-DRGs 266 and 267 and to assign the eight new procedure codes that describe percutaneous and transapical, percutaneous tricuspid valve replacement procedures to MS-DRGs 266 and 267. Commenters noted that these updates will appropriately reflect the clinical characteristics and resource use for this group of endovascular cardiac valve replacement procedures.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal 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 and 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 effective October 1, 2017 for ICD-10 MS-DRGs Version 35.

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/clearance marketing authorization. However, the FORMA system is presently available through a compassionate use program. 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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19828 through 19829), 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
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
Start Printed Page 38028
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). We stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19829), we did not propose to reassign cases reporting procedure code 02UJ3JZ from MS-DRGs 216 through 221 to MS-DRGs 228 and 229.

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

Comment: Commenters supported the proposal to maintain the current MS-DRG assignment for ICD-10-PCS procedure code 02UJ3JZ in MS-DRGs 216 through 221. One commenter also noted that, while CMS' analysis demonstrated the current assignment is appropriate, CMS should consider revisiting this procedure in the future in the event it becomes more common and warrants further consideration for reassignment. The commenter believed that there could be value in creating MS-DRGs for endovascular cardiac repair similar to those MS-DRGs for endovascular cardiac valve replacement.

Response: We appreciate the commenters' support. As additional ICD-10 claims data become available, we will continue to welcome input from the public and consider further modifications to the ICD-10 MS-DRGs if warranted.

Comment: One commenter did not agree with the proposal to maintain the current MS-DRG assignment for ICD-10-PCS procedure code 02UJ3JZ in MS-DRGs 216 through 221. The commenter stated that transcatheter tricuspid valve repair procedures are clinically coherent with other percutaneous transcatheter cardiac valve repair procedures. This commenter asserted that the devices utilized in these procedures are currently under clinical investigation and the utilization of these technologies is expected to increase through clinical trials. Therefore, the commenter suggested that these procedures should be assigned to MS-DRGs 228 and 229.

Response: As we noted in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19829), the results of our analysis of the current MS-DRG assignment for percutaneous tricuspid valve repair procedures to MS-DRGs 216 through 221 and the advice of our clinical advisors demonstrate that this procedure is clinically coherent with the other percutaneous procedures performed on the heart valves that are currently assigned to these MS-DRGs because percutaneous repair of the aortic, pulmonary, and tricuspid valves utilizing various tissue substitutes (autologous, nonautologous, zooplastic, and snythetic) are assigned to MS-DRGs 216 through 221. We will continue to consider further modifications to the ICD-10 MS-DRGs as additional ICD-10 claims data become available that support suggested changes.

After consideration of the public comments that we received, we are finalizing our proposal to maintain the current MS-DRG assignment for cases reporting procedure code 02UJ3JZ (Supplement tricuspid valve with synthetic substitute, percutaneous approach) to MS-DRGs 216 through 221 for FY 2018.

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.Start Printed Page 38029

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 hip 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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19829 through 19830), 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). We stated in the proposed rule that 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.

We stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19829 through 19830), we proposed 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 proposed 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 invited public comments on our proposals.

Comment: Several commenters supported CMS' recommendation 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. The commenters also supported the change in MS-DRG titles for MS-DRG 469 and 470 to reflect this MS-DRG update. One commenter stated that claims data supported this recommendation because, as CMS pointed out, the average costs of TAR cases in MS-DRG 470 are much closer to the average costs of all cases in MS-DRG 469 ($20,862 versus $22,139). The commenter also agreed with the CMS clinical advisors that it was clinically appropriate to reassign all TAR procedure cases from MS-DRG 470 to MS-DRG 469, even when there is no MCC reported. The commenter stated that the update will remedy a historical cost-to-payment disparity, and thus enable hospitals to continue offering Primary TAR surgery to Medicare beneficiaries as an economically sustainable, and clinically viable, alternative to ankle fusion when medically appropriate. The commenter commended CMS for its consideration of how to address this MS-DRG issue.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are reassigning 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 changing the titles of MS-DRGs 469 and 470 to the following to reflect these MS-DRG reassignments:

  • MS-DRG 469: “Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement”; and
  • MS-DRG 470: “Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC.”Start Printed Page 38030

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 the requestors indicated 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 which they indicated identify revision of TAR procedures and which are assigned to MS-DRGs 515, 516, and 517. As we discuss later in this section in response to public comments, while the requestors requested that we analyze these eight procedure codes for revisions of TAR procedures in the proposed rule, these procedures are in fact represented by a combination of other codes that capture the root operation removal and replacement of joint devices.

  • 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);
  • 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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19830 through 19831), we examined claims data from the December 2016 update of the FY 2016 MedPAR file on cases reporting the eight revision codes listed above 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 identified with the eight revision codes suggested by the requestor with no cases in MS-DRG 515, two cases in MS-DRG 516, and four cases in MS-DRG 517. We stated in the proposed rule that 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 these revision 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 these revision Start Printed Page 38031procedures 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). We stated that the data do not support reassigning the cases from MS-DRGs 515, 516, and 517.

Furthermore, we stated that the average length of stay and average costs of cases in MS-DRGs 466, 467, 468, and 469 are significantly higher than those for these revision procedures in MS-DRG 516 and 517. We stated that 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 these revision 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 these revision procedures in MS-DRGs 516 and 517, respectively. Therefore, we stated that in the proposed rule that the data do not support reassigning the cases to MS-DRGs 466, 467, 468, or 469.

We stated in the proposed rule that our clinical advisors reviewed the clinical issue and the claims data and agreed that the eight revision codes 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19830 through 19831), we proposed to maintain the current MS-DRG assignment for these revision procedures within MS-DRGs 515, 516, and 517 for FY 2018.

Comment: Commenters supported CMS' proposal to maintain the current MS-DRG assignments for procedures within MS-DRGs 515, 516, and 517 for FY 2018.

Several commenters questioned the reliability of the revision of TAR data presented in the proposed rule. The commenters questioned the codes used in the analysis and stated that revision of TAR procedures are not captured with the Revision of synthetic substitute codes identified in the proposed rule. The commenters stated that the procedures are captured by reporting a combination of codes that capture the removal of a prior device and the replacement of the device with a new device. The commenters stated that the correct root operations for these codes would be Removal and Replacement instead of Revision as stated in the proposed rule. The commenters provided the following codes which reported in combination would identify revision of TAR procedures. The commenters stated that revisions of TAR procedures are performed with an open approach.

Removals

  • 0SPG0JZ (Removal of Synthetic Substitute from Left Ankle Joint, Open Approach); and
  • 0SPF0JZ (Removal of Synthetic Substitute from Right Ankle Joint, Open Approach)

Replacements

  • 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 commenters requested that CMS encourage the correct coding of revision of TAR cases through additional educational materials. The commenters requested that CMS review hospital claims data for revision of TAR procedures using the list of Removal and Replacement code combinations provided to identify revision of TAR cases. The commenter stated that an increasing number of claims for revision of TAR procedures will become identifiable in the future as patients and implants naturally age into a need for revision surgery.

Response: We appreciate the commenters' support for our proposal to maintain the current MS-DRG assignment for procedures within MS-DRGs 515, 516, and 517 for FY 2018.

We conducted an analysis of the correct coding of revision of TARs and agree with the commenters that these cases are not captured with ICD-10-PCS codes with the root operation Revision as stated in the proposed rule. The commenters are correct that the revision of TAR cases are correctly coded using a combination of codes with the root operation Removal and Replacement as the commenters suggested. Updates were made to the ICD-10-PCS index on October 1, 2015 to reinforce this direction. The index entry is shown below:

Revision

Correcting a portion of existing device

see Revision of device in Removal of device without replacement

see Removal of device from Replacement of existing device

see Removal of device from

see Root operation to place new device, e.g., Insertion, Replacement, Supplement

We agree that this index entry clearly indicates that the correct root operations for revision of TARs would be Removal and Replacement. The codes with the root operation Revision (included in the Revision of synthetic substitute codes used in our original analysis) would not be used to capture revision of TAR procedures. Cases reporting the combination codes are assigned to MS-DRGs 469 and 470 (Major Joint Replacement or Reattachment of Lower Extremity with and without MCC, respectively).

As requested by the commenters, we identified revision of TAR cases using the correct ICD-10-PCS codes that are captured with the root operation of Removal and Replacement. We examined our claims data for cases within MDC 8 that reported one of the Removal codes with one of the Replacement codes for ankle joint devices. These codes accurately capture revision of TAR cases. The following table shows our findings.

Revision of Total Ankle Replacement Procedures Using Code Combinations

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 469—All cases25,7786.7$22,139
MS-DRG 469—Cases reporting revision of TAR code combinations0
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MS-DRG 470—All cases461,5532.714,751
MS-DRG 470—Cases reporting revision of TAR code combinations591.719,594

Using the updated correct ICD-10-PCS codes, we found that there were 59 revision of TAR procedures in MS-DRG 470 with average costs of $19,594 and average length of stay of 1.7 days compared to average costs of $14,751 and average length of stay of 2.7 days for all cases in MS-DRG 470. There were no revision of TAR procedures in MS-DRG 469. As discussed in section II.5.a. of the preamble of this final rule on Total Ankle Replacements, we are finalizing updates to reassign all of the TAR procedure codes to MS-DRG 469, even if there is no MCC present, for FY 2018. This update will also impact revision of TAR cases because the same total ankle replacement codes are also used to identify revision of TAR procedures. Therefore, the MS-DRG 469 and 470 updates result in all revision of TAR procedures being assigned to MS-DRG 469 even if there is no MCC reported in FY 2018.

Revisions of TARs were assigned to MS-DRGs 515, 516, and 517 under the ICD-9-CM MS-DRGs. However, an error in replication for the ICD-10 MS-DRGs resulted in the revision of TAR procedure cases being assigned to MS-DRGs 469 and 470. This replication error was not noticed until the commenters on the FY 2018 IPPS/LTCH PPS proposed rule pointed out that accurate coding of revision of TARs would result in cases not being assigned to MS-DRGs 515, 516, and 517. Since the implementation of ICD-10 MS-DRGs, revision of TAR procedure cases have not been assigned to MS-DRGs 515, 516, and 517. Therefore, we do not need to modify MS-DRG logic to reassign revision of TAR procedures from MS-DRGs 515, 516, and 517 because correctly coded cases are not assigned there, but instead to MS-DRGs 469 and 470. As noted earlier, under our finalized policy for FY 2018, all revision of TAR procedures will be assigned to MS-DRG 469, even if there is no MCC reported.

We agree with the commenters that it is important to encourage the accurate and consistent use of ICD-10-PCS to capture procedures such as revision of TAR. Therefore, we have asked the American Hospital Association to provide additional information on how to capture revision of TARs in a future issue of Coding Clinic for ICD-10. We encourage any providers that have revision of TAR cases on which they need ICD-10 coding assistance to submit this information and their questions to the American Hospital Association's Central Office on ICD-10 at https://www.codingclinicadvisor.com/​. We share information included in Coding Clinic for ICD-10 with our contractors.

After consideration of the public comments that we received, we are not finalizing any changes to MS-DRGs 515, 516, and 517 for FY 2018 because, as noted, the revision of TAR procedures are not assigned to these MS-DRGs. Under our finalized policy regarding TAR procedures, as discussed in section II.5.a. of the preamble of this final rule, all TAR procedure cases, as well as revision of TAR procedure cases, will be assigned to MS-DRG 469 for FY 2018, even if there is no MCC present.

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.

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.
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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.

We stated in the proposed rule that 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 noted that cases are assigned to MS-DRGs 456, 457, and 458 when an actual spinal fusion procedure is performed. We stated that 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 were no claims data available at the time of development of the proposed rule and based on the advice of our clinical advisors, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19832), we did not propose to add the six procedure codes to MS-DRGs 456, 457, or 458. We stated that 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 invited 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 invited public comments on our proposal to maintain the assignment of the six procedure codes in MS-DRGs 518, 519, and 520.

Comment: Commenters agreed with CMS' proposal to maintain the assignment of the six procedure codes in MS-DRGs 518, 519, and 520 and to not reassign the six procedure codes describing the use of the MAGEC® System magnetically controlled growth rods to the spinal fusion MS-DRGs 456, 457 and 458.

Response: We appreciate the commenters' support. We also take this time to point out that the three ICD-10-PCS procedure codes describing reposition of the vertebra using magnetically controlled growth rods with a percutaneous endoscopic approach listed below have been deleted as displayed in Table 6D.—Invalid Procedure Codes associated with this FY 2018 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/​index.html) effective October 1, 2017 in the ICD-10 MS-DRGs Version 35.

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

The three ICD-10-PCS procedure codes listed in the table above were discussed in a proposal at the March 7-8, 2017 ICD-10 Coordination and Maintenance Committee meeting. Decisions for proposals presented at that meeting were not finalized at the time of publication of the FY 2018 IPPS/LTCH PPS proposed rule. Additional information relating to the discussion of these codes can be located via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​ICD-9-CM-C-and-M-Meeting-Materials.html. Also included in that discussion was a proposal to add a new approach value to the procedures describing Reposition of the vertebra. As displayed in Table 6B.—New Procedure Codes associated with this FY 2018 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/​index.html), the following three ICD-10-PCS codes have been created effective October 1, 2017 in the ICD-10 MS-DRGs Version 35 and are assigned to MS-DRGs 518, 519 and 520.

ICD-10-PCS codeCode description
XNS0332Reposition of lumbar vertebra using magnetically controlled growth rod(s), percutaneous approach, new technology group 2.
XNS3332Reposition of cervical vertebra using magnetically controlled growth rod(s), percutaneous approach, new technology group 2.
XNS4332Reposition of thoracic vertebra using magnetically controlled growth rod(s), percutaneous approach, new technology group 2.

After consideration of the public comments that we received, we are finalizing our proposal to maintain the current GROUPER logic for cases assigned to MS-DRGs 456, 457, and 458. We also are finalizing our proposal to maintain the assignment of the three existing ICD-10-PCS procedure codes (describing an open approach) and finalizing assignment of the three new ICD-10-PCS codes (describing a percutaneous approach) for the use of magnetically controlled growth rods in the treatment of early onset scoliosis to MS-DRGs 518, 519, and 520 for FY 2018.

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-Start Printed Page 38034DRGs 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. We stated in the proposed rule that 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. We stated that 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 list. 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. In the FY 2018 IPPS/LTCH PPS proposed rule, we proposed to move the 149 ICD-10-PCS procedure codes listed in Table 6P.3a. associated with the 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.
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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.

In the proposed rule, we proposed to delete these 33 procedure codes from MS-DRGs 453, 454, and 455 for FY 2018. We also noted 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 CC/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 proposed to delete the 33 procedure codes from the logic for those spinal fusion MS-DRGs as well. In addition, we proposed to delete the 33 procedure codes from the ICD-10-PCS classification as shown in Table 6D.—Invalid Procedure Codes associated with the 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 invited 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 invited 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 invited 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.

Comment: Many commenters supported CMS' proposals related to the combined anterior/posterior spinal fusion MS-DRGs, including (1) support 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; (2) support 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; and (3) 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.

Response: We appreciate the commenters' support.

Comment: One commenter expressed concern with the proposal to move the 149 ICD-10-PCS procedure codes describing spinal fusion of the anterior column with a posterior approach that are currently on the posterior spinal fusion list to the anterior spinal fusion list and indicated that the proposed decrease in payment weights for this set of MS-DRGs would affect providers' ability to continue treating patients necessitating these procedures. The commenter noted that results from an Start Printed Page 38036independent analysis it had conducted demonstrated that reassignment of these procedure codes and the resulting combinations for anterior/posterior spinal fusion are less costly in comparison to other procedure combinations assigned to MS-DRGs 453, 454 and 455. This commenter acknowledged that ICD-10 coded claims data enable CMS to make important clinical refinements to the ICD-10 MS-DRGs. However, the commenter stated, the resource homogeneity of the MS-DRGs may be adversely affected. The commenter also stated that it understood that the greater specificity of ICD-10 codes will naturally lead to changes in the MS-DRG weights and assignments and that these changes should generally lead to improved payment accuracy within the IPPS. However, the commenter pointed out that not all weight fluctuations occurring during the early stages of the ICD-10 transition necessarily reflect improvements in coding and payment. The commenter stated that providers should not be subject to such disruptive fluctuations in their payments in a single year. The commenter recommended applying a cap to the decline in the MS-DRG payment weights relative to the FY 2017 payment weights until the fluctuations in the number of cases and the case weights can be determined and Medicare's utilization reflects hospital adaptation to ICD-10 coding. The commenter stated that applying a cap would allow CMS to move forward with the proposal to move the 149 ICD-10-PCS spinal fusion procedure codes from the posterior spinal fusion list to the anterior spinal fusion list.

Response: We acknowledge the commenter's concerns and appreciate the analysis that was conducted. In response to the recommendation that we implement a cap to the decline in the MS-DRG payment weights relative to the FY 2017 payment weights, we refer readers to section II.G. of the preamble of this FY 2018 IPPS/LTCH PPS final rule for further discussion regarding recalibration of the FY 2018 MS-DRG relative weights, including our response to comments requesting a transition period for substantial reductions in relative weights in order to facilitate payment stability.

We also believe it is important to be able to fully evaluate the MS-DRGs for which all spinal fusion procedures are currently assigned under ICD-10 with additional claims data. Therefore, in response to the public comments received, we are planning to review the ICD-10 logic for the MS-DRGs where procedures involving spinal fusion are currently assigned for FY 2019.

After consideration of the public comments we received, we are finalizing our proposal to: (1) 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; (2) 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; and (3) 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 for FY 2018.

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 stated in the proposed rule that we believe that the Version 34 Definitions Manual and GROUPER logic for MS-DRG 774 continues 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.

As discussed in the proposed rule, 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. As we stated in the proposed rule, 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.Start Printed Page 38037

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. As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19834), upon review and discussion, our clinical advisors recommended, and we agreed, 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19834), we solicited 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), we stated that public comments that we receive from this solicitation will be helpful in determining what proposed revisions to the current logic should be made. We indicated that 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 requested that all comments be directed to the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov by November 1, 2017.

Comment: Commenters agreed that the MS-DRG logic for a vaginal delivery under MDC 14 is technically complex. One commenter stated its intention to provide separate comments related to the solicitation in accordance with the November 1, 2017 deadline.

Response: We thank the commenters for their acknowledgment of the complexity with the GROUPER logic for vaginal deliveries under MDC 14 and for their support and consideration of these issues as we continue to consider possible refinement to the logic. We will review the comments received in response to the solicitation as we continue to evaluate this area and, if warranted, we will propose refinements for the FY 2019 rulemaking.

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, as discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19835), we 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 the 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 proposed 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. We stated that this would enable more appropriate MS-DRG assignments and payment for these cases. We invited public comments on our proposal.

Comment: Commenters agreed with the proposal 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. However, one commenter disagreed with the proposal and noted that lack of documentation that specifies the trimester on an inpatient record is representative of poor documentation and should not be acceptable for valid MS-DRG assignment. This commenter believed that the trimester could reasonably be determined or estimated, despite the patient's circumstances, such as being from out of town or unable to communicate effectively.

Response: We appreciate the commenters' support. In response to the commenter who did not support our proposal, we acknowledge that any diagnosis involving the term “unspecified” in a code title can appear to be the result of poor documentation. However, there are several instances across the ICD-10 MS-DRG GROUPER logic where an “unspecified” principal diagnosis leads to a valid MS-DRG assignment as a result of the resources and/or complexities involved regarding the condition itself. The “unspecified trimester” diagnoses involved in the proposal included significant clinical conditions such as eclampsia, preexisting hypertensive heart disease, and cerebral venous thrombosis, to Start Printed Page 38038name a few. The fact that the trimester is not specified does not preclude the significance of these conditions nor the resources involved in caring for the patients with these conditions. Therefore, while we encourage providers to continue to focus efforts on improving their respective facilities medical record documentation practices, we also believe that the MS-DRG assignment should appropriately reflect the resources involved in evaluating and caring for these patients.

After consideration of the public comments we received, we are finalizing our proposal to remove the 314 ICD-10-CM diagnosis codes identified with “unspecified trimester” from MS-DRG 998 as shown in Table 6P.3b. associated with this 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/​index.html 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, in the ICD-10 MS-DRGs Version 35, effective October 1, 2017.

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 in section II.F.6.b. of the preamble of the FY 2018 IPPS/LTCH PPS proposed rule, the supervision of pregnancy codes are accurately reflected in the MCE code edit list for Unacceptable principal diagnosis. Therefore, we stated that it is not appropriate to include the three above listed codes in MS-DRG 782.

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19835), we proposed 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 invited public comments on our proposal.

Comment: Commenters supported the proposal to remove the three codes (ICD-10-CM diagnosis codes O09.41, O09.42 and O09.43) describing supervision of pregnancy and reassign them to a more appropriate MS-DRG assignment.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to remove ICD-10-CM diagnosis codes O09.41, O09.42 and O09.43, which describe supervision of pregnancy, from MS-DRG 782 and reassign them to MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis) in the ICD-10 MS-DRGs Version 35, effective October 1, 2017.

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 in section II.F.14.a. of the preamble of the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19835 through 19836) and this final 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/​AcuteInpatientPPS/​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 Start Printed Page 38039MS-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.

We stated in the proposed rule that 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 stated that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19835 through 19836), we proposed 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 invited public comments on our proposals.

Comment: Many commenters supported all of CMS' proposals involving diagnosis code O75.1 and MS-DRGs 767, 768, 769, 774, and 776.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing the following in the ICD-10 MS-DRGs Version 35, effective October 1, 2017:

  • 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.

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).

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19836), 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.

We stated in the proposed rule that 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 Start Printed Page 38040794 is not accurate because the assignment incorrectly labels the newborns as having a significant problem when the condition does not truly exist. We stated that we and our clinical advisors also agree that the above list of diagnosis codes should be added to MS-DRG 795. Therefore, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19836), we proposed 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 invited public comments on our proposals.

Comment: Commenters supported the proposal to add the 14 diagnosis codes describing observation and evaluation of newborn for suspected conditions ruled out to the MS-DRG logic for normal newborn.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal 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 (Normal newborn) in the ICD-10 MS-DRGs Version 35, effective October 1, 2017.

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.
Start Printed Page 38041

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.
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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19837 through 19839), 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 agreed 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.

In the FY 2018 IPPS/LTCH PPS proposed rule, we invited 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 on which we sought public comment 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
Start Printed Page 38042
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
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

Comment: Commenters supported the 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. However, one commenter did not support the reassignment of 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. This commenter agreed that the codes with the 7th character “S” should not be assigned to MS-DRGs 949 and 950. However, the commenter disagreed with the proposed reassignment to MS-DRGs 922 and 923 and referenced language from the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting under Section I.B.10. Sequela (Late Effects) which states: “A sequela is the residual effect (condition produced) after the acute phase of an illness or injury has terminated. The condition or nature of the sequela is sequenced first. The sequela code is sequenced second.” According to the commenter, sequela cases are appropriately classified to the MS-DRGs corresponding to the reported residual condition rather than MS-DRGs 922 and 923 or MS-DRGs 949 and 950.

Response: We appreciate the support of the commenters on our proposals. In response to the commenter who did not agree with the reassignment of 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, we note that the proposal for the ICD-10-CM diagnosis codes with the 7th character “S” (sequela) is consistent with the assignments under Version 33 of the ICD-10 MS-DRGs from which their respective predecessor codes were derived. For example, under Version 33 of the ICD-10 MS-DRGs, ICD-10-CM diagnosis code T85.81XS (Embolism due to internal prosthetic devices, implants and grafts, not elsewhere Start Printed Page 38043classified, sequela) was assigned to MDC 21 under MS-DRGs 922 and 923. Similar to the inadvertent errors in MDC and MS-DRG assignments that occurred with the ICD-10-CM diagnosis codes involving 7th characters “A” (initial encounter) and “D” (subsequent encounter) from Version 33 to Version 34 of the ICD-10 MS-DRGs, the ICD-10-CM diagnosis codes involving 7th character “S” were also inadvertently assigned to the incorrect MDC and MS-DRGs under Version 34 of the ICD-10 MS-DRGs. Therefore, the proposal is consistent for all the 7th characters. In addition, while the commenter disagreed with our proposed MDC and MS-DRG assignments, the commenter did not offer suggestions on alternative assignments.

After consideration of the public comments we received, we are finalizing our proposals as set forth in the FY 2018 IPPS/LTCH PPS proposed rule for the complication codes discussed above in the ICD-10 MS-DRGs Version 35, effective October 1, 2017.

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 the 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 were 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 are included in Table 6A associated with this FY 2018 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/​index.html).

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.

As we stated in the proposed rule, 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.

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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule, 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 Start Printed Page 38044Disorders 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 stated in the FY 2018 proposed rule that we were 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 invited public comments on our proposal not to update MS-DRGs 945 and 946 for FY 2018.

Comment: Several commenters acknowledged that CMS' analysis indicates that there was a decrease in the number of cases reported in MS-DRG 945 and 946 from FY 2015 to FY 2016 and there was an increase in average length of stay for MS-DRG 945 and a decrease in average length of stay for MS-DRG 946 from FY 2015 to FY 2016. The commenters stated that, without an ICD-10-CM diagnosis code to capture encounters for rehabilitation therapy, it was not possible to identify any specific shifts in these cases. The commenters stated that they had written to CDC to support the creation of a new diagnosis code to capture these admissions after the topic was presented at the March 7-8, 2017 ICD-10 Coordination and Maintenance Committee meeting. The commenters stated that if CDC creates a new ICD-10-CM code for encounters for rehabilitation therapy, it recommended that CMS propose adding the new code as part of the MS-DRG logic for MS-DRGs 945 and 946 as part of the FY 2019 IPPS/LTCH PPS proposed rule. The commenters stated that if CDC decides not to create a new ICD-10-CM code for encounters for rehabilitation therapy, CMS should consider assembling a technical advisory panel made up of stakeholders, such as rehabilitation providers and other representation, to conduct an evaluation of this issue and recommend options to improve the MS-DRG logic and changes that could be proposed as part of future rulemaking.

Response: We agree with the commenters that without a specific ICD-10-CM code for encounters for rehabilitation therapy, it is not possible to identify any specific shifts in these cases. If the CDC creates a new code effective October 1, 2018, we will evaluate potential updates to the MS-DRGs utilizing this new code as part of the FY 2019 IPPS/LTCH PPS proposed rule. If the CDC decides not to create a new code, we welcome recommendations from the public on how the MS-DRG logic could be updated to better capture patients within MS-DRGs 945 and 946.

After consideration of the public comments that we received, we are finalizing our proposal not to update MS-DRGs 945 and 946 for FY 2018.

10. 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 claims 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 Start Printed Page 38045Version 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.

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19840 through 19846), we addressed the MCE requests we received by the December 7, 2016 deadline. We also discussed the proposals we made based on our internal review and analysis. In addition, as a result of new and modified code updates approved after the annual spring ICD-10 Coordination and Maintenance Committee meeting, we routinely make changes to the MCE. In the past, in both the IPPS proposed and final rules, we have only provided the list of changes to the MCE that were brought to our attention after the prior year's final rule. We historically have not listed the changes we have made to the MCE as a result of the new and modified codes approved after the annual spring ICD-10 Coordination and Maintenance Committee meeting. These changes are approved too late in the rulemaking schedule for inclusion in the proposed rule. Furthermore, although our MCE policies have been described in our proposed and final rules, we have not provided the detail of each new or modified diagnosis and procedure code edit in the final rule. However, we make available the finalized Definitions of Medicare Code Edits (MCE) file. Therefore, we have made available the FY 2018 ICD-10 MCE Version 35 manual file. The link to this MCE manual file, along with the link to the mainframe and computer software for the MCE Version 35 (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 2018 IPPS Final Rule Home Page.

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.

Comment: Some commenters believe that CMS is responsible for addressing questions relating to the pediatric and adult age ranges in the Age Conflict edit. Other commenters stated that, while the Coding Clinic for ICD-10-CM and ICD-10-PCS addresses proper coding, it cannot address issues related to payer-specific edits or definitions.

Response: We believe there is some confusion with regard to the issue presented in the FY 2018 IPPS/LTCH PPS proposed rule pertaining to the Age Conflict edit. We specifically responded to a request that sought 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. We responded that the age ranges defined within the Age Conflict edits were established with the implementation of the IPPS and noted that the adult age range includes the minimum age of 15 years for those patients who are declared emancipated minors. Therefore, we fully responded to the request that we clarify the Age ranges in the MCE. However, in addition to the request regarding the overlapping age ranges in the Age Conflict edit, the requester specifically asked for coding advice. As noted earlier, “The requester 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.” We provided 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 as displayed in the table above. The statement recommending that the requester and other interested parties submit questions pertaining to correct coding practices for this specific issue to the AHA was with regard to reporting the most appropriate diagnosis code based on the clarification provided regarding the Age Conflict edit. As stated in the FY 2018 IPPS/LTCH PPS proposed rule, we have not provided coding advice in rulemaking with respect to policy. Accordingly, any Start Printed Page 38046questions regarding which diagnosis code would be most appropriate to report when a general or routine health examination is performed on patients who are within the age range of 15 to 17 years would be best addressed by the Coding Clinic.

(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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19841), we proposed to not add these two diagnosis codes to the Perinatal/Newborn Diagnosis category under the Age Conflict edit. We invited public comments on our proposal.

Comment: Commenters agreed that ICD-10-CM diagnosis codes D80.7 and E71.511 should not be added to the Perinatal/Newborn Diagnosis category under the Age Conflict edit.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to not add diagnosis code D80.7 (Transient hypogammaglobulinemia of infancy) and diagnosis code E71.511 (Neonatal adrenoleukodystrophy) to the Perinatal/Newborn Diagnosis category under the Age Conflict edit.

(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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19841), we proposed to remove diagnosis code L21.0 from the list of diagnosis codes for the Pediatric diagnosis category under the Age Conflict edit. We invited public comments on our proposal.

Comment: Commenters agreed that diagnosis code L21.0 should be removed from the list of diagnosis codes for the Pediatric diagnosis category under the Age Conflict edit.

Response: We appreciate the commenters support.

After consideration of the public comments that we received, we are finalizing our proposal to remove diagnosis code L21.0 (Seborrhea capitis) from the Pediatric diagnosis category under the Age Conflict edit in the ICD-10 MCE Version 35, effective October 1, 2017.

(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 the proposed rule and this final 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 the FY 2018 IPPS/LTCH PPS 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 proposed to add to the Age Conflict edit list. We invited public comments on our proposal.

Comment: Commenters supported the proposal to add the list of diagnosis codes displayed in Table 6P.1a. associated with the FY 2018 IPPS/LTCH PPS proposed rule to the Maternity diagnoses category under the Age Conflict edit. Commenters recommended that this same list of diagnosis codes also be added to the Diagnoses for Females Only edit.

Response: We appreciate the commenters' support. We agree that the diagnosis codes proposed to be added to the Maternity diagnoses category under the Age Conflict edit are also appropriate to be added to the Diagnoses for Females Only edit code list under the Sex Conflict edit with other diagnosis codes associated with pregnancy and maternal care.

After consideration of the public comments that we received, we are finalizing our proposal to add the list of diagnosis codes displayed in Table 6P.1a. associated with the FY 2018 IPPS/LTCH PPS proposed rule and this 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/​index.html) to the Maternity diagnoses category under the Age Conflict edit and we are adding this same list of diagnosis codes to the Diagnoses for Females Only code list under the Sex Conflict edit, effective October 1, 2017.

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.Start Printed Page 38047

(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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19842), we agreed 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 agreed 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 agreed 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, in the FY 2018 IPPS/LTCH PPS proposed rule, we proposed 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 proposed 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 the proposed rule, Table 6A.—New Diagnosis Codes associated with the proposed rule listed the new ICD-10-CM diagnosis codes that had 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 the 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 proposed to add to the list of diagnosis codes for the Diagnoses for Males Only category.

We invited public comments on our proposals.

Comment: Commenters supported the proposal to add the diagnosis codes listed in the table in the proposed rule describing conditions applicable to males to the Diagnoses for Males Only edit. Commenters also supported the addition of new diagnosis codes associated with male body parts as displayed in Table 6P.1b. associated with the proposed rule to the Diagnoses for Males Only edit. In addition, commenters supported the proposal to remove diagnosis code Q64.0 (Epispadias) from the list of diagnosis codes for the Diagnoses for Males Only edit because this condition can occur in both males and females.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposals to add the eight diagnosis codes displayed in the table above and the new diagnosis codes associated with male body parts as displayed in Table 6P.1b. associated with the proposed rule and this 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/​index.html ) to the Diagnoses for Males Only edit, effective October 1, 2017. We are also finalizing our proposal to remove diagnosis code Q64.0 (Epispadias) from the list of diagnosis codes for the Diagnoses for Males Only edit, effective October 1, 2017.

(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 38048

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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19842 through 19843), 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 proposed to remove these three diagnosis codes from the list of diagnosis codes for the Diagnoses for Females Only edit. We invited public comments on our proposals.

In addition, we proposed 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 referred readers to Table 6A.—New Diagnosis Codes associated with the FY 2018 IPPS/LTCH PPS 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 that had been finalized to date. We invited public comments on our proposal.

Comment: Commenters supported the proposal to remove diagnosis codes F52.6, J84.81, and R97.1 from the list of diagnosis codes for the Diagnoses for Females Only edit. Commenters also supported the proposal to add new diagnosis code Z40.03 to the list of diagnosis codes for the Diagnoses for Females Only edit.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to remove diagnosis codes F52.6 (Dyspareunia not due to a substance or known physiological condition), J84.81 (Lymphangioleiomyomatosis) and diagnosis code R97.1 (Elevated cancer antigen 125 [CA 125]) from the Diagnoses for Females Only edit, effective October 1, 2017. We are also finalizing our proposal 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, effective Octber 1, 2017.

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-PCS 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19843), we proposed 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 invited public comments on our proposal.

Comment: Commenters agreed with the proposal to remove the ICD-10-PCS procedure codes included in the table in the proposed rule from the list of procedure codes under the Non-Covered Procedure edit. One commenter who supported the proposal also requested that CMS review current policies related to breast implant procedures for transgender females. This commenter noted that estrogen therapy by itself does not provide adequate growth tissue. Another commenter stated that these gender reassignment procedures should remain noncovered as they are a form of plastic surgery and, in principle, are not unlike elective abortion procedures.

Response: We appreciate the commenters' support. In response to the commenter who requested that we review current policies related to breast implant procedures for transgender females, we recommend that the commenter contact its local MAC for additional information because there is Start Printed Page 38049no national coverage determination (NCD) for this service. With regard to the commenter who stated that the procedure codes describing gender reassignment surgery listed in the table in the proposed rule should remain noncovered, we note that, as mentioned earlier in this section, NCD 140.3 for Transsexual Surgery was invalidated effective May 30, 2014, and therefore, the MACs determine coverage on a case-by-case basis.

After consideration of the public comments we received, we are finalizing our proposal 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.

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)

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19843), 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. In the FY 2018 IPPS/LTCH PPS proposed rule, we proposed to add the 45 ICD-10-CM diagnosis codes shown in Table 6P.1c. associated with the 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 invited public comments on our proposal.

Comment: Commenters supported the proposal to add the 45 ICD-10-CM diagnosis codes shown in Table 6P.1c. associated with the proposed rule to the list of codes for the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add the 45 ICD-10-CM diagnosis codes shown in Table 6P.1c. associated with the proposed rule and this 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/​index.html) to the list of codes for the Unacceptable Principal Diagnosis edit, effective October 1, 2017.

(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 Physiological 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.” We stated in the proposed rule that 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19843 through 19844), we proposed to add the 19 ICD-10-CM diagnosis codes shown in Table 6P.1d. associated with the 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 invited public comments on our proposal.

Comment: Some commenters disagreed with the proposal to add the 19 ICD-10-CM diagnosis codes shown in Table 6P.1d. associated with the proposed rule to the list of codes for the Unacceptable Principal Diagnosis edit. The commenters suggested that CMS consult with the NCHS to determine if any of the codes may appropriately be sequenced as a principal diagnosis in certain circumstances. One commenter noted it had been informed through communications with the NCHS and AHA that, within the ICD-10-CM classification, there are instances where some “Code first” notes are intended to be interpreted as “Code first, if applicable” or “Code first, if known,” although those terms are not explicitly stated in the instructional note. The commenter acknowledged that while some of the diagnosis codes that were proposed to be added to the Unacceptable Principal Diagnosis edit appear straightforward, such as diagnosis code F04 (Amnestic disorder due to known physiological condition), other diagnosis codes are not as clear, such as diagnosis code F01.5 (Vascular dementia) or diagnosis code F07.81 (Postconcussional syndrome).

Response: We appreciate the commenters' review and input regarding the proposal. We consulted with the staff at NCHS and they acknowledged that this group of codes was modified from the original World Health Organization (WHO) version of ICD-10. They indicated that while some code titles do include the language “due to known physiological condition,” they are evaluating these “Code first” instructional notes further as they perform their annual review of the coding guidelines and consider updates for FY 2018.

After consideration of the public comments that we received and for the reasons described, we are not finalizing our proposal to add the 19 ICD-10-CM diagnosis codes shown in Table 6P.1d. associated with the proposed rule to the list of codes for the Unacceptable Principal Diagnosis edit.Start Printed Page 38050

(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 stated in the proposed rule that 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). In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19844), we proposed to add ICD-10-CM diagnosis code O94 to the list of codes for the Unacceptable Principal Diagnosis edit. We invited public comments on our proposal.

Comment: Commenters agreed with the proposal to add diagnosis code O94 to the list of codes for the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to add diagnosis code O94 (Sequelae of complication of pregnancy, childbirth, and the puerperium) to the list of codes for the Unacceptable Principal Diagnosis edit, effective October 1, 2017.

(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 stated in the proposed rule that 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. In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19844), we proposed to add the 96 ICD-10-CM diagnosis codes shown in Table 6P.1e. associated with the 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 invited public comments on our proposal.

Comment: Commenters agreed with the proposed addition of 95 of the 96 diagnosis codes included in Table 6P.1e. associated with the proposed rule. The commenters specifically disagreed with the proposal to include diagnosis code R40.20 (Unspecified coma) to the Unacceptable Principal Diagnosis edit because the term “any” in the instructional note “Code first any associated: Fracture of skull (S02.-); Intracranial injury (S06.-)” indicates that if there is not a documented skull fracture or intracranial injury, then diagnosis code R40.20 could appropriately be reported as a Principal Diagnosis.

Response: We appreciate the commenters' support to add 95 of the 96 diagnosis codes included in our proposal as shown in Table 6P.1e. associated with the proposed rule. We agree with the commenters that there could be circumstances in which diagnosis code R40.20 would appropriately be reported as the principal diagnosis in the absence of a documented fracture of skull or intracranial injury.

After consideration of the public comments we received, we are finalizing the addition of 95 of the 96 diagnosis codes shown in Table 6P.1e. associated with the proposed rule (which is available via the Internet on the CMS Web site) to the list of codes for the Unacceptable Principal Diagnosis edit. For the reasons stated, we are not finalizing the proposal to add diagnosis code R40.20 (Unspecified coma) to the Unacceptable Principal Diagnosis edit. Table 6P.1e. associated with this 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/​index.html) sets forth the 95 diagnosis codes that we are adding to the list of codes for the Unacceptable Principal Diagnosis edit, consistent with our finalized policy.

(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.
Start Printed Page 38051

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19844), we proposed 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 invited public comments on our proposal.

Comment: Commenters agreed with the proposal to add the four diagnosis codes listed in the table in the proposed rule to the Unacceptable Principal Diagnosis edit. However, another commenter disagreed with adding diagnosis code R65.10 (Systemic inflammatory response syndrome (SIRS) of non-infectious origin without acute organ dysfunction) and diagnosis code R65.11 (Systemic inflammatory response syndrome (SIRS) of non-infectious origin with acute organ dysfunction) to the edit. According to the commenter, if the underlying condition is not known, it would be appropriate to report either one of the two codes (R65.10 and R65.11) as the principal diagnosis.

Response: We appreciate the commenters' support. We disagree with the commenter who asserted that if the underlying condition is not known, it would be appropriate to report either diagnosis code R65.10 or R65.11 as a principal diagnosis. The current FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting at Section 1.C.18.g. states, “The systemic inflammatory response syndrome (SIRS) can develop as a result of certain non-infectious disease processes, such as trauma, malignant neoplasm, or pancreatitis. When SIRS is documented with a noninfectious condition, and no subsequent infection is documented, the code for the underlying condition, such as an injury, should be assigned, followed by code R65.10, Systemic inflammatory response syndrome (SIRS) of non-infectious origin without acute organ dysfunction, or code R65.11, Systemic inflammatory response syndrome (SIRS) of non-infectious origin with acute organ dysfunction.” Therefore, the underlying condition (for example, trauma, neoplasm, pancreatitis, amongothers) responsible for causing the systemic inflammatory response syndrome (SIRS) should be readily available in the medical record documentation due to its clinical significance for the care and treatment of the patient.

After consideration of the public comments that we received, we are finalizing our proposal to add the four diagnosis codes shown in the table above from code category R65 (Symptoms and signs associated with systemic inflammation and infection) to the Unacceptable Principal Diagnosis edit code list, effective October 1, 2017.

(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.”

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. In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19844 through 19845), we proposed to add the 996 ICD-10-CM diagnosis codes shown in Table 6P.1f. associated with the 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 invited public comments on our proposal.

Comment: Commenters supported the proposal to add the 996 ICD-10-CM diagnosis codes shown in Table 6P.1f. associated with the proposed rule describing adverse effects and underdosing to the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to add the 996 ICD-10-CM diagnosis codes shown in Table 6P.1f. associated with the proposed rule and this 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/​index.html) to the list of codes for the Unacceptable Principal Diagnosis edit code list, effective October 1, 2017.

(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.

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19845), we proposed 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 invited public comments on our proposal.

Comment: Commenters supported the proposal to add the two diagnosis codes shown in the table in the proposed rule to the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to add the two diagnosis codes describing postprocedural septic shock listed in the Start Printed Page 38052proposed rule and above in this final rule to the list of codes for the Unacceptable Principal Diagnosis edit, effective October 1, 2017.

(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, we stated in the proposed rule that diagnosis code Z00.6 should not be reported as a principal/first-listed diagnosis. In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19845), we proposed to add ICD-10-CM diagnosis code Z00.6 to the list of codes for the Unacceptable Principal Diagnosis edit. We invited public comments on our proposal.

Comment: Commenters did not support the proposal to add diagnosis code Z00.6 to the list of codes for the Unacceptable Principal Diagnosis edit. The commenters stated that, although this diagnosis code is listed as an exception in the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting, the code is not prohibited from ever being reported as a principal diagnosis, rather, it is not required to be reported as a principal diagnosis. According to the commenters, there are circumstances when a control subject in a clinical research program may be admitted to the hospital and diagnosis code Z00.6 would be appropriate to report as the principal diagnosis. One commenter also noted that while Medicare may not be the responsible payer in these circumstances, other payers use the MCE edits, and these edits are frequently programmed in their billing software. Therefore, the commenter believed that including diagnosis code Z00.6 on the edit could cause unintended coding and reporting issues.

Response: We appreciate the commenters' feedback on our proposal. We agree that there could be circumstances where it would be appropriate to report diagnosis code Z00.6 as the principal diagnosis. We have noted previously (72 FR 47152) that we encourage other payers to develop refinements to Medicare's DRG system, which includes the Medicare code edits, consistent with their population's needs. However, we also recognize that tother payers use the MCE edits in their systems.

After consideration of the public comments we received and for the reasons described, we are not finalizing our proposal to add diagnosis code Z00.6 (Encounter for examination for normal comparison and control in clinical research program) to the list of codes for the Unacceptable Principal Diagnosis edit.

To address a separate issue, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19845), we proposed 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 proposed 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.

We invited public comments on our proposal.

Comment: Commenters agreed with the proposal to remove the 14 ICD-10-CM diagnosis codes describing observation and evaluation of newborn for various suspected conditions that have been ruled out as shown in the Start Printed Page 38053table in the proposed rule from the list of codes for the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to remove the 14 ICD-10-CM diagnosis codes as shown in the table above from the list of codes for the Unacceptable Principal Diagnosis edit, effective October 1, 2017.

(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, we stated in the proposed rule that ICD-10-CM diagnosis code Z52.9 should not be reported as a principal/first-listed diagnosis. In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19846), we proposed to add ICD-10-CM diagnosis code Z52.9 to the list of codes for the Unacceptable Principal Diagnosis edit. We invited public comments on our proposal.

Comment: Commenters supported the proposal to add diagnosis code Z52.9 to the list of codes for the Unacceptable Principal Diagnosis edit. Commenters stated that this code is on the list of “non-specific Z codes” in the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting, indicating that this code is so nonspecific that there is little justification for its use in the hospital inpatient setting. However, another commenter disagreed with adding diagnosis code Z52.9 to the list of codes for the Unacceptable Principal Diagnosis edit. Similar to the circumstances with diagnosis code Z00.6 (Encounter for examination for normal comparison and control in clinical research program) discussed earlier in this section, this commenter stated that the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting does not prohibit diagnosis code Z52.9 from ever being reported as a principal diagnosis; rather, it is not required to be reported as a principal diagnosis.

Response: We thank the commenters for their support and feedback. Upon further review, we agree that, consistent with the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting, the interpretation of the exception for diagnosis code Z52.9 is that it does not prohibit the code from ever being reported as a principal diagnosis; rather, the exception is indicating that the code is not required to be reported as a principal diagnosis.

After consideration of the public comments we received and for the reasons described, we are not finalizing our proposal to add ICD-10-CM diagnosis code Z52.9 to the list of codes for the Unacceptable Principal Diagnosis edit.

(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), in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19846), we proposed to add new diagnosis code Z71.82 (Exercise counseling) to the list of codes for the Unacceptable Principal Diagnosis edit. We referred readers to Table 6A.—New Diagnosis Codes associated with the 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 that had been finalized to date. We invited public comments on our proposal.

Comment: Commenters supported the proposal to add new diagnosis code Z71.82 (Exercise counseling) to the list of codes for the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to add new ICD-10-CM diagnosis code Z71.82 (Exercise counseling) to the list of codes for the Unacceptable Principal Diagnosis edit, effective October 1, 2017.

(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), in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19846), we proposed 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 referred readers to Table 6A.—New Diagnosis Codes associated with the 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 that had been finalized to date. We invited public comments on our proposal.

Comment: Commenters supported the proposal to add new diagnosis codes in subcategory Z91.84, Risk for dental caries, to the list of codes for the Unacceptable Principal Diagnosis edit.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal 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, effective October 1, 2017.

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 Start Printed Page 38054continue 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 continue to 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. Comments should be directed to the MS-DRG Classification Change Mailbox located at MSDRGClassificationChange@cms.hhs.gov by November 1, 2017 for FY 2019.

11. 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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19846), 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 consumption 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.

As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19847), 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 the FY 2018 IPPS/LTCH PPS proposed rule, we proposed 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 invited public comments on our proposal.

Comment: Commenters supported the proposal to move MS-DRGs 614 and Start Printed Page 38055615 above MS-DRGs 622, 623, and 624 in the surgical hierarchy. Another commenter expressed concern that the proposal to move MS-DRGs 614 and 615 above MS-DRGs 622, 623, and 624 in the surgical hierarchy was made as the result of a single scenario and recommended that a more thorough analysis be performed to determine the potential impact of such a change prior to modifying existing GROUPER logic.

Response: We appreciate the commenters' support. In response to the commenter who expressed concern that the proposal to move MS-DRGs 614 and 615 above MS-DRGs 622, 623, and 624 in the surgical hierarchy was made as the result of a single scenario and that additional analysis should be performed to determine potential impacts, we are unclear as to what specific impacts the commenter is referring to and what type of analysis the commenter is recommending. However, we did analyze claims from the December 2016 update of the FY 2016 MedPAR file for MS-DRGs 614 and 615, as well as from MS-DRGs 622, 623 and 624, to determine the volume of cases where procedure codes from both sets of MS-DRGs were reported. Our findings are shown in the tables below.

MS-DRGs for Adrenal and Pituitary Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 614—All cases1,5265$16,957
MS-DRG 615—All cases1,0072.410,680

MS-DRGs for Skin Grafts and Wound Debridement Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 622—All cases1,28910.7$23,954
MS-DRG 623—All cases4,4236.312,522
MS-DRG 624—All cases4543.59,345

As shown in the tables above, there were a total of 1,526 cases in MS-DRG 614 with an average length of stay of 5 days and average costs of $16,957. There were a total of 1,007 cases in MS-DRG 615 with an average length of stay of 2.4 days and average costs of $10,680. For MS-DRG 622, there were a total of 1,289 cases with an average length of stay of 10.7 days and average costs of $23,954. For MS-DRG 623, there were a total of 4,423 cases with an average length of stay of 6.3 days and average costs of $12,522. For MS-DRG 624, there were a total of 454 cases with an average length of stay of 3.5 days and average costs of $9,345.

We then analyzed claims from the March 2017 update of the FY 2016 MedPAR file to determine the number of cases where a procedure code from MS-DRG 614 or MS-DRG 615 was reported with a procedure code from MS-DRGs 622, 623 or 624 on the same claim. Our findings are shown in the table below.

MS-DRGs for Adrenal, Pituitary, Skin Grafts and Wound Debridement Procedures

MS-DRGNumber of casesAverage length of stayAverage costs
MS-DRG 614 procedures with MS-DRG 622 procedures4610.2$12,977
MS-DRG 614 procedures with MS-DRG 623 procedures2404.411,540
MS-DRG 615 procedures with MS-DRG 624 procedures1252.914,494

As shown in the table above, there were a total of 46 cases reporting procedures from MS-DRG 614 and 622 on the same claim with an average length of stay of 10.15 days and average costs of $12,977. There were a total of 240 cases reporting procedures from MS-DRG 614 and MS-DRG 623 on the same claim with an average length of stay of 4.42 days and average costs of $11,540. Lastly, there were a total of 125 cases reporting procedures from MS-DRG 615 and MS-DRG 624 on the same claim with an average length of stay of 2.93 days and average costs of $14,494.

We then examined the redistribution of cases that is anticipated to occur as a result of the proposal to move MS-DRGs 614 and 615 above MS-DRGs 622, 623, and 624 in the surgical hierarchy for Version 35 of the ICD-10 MS-DRGs, by processing the claims data from the March update of the FY 2016 MedPAR file through the ICD-10 MS-DRG GROUPER Version 34 and then processing the same claims data through the ICD-10 MS-DRG GROUPER Version 35 for comparison. The number of cases from this comparison that result in different MS-DRG assignments is the number of the cases that are anticipated to potentially shift or be redistributed. We found that the number of cases moving out of MS-DRG 622 and into MS-DRG 614 is approximately 46 cases, the number of cases moving out of MS-DRG 623 and into MS-DRG 614 is approximately 240 cases and the number of cases moving out of MS-DRG 624 and into MS-DRG 615 is approximately 125 cases. We believe that overall, the impact of this change is limited because the subset of cases that would be reclassified is approximately 6.7 percent of the total cases currently grouping to MS-DRGs 622, 623 and 624. Additionally, as shown above, in the analysis of claims where a procedure code from MS-DRG 614 or MS-DRG 615 was reported with a procedure code from MS-DRGs 622, 623, or 624 on the same claim, the average costs for those cases are consistent with the average costs for all cases in MS DRGs 614 and 615.

For issues pertaining to the surgical hierarchy, as with other MS-DRG Start Printed Page 38056related requests, we encourage commenters to submit requests to examine ICD-10 claims data via the CMS MS-DRG Classification Change Requests Mailbox located at MSDRGClassificationChange@cms.hhs.gov by November 1, 2017 for FY 2019 consideration.

After consideration of the public comments we received, we are finalizing our proposal to move MS-DRGs 614 and 615 above MS-DRGs 622, 623, and 624 in the surgical hierarchy effective October 1, 2017.

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

We stated in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19847) that 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 invited public comments on our proposed severity level designations for the diagnosis codes listed in Table 6I.1. and Table 6J.1. We noted that, for Table 6I.2. and Table 6J.2., the proposed deletions were 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.

Comment: Commenters agreed with the proposed additions and deletions to the MCC and CC List severity level designations for FY 2018. One commenter suggested that CMS also consider adding existing diagnosis codes from subcategories L97.5 (Non-pressure chronic ulcer of other part of foot) and L98.4 (Non-pressure chronic ulcer of skin, not elsewhere classified) to the CC List. This commenter noted that new diagnosis codes from these subcategories were proposed to be added to the CC List. However, according to the commenter, existing codes from these same subcategories are not currently included in the CC List even though some of them represent a greater severity level than the new codes that were proposed to be added to the CC List.

Response: We appreciate the commenters' support. In response to the commenter who suggested that we consider adding existing diagnosis codes in subcategories L97.5 and L98.4 to the CC list, we were unable to fully evaluate this request for FY 2018 but will consider this recommendation as part of our comprehensive review of the CC and MCC lists. As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19848) and in the sections that follow, we have plans to conduct a comprehensive review of the CC and MCC lists for FY 2019. Therefore, we will be evaluating all of the ICD-10-CM diagnosis codes for this effort.

After consideration of the public comments we received, we are finalizing our 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. We refer readers to the Tables 6I.1, 6I.2, 6J.1, and 6J.2 associated with this final rule, which are available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

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-9-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&​DLEntries=​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 Start Printed Page 38057accept these patients in transfer have resources to care for them.

As we stated in the proposed rule, 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19848), we did not propose 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 did not propose any changes to Table 6L.—Principal Diagnosis Is Its Own MCC List and Table 6M.—Principal Diagnosis Is Its Own CC List. We invited public comments on our proposal to maintain the existing lists of principal diagnosis codes in Tables 6L. and 6M for FY 2018.

Comment: Commenters supported the proposal to not make changes to Table 6L and Table 6M. One commenter acknowledged that CMS is delaying further modifications to Tables 6L. and 6M. until the severity level (MCC and CC) analysis is performed for FY 2019. However, this commenter requested that the proposed MS-DRG assignments for the new myocardial infarction type 2 diagnosis codes be reviewed for more appropriate assignments.

Response: We appreciate the commenters' support. In response to the commenter's request that we review the proposed MS-DRG assignments for the new myocardial infarction type 2 diagnosis codes for more appropriate assignments, we point out that the codes identifying myocardial infarction type 2 diagnoses were not finalized at the time of publication of the FY 2018 IPPS/LTCH PPS proposed rule and, therefore, were not included in Table 6A.—New Diagnosis Codes that was associated with the proposed rule. As discussed in the section that follows, we have made available the final tables associated with this final rule via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. We refer readers to the final rule Table 6A.—New Diagnosis Codes for the MS-DRG assignments for the acute myocardial infarction type 2 diagnosis codes for FY 2018, which are based on our usual process of assigning new codes to their predecessor code's MS-DRG assignment(s).

After consideration of the public comments we received, we are maintaining the current code lists for Table 6L.—Principal Diagnosis Is Its Own MCC and Table 6M.—Principal Diagnosis Is Its Own CC List for FY 2018.

d. 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.

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19848), for FY 2018, we proposed changes to the ICD-10 MS-DRGs Version 35 CC Exclusion List. Therefore, we 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 the 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.

Comment: Commenters supported the proposed modifications to the CC Exclusion List for FY 2018 as displayed in Table 6G.1., Table 6G.2., Table 6H.1., and Table 6H.2. that were associated with the proposed rule and made available via the Internet on the CMS Web site.

Response: We appreciate the commenters' support.

We note that, for this FY 2018 IPPS/LTCH PPS final rule, we have developed Table 6K.—Complete List of CC Exclusions. Table 6K. corresponds to the Part 1 list of Appendix C in the ICD-10 MS-DRG Definitions Manual as described above.

The complete documentation of the ICD-10 MS-DRG Version 35 GROUPER logic, including the CC Exclusion List, is available via the Internet on the CMS Acute Inpatient PPS Web page at: https://www.cms.gov/​Medicare/​Start Printed Page 38058Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

To identify new, revised and deleted diagnosis and procedure codes, for FY 2018, we 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 the proposed rule and this final rule.

These tables are not published in the Addendum to the proposed rule or the final 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 final rule. As discussed in section II.F.15. of the preamble of this final 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. In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19849), we invited public comments on the MDC and MS-DRG assignments for the new diagnosis and procedure codes as set forth in Table 6A.—New Diagnosis Codes and Table 6B.—New Procedure Codes. In addition, we invited 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.

Comment: One commenter disagreed with the addition of new ICD-10-CM diagnosis code R06.03 (Acute respiratory distress) as displayed in Table 6A.—New Diagnosis Codes associated with the FY 2018 IPPS/LTCH PPS proposed rule, stating that the terminology for this code title is outdated. The commenter stated that physician documentation generally supports either Acute Respiratory Distress Syndrome (ARDS) or Acute Respiratory Failure (ARF). The commenter requested that new diagnosis codes be created to avoid confusion and to support appropriate physician documentation.

Response: As noted earlier and discussed in section II.F.15. of the preamble of this final 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 also note that the condition of ARDS is identified by ICD-10-CM diagnosis code J80 (Acute respiratory distress syndrome) and ARF is identified in ICD-10-CM subcategory J96.0 (Acute respiratory failure). Therefore, it is not necessary to submit a request for new diagnosis codes to the ICD-10 Coordination and Maintenance Committee.

Comment: Several commenters disagreed with the proposed Non-O.R. designations for certain procedure codes displayed in Table 6B.—New Procedure Codes associated with the FY 2018 IPPS/LTCH PPS proposed rule. The commenters recommended that CMS consider revising the designation of these procedure codes from Non-O.R. to O.R. The commenters identified approximately 200 new procedure codes describing the insertion, removal, or revision of “other device” in various body parts that they stated require an O.R. setting or are most often performed in the O.R. setting using sterile technique. The commenters further stated that patients undergoing these procedures are placed under general anesthesia and the procedures require significant time and skill.

Response: We reexamined a significant portion of the procedure codes listed in Table 6B.—New Procedure Codes that was associated with the FY 2018 IPPS/LTCH PPS proposed rule that the commenters recommended we consider revising from Non-O.R. to O.R. We note that we were unable to fully reevaluate the complete list for FY 2018, but we plan to conduct a review for FY 2019. Based upon our review, and upon further consideration of whether these procedures would be performed in an O.R. setting, we are revising the designation of the new procedure codes in the following table from non-O.R. to O.R.

ICD-10-PCS codeCode description
00H03YZInsertion of Other Device into Brain, Percutaneous Approach.
00H04YZInsertion of Other Device into Brain, Percutaneous Endoscopic Approach.
00H63YZInsertion of Other Device into Cerebral Ventricle, Percutaneous Approach.
00H64YZInsertion of Other Device into Cerebral Ventricle, Percutaneous Endoscopic Approach.
00HU0YZInsertion of Other Device into Spinal Canal, Open Approach.
00HV0YZInsertion of Other Device into Spinal Cord, Open Approach.
00HV3YZInsertion of Other Device into Spinal Cord, Percutaneous Approach.
00HV4YZInsertion of Other Device into Spinal Cord, Percutaneous Endoscopic Approach.
02H43YZInsertion of Other Device into Coronary Vein, Percutaneous Approach.
02H44YZInsertion of Other Device into Coronary Vein, Percutaneous Endoscopic Approach.
02H63YZInsertion of Other Device into Right Atrium, Percutaneous Approach.
02H64YZInsertion of Other Device into Right Atrium, Percutaneous Endoscopic Approach.
02H73YZInsertion of Other Device into Left Atrium, Percutaneous Approach.
02H74YZInsertion of Other Device into Left Atrium, Percutaneous Endoscopic Approach.
02HA3YZInsertion of Other Device into Heart, Percutaneous Approach.
02HA4YZInsertion of Other Device into Heart, Percutaneous Endoscopic Approach.
02HK3YZInsertion of Other Device into Right Ventricle, Percutaneous Approach.
02HK4YZInsertion of Other Device into Right Ventricle, Percutaneous Endoscopic Approach.
02HL3YZInsertion of Other Device into Left Ventricle, Percutaneous Approach.
02HL4YZInsertion of Other Device into Left Ventricle, Percutaneous Endoscopic Approach.
02HN3YZInsertion of Other Device into Pericardium, Percutaneous Approach.
02HN4YZInsertion of Other Device into Pericardium, Percutaneous Endoscopic Approach.
02HP0YZInsertion of Other Device into Pulmonary Trunk, Open Approach.
02HP3YZInsertion of Other Device into Pulmonary Trunk, Percutaneous Approach.
02HP4YZInsertion of Other Device into Pulmonary Trunk, Percutaneous Endoscopic Approach.
02HQ3YZInsertion of Other Device into Right Pulmonary Artery, Percutaneous Approach.
02HQ4YZInsertion of Other Device into Right Pulmonary Artery, Percutaneous Endoscopic Approach.
Start Printed Page 38059
02HR3YZInsertion of Other Device into Left Pulmonary Artery, Percutaneous Approach.
02HR4YZInsertion of Other Device into Left Pulmonary Artery, Percutaneous Endoscopic Approach.
02HS3YZInsertion of Other Device into Right Pulmonary Vein, Percutaneous Approach.
02HS4YZInsertion of Other Device into Right Pulmonary Vein, Percutaneous Endoscopic Approach.
02HT3YZInsertion of Other Device into Left Pulmonary Vein, Percutaneous Approach.
02HT4YZInsertion of Other Device into Left Pulmonary Vein, Percutaneous Endoscopic Approach.
02HV3YZInsertion of Other Device into Superior Vena Cava, Percutaneous Approach.
02HV4YZInsertion of Other Device into Superior Vena Cava, Percutaneous Endoscopic Approach.
02HW0YZInsertion of Other Device into Thoracic Aorta, Descending, Open Approach.
02HW3YZInsertion of Other Device into Thoracic Aorta, Descending, Percutaneous Approach.
02HW4YZInsertion of Other Device into Thoracic Aorta, Descending, Percutaneous Endoscopic Approach.
07HK0YZInsertion of Other Device into Thoracic Duct, Open Approach.
07HK4YZInsertion of Other Device into Thoracic Duct, Percutaneous Endoscopic Approach.
07HL0YZInsertion of Other Device into Cisterna Chyli, Open Approach.
07HL4YZInsertion of Other Device into Cisterna Chyli, Percutaneous Endoscopic Approach.
07HM0YZInsertion of Other Device into Thymus, Open Approach.
07HM4YZInsertion of Other Device into Thymus, Percutaneous Endoscopic Approach.
07HN0YZInsertion of Other Device into Lymphatic, Open Approach.
07HP0YZInsertion of Other Device into Spleen, Open Approach.
09HY0YZInsertion of Other Device into Sinus, Open Approach.
0BH04YZInsertion of Other Device into Tracheobronchial Tree, Percutaneous Endoscopic Approach.
0BH14YZInsertion of Other Device into Trachea, Percutaneous Endoscopic Approach.
0BHK4YZInsertion of Other Device into Right Lung, Percutaneous Endoscopic Approach.
0BHK8YZInsertion of Other Device into Right Lung, Via Natural or Artificial Opening Endoscopic.
0BHL4YZInsertion of Other Device into Left Lung, Percutaneous Endoscopic Approach.
0BHL8YZInsertion of Other Device into Left Lung, Via Natural or Artificial Opening Endoscopic.
0BHQ4YZInsertion of Other Device into Pleura, Percutaneous Endoscopic Approach.
0BHQ8YZInsertion of Other Device into Pleura, Via Natural or Artificial Opening Endoscopic.
0BHT4YZInsertion of Other Device into Diaphragm, Percutaneous Endoscopic Approach.
0BPK4YZRemoval of Other Device from Right Lung, Percutaneous Endoscopic Approach.
0BPK8YZRemoval of Other Device from Right Lung, Via Natural or Artificial Opening Endoscopic.
0BPL4YZRemoval of Other Device from Left Lung, Percutaneous Endoscopic Approach.
0BPL8YZRemoval of Other Device from Left Lung, Via Natural or Artificial Opening Endoscopic.
0BPQ0YZRemoval of Other Device from Pleura, Open Approach.
0BPQ4YZRemoval of Other Device from Pleura, Percutaneous Endoscopic Approach.
0BPQ8YZRemoval of Other Device from Pleura, Via Natural or Artificial Opening Endoscopic.
0BPT4YZRemoval of Other Device from Diaphragm, Percutaneous Endoscopic Approach.
0BWK4YZRevision of Other Device in Right Lung, Percutaneous Endoscopic Approach.
0BWK8YZRevision of Other Device in Right Lung, Via Natural or Artificial Opening Endoscopic.
0BWL4YZRevision of Other Device in Left Lung, Percutaneous Endoscopic Approach.
0BWL8YZRevision of Other Device in Left Lung, Via Natural or Artificial Opening Endoscopic.
0BWQ4YZRevision of Other Device in Pleura, Percutaneous Endoscopic Approach.
0BWQ8YZRevision of Other Device in Pleura, Via Natural or Artificial Opening Endoscopic.
0BWT4YZRevision of Other Device in Diaphragm, Percutaneous Endoscopic Approach.
0HPT0YZRemoval of Other Device from Right Breast, Open Approach.
0HPU0YZRemoval of Other Device from Left Breast, Open Approach.
0HWT0YZRevision of Other Device in Right Breast, Open Approach.
0HWU0YZRevision of Other Device in Left Breast, Open Approach.
0JHS0YZInsertion of Other Device into Head and Neck Subcutaneous Tissue and Fascia, Open Approach.
0JHT0YZInsertion of Other Device into Trunk Subcutaneous Tissue and Fascia, Open Approach.
0JHV0YZInsertion of Other Device into Upper Extremity Subcutaneous Tissue and Fascia, Open Approach.
0JHW0YZInsertion of Other Device into Lower Extremity Subcutaneous Tissue and Fascia, Open Approach.
0TH58YZInsertion of Other Device into Kidney, Via Natural or Artificial Opening Endoscopic.
0TH98YZInsertion of Other Device into Ureter, Via Natural or Artificial Opening Endoscopic.
0THB8YZInsertion of Other Device into Bladder, Via Natural or Artificial Opening Endoscopic.
0TP58YZRemoval of Other Device from Kidney, Via Natural or Artificial Opening Endoscopic.
0TW98YZRevision of Other Device in Ureter, Via Natural or Artificial Opening Endoscopic.
0TWB8YZRevision of Other Device in Bladder, Via Natural or Artificial Opening Endoscopic.

After consideration of the public comments that we received, we are finalizing the designation of the procedure codes listed in the table above from non-O.R. to O.R., effective October 1, 2017.

We note that, historically, when new procedure codes were created, they were proposed to be given the same O.R. designation as their predecessor code. However, with the transition from ICD-9 to ICD-10, the determination of when a procedure code should be designated as an O.R. procedure has become a much more complex task. This is, in part, due to the number of various approaches available in the ICD-10-PCS classification. While we have typically evaluated procedures on the basis of whether or not they would be performed in an operating room, we believe that there may be other factors to consider, particularly with the implementation of ICD-10. Therefore, we are soliciting comments on what factors or criteria to consider in determining whether a procedure should be designated as an O.R. procedure in the ICD-10-PCS Start Printed Page 38060classification system. We encourage commenters to submit comments via the CMS MS-DRG Classification Change Requests Mailbox located at MSDRGClassificationChange@cms.hhs.gov by November 1, 2017 for FY 2019 consideration.

We are also making available on the CMS Web site at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html the following final tables associated with this final rule:

  • Table 6A.—New Diagnosis Codes-FY 2018;
  • Table 6B.—New Procedure Codes-FY 2018;
  • Table 6C.—Invalid Diagnosis Codes-FY 2018;
  • Table 6D.—Invalid Procedure Codes-FY 2018;
  • Table 6E.—Revised Diagnosis Code Titles-FY 2018;
  • Table 6F.—Revised Procedure Code Titles-FY 2018;
  • Table 6G.1.—Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2018;
  • Table 6G.2.—Principal Diagnosis Order Additions to the CC Exclusions List—FY 2018;
  • Table 6H.1.—Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2018;
  • Table 6H.2.—Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2018;
  • Table 6I.—Complete MCC List—FY 2018;
  • Table 6I.1.—Additions to the MCC List-FY 2018;
  • Table 6I.2.-Deletions to the MCC List—FY 2018;
  • Table 6J.—Complete CC List—FY 2018;
  • Table 6J.1.—Additions to the CC List-FY 2018;
  • Table 6J.2.—Deletions to the CC List -FY 2018;
  • Table 6K.—Complete List of CC Exclusions-FY 2018;
  • Table 6L.—Principal Diagnosis Is Its Own MCC List-FY 2018; and
  • Table 6M.—Principal Diagnosis Is Its Own CC List-FY 2018.

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 discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19849), 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 invited public comments regarding other possible ways we can incorporate meaningful indicators of clinical severity.

We did not receive any public comments offering suggestions on alternate ways to incorporate meaningful indicators of clinical severity. Therefore, we expect to continue to utilize this same statistical algorithm to determine the impact on resource use of each secondary diagnosis to conduct our comprehensive review of the CC and MCC lists for FY 2019.

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 Start Printed Page 38061are intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group.

In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19849), we stated that 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 was associated with the 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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19849 through 19850), for FY 2018, we did not propose to change the procedures assigned among these MS-DRGs. We invited public comments on our proposal to maintain the current structure of these MS-DRGs.

Comment: Commenters supported the proposal to maintain the current structure of MS-DRGs 984 through 986 and not to reassign or change the procedures assigned among these MS-DRGs to other MDCs.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to maintain the current structure of MS-DRGs 984 through 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) and not to reassign or change the procedures assigned among these MS-DRGs to other MDCs for ICD-10 MS-DRGs Version 35, effective October 1, 2017.

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 into 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. As we indicated in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19850), 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 did not propose 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 invited public comments on our proposal to maintain the current structure of these MS-DRGs.

Comment: Commenters supported the proposal to maintain the current structure of MS-DRGs 981 through 983 and MS-DRGs 987 through 989.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to not remove any procedures from 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) into one of the surgical MS-DRGs for the MDC into which the principal diagnosis is assigned for ICD-10 MS-DRGs Version 35, effective October 1, 2017.

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, in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19850), we proposed 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.Start Printed Page 38062

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. As we discussed in the proposed rule, 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 proposed 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 invited public comments on our proposals.

Comment: Commenters supported the proposal 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.

Response: We appreciate the commenters' support.

After consideration of the public comments that we received, we are finalizing our proposal to reassign the prostatic O.R. procedure codes from MS-DRGs 984 through 986 to MS-DRGs 987 through 989 (Non-extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively) and to delete MS-DRGs 984, 985 and 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively) for ICD-10 MS-DRGs Version 35, effective October 1, 2017.

15. 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 (CDC), 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 contribute 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 the proposed rule and this final 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 the proposed rule and this final 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 final rule. Rather, they are available via the Internet as discussed in section VI. of the Addendum to this final rule.

We note that after publication of the FY 2018 IPPS/LTCH PPS proposed rule, we were notified by the CDC of changes to the FY 2018 ICD-10-CM diagnosis codes that were listed in Table 6A.—New Diagnosis Codes and Table 6C.— Invalid Diagnosis Codes that were Start Printed Page 38063associated with the proposed rule. Specifically, ICD-10-CM diagnosis code K61.3 (Ischiorectal abscess) was listed in Table 6C. as an invalid diagnosis, and diagnosis codes K61.31 (Horseshoe abscess) and K61.32 (Ischiorectal abscess, NOS) were listed in Table 6A. as new diagnosis codes. The CDC informed us that they reversed their decision with respect to these codes. Therefore, diagnosis codes K61.31 and K61.32 are not being created for FY 2018 and are not reflected in Table 6A.—New Diagnosis Codes associated with this FY 2018 IPPS/LTCH PPS final rule. In addition, diagnosis code K61.3 is no longer reflected in Table 6C. associated with this final rule as an invalid diagnosis. Diagnosis code K61.3 will continue to be a valid code for FY 2018 in the ICD-10-CM classification.

The CDC also informed us of changes to diagnosis code K61.5 (Supralevator abscess). This diagnosis code was listed as a new diagnosis code in Table 6A.—New Diagnosis Codes that was associated with the proposed rule. However, this decision was also reversed. Therefore, diagnosis code K61.5 is not reflected in Table 6A. associated with this FY 2018 IPPS/LTCH PPS final rule and will not be reflected in the ICD-10-CM classification.

We also note that after publication of the FY 2018 IPPS/LTCH PPS proposed rule, the CDC revised the title for diagnosis code O00.212 from “Left ovarian pregnancy without intrauterine pregnancy” to “Left ovarian pregnancy with intrauterine pregnancy”. The description of the code title changed from “without” to “with” for this diagnosis code. This change will not be reflected in Table 6E.—Revised Diagnosis Code Titles because it is a new diagnosis code effective FY 2018. Rather, the corrected code title description will appear in Table 6A.—New Diagnosis Codes associated with this FY 2018 IPPS/LTCH PPS final rule. Furthermore, the CDC issued an ICD-10-CM Errata on June 27, 2017 regarding this code title change for diagnosis code O00.212. The Errata document is available via the Internet on the CMS Web site at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​2018-ICD-10-CM-and-GEMs.html.

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: nchsicd10cm@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 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 Start Printed Page 38064also 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 technology 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-CM71,704+218
ICD-10-PCS78,705+2,916

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.

Comment: One commenter stated that coding updates interfere with consistent clinical vocabulary maintenance. The commenter pointed to ICD-10-PCS code updates for FY 2018 which involve the addition of specificity beyond what was included in the 2017 version of ICD-10-PCS. The commenter stated that a core principle of clinical vocabulary maintenance is that the meaning of a code should not change over time. The commenter acknowledged that deadline for submitting comments on code proposals for the FY 2018 ICD-10-PCS had passed. The commenter stated that clinical vocabulary maintenance should be a primary consideration of the ICD-10 Coordination and Maintenance Committee before any further coding updates are proposed. The commenter looked forward to working with the ICD-10 Coordination and Maintenance Committee meeting on future code updates.

Response: CMS and CDC welcome the participation of the public at the ICD-10 Coordination and Maintenance Committee meetings. CMS and CDC encourage comments on any ICD-10-CM and ICD-10-PCS code updates presented at the meetings. The ICD-10-CM and ICD-10-PCS coding systems are not clinical vocabularies. The coding systems do not attempt to clarify or standardize how physicians describe clinical conditions or procedures. The ICD-10-CM and ICD-10-PCS coding systems are clinical classification systems. Classification systems arrange and organize like or related clinical conditions and procedures. The coding systems assign codes to capture diagnoses and procedures as documented by physicians. This can involve multiple diagnosis and procedure terms being captured in a single code. It is recognized that not all physicians use consistent terminology for identifying a condition or procedure. The coding systems recognize this fact and develop codes which capture this group of similar terms into a single code. The coding systems should not be viewed as a means to standardize medical terminology.

In response to public requests for updates to ICD-10-CM and ICD-10-PCS, the ICD-10 Coordination and Maintenance Committee presents the requested code updates and then solicits comments prior to making those updates. The ICD-9-CM and ICD-10 coding systems have been updated through the Coordination and Maintenance Committee since 1985, making updates to the coding systems that capture advances in medicine and changes in medical practices. The Committee will continue to meet to allow the public to provide comments on any requests to update the ICD-10-CM and ICD-10-PCS coding systems.

Comment: One commenter stated that it was a strong supporter of the conversion from ICD-9-CM to ICD-10-CM, including the creation of the new Section “X” codes to identify new medical services and technologies, because the newer, more robust coding system will allow for recognition of more technologies, procedures, and variations in patients' conditions