Skip to Content

Rule

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 2020 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals

Document Details

Information about this document as published in the Federal Register.

Document Statistics
Document page views are updated periodically throughout the day and are cumulative counts for this document including its time on Public Inspection. Counts are subject to sampling, reprocessing and revision (up or down) throughout the day.
Enhanced Content

Relevant information about this document from Regulations.gov provides additional context. This information is not part of the official Federal Register document.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble Start Printed Page 42044

AGENCY:

Centers for Medicare & 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 2020 and to implement certain recent legislation. We also are making changes relating to Medicare graduate medical education (GME) for teaching hospitals and payments to critical access hospital (CAHs). 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 2020. 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 2020. In this FY 2020 IPPS/LTCH PPS final rule, we are addressing wage index disparities impacting low wage index hospitals; providing for an alternative IPPS new technology add-on payment pathway for certain transformative new devices and qualified infectious disease products; and revising the calculation of the IPPS new technology add-on payment. In addition, we are revising and clarifying our policies related to the substantial clinical improvement criterion used for evaluating applications for the new technology add-on payment under the IPPS.

We are establishing new requirements or revising existing requirements for quality reporting by specific Medicare providers (acute care hospitals, PPS-exempt cancer hospitals, and LTCHs). We also are establishing new requirements and revising existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare and Medicaid Promoting Interoperability Programs. We are updating policies for the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.

DATES:

This final rule is effective October 1, 2019.

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, Medicare Disproportionate Share Hospital (DSH) Payment Adjustment, Medicare-Dependent Small Rural Hospital (MDH) Program, Low-Volume Hospital Payment Adjustment, and Critical Access Hospital (CAH) 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.

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

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

Erin Patton, (410) 786-2437, Hospital Readmissions Reduction Program Administration Issues.

Lein Han, 410-786-0205, Hospital Readmissions Reduction Program—Measures Issues.

Michael Brea, (410) 786-4961, Hospital-Acquired Condition Reduction Program Issues.

Annese Abdullah-Mclaughlin, (410) 786-2995, Hospital-Acquired Condition Reduction Program—Measures Issues.

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

Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing—Measures Issues Except Hospital Consumer Assessment of Healthcare Providers and Systems Issues.

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

Nekeshia McInnis, (410) 786-4486 and Ronique Evans, (410) 786-1000, PPS-Exempt Cancer Hospital Quality Reporting Issues.

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

Elizabeth Holland, (410) 786-1309, Dylan Podson (410) 786-5031, and Bryan Rossi (410) 786-065l, Promoting Interoperability Programs.

Benjamin Moll, (410) 786-4390, Provider Reimbursement Review Board Appeals Issues.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Tables Available Through the Internet on the CMS Website

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, the majority 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 FY 2020 final rule are available through the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled, “FY 2020 IPPS Final Rule Home Page” or “Acute Inpatient—Files for Download.” The LTCH PPS tables for this FY 2020 final rule are available through the internet on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​LongTermCareHospitalPPS/​index.html under the list item for Regulation Number CMS-1716-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 FY 2020 IPPS/LTCH PPS final rule.

Readers who experience any problems accessing any of the tables that are posted on the CMS websites, as previously identified, should contact Michael Treitel at (410) 786-4552.

Table of Contents

I. Executive Summary and Background

A. Executive Summary

B. Background Summary

C. Summary of Provisions of Recent Legislation Implemented in This Final Rule

D. Issuance of Notice of Proposed RulemakingStart Printed Page 42045

E. Advancing Health Information Exchange

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 2020 MS-DRG Documentation and Coding Adjustment

E. Refinement of the MS-DRG Relative Weight Calculation

F. Changes to Specific MS-DRG Classifications

G. Recalibration of the FY 2020 MS-DRG Relative Weights

H. Add-On Payments for New Services and Technologies for FY 2020

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

A. Background

B. Worksheet S-3 Wage Data for the FY 2020 Wage Index

C. Verification of Worksheet S-3 Wage Data

D. Method for Computing the FY 2020 Unadjusted Wage Index

E. Occupational Mix Adjustment to the FY 2020 Wage Index

F. Analysis and Implementation of the Occupational Mix Adjustment and the Final FY 2020 Occupational Mix Adjusted Wage Index

G. Application of the Rural Floor, Expired Imputed Floor Policy, and Application of the State Frontier Floor

H. FY 2020 Wage Index Tables

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

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. Process for Requests for Wage Index Data Corrections

M. Labor-Related Share for the FY 2020 Wage Index

N. Final Policies To Address Wage Index Disparities Between High and Low Wage Index Hospitals

IV. 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 2020 (§ 412.64(d))

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

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

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

F. Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) for FY 2020 (§ 412.106)

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

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

I. Hospital-Acquired Condition (HAC) Reduction Program

J. Payments for Indirect and Direct Graduate Medical Education Costs (§§ 412.105 and 413.75 Through 413.83)

K. Rural Community Hospital Demonstration Program

V. Changes to the IPPS for Capital-Related Costs

A. Overview

B. Additional Provisions

C. Annual Update for FY 2020

VI. Changes for Hospitals Excluded From the IPPS

A. Rate-of-Increase in Payments to Excluded Hospitals for FY 2020

B. Methodologies and Requirements for TEFRA Adjustments to Rate-of-Increase Ceiling

C. Critical Access Hospitals (CAHs)

VII. Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2020

A. Background of the LTCH PPS

B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2020

C. Payment Adjustment for LTCH Discharges That Do Not Meet the Applicable Discharge Payment Percentage

D. Changes to the LTCH PPS Payment Rates and Other Changes to the LTCH PPS for FY 2020

VIII. Quality Data Reporting Requirements for Specific Providers and Suppliers

A. Hospital Inpatient Quality Reporting (IQR) Program

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

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

D. Changes to the Medicare and Medicaid Promoting Interoperability Programs

IX. MedPAC Recommendations

X. Other Required Information

A. Publicly Available Data

B. Collection of Information Requirements

XI. Provider Reimbursement Review Board (PRRB) Appeals

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, 2019 and Payment Rates for LTCHs Effective With Discharges Occurring on or After October 1, 2019

I. Summary and Background

II. Changes to the Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2020

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 2020

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

B. Calculation of the Inpatient Capital-Related Prospective Payments for FY 2020

C. Capital Input Price Index

IV. Changes to Payment Rates for Excluded Hospitals: Rate-of-Increase Percentages for FY 2020

V. Updates to the Payment Rates for the LTCH PPS for FY 2020

A. LTCH PPS Standard Federal Payment Rate for FY 2020

B. Adjustment for Area Wage Levels Under the LTCH PPS for FY 2020

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 2020

VI. Tables Referenced in This FY 2020 IPPS/LTCH PPS Final Rule and Available Through the Internet on the CMS Website

Appendix A—Economic Analyses

I. Regulatory Impact Analysis

A. Statement of Need

B. Overall Impact

C. Objectives of the IPPS and the LTCH PPS

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

H. Effects of Other Policy Changes

I. Effects of Changes in the Capital IPPS

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

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 Requirements Regarding the Medicare Promoting Interoperability Program

O. Alternatives Considered

P. Reducing Regulation and Controlling Regulatory Costs

Q. Overall Conclusion

R. 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 12866Start Printed Page 42046

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

I. Background

II. Inpatient Hospital Update for FY 2020

A. FY 2020 Inpatient Hospital Update

B. Update for SCHs and MDHs for FY 2020

C. FY 2020 Puerto Rico Hospital Update

D. Update for Hospitals Excluded From the IPPS

E. Update for LTCHs for FY 2020

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 FY 2020 IPPS/LTCH PPS 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. 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). This final rule also makes policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this final rule, we are addressing wage index disparities impacting low wage index hospitals; providing for an alternative IPPS new technology add-on payment pathway for certain transformative new devices and qualified infectious disease products; revising the calculation of the IPPS new technology add-on payment; and making revisions and clarifications related to the substantial clinical improvement criterion under the IPPS.

We are establishing new requirements and revising existing requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt cancer hospitals, and LTCHs) that are participating in Medicare. We also are establishing new requirements and revising existing requirements for eligible hospitals and CAHs participating in the Medicare and Medicaid Promoting Interoperability Programs. We are updating policies for the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.

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 2020 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, 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.
  • Section 1866(k) of the Act, which provides for the establishment of 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, 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 amended by 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 as defined 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 hospitals with respect to the number of their Medicare-Medicaid dual-eligible beneficiaries (dual-eligibles) 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; and (3) a hospital's uncompensated care amount relative to the uncompensated care amount of all DSH hospitals expressed as a percentage.Start Printed Page 42047
  • Section 1886(m)(6) of the Act, as added by section 1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the Bipartisan Budget Act of 2018 (Pub. L. 115-123), which provided for the establishment of site neutral payment rate criteria under the LTCH PPS, with implementation beginning in FY 2016, and provides for a 4-year transitional blended payment rate for discharges occurring in LTCH cost reporting periods beginning in FYs 2016 through 2019. Section 51005(b) of the Bipartisan Budget Act of 2018 amended section 1886(m)(6)(B) by adding new clause (iv), which specifies that the IPPS comparable amount defined in clause (ii)(I) shall be reduced by 4.6 percent for FYs 2018 through 2026.
  • Section 1899B of the Act, as added by section 2(a) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185), which provides for the establishment of standardized data reporting for certain post-acute care providers, including LTCHs.

2. Summary of the Major Provisions

In this final rule, we provide a summary of the major provisions in this FY 2020 IPPS/LTCH PPS final rule. In general, these major provisions are part of the annual update to the payment policies and payment rates, consistent with the applicable statutory provisions. A general summary of the proposed changes that were included in the FY 2020 IPPS/LTCH PPS proposed rule is presented in section I.D. of the preamble of this final rule.

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.) Therefore, for FY 2020, we are making an adjustment of +0.5 percent to the standardized amount.

b. Revisions and Clarifications to the New Technology Add-On Payment Policy Substantial Clinical Improvement Criterion Under the IPPS

In the proposed rule, in addition to a broad request for public comments for potential rulemaking in future years, in order to respond to stakeholder feedback requesting greater understanding of CMS' approach to evaluating substantial clinical improvement, we solicited public comments on specific changes or clarifications to the IPPS and Outpatient Prospective Payment System (OPPS) substantial clinical improvement criterion used to evaluate applications for new technology add-on payments under the IPPS and the transitional pass-through payment for additional costs of innovative devices under the OPPS that CMS might consider making in this FY 2020 IPPS/LTCH PPS final rule for applications received beginning in FY 2020 for the IPPS and CY 2020 for the OPPS, to provide greater clarity and predictability.

In this final rule, after consideration of public comments, we are revising and clarifying certain aspects of our evaluation of the substantial clinical improvement criterion under the IPPS in 42 CFR 412.87.

c. Alternative Inpatient New Technology Add-On Payment Pathway for Transformative New Devices and Antimicrobial Resistant Products

As discussed in section III.H.8. of the preamble of this final rule, after consideration of public comments, given the Food and Drug Administration's (FDA's) expedited programs, and consistent with the Administration's commitment to addressing barriers to health care innovation and ensuring that Medicare beneficiaries have access to critical and life-saving new cures and technologies that improve beneficiary health outcomes, we are adopting an alternative pathway for the inpatient new technology add-on payment for certain transformative medical devices. In situations where a new medical device has received FDA marketing authorization (that is, the device has received pre-market approval (PMA); 510(k) clearance; or the granting of a De Novo classification request) and is the subject of the FDA's Breakthrough Devices Program, we are finalizing our proposal to create an alternative inpatient new technology add-on payment pathway to facilitate access to this technology for Medicare beneficiaries. In addition, after consideration of public comments and concerns related to antimicrobial resistance and its serious impact on Medicare beneficiaries and public health overall, we are finalizing an alternative inpatient new technology add-for Qualified Infectious Disease Products (QIDPs).

Specifically, we are establishing that, for applications received for IPPS new technology add-on payments for FY 2021 and subsequent fiscal years, if a medical device is the subject of the FDA's Breakthrough Devices Program or if a medical product technology receives the FDA's QIDP designation and received FDA marketing authorization, such a device or product will be considered new and not substantially similar to an existing technology for purposes of new technology add-on payment under the IPPS. We are also establishing that the medical device or product will not need to meet the requirement under 42 CFR 412.87(b)(1) that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

d. Revision of the Calculation of the Inpatient Hospital New Technology Add-On Payment

The current calculation of the new technology add-on payment is based on the cost to hospitals for the new medical service or technology. Under § 412.88, if the costs of the discharge (determined by applying cost-to-charge ratios (CCRs), as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 50 percent of the costs of the new medical service or technology; or (2) 50 percent of the amount by which the costs of the case exceed the standard DRG payment. Unless the discharge qualifies for an outlier payment, the additional Medicare payment is limited to the full MS-DRG payment plus 50 percent of the estimated costs of the new technology or medical service.

As discussed in section III.H.9. of the preamble of this final rule, after consideration of the concerns raised by Start Printed Page 42048commenters and other stakeholders, we agree that capping the add-on payment amount at 50 percent could, in some cases, not adequately reflect the costs of new technology or sufficiently support healthcare innovations.

After consideration of public comments, we are finalizing the proposed modification to the current payment amount to increase the maximum add-on payment amount to 65 percent of the costs of the new technology or medical service (except with respect to a medical product designated by the FDA as a QIDP). Therefore, we are establishing that, beginning with discharges occurring on or after October 1, 2019, for a new technology other than a medical product designated as a QIDP by the FDA, if the costs of a discharge involving a new medical service or technology exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 65 percent of the costs of the new medical service or technology; or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment. In addition, after consideration of public comments and concerns related to antimicrobial resistance and its serious impact on Medicare beneficiaries and public health overall, we are establishing that, beginning with discharges occurring on or after October 1, 2019, for a new technology that is a medical product designated as a QIDP by the FDA, if the costs of a discharge involving a new medical service or technology exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment.

e. Finalized Policies To Address Wage Index Disparities

In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20372), we invited the public to submit further comments, suggestions, and recommendations for regulatory and policy changes to the Medicare wage index. Many of the responses received from this request for information (RFI) reflect a common concern that the current wage index system perpetuates and exacerbates the disparities between high and low wage index hospitals. Many respondents also expressed concern that the calculation of the rural floor has allowed a limited number of States to manipulate the wage index system to achieve higher wages for many urban hospitals in those States at the expense of hospitals in other States, which also contributes to wage index disparities.

To help mitigate these wage index disparities, including those resulting from the inclusion of hospitals with rural reclassifications under 42 CFR 412.103 in the rural floor, in this final rule, we are reducing the disparity between high and low wage index hospitals by increasing the wage index values for certain hospitals with low wage index values and doing so in a budget neutral manner through an adjustment applied to the standardized amounts for all hospitals, as well as changing the calculation of the rural floor. We also are providing for a transition for hospitals experiencing significant decreases in their wage index values as compared to their final FY 2019 wage index. We are making these changes in a budget neutral manner.

In this final rule, we are increasing the wage index for hospitals with a wage index value below the 25th percentile wage index value for a fiscal year by half the difference between the otherwise applicable final wage index value for a year for that hospital and the 25th percentile wage index value for that year across all hospitals. Furthermore, this policy will be effective for at least 4 years, beginning in FY 2020, in order to allow employee compensation increases implemented by these hospitals sufficient time to be reflected in the wage index calculation. In order to offset the estimated increase in IPPS payments to hospitals with wage index values below the 25th percentile wage index value, we are applying a uniform budget neutrality factor to the standardized amount.

In addition, we are removing urban to rural reclassifications from the calculation of the rural floor, such that, beginning in FY 2020, the rural floor is calculated without including the wage data of hospitals that have reclassified as rural under section 1886(d)(8)(E) of the Act (as implemented in the regulations at § 412.103). Also, for the purposes of applying the provisions of section 1886(d)(8)(C)(iii) of the Act, we are removing urban to rural reclassifications from the calculation of “the wage index for rural areas in the State in which the county is located” as referred to in the statute.

Lastly, for FY 2020, we are placing a 5-percent cap on any decrease in a hospital's wage index from the hospital's final wage index in FY 2019. We are applying a budget neutrality adjustment to the standardized amount so that our transition for hospitals that could be negatively impacted is implemented in a budget neutral manner.

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 FY 2020 IPPS/LTCH PPS final rule, we have updated our estimates of the three factors used to determine uncompensated care payments for FY 2020. We continue to use uninsured estimates produced by CMS' Office of the Actuary (OACT), as part of the development of the National Health Expenditure Accounts (NHEA) in the calculation of Factor 2. We also are using a single year of data on uncompensated care costs from Worksheet S-10 for FY 2015 to determine Factor 3 for FY 2020. In addition, we are continuing to use only data regarding low-income insured days (Medicaid days for FY 2013 and FY 2017 SSI days) to determine the amount of uncompensated care payments for Puerto Rico hospitals, and Indian Health Service and Tribal hospitals. We did not adopt specific Factor 3 polices for all-inclusive rate providers for FY 2020. In this final rule, we also are continuing to use the following established policies: (1) For providers with multiple cost reports, beginning in the same fiscal year, to use the longest cost report and annualize Medicaid data and uncompensated care data if a hospital's cost report does not equal 12 months of data; (2) in the rare case where a provider has multiple cost reports beginning in the same fiscal year, but one report also spans the entirety of the following fiscal year, such that the hospital has no cost report for that fiscal year, to use the cost report that spans both fiscal years for the latter fiscal year; Start Printed Page 42049and (3) to apply statistical trim methodologies to potentially aberrant cost-to-charge ratios (CCRs) and potentially aberrant uncompensated care costs reported on the Worksheet S-10.

g. Changes to the LTCH PPS

In this FY 2020 IPPS/LTCH PPS 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 2020. We also are establishing the payment adjustment for LTCH discharges when the LTCH does not meet the applicable discharge payment percentage and a reinstatement process, as required by section 1886(m)(6)(C) of the Act. An LTCH will be subject to this payment adjustment if, for cost reporting periods beginning in FY 2020 and subsequent fiscal years, the LTCH's percentage of Medicare discharges that meet the criteria for exclusion from the site neutral payment rate (that is, discharges paid the LTCH PPS standard Federal payment rate) of its total number of Medicare FFS discharges paid under the LTCH PPS during the cost reporting period is not at least 50 percent. We are adopting a probationary cure period as part of the reinstatement process.

h. Reduction of Hospital Payments for Excess Readmissions

We are making changes to policies for the Hospital Readmissions Reduction Program, which was established under section 1886(q) of the Act, as amended by section 15002 of the 21st Century Cures 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 2017 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), elective primary total hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG) surgery. In this FY 2020 IPPS/LTCH PPS final rule, we are establishing the following policies: (1) A measure removal policy that aligns with the removal factor policies previously adopted in other quality reporting and quality payment programs; (2) an update to the Program's definition of “dual-eligible,” beginning with the FY 2021 program year to allow for a 1-month lookback period in data sourced from the State Medicare Modernization Act (MMA) files to determine dual-eligible status for beneficiaries who die in the month of discharge; (3) a subregulatory process to address any potential future nonsubstantive changes to the payment adjustment factor components; and (4) an update to the Program's regulations at 42 CFR 412.152 and 412.154 to reflect policies we are finalizing in this final rule and to codify additional previously finalized policies.

i. 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 FY 2020 IPPS/LTCH PPS final rule, we are establishing that the Hospital VBP Program will use the same data used by the HAC Reduction Program for purposes of calculating the Centers for Disease Control and Prevention (CDC) National Health Safety Network (NHSN) Healthcare-Associated Infection (HAI) measures beginning with CY 2020 data collection, which is when the Hospital IQR Program will no longer collect data on those measures, and will rely on HAC Reduction Program validation to ensure the accuracy of CDC NHSN HAI measure data used in the Hospital VBP Program. We also are newly establishing certain performance standards.

j. Hospital-Acquired Condition (HAC) Reduction Program

Section 1886(p) of the 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 hospitals that rank in the worst-performing 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. As part of our agency-wide Patients over Paperwork and Meaningful Measures Initiatives, discussed in section I.A.2. of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41147 and 41148), we are: (1) Adopting a measure removal policy that aligns with the removal factor policies previously adopted in other quality reporting and quality payment programs; (2) clarifying administrative policies for validation of the CDC NHSN HAI measures; (3) adopting the data collection periods for the FY 2022 program year; and (4) updating 42 CFR 412.172(f) to reflect policies finalized in the FY 2019 IPPS/LTCH PPS final rule.

k. 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 this FY 2020 IPPS/LTCH PPS final rule, we are making several changes. We are: (1) Adopting the Safe Use of Opioids—Concurrent Prescribing eCQM beginning with the CY 2021 reporting period/FY 2023 payment determination with a clarification and update; (2) adopting the Hybrid Hospital-Wide All-Cause Readmission (Hybrid HWR) measure (NQF #2879) in a stepwise fashion, beginning with two voluntary reporting periods which will run from July 1, 2021 through June 30, 2022, and from July 1, 2022 through June 30, 2023, before requiring reporting of the measure for the reporting period that will run from July 1, 2023 through June 30, 2024, impacting the FY 2026 payment determination and for subsequent years; and (3) removing the Claims-Based Hospital-Wide All-Cause Unplanned Readmission Measure (NQF #1789) (HWR claims-only measure), beginning with the FY 2026 payment determination. We are not finalizing our proposal to adopt the Hospital Harm—Opioid-Related Adverse Events eCQM. We also are establishing reporting and submission requirements for eCQMs, including policies to: (1) Extend current eCQM reporting and submission requirements for both the CY 2020 reporting period/FY 2022 payment determination and CY 2021 reporting period/FY 2023 payment determination; (2) change the eCQM reporting and submission requirements for the CY 2022 reporting period/FY 2024 payment determination, such that hospitals will be required to report one, self-selected calendar quarter of data for three self-selected eCQMs and the Safe Use of Opioids—Concurrent Prescribing eCQM (NQF #3316e), for a total of four eCQMs; and (3) continue requiring that EHRs be certified to all available eCQMs used in the Hospital IQR Program for the CY 2020 reporting period/FY 2022 payment determination and subsequent years. These eCQM reporting and submission policies are in alignment with policies under the Promoting Interoperability Program. We also are establishing reporting and submission requirements Start Printed Page 42050for the Hybrid HWR measure. In addition, we are summarizing public comments we received on three measures we are considering for potential future inclusion in the Hospital IQR Program.

l. Medicare and Medicaid Promoting Interoperability Programs

For purposes of an increased level of stability, reducing the burden on eligible hospitals and CAHs, and clarifying certain existing policies, we are finalizing several changes to the Promoting Interoperability Program. Specifically, we are: (1) Eliminating the requirement that, for the FY 2020 payment adjustment year, for an eligible hospital that has not successfully demonstrated it is a meaningful EHR user in a prior year, the EHR reporting period in CY 2019 must end before and the eligible hospital must successfully register for and attest to meaningful use no later than the October 1, 2019 deadline; (2) establishing an EHR reporting period of a minimum of any continuous 90-day period in CY 2021 for new and returning participants (eligible hospitals and CAHs) in the Medicare Promoting Interoperability Program attesting to CMS; (3) requiring that the Medicare Promoting Interoperability Program measure actions must occur within the EHR reporting period, beginning with the EHR reporting period in CY 2020; (4) revising the Query of PDMP measure to make it an optional measure worth 5 bonus points in CY 2020, removing the exclusions associated with this measure in CY 2020, requiring a yes/no response instead of a numerator and denominator for CY 2019 and CY 2020, and clearly stating our intended policy that the measure is worth a full 5 bonus points in CY 2019 and CY 2020; (5) changing the maximum points available for the e-Prescribing measure from 5 points to 10 points beginning in CY 2020; (6) removing the Verify Opioid Treatment Agreement measure beginning in CY 2020 and clearly stating our intended policy that this measure is worth a full 5 bonus points in CY 2019; and (7) revising the Support Electronic Referral Loops by Receiving and Incorporating Health Information measure to more clearly capture the previously established policy regarding CEHRT use. We also are amending our regulations to incorporate several of these finalized policies.

For CQM reporting under the Medicare and Medicaid Promoting Interoperability Programs, we are generally aligning our requirements with requirements under the Hospital IQR Program. Specifically, we are: (1) Adopting one opioid-related CQM (Safe Use of Opioids—Concurrent Prescribing CQM beginning with the reporting period in CY 2021 (we are not finalizing our proposal to add the Hospital Harm—Opioid-Related Adverse Events CQM); (2) extending current CQM reporting and submission requirements for the reporting periods in CY 2020 and CY 2021; and (3) establishing CQM reporting and submission requirements for the reporting period in CY 2022, which will require all eligible hospitals and CAHs to report on the Safe Use of Opioids—Concurrent Prescribing eCQM beginning with the reporting period in CY 2022.

We sought public comments on whether we should consider proposing to adopt in future rulemaking the Hybrid Hospital-Wide All-Cause Readmission (Hybrid HWR) measure, beginning with the reporting period in CY 2023, a measure which we adopted under the Hospital IQR Program, and we sought information on a variety of issues regarding the future direction of the Medicare and Medicaid Promoting Interoperability Programs. We may use the input we received to inform further rulemaking.

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 percentage point 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 percentage point by section 15005 of the 21st Century Cures Act.) For FY 2020, we are making an adjustment of +0.5 percentage point to the standardized amount consistent with the MACRA.
  • Alternative Inpatient New Technology Add-On Payment Pathway for Transformative New Devices: In this FY 2020 IPPS/LTCH PPS final rule, we are establishing an alternative inpatient new technology add-on payment pathway for a new medical device that is subject to the FDA Breakthrough Devices Program and has received FDA authorization (that is, received PMA approval, 510(k) clearance, or the granting of De Novo classification request). We are also establishing that, if a medical product is designated by the FDA as a Qualified Infectious Disease Product (QIDP) and received FDA market authorization. Under these alternative inpatient new technology add-on payment pathways, such a medical device or product will be considered new and not substantially similar to an existing technology for purposes of new technology add-on payment under the IPPS, and such a medical product or device will not need to meet the requirement under § 412.87(b)(1) that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

Given the relatively recent introduction of FDA's Breakthrough Devices Program, there have not been any medical devices that were part of the Breakthrough Devices Program and received FDA marketing authorization and for which the applicant applied for a new technology add-on payment under the IPPS and was not approved. If all of the future new medical devices that were part of the Breakthrough Devices Program and QIDPs that would have applied for new technology add-on payments would have been approved under the existing criteria, this policy has no impact. To the extent that there are future medical devices that were part of the Breakthrough Devices Program or QIDPs that are the subject of applications for new technology add-on payments, and those applications would have been denied under the current new technology add-on payment criteria, this policy is a cost, but that cost is not estimable. Therefore, it is not possible to quantify the impact of this policy.

Revisions to the Calculation of the Inpatient Hospital New Technology Add-On Payment: The current calculation of the new technology add-on payment is based on the cost to hospitals for the new medical service or technology. Under existing § 412.88, if the costs of the discharge exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare makes an add-on payment equal to the lesser of: (1) 50 percent of the estimated costs of the new technology or medical service; or (2) 50 percent of the amount by which the costs of the case exceed the standard DRG payment.

As discussed in section II.H.9. of the preamble of this final rule, we have modified the current payment mechanism to increase the amount of the maximum add-on payment amount to 65 percent (and 75 percent for QIDPs). Specifically, for technologies other than QIDPs, if the costs of a discharge (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare Start Printed Page 42051will make an add-on payment equal to the lesser of: (1) 65 percent (or 75 percent for QIDPs) of the costs of the new medical service or technology; or (2) 65 percent (75 percent for QIDPs) of the amount by which the costs of the case exceed the standard DRG payment.

We estimate that for the nine technologies for which we are continuing to make new technology add on payments in FY 2020 and for the nine FY 2020 new technology add-on payment applications that we are approving for new technology add-on payments for FY 2020, these changes to the calculation of the new technology add-on payment will increase IPPS spending by approximately $94 million in FY 2020.

Technologies Approved for FY 2020 New Technology Add-On Payments: In section II.H.5. of the preamble to this final rule, we discuss 13 technologies for which we received applications for add-on payments for new medical services and technologies for FY 2020. We also discuss the status of the new technologies that were approved to receive new technology add-on payments in FY 2019 in section II.H.4. of the preamble to this final rule. As explained in the preamble to this final rule, add-on payments for new medical services and technologies under section 1886(d)(5)(K) of the Act are not required to be budget neutral. Based on those technologies approved for new technology add-on payments for FY 2020, new technology add-on payment are projected to increase approximately $162 million as compared to FY 2019 (which also reflects the estimated changes to the calculation of the inpatient new technology add-on payment described above).

  • Changes To Address Wage Index Disparities. As discussed in section III.N. of the preamble of this final rule, to help mitigate wage index disparities, including those resulting from the inclusion of hospitals with rural reclassifications under 42 CFR 412.103 in the rural floor, we are reducing the disparity between high and low wage index hospitals by increasing the wage index values for certain hospitals with low wage index values (that is, hospitals with wage index values below the 25th percentile wage index value across all hospitals), as well as changing the calculation of the rural floor. In order to offset the estimated increase in IPPS payments to hospitals with wage index values below the 25th percentile wage index value, we have applied a uniform budget neutrality adjustment to the standardized amount. We also are establishing a transition for FY 2020 for hospitals experiencing significant decreases in their wage index values, and we are implementing this in a budget neutral manner by applying a budget neutrality adjustment to the standardized amount.
  • Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. For FY 2020, we are updating our estimates of the three factors used to determine uncompensated care payments. We are continuing to use uninsured estimates produced by OACT, as part of the development of the NHEA in the calculation of Factor 2. We also are using a single year of data on uncompensated care costs from Worksheet S-10 for FY 2015 to determine Factor 3 for FY 2020. To determine the amount of uncompensated care for purposes of calculating Factor 3 for Puerto Rico hospitals and Indian Health Service and Tribal hospitals, we are continuing to use only data regarding low-income insured days (Medicaid days for FY 2013 and FY 2017 SSI days).

We project that the amount available to distribute as payments for uncompensated care for FY 2020 will increase by approximately $78 million, as compared to our estimate of the uncompensated care payments that will be distributed in FY 2019. The payments have redistributive effects, based on a hospital's uncompensated care amount relative to the uncompensated care amount for all hospitals that are projected to be eligible to receive Medicare DSH payments, and the calculated payment amount is not directly tied to a hospital's number of discharges.

Update to the LTCH PPS Payment Rates and Other Payment Policies. Based on the best available data for the 384 LTCHs in our database, we estimate that the changes to the payment rates and factors that we presented in the preamble of and Addendum to this FY 2020 IPPS/LTCH PPS final rule, which reflect the end of the transition of the statutory application of the site neutral payment rate and the update to the LTCH PPS standard Federal payment rate for FY 2020, will result in an estimated increase in payments in FY 2020 of approximately $43 million.

  • Changes to the Hospital Readmissions Reduction Program. For FY 2020 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), elective primary total hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG) surgery. Overall, in this FY 2020 IPPS/LTCH PPS final rule, we estimate that 2,583 hospitals would have their base operating DRG payments reduced by their determined proxy FY 2020 hospital-specific readmission adjustment. As a result, we estimate that the Hospital Readmissions Reduction Program will save approximately $563 million in FY 2020.
  • Value-Based Incentive Payments Under the Hospital VBP Program. We estimate that there will be no net financial impact to participating hospitals under the Hospital VBP Program for the FY 2020 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 2020 program year and, therefore, the estimated amount available for value-based incentive payments for FY 2020 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 depend on several different factors. The FY 2020 program year is the first year in which we are implementing our equal measure weights scoring methodology. Any significant impact due to the HAC Reduction Program changes for FY 2020, including which hospitals will receive the adjustment, will depend on the actual experience of hospitals in the Program. We also are updating the hourly wage rate associated with burden for CDC NHSN HAI validation under the HAC Reduction Program.
  • Changes to the Hospital Inpatient Quality Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that our changes for the Hospital IQR Program in this FY 2020 IPPS/LTCH PPS final rule would result in changes to the information collection burden compared to previously adopted requirements. The only policy that will affect the information collection burden for the Hospital IQR Program is the policy to adopt the Hybrid Hospital-Wide All-Cause Readmission (Hybrid HWR) measure (NQF #2879) in a stepwise fashion, beginning with two voluntary reporting periods which will run from July 1, 2021 through June 30, 2022, and from July 1, 2022 through June 30, 2023, before requiring reporting of the measure for the reporting period that will run from July 1, 2023 through Start Printed Page 42052June 30, 2024, impacting the FY 2026 payment determination and for subsequent years. We estimate that the impact of this change is a total collection of information burden increase of 2,211 hours and a total cost increase of approximately $83,266 for all participating IPPS hospitals annually.
  • Changes to the Medicare and Medicaid Promoting Interoperability Programs. We believe that, overall, the revised policies in this FY 2020 IPPS/LTCH PPS final rule will reduce burden, as described in detail in section X.B.9. of the preamble and Appendix A, section I.N. of this final rule.

B. Background 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 beginning on October 1, 2013, that considers the amount of uncompensated care furnished by the hospital relative to all other qualifying hospitals.

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 an 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 2022. 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, 2022, 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 (or, as amended by the Bipartisan Budget Act of 2018, a hospital located in a State with no rural area that meets certain statutory criteria), has not more than 100 beds, is not an SCH, and has a high percentage of Medicare discharges (not less than 60 percent of its inpatient days or discharges in its cost reporting year beginning in FY 1987 or in two of its three most recently settled Medicare cost reporting years).

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

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

2. Hospitals and Hospital Units Excluded From the IPPS

Under section 1886(d)(1)(B) of the Act, as amended, certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Inpatient rehabilitation facility (IRF) hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; cancer hospitals; extended neoplastic disease care hospitals, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa). Religious nonmedical health care institutions (RNHCIs) are also excluded Start Printed Page 42053from 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. Similarly, extended neoplastic disease care hospitals are paid on a reasonable cost basis, 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 through September 30, 2015 all LTCHs were 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 generally 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 That Are Implemented in This Final Rule

1. 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, receive payment under a site neutral rate unless the discharge meets certain patient-specific criteria. In this FY 2020 IPPS/LTCH PPS final rule, we are continuing to update certain policies that implemented provisions under section 1206 of the Pathway for SGR Reform Act.

2. 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 Hospital Quality 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 post-acute care providers, to report standardized patient assessment data, data on quality measures, and data on resource use and other measures.

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

Section 414 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. These adjustments follow the 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 2017 to fully offset $11 billion, in accordance with section 631 of the ATRA. The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.

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

The 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016, contained the following provision affecting payments under the Hospital Readmissions Reduction Program, which we are continuing to implement in this final rule:

  • 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 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 FY 2020 IPPS/LTCH PPS final rule, we are continuing to implement changes to the payment adjustment factor to assess penalties, based on a hospital's performance, relative to other hospitals Start Printed Page 42054treating a similar proportion of dual-eligible patients.

D. Issuance of Notice of Proposed Rulemaking

In the FY 2020 IPPS/LTCH PPS proposed rule appearing in the Federal Register on May 3, 2019 (84 FR 19158), we set forth proposed payment and policy changes to the Medicare IPPS for FY 2020 operating costs and 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 associated with payment rate policies under the LTCH PPS for FY 2020.

In this final rule is a general summary of the 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 2020.
  • Proposed adjustment to the standardized amounts under section 1886(d) of the Act for FY 2020 in accordance with the amendments made to section 7(b)(1)(B) of Public Law 110-90 by section 414 of the MACRA.
  • Proposed recalibration of the MS-DRG relative weights.
  • A discussion of the proposed FY 2020 status of new technologies approved for add-on payments for FY 2019 and a presentation of our evaluation and analysis of the FY 2020 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).
  • A request for public comments on the substantial clinical improvement criterion used to evaluate applications for both the IPPS new technology add-on payments and the OPPS transitional pass-through payment for devices, and a discussion of potential revisions that we were considering adopting as final policies related to the substantial clinical improvement criterion for applications received beginning in FY 2020 for the IPPS (that is, for FY 2021 and later new technology add-on payments) and beginning in CY 2020 for the OPPS.
  • A proposed alternative IPPS new technology add-on payment pathway for certain transformative new devices.
  • Proposed changes to the calculation of the IPPS new technology add-on payment.

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 included, but were not limited to, the following:

  • The proposed FY 2020 wage index update using wage data from cost reporting periods beginning in FY 2016.
  • Proposals to address wage index disparities between high and low wage index hospitals.
  • Calculation, analysis, and implementation of the proposed occupational mix adjustment to the wage index for acute care hospitals for FY 2020 based on the 2016 Occupational Mix Survey.
  • Proposed application of the rural floor and the frontier State 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.
  • Proposed change to Lugar county assignments.
  • Proposed adjustment to the wage index for acute care hospitals for FY 2020 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index.
  • Proposed labor-related share for the proposed FY 2020 wage index.

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

In section IV. 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 and special payment policy.
  • Proposed changes to the inpatient hospital update for FY 2020.
  • Proposed conforming changes to the regulations for the low-volume hospital payment adjustment policy.
  • Proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.
  • The statutorily required IME adjustment factor for FY 2020.
  • Proposed changes to the methodologies for determining Medicare DSH payments and the additional payments for uncompensated care.
  • A request for public comments on PRRB appeals related to a hospital's Medicaid fraction in the DSH payment adjustment calculation.
  • Proposed changes to the policies 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 2020.
  • 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 2020.
  • Proposed changes related to CAHs as nonproviders for direct GME and IME payment purposes.
  • Discussion of the implementation of the Rural Community Hospital Demonstration Program in FY 2020.

4. Proposed FY 2020 Policy Governing the IPPS for Capital-Related Costs

In section V. 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 2020.

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

In section VI. of the preamble of the proposed rule, we discussed—

  • Proposed changes to payments to certain excluded hospitals for FY 2020.
  • Proposed change related to CAH payment for ambulance services.
  • Proposed continued implementation of the Frontier Community Health Integration Project (FCHIP) Demonstration.

6. Proposed Changes to the LTCH PPS

In section VII. of the preamble of the is 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 2020.
  • Proposed payment adjustment for discharges of LTCHs that do not meet the applicable discharge payment percentage.

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

In section VIII. 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 Start Printed Page 42055program for PPS-exempt cancer hospitals (PCHQR Program).
  • Proposed changes to the requirements under the LTCH Quality Reporting Program (LTCH QRP).
  • Proposed changes to requirements pertaining to eligible hospitals and CAHs participating in the Medicare and Medicaid Promoting Interoperability Programs.

8. Provider Reimbursement Review Board Appeals

In section XI. of the preamble of the proposed rule, we discussed the growing number of Provider Reimbursement Review Board appeals made by providers and the action initiatives that are being implemented with the goal to: Decrease the number of appeals submitted; decrease the number of appeals in inventory; reduce the time to resolution; and increase customer satisfaction.

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

In sections II. and III. of the Addendum to the proposed rule, we set forth the proposed changes to the amounts and factors for determining the proposed FY 2020 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We proposed to establish the threshold amounts for outlier cases, including a proposed change to the methodology for calculating those threshold amounts for FY 2020 to incorporate a projection of outlier payment reconciliations. In addition, in section IV. of the Addendum to the proposed rule, we addressed the update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2020 for certain hospitals excluded from the IPPS.

10. Determining Prospective Payment Rates for LTCHs

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 2020 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 2020. 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.

11. Impact Analysis

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

12. 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 2020 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 and MDHs).
  • 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.

13. 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 2019 recommendations concerning hospital inpatient payment policies addressed the update factor for hospital inpatient operating costs and capital-related costs for hospitals under the IPPS. We address these recommendations in Appendix B of this FY 2020 IPPS/LTCH PPS final rule. For further information relating specifically to the MedPAC March 2019 report or to obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit MedPAC's website at: http://www.medpac.gov.

E. Advancing Health Information Exchange

The Department of Health and Human Services (HHS) has a number of initiatives designed to encourage and support the adoption of interoperable health information technology and to promote nationwide health information exchange to improve health care. The Office of the National Coordinator for Health Information Technology (ONC) and CMS work collaboratively to advance interoperability across settings of care, including post-acute care.

To further interoperability in post-acute care, we developed a Data Element Library (DEL) to serve as a publicly available centralized, authoritative resource for standardized data elements and their associated mappings to health IT standards. The DEL furthers CMS' goal of data standardization and interoperability. These interoperable data elements can reduce provider burden by allowing the use and exchange of health care data, support provider exchange of electronic health information for care coordination, person-centered care, and support real-time, data driven, clinical decision making. Standards in the Data Element Library (https://del.cms.gov/​) can be referenced on the CMS website and in the ONC Interoperability Standards Advisory (ISA). The 2019 ISA is available at: https://www.healthit.gov/​isa .

The 21st Century Cures Act (the Cures Act) (Pub. L. 114-255, enacted December 13, 2016) requires HHS to take new steps to enable the electronic sharing of health information ensuring interoperability for providers and settings across the care continuum. In an important provision, Congress defined “information blocking” as practices likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information, and established new authority for HHS to discourage these practices. In March 2019, ONC and CMS published the proposed rules, “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” (84 FR 7424 through 7610) and “Interoperability and Patient Access” (84 FR 7610 through 7680), to promote secure and more immediate access to health information for patients and health care providers through the implementation of information blocking provisions of the Cures Act and the use of standardized application programming interfaces (APIs) that enable easier access to electronic health information. These two proposed rules extended their comment period by 30 days and closed on June 3, 2019. The proposed rules can be found at: www.regulations.gov.

In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19158), we invited providers to learn more about these important developments and how they are likely to affect hospitals paid under the IPPS and the LTCH PPS.Start Printed Page 42056

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 2019 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; 81 FR 56787 through 56872; 82 FR 38010 through 38085, and 83 FR 41158 through 41258, 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 with comment period (72 FR 47140 through 47189).

D. FY 2020 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 and the Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA)

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

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

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

As discussed in prior year rulemakings, 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 under Public Law 110-90.

In addition, as discussed in prior rulemakings and most recently in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009), 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.

2. Adjustments Made for FY 2018 and FY 2019 as 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. 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 positive adjustment to a 0.4588 percentage point positive Start Printed Page 42057adjustment. As we discussed in the FY 2018 rulemaking, we believe the directive under section 15005 of Public Law 114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38009) for FY 2018, we implemented the required +0.4588 percentage point adjustment to the standardized amount. In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41157), consistent with the requirements of section 414 of the MACRA, we implemented a 0.5 percentage point positive adjustment to the standardized amount for FY 2019. We indicated that both the FY 2018 and FY 2019 adjustments were permanent adjustments to payment rates. We also stated that we plan to propose future adjustments required under section 414 of the MACRA for FYs 2020 through 2023 in future rulemaking.

3. Adjustment for FY 2020

In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19170 through 19171) consistent with the requirements of section 414 of the MACRA, we proposed to implement a 0.5 percentage point positive adjustment to the standardized amount for FY 2020. We indicated that this would constitute a permanent adjustment to payment rates. We stated in the proposed rule that we plan to propose future adjustments required under section 414 of the MACRA for FYs 2021 through 2023 in future rulemaking.

Comment: Several commenters stated that in order to comply with ATRA requirements, CMS anticipated that a cumulative −3.2 percentage point adjustment to the standardized amount would achieve the mandated $11 billion recoupment. Commenters stated that CMS misinterpreted the relevant statutory authority, which they asserted explicitly assumes that recoupment under section 631 of the ATRA would result in an estimated −3.2 percentage point cumulative adjustment by FY 2017. Commenters asserted that the additional −0.7 percentage point adjustment made in FY 2017 has been improperly continued in FY 2018 and FY 2019, and failure to restore the additional 0.7 percentage point adjustment will make this reduction in hospital payments a permanent part of the baseline calculation of the IPPS rates, which, they contend, was not Congress's legislative intent in implementing the series of adjustments required under section 414 of the MACRA. Commenters urged CMS to use its exceptions and adjustments authority under section 1886(d)(5)(I) to restore an additional 0.7 percentage point payment adjustment in FY2020 to restore payment equity to hospitals and comply with what they asserted was Congressional intent. Other commenters suggested CMS implement an approximate positive adjustment of 1.0 percentage point by FY 2024 to fully and permanently restore the entire −3.9 percentage point recoupment adjustment to IPPS rates. A commenter requested that CMS provide its rationale for failing to do so. Finally, some of the commenters, while acknowledging that CMS may be bound by law, expressed opposition to the permanent reductions and requested that CMS refrain from making any additional coding adjustments in the future.

Response: As we discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19170 through 19171), and in response to similar comments in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41157), we believe section 414 of the MACRA and section 15005 of the 21st Century Cures Act set forth the levels of positive adjustments for FYs 2018 through 2023. We are not convinced that the adjustments prescribed by MACRA were predicated on a specific adjustment level estimated or implemented by CMS in previous rulemaking. 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 required that we implement a 0.5 percentage point positive adjustment for each of FYs 2018 through 2023, and not the single positive adjustment we intended to make in FY 2018. As 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). Moreover, as discussed in the FY 2018 IPPS/LTCH PPS final rule, 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 had proposed and finalized the final negative −1.5 percentage point adjustment required under section 631 of the ATRA. We see no evidence that Congress enacted these adjustments with the intent that CMS would make an additional +0.7 percentage point adjustment in FY 2018 to compensate for the higher than expected final ATRA adjustment made in FY 2017, nor are we persuaded that it would be appropriate to use the Secretary's exceptions and adjustments authority under section 1886(d)(5)(I) of the Act to adjust payments in FY 2020 to restore any additional amount of the original 3.9 percentage point reduction, given Congress' prescriptive adjustment levels under section 414 of the MACRA and section 15005 of the 21st Century Cures Act.

After consideration of the public comments we received, we are finalizing our proposal to implement a 0.5 percentage point adjustment to the standardized amount for FY 2020.

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 have calculated 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 2020

Consistent with our established policy, we calculated the final MS-DRG relative weights for FY 2020 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 2020 is included in section II.G. of the preamble to this FY 2020 IPPS/LTCH PPS final rule. As we did with the FY 2019 IPPS/LTCH PPS final rule, for this FY 2020 final rule, we are providing the version of the HCRIS from which we calculated these 19 CCRs on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled “FY 2020 IPPS Final Rule Home Page” or “Acute Inpatient Files for Download.”Start Printed Page 42058

Comment: A 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 have addressed similar public comments in prior rulemaking and 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.

F. Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for FY 2020 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 ICD-10-CM and ICD-10-PCS Official 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 2020 MS-DRG Updates

CMS has previously encouraged input from our stakeholders concerning the annual IPPS updates when that input was made available to us by December 7 of the year prior to the next annual proposed rule update. As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38010), as we work 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, which will require additional time for us to review requests from the public to make specific updates, analyze claims data, and consider any proposed updates. Given the need for more time to carefully evaluate requests and propose updates, we changed the deadline to request updates to the MS-DRGs to November 1 of each year. This will provide an additional 5 weeks for the data analysis and review process. Interested parties had to submit any comments and suggestions for FY 2020 by November 1, 2018, and should submit any comments and suggestions for FY 2021 by November 1, 2019 via the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov. The comments that were submitted in a timely manner for FY 2020 are discussed in this section of the preamble of this final rule. As discussed in the proposed rule and in the sections that follow, we may not be able to fully consider all of the requests that we receive for the upcoming fiscal year. We have found that, with the implementation of ICD-10, some types of requested changes to the MS-DRG classifications require more extensive research to identify and analyze all of the data that are relevant to evaluating the potential change. We note in the discussion that follows those topics for which further research and analysis are required, and which we will continue to consider in connection with future rulemaking.

Following are the changes that we proposed to the MS-DRGs for FY 2020 in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19171 through 19257). 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 and consultation with our clinical advisors. In other cases, we proposed to maintain the existing MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. For the FY 2020 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data from the September 2018 update of the FY 2018 MedPAR file, which contains hospital bills received through September 30, 2018, for discharges occurring through September 30, 2018. In our discussion of the proposed MS-DRG reclassification changes, we referred to our analysis of claims data from the “September 2018 update of the FY 2018 MedPAR file.”

In this FY 2020 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 2020 final rule, we generally did not perform any further MS-DRG analysis of claims data. Therefore, our MS-DRG analysis is based on ICD-10 claims data from the September 2018 update of the FY 2018 MedPAR file, which contains hospital bills received through September 30, 2018, for discharges occurring through September 30, 2018, except as otherwise noted.

As explained in previous rulemaking (76 FR 51487), in deciding whether to propose to make further modifications 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 Start Printed Page 42059(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; and
  • 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.

We are making the FY 2020 ICD-10 MS-DRG GROUPER and Medicare Code Editor (MCE) Software Version 37, the ICD-10 MS-DRG Definitions Manual files Version 37 and the Definitions of Medicare Code Edits Manual Version 37 available to the public on our CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html.

2. Pre-MDC

a. Peripheral ECMO

In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41166 through 41169), we discussed a request we received to review cases reporting the use of extracorporeal membrane oxygenation (ECMO) in combination with the insertion of a percutaneous short-term external heart assist device. We also noted that a separate request to create a new ICD-10-PCS procedure code specifically for percutaneous ECMO was discussed at the March 6-7, 2018 ICD-10 Coordination and Maintenance Committee Meeting for which we finalized the creation of three new procedure codes to identify and describe different types of ECMO treatments currently being utilized. These three new procedure codes were included in the FY 2019 ICD-10-PCS procedure codes files (which are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​2019-ICD-10-PCS.html) and were made publicly available in May 2018. We received recommendations from commenters on suggested MS-DRG assignments for the two new procedure codes that uniquely identify percutaneous (peripheral) ECMO, including assignment to MS-DRG 215 (Other Heart Assist System Implant), or to Pre-MDC MS-DRG 004 (Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except Face, Mouth and Neck without Major O.R. Procedure) specifically for the new procedure code describing percutaneous veno-venous (VV) ECMO or an alternate MS-DRG within MDC 4 (Diseases and Disorders of the Respiratory System). In our response, we noted that because these codes were not finalized at the time of the proposed rule, there were no proposed MDC or MS-DRG assignments or O.R. and non-O.R. designations for these new procedure codes and they were not reflected in Table 6B.—New Procedure Codes (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) associated with the FY 2019 IPPS/LTCH PPS proposed rule.

We further noted that, consistent with our annual process of assigning new procedure codes to MDCs and MS-DRGs, and designating a procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor procedure code assignment. For the reasons discussed in the FY 2019 IPPS/LTCH PPS final rule, our clinical advisors did not support assigning the new procedure codes for the percutaneous (peripheral) ECMO procedures to the same MS-DRG as the predecessor code for open (central) ECMO in pre-MDC MS-DRG 003.

Effective with discharges occurring on and after October 1, 2018, the three ECMO procedure codes and their corresponding MS-DRG assignments are as shown in the following table.

Start Printed Page 42060

As noted in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19173), after publication of the FY 2019 IPPS/LTCH PPS final rule, we received comments and feedback from stakeholders expressing concern with the MS-DRG assignments for the two new procedure codes describing peripheral ECMO. Specifically, these stakeholders stated that: (1) The MS-DRG assignments for ECMO should not be based on how the patient is cannulated (open versus peripheral) because most of the costs for both central and peripheral ECMO can be attributed to the severity of illness of the patient; (2) there was a lack of opportunity for public comment on the finalized MS-DRG assignments; (3) patient access to ECMO treatment and programs is now at risk because of inadequate payment; and (4) CMS did not appear to have access to enough patient data to evaluate for appropriate MS-DRG assignment consideration. They also stated that the new procedure codes do not account for an open cut-down approach that may be performed on a peripheral vessel during a peripheral ECMO procedure. These stakeholders recommended that, consistent with the usual process of assigning new procedure codes to the same MS-DRG as the predecessor code, the MS-DRG assignment for peripheral ECMO procedures should be revised to allow assignment of peripheral ECMO procedures to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedure). They stated that this revision would also allow for the collection of further claims data for patients treated with ECMO and assist in determining the appropriateness of any future modifications in MS-DRG assignment.

We also received feedback from a few stakeholders that, for some cases involving peripheral ECMO, the current designation provides compensation that these stakeholders believe is “reasonable” (for example, for peripheral ECMO in certain patients admitted with acute respiratory failure and sepsis). Some of these stakeholders agreed with CMS that once claims data become available, the volume, length of stay and cost data of claims with these new codes can be examined to determine if modifications to MS-DRG assignment or O.R. and non-O.R. designation are warranted. However, some of these stakeholders also expressed concerns that the current assignments and designation do not appropriately compensate for the resources used when peripheral ECMO is used to treat certain patients (for example, patients who are admitted with cardiac arrest and cardiogenic shock of known cause or patients admitted with a different principal diagnosis or patients who develop a diagnosis after admission that requires Start Printed Page 42061ECMO). These stakeholders stated that the current MS-DRG assignments for such cases involving peripheral ECMO do not provide sufficient payment and do not fully consider the severity of illness of the patient and the level of resources involved in treating such patients, such as surgical team, general anesthesia, and other ECMO support such as specialized monitoring.

We stated in the proposed rule that with regard to stakeholders' concerns that we did not allow the opportunity for public comment on the MS-DRG assignment for the three new procedure codes that describe central and peripheral ECMO, as noted above and as explained in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41168), these new procedure codes were not finalized at the time of the proposed rule. We noted that although there were no proposed MDC or MS-DRG assignment or O.R. and non-O.R. designations for these three new procedure codes, we did, in fact, review and respond to comments on the recommended MDC and MS-DRG assignments and O.R./non-O.R. designations in the final rule (83 FR 41168 through 41169). For FY 2019, consistent with our annual process of assigning new procedure codes to MDCs and MS-DRGs and designating a procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor procedure code assignments. Upon completing the review, our clinical advisors did not support assigning the two new ICD-10-PCS procedure codes for peripheral ECMO procedures to the same MS-DRG as the predecessor code for open (central) ECMO procedures. Further, our clinical advisors also did not agree with designating peripheral ECMO procedures as O.R. procedures because they stated that these procedures are less resource intensive compared to open ECMO procedures.

As noted, our annual process for assigning new procedure codes involves review of the predecessor procedure code's MS-DRG assignment. However, this process does not automatically result in the new procedure code being assigned (or proposed for assignment) to the same MS-DRG as the predecessor code. There are several factors to consider during this process that our clinical advisors take into account. For example, in the absence of volume, length of stay, and cost data, they may consider the specific service, procedure, or treatment being described by the new procedure code, the indications, treatment difficulty, and the resources utilized. For FY 2020, as discussed in the FY 2020 IPPS/LTCH PPS proposed rule, we have continued to consider how these and other factors may apply in the context of classifying procedures under the ICD-10 MS-DRGs, including with regard to the specific concerns raised by stakeholders.

In the absence of claims data for the new ICD-10-PCS procedure codes describing peripheral ECMO, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for cases reporting the predecessor ICD-10-PCS procedure code 5A15223 (Extracorporeal membrane oxygenation, continuous) in Pre-MDC MS-DRG 003, including those cases reporting secondary diagnosis MCC and CC conditions, that were grouped under the ICD-10 MS-DRG Version 35 GROUPER. Our findings are shown in the table below.

The total number of cases reported in MS-DRG 003 was 14,456, with an average length of stay of 29.6 days and average costs of $122,168. For the cases reporting procedure code 5A15223 (Extracorporeal membrane oxygenation, continuous), there was a total of 2,086 cases, with an average length of stay of 20.2 days and average costs of $128,168. For the cases reporting procedure code 5A15223 with an MCC, there was a total 9 of 2,000 cases, with an average length of stay of 20.7 days and average costs of $131,305. For the cases reporting procedure 5A15223 with a CC, there was a total of 79 cases, with an average length of stay of 7.6 days and average costs of $58,231.

In the proposed rule, we stated that our clinical advisors reviewed these data and noted that the average length of stay for the cases reporting ECMO with procedure code 5A15223 of 20.2 days may not necessarily be a reliable indicator of resources that can be attributed to ECMO treatment. We also stated that our clinical advisors believed that a more appropriate measure of resource consumption for ECMO would be the number of hours or days that a patient was specifically receiving ECMO treatment, rather than the length of hospital stay. However, they noted that this information is not currently available in the claims data. Further, we noted that our clinical advisors also stated that the average costs of $128,168 for the cases reporting ECMO with procedure code 5A15223 are not necessarily reflective of the resources utilized for ECMO treatment alone, as the average costs represent a combination of factors, including the principal diagnosis, any secondary diagnosis CC and/or MCC conditions necessitating initiation of ECMO, and potentially any other procedures that may be performed during the hospital stay. Our clinical advisors recognized that patients who require ECMO treatment are severely ill and recommended we review the claims data to identify the number (frequency) and types of principal and secondary diagnosis CC and/or MCC conditions that were reported among the 2,086 cases reporting procedure code 5A15223. Our findings are shown in the following tables for the top 10 principal diagnosis codes, followed by the top 10 Start Printed Page 42062secondary diagnosis MCC and secondary diagnosis CC conditions that were reported within the claims data with procedure code 5A15223.

Start Printed Page 42063

We stated in the proposed rule that these data show that the conditions reported for these patients requiring treatment with ECMO and reported with predecessor ICD-10-PCS procedure code 5A1223 represent a greater severity of illness, present greater treatment difficulty, have poorer prognoses, and have a greater need for intervention. While the data analysis was based on the conditions reported with the predecessor ICD-10-PCS procedure code 5A1223 (Extracorporeal membrane oxygenation, continuous), we stated that our clinical advisors believe the data may provide an indication of how cases reporting the new procedure codes describing peripheral (percutaneous) ECMO may be represented in future claims data with regard to indications for treatment, a patient's severity of illness, resource utilization, and treatment difficulty.

Based on the results of our data analysis and further review of the cases reporting ECMO, including consideration of the stakeholders' concerns that the MS-DRG assignments for ECMO procedures should not be based on the method of cannulation, we stated in the proposed rule that our clinical advisors agreed that resource consumption for both central and peripheral ECMO cases can be primarily attributed to the severity of illness of the patient, and that the method of cannulation is less relevant when considering the overall resources required to treat patients on ECMO. Specifically, we stated that our clinical advisors noted that consideration of resource consumption for cases reporting the use of ECMO may extend well beyond the duration of time that a patient was actively receiving ECMO treatment, which may range anywhere from less than 24 hours to 10 days or more. As noted in the proposed rule and above, in the absence of unique procedure codes that specify the duration of time that a patient was receiving ECMO treatment, we cannot ascertain from the claims data the resource use specifically attributable to treatment with ECMO during a hospital stay (84 FR 19175). However, when reviewing consumption of hospital resources for the cases in which ECMO was reported during a hospital stay, the claims data clearly show that the patients placed on ECMO typically have multiple MCC and CC conditions. These data provide additional information on the expanding indications for ECMO treatment as well as an indication of the complexities and the treatment difficulty associated with these patients. We also stated in the proposed rule that, while our clinical advisors continue to believe that central (open) ECMO may be more resource intensive and carries significant risks for complications, including bleeding, infection, and vessel injury because it requires an incision along the sternum (sternotomy) and is performed for open heart surgery, they believe that the subset of patients who require treatment with ECMO, regardless of the cannulation method, would be similar in terms of overall hospital resource consumption. We also Start Printed Page 42064noted that while we do not yet have Medicare claims data to evaluate the new peripheral ECMO procedure codes, review of limited registry data provided by stakeholders for patients treated with a reported peripheral ECMO procedure did not contradict that costs for peripheral ECMO appear to be similar to the costs of overall resources required to treat patients on ECMO (regardless of method of cannulation) and appear to be attributable to the severity of illness of the patient.

With regard to stakeholders who stated that the two new procedure codes do not account for an open cut-down approach that may be performed on a peripheral vessel during a peripheral ECMO procedure, we noted in the proposed rule that a request and proposal to create ICD-10-PCS codes to differentiate between peripheral vessel percutaneous and peripheral vessel open cutdown according to the indication (VA or VV) for ECMO was discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting. We refer readers to the website at: https://www.cms.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​ICD-9-CM-C-and-M-Meeting-Materials.html for the committee meeting materials and discussion regarding this proposal. We also noted that, in this same proposal, another coding option to add duration values to allow the reporting of the number of hours or the number of days a patient received ECMO during the stay was also made available for public comment.

Upon further review and consideration of peripheral ECMO procedures, including the indications, treatment difficulty, and the resources utilized, for the reasons discussed above, in the FY 2020 IPPS/LTCH PPS proposed rule, we stated that our clinical advisors supported the assignment of the new ICD-10-PCS procedure codes for peripheral ECMO procedures to the same MS-DRG as the predecessor code for open (central) ECMO procedures for FY 2020. Therefore, based on our review, including consideration of the comments and input from our clinical advisors, we proposed to reassign the following procedure codes describing peripheral ECMO procedures from their current MS-DRG assignments to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedure) as shown in the table below. We stated in the proposed rule that, if this proposal is finalized, we also would make conforming changes to the titles for MS-DRGs 207, 291, 296, and 870 to no longer reflect the “or Peripheral Extracorporeal Membrane Oxygenation (ECMO)” terminology in the title. We also noted in the proposed rule that this proposal included maintaining the designation of these peripheral ECMO procedures as non-O.R. Therefore, we stated in the proposed rule that, if finalized, the procedures would be defined as non-O.R. affecting the MS-DRG assignment for Pre-MDC MS-DRG 003.

Start Printed Page 42065

Comment: Several commenters expressed support for the proposal to reassign procedure codes 5A1522G and 5A1522H describing peripheral ECMO procedures from their current MS-DRG assignments to Pre-MDC MS-DRG 003 and to revise the titles for MS-DRGs 207, 291, 296 and 870 as shown in the table above. The commenters stated that this reassignment more appropriately reflects the resource utilization of patients requiring this treatment. A commenter also stated their appreciation of CMS' research for the proposal which they believe was needed to maintain the financial viability of ECMO programs. Another commenter stated they agreed with the non-O.R. designation of peripheral ECMO procedures noting these procedures are typically performed at the bedside or in Start Printed Page 42066an ICU setting due to the emergent condition of the patient. This commenter also stated that the delivery of ECMO support in a non-O.R. setting does not diminish the resource intensive nature of the treatment however, and therefore agreed with the designation of non-O.R. affecting Pre-MDC MS-DRG 003.

Response: We thank the commenters for their support.

Comment: A few commenters recommended that ICD-10-PCS procedure codes 5A1522G and 5A1522H be assigned to MS-DRG 215 (Other Heart Assist System Implant) as opposed to Pre-MDC MS-DRG 003. The commenters stated that MS-DRG 215 is the primary MS-DRG for peripheral heart assist pumps with similar patient conditions and clinical coherence. A commenter stated that assigning percutaneous (peripheral) ECMO into a different category for payment than percutaneous VAD (Ventricular Assist Device) creates a system of winners and losers by device.

Response: We thank the commenters for their recommendation. We note that as stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41168), in cases where a percutaneous external heart assist device is utilized, in combination with a percutaneous ECMO procedure, effective October 1, 2018, the ICD-10 MS-DRG GROUPER logic results in a case assignment to MS-DRG 215 because the percutaneous external heart assist device procedure is designated as an O.R. procedure and assigned to MS-DRG 215. We also note that under the ICD-10-PCS classification, ECMO is not defined as a device. The procedure codes in Table 5A0, specifically any procedure code for ECMO, do not contain a device value for the sixth character, rather they contain a function value for the sixth character to identify oxygenation.

Comment: A commenter expressed concern with the proposal to continue designating peripheral ECMO procedures as non-O.R. procedures, however, the commenter acknowledged that these procedures may be performed in non-O.R. locations such as the ER or ICU. The commenter noted that the determining factor for the location where ECMO is initiated is typically dictated by the patient's situation. According to the commenter, for critically ill patients who require life-saving ECMO, cannulation and initiation of the ECMO circuit is usually done in an emergent manner. The commenter also noted that these patients are often at risk of imminent death and cannot safely be moved to another location for cannulation and ECMO initiation. The commenter requested that CMS review the designation of the ECMO codes and consider the unique nature of these procedures during the comprehensive review of the ICD-10-PCS procedure codes.

Response: We appreciate the commenter's feedback. As noted in the proposed rule and in section II.F.13.a. of the preamble of this final rule, we plan to conduct a comprehensive, systematic review of the ICD-10-PCS procedure codes, including the ECMO procedure codes, and as part of that comprehensive procedure code review, we will also review the process for determining when a procedure is considered an operating room procedure.

Comment: A commenter noted that the FY 2020 ICD-10-PCS codes were made publicly available in June 2019 and that new procedure codes describing intraoperative ECMO were created. The commenter requested that CMS provide guidance on the correct reporting of these procedure codes when performed in the cardiac catheterization lab, the electrophysiology lab or other inpatient places of service, including the O.R., since the designation of these new procedure codes is non-O.R.

Response: The commenter is correct that the FY 2020 ICD-10-PCS procedure code files were made publicly available in June 2019 (which are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​2020-ICD-10-PCS.html) and that new procedure codes describing intraoperative ECMO have been created. As shown in Table 6B.—New Procedure Codes, associated with this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html), procedure codes 5A15A2F (Extracorporeal oxygenation, membrane, central, intraoperative), 5A15A2G (Extracorporeal oxygenation, membrane, peripheral veno-arterial, intraoperative) and 5A15A2H (Extracorporeal oxygenation, membrane, peripheral veno-venous, intraoperative) are effective with discharges on and after October 1, 2019 and are designated as non-O.R. procedures. 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 (81 FR 56841).

Comment: Some commenters suggested that CMS should assign the new procedure codes describing intraoperative peripheral ECMO procedures (as discussed above) to Pre-MDC MS-DRG 003 until claims data is available to analyze their impact on resource utilization.

Response: We appreciate the commenters' suggestion, however, as discussed at the ICD-10 Coordination and Maintenance Committee meeting held on March 5-6, 2019, the request (and subsequent finalization) for new procedure codes describing the intraoperative use of ECMO was specifically to address those situations in which the use of the ECMO was in support of a surgical (O.R.) procedure and the ECMO was discontinued at the conclusion of the procedure. For example, a patient who undergoes a lung transplant and receives ECMO support during the transplant procedure and the ECMO is discontinued at the conclusion of the lung transplant procedure. In this scenario, it is the lung transplant that is the surgical (O.R.) procedure and case assignment to MS-DRG 007 (Lung Transplant) by the GROUPER logic is what is appropriately reflected in the MedPAR claims data. As stated in the proposed rule and in this final rule, our annual process of assigning new procedure codes to MDCs and MS-DRGs, and designating a procedure as an O.R. or non-O.R. procedure involves review of the predecessor procedure code assignment. However, this process does not automatically result in the new procedure code being assigned to the same MS-DRG as the predecessor code. Consistent with our annual process of reviewing the MS-DRGs, we will continue to monitor cases to determine if any additional adjustments are warranted to account for changes in resource consumption.

Comment: A few commenters requested that CMS consider reprocessing claims for cases reporting procedure code 5A1522G or 5A1522H in MS-DRGs 207, 291, 296 or 870 in FY 2019 as a result of the financial impact it has had on providers and their belief that the codes were inappropriately classified. Specifically, commenters questioned if CMS would permit acute care hospitals to re-bill all FY 2019 ECMO cases under MS-DRG 003 to recoup lost revenues.

Response: As previously discussed, consistent with our annual process of assigning new procedure codes to MDCs and MS-DRGs, we reviewed the predecessor procedure code assignments, as well as other factors relevant to the MS-DRG assignment. As Start Printed Page 42067discussed in the proposed rule, after further consideration of these factors and review of these cases, including the data analysis described previously, CMS proposed to change the assignment of these cases beginning in FY 2020. As such, and consistent with our general approach to changes in MS-DRG assignment, the finalized policy we are adopting with regard to the assignment of cases reporting peripheral ECMO procedures is prospective, effective with discharges beginning in FY 2020 and is not applicable to discharges in FY 2019. We also note that section 1886(d)(5)(A) of the Act provides for Medicare payments to Medicare-participating hospitals in addition to the basic prospective payments for cases incurring extraordinarily high costs. To qualify for outlier payments, a case must have costs above a fixed-loss cost threshold amount (a dollar amount by which the costs of a case must exceed payments in order to qualify for outliers).

Comment: A commenter stated that Tables 7A and 7B associated with the proposed rule show a decline of the case counts in Pre-MDC MS-DRG 003 from Version 36 to Version 37 of the ICD-10 MS-DRG GROUPER (15,749 vs. 15,164). The commenter stated that under the current proposal to reassign cases reporting peripheral ECMO procedures, they would expect to see a shift in cases to Pre-MDC MS-DRG 003 from MS-DRGs 207, 291, 296, and 870 for the cases reporting procedures for peripheral ECMO. The commenter requested that CMS revisit these tables to provide insight and clarification concerning a potential issue with the surgical hierarchy given that the peripheral ECMO procedure codes are not recognized as O.R. procedures and the Version 36 volume of cases is higher than the Version 37 volume of cases based on the data within these tables.

Response: We reviewed the cases assigned to Pre-MDC MS-DRG 003 and found that the majority of the reduction in the case counts between Version 36 and Version 37 of the GROUPER was attributable to the proposed change in the designation of the ICD-10-PCS procedure codes describing bronchoalveolar lavage from O.R. to non-O.R. status, which is discussed in section II.F.13.b.1. of the preamble of this final rule. Since these procedures were the only operating room procedure reported for these cases, the proposed change in the O.R. status of these codes resulted in the reassignment or “shift” of these cases reporting these procedures from Pre-MDC MS-DRG 003 to Pre-MDC MS-DRG 004. As discussed in section II.F.13.b.1, we are finalizing this proposed change in designation for these procedure codes, and therefore Tables 7A and 7B associated with this final rule reflect similar “shifts” in the volume of cases reported to MS-DRG 003 between Version 36 and Version 37 of the GROUPER.

After consideration of the public comments we received, we are finalizing our proposal to reassign the procedure codes describing peripheral ECMO procedures from their current MS-DRG assignments to Pre-MDC MS-DRG 003 and maintain the designation of the peripheral ECMO procedures as non-O.R. We are also finalizing our proposal to make changes to the titles for MS-DRGs 207, 291, 296, and 870 to no longer reflect the “or Peripheral Extracorporeal Membrane Oxygenation (ECMO)” terminology in the title under the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

b. Allogeneic Bone Marrow Transplant

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19176), we received a request to create new MS-DRGs for cases that would identify patients who undergo an allogeneic hematopoietic cell transplant (HCT) procedure. The requestor asked us to split MS-DRG 014 (Allogeneic Bone Marrow Transplant) into two new MS-DRGs and assign cases to the recommended new MS-DRGs according to the donor source, with cases for allogeneic related matched donor source assigned to one MS-DRG and cases for allogeneic unrelated matched donor source assigned to the other MS-DRG. The requestor stated that by creating two new MS-DRGs for allogeneic related and allogeneic unrelated donor source, respectively, the MS-DRGs would more appropriately recognize the clinical characteristics and cost differences in allogeneic HCT cases.

The requestor stated that allogeneic related and allogeneic unrelated HCT cases are clinically different and have significantly different donor search and cell acquisition charges. According to the requestor, 70 percent of patients do not have a matched sibling donor (that is, an allogeneic related matched donor) in their family. The requestor also stated that this rate is higher for Medicare beneficiaries. According to the requestor, the current payment for allogeneic HCT cases is inadequate and affects patient's access to care.

The requestor performed its own analysis and stated that it found the average costs for HCT cases reporting revenue code 0815 (Stem cell acquisition) alone or revenue code 0819 (Other organ acquisition) in combination with revenue code 0815 with one of the ICD-10-PCS procedure codes for allogeneic unrelated donor source were significantly higher than the average costs for HCT cases reporting revenue code 0815 alone or both revenue codes 0815 and 0819 in combination with one of the ICD-10-PCS procedure codes for allogeneic related donor source. Further, the requestor reported that, according to its analysis, the average costs for HCT cases reporting revenue code 0815 alone or both revenue codes 0815 and 0819 in combination with one of the ICD-10-PCS procedure codes for unspecified allogeneic donor source were also significantly higher than the average costs for HCT cases reporting the ICD-10-PCS procedure codes for allogeneic related donor source. The requestor suggested that cases reporting the unspecified donor source procedure code are highly likely to represent unrelated donors, and recommended that, if the two new MS-DRGs are created as suggested, the cases reporting the procedure codes for unspecified donor source be included in the suggested new “unrelated donor” MS-DRG. The requestor also suggested that CMS apply a code edit through the inpatient Medicare Code Editor (MCE), similar to the edit in the Integrated Outpatient Code Editor (I/OCE) which requires reporting of revenue code 0815 on the claim with the appropriate procedure code or the claim may be subject to being returned to the provider.

As noted in the proposed rule, the ICD-10-PCS procedure codes assigned to MS-DRG 014 that identify related, unrelated and unspecified donor source for an allogeneic HCT are shown in the following table.

Start Printed Page 42068

As noted in the FY 2020 IPPS/LTCH PPS proposed rule, we examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRG 014 and identified the subset of cases within MS-DRG 014 reporting procedure codes for allogeneic HCT related donor source, allogeneic HCT unrelated donor source, and allogeneic HCT unspecified donor source, respectively. Our findings are shown in the following table.

Start Printed Page 42069

The total number of cases reported in MS-DRG 014 was 854, with an average length of stay of 28.2 days and average costs of $91,446. For the subset of cases reporting procedure codes for allogeneic HCT related donor source, there were a total of 292 cases with an average length of stay of 29.5 days and average costs of $87,444. For the subset of cases reporting procedure codes for allogeneic HCT unrelated donor source, there was a total of 466 cases with an average length of stay of 27.9 days and average costs of $95,146. For the subset of cases reporting procedure codes for allogeneic HCT unspecified donor source, there was a total of 90 cases with an average length of stay of 26.2 days and average costs of $90,945.

We stated in the proposed rule that based on the analysis described above, the current MS-DRG assignment for the cases in MS-DRG 014 that identify patients who undergo an allogeneic HCT procedure, regardless of donor source, appears appropriate. The data analysis reflects that each subset of cases reporting a procedure code for an allogeneic HCT procedure (that is, related, unrelated, or unspecified donor source) has an average length of stay and average costs that are comparable to the average length of stay and average costs of all cases in MS-DRG 014. We also noted that, in deciding whether to propose to make further modifications to the MS-DRGs for particular circumstances brought to our attention, we do not consider the reported revenue codes. Rather, as stated previously, 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 do this by evaluating the ICD-10-CM diagnosis and/or ICD-10-PCS procedure codes that identify the patient conditions, procedures, and the relevant MS-DRG(s) that are the subject of a request. Specifically, we stated that, for this request, as noted above, we analyzed the cases reporting the ICD-10-PCS procedure codes that identify an allogeneic HCT procedure according to the donor source. We then evaluated patient care costs using average costs and average lengths of stay (based on the MedPAR data) and rely on the judgment of our clinical advisors to determine whether the patients are clinically distinct or similar to other patients represented in the MS-DRG. We stated that because MS-DRG 014 is defined by patients who undergo an allogeneic HCT transplant procedure, our clinical advisors state they are all clinically similar in that regard. We also noted that the ICD-10-PCS procedure codes that describe an allogeneic HCT procedure were revised effective October 1, 2016 to uniquely identify the donor source in response to a request and proposal that was discussed at the March 9-10, 2016 ICD-10 Coordination and Maintenance Committee meeting. We refer readers to the website at: https://www.cms.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​ICD-9-CM-C-and-M-Meeting-Materials.html for the committee meeting materials and discussion regarding this proposal.

In the proposed rule, in response to the requestor's statement that allogeneic related and allogeneic unrelated HCT cases are clinically different and have significantly different donor search and cell acquisition charges, we stated that our clinical advisors supported maintaining the current structure for MS-DRG 014 because they believe that MS-DRG 014 appropriately classifies all patients who undergo an allogeneic HCT procedures and, therefore, it is clinically coherent. While the requestor stated that there are clinical differences in the related and unrelated HCT cases, they did not provide any specific examples of these clinical differences. With regard to the donor search and cell acquisition charges, the requestor noted that the unrelated donor cases are more expensive than the related donor cases because of the donor search process, which includes a registry search to identify the best donor source, extensive donor screenings, evaluation, and cell acquisition and transportation services for the patient. The requestor appeared to base that belief according to the donor source and average charges reported with revenue code 0815. As noted in the proposed rule and above, we use MedPAR data and do not consider the reported revenue codes in deciding whether to propose to make further modifications to the MS-DRGs. Based on our analysis of claims data for MS-DRG 014, our clinical advisors stated that the resources are similar for patients who undergo an allogeneic HCT procedure regardless of the donor source.

In reviewing this request, we also reviewed the instructions on billing for stem cell transplantation in Chapter 3 of the Medicare Claims Processing Manual and found that there appears to be inadvertent duplication under Section 90.3.1 and Section 90.3.3 of Chapter 3, as both sections provide instructions on Billing for Stem Cell Transplantation. Therefore, in the proposed rule, we stated that we are further reviewing the Medicare Claims Processing Manual to identify potential revisions to address this duplication. However, we also noted that section 90.3.1 and section 90.3.3 provide different instruction regarding which revenue code should be reported. Section 90.3.1 instructs providers to report revenue code 0815 and Section 90.3.3 instructs providers to report revenue code 0819. We noted that we issued instructions as a One-Time Notification, Pub. No. 100-04, Transmittal 3571, Change Request 9674, effective January 1, 2017, which instructs that the appropriate revenue code to report on claims for allogeneic stem cell acquisition/donor services is revenue code 0815. Accordingly, in the proposed rule, we stated that we also are considering additional revisions as needed to conform the instructions for reporting these codes in the Medicare Claims Processing Manual.

With regard to the requestor's recommendation that we create a new code edit through the inpatient MCE similar to the edit in the I/OCE which requires reporting of revenue code 0815 on the claim, in the proposed rule we noted that the MCE is not designed to include revenue codes for claims editing purposes. Rather, as stated in section II.F.16. of the preamble of this final rule, it is a software program that detects and reports errors in the coding of Medicare claims data. The coding of Medicare claims data refers to diagnosis and procedure coding, as well as demographic information.

For the reasons described above, in the FY 2020 IPPS/LTCH PPS proposed Start Printed Page 42070rule, we did not propose to change the current structure of MS-DRG 014. In addition, we did not propose to split MS-DRG 014 into two new MS-DRGs that assign cases according to whether the allogeneic donor source is related or unrelated, as the requestor suggested.

In addition, while conducting our analysis of cases reporting ICD-10-PCS procedure codes for allogeneic HCT procedures that are assigned to MS-DRG 014, in the proposed rule, we noted that 8 procedure codes for autologous HCT procedures are currently included in MS-DRG 014, as shown in the following table. We stated that these codes are not properly assigned because MS-DRG 014 is defined by cases reporting allogenic HCT procedures.

In the proposed rule, we stated that the 8 ICD-10-PCS procedure codes for autologous HCT procedures were inadvertently included in MS-DRG 014 as a result of efforts to replicate the ICD-9-CM MS-DRGs. Under the ICD-9-CM MS-DRGs, procedure code 41.06 (Cord blood stem cell transplant) was used to identify these procedures and was also assigned to MS-DRG 014. As shown in the ICD-9-CM code description, the reference to “autologous” is not included. However, because the ICD-10-PCS autologous HCT procedure codes were considered as plausible translations of the ICD-9-CM procedure code (41.06), they were inadvertently included in MS-DRG 014. We also noted that, of these 8 procedure codes, there are 4 procedure codes that describe a transfusion via arterial access. As noted in the proposed rule and described in more detail below, because a transfusion procedure always uses venous access rather than arterial access, these codes are considered clinically invalid and were the subject of a proposal discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting to delete these codes effective October 1, 2019 (FY 2020).

The majority of ICD-10-PCS procedure codes specifying autologous HCT procedures are currently assigned to MS-DRGs 016 and 017 (Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy and Autologous Bone Marrow Transplant without CC/MCC, respectively). These codes are listed in the following table.

We stated in the proposed rule that, while we believe, as indicated, the cases reporting ICD-10-PCS procedure codes for autologous HCT procedures may be improperly assigned to MS-DRG 014, we also examined claims data for this subset of cases to determine the frequency with which they were reported and the relative resource use as compared with all cases assigned to MS-DRGs 016 and 017. Our findings are shown in the following table.

For the subset of cases in MS-DRG 014 reporting ICD-10-PCS codes for autologous HCT procedures, there was a total of 6 cases with an average length of stay of 23.5 days and average costs of $38,319. The total number of cases reported in MS-DRG 016 was 2,150, with an average length of stay of 18 days and average costs of $47,546. The total number of cases reported in MS-DRG 017 was 104, with an average length of stay of 11 days and average costs of $33,540.

As indicated in the FY 2020 IPPS/LTCH PPS proposed rule, the results of our analysis indicate that the frequency with which these autologous HCT procedure codes were reported in MS-Start Printed Page 42071DRG 014 is low and that average costs of cases reporting autologous HCT procedures assigned to MS-DRG 014 are more aligned with the average costs of cases assigned to MS-DRGs 016 and 017, with the average costs being lower than the average costs for all cases assigned to MS-DRG 016 and higher than the average costs for all cases assigned to MS-DRG 017. We further stated in the proposed rule that our clinical advisors also indicated that the procedure codes for autologous HCT procedures are more clinically aligned with cases that are assigned to MS-DRGs 016 and 017 that are comprised of autologous HCT procedures. Therefore, in the FY 2020 IPPS/LTCH PPS proposed rule, we proposed to reassign the following 4 procedure codes for HCT procedures specifying autologous cord blood stem cell as the donor source via venous access to MS-DRGs 016 and 017 for FY 2020.

As discussed in the proposed rule and earlier in this section, the 4 procedure codes for HCT procedures that describe an autologous cord blood stem cell transfusion via arterial access currently assigned to MS-DRG 014, as listed previously, are considered clinically invalid. These procedure codes were discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting, along with additional procedure codes that are also considered clinically invalid, as described in the section below.

We stated in the proposed rule that during our analysis of procedure codes that describe a HCT procedure, we identified 128 clinically invalid codes from the transfusion table (table 302) in the ICD-10-PCS classification identifying a transfusion using arterial access, as listed in Table 6P.1a. associated with the proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html). As shown in Table 6P.1a., these 128 procedure codes describe transfusion procedures with body system/region values “5” Peripheral Artery and “6” Central Artery. Because a transfusion procedure always uses venous access rather than arterial access, these codes are considered clinically invalid and were proposed for deletion at the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting. We refer the reader to the website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​C-and-M-Meeting-Materials.html for the Committee meeting materials regarding this proposal.

As discussed in the proposed rule, we examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 014, 016, and 017 to determine if there were any cases that reported one of the 128 clinically invalid codes from the transfusion table in the ICD-10-PCS classification identifying a transfusion using arterial access, and as listed in Table 6P.1a. associated with the proposed rule. Our clinical advisors agreed that because a transfusion procedure always uses venous access rather than arterial access, these codes are considered invalid. We stated in the proposed rule that because these procedure codes describe clinically invalid procedures, we would not expect these codes to be reported in any claims data. Our findings are shown in the following table.

As shown in this table, we found a total of 3,108 cases across MS-DRGs 014, 016, and 017 with an average length of stay of 20.4 days and average costs of $59,140. We found a total of 31 cases (0.9 percent) reporting a procedure code for an invalid transfusion procedure, identifying the body system/region value “5” Peripheral Artery or “6” Central Artery, with an average length of stay of 19.6 days and average costs of $52,912.

The results of the data analysis demonstrate that these invalid transfusion procedures represent approximately 1 percent of all discharges across MS-DRGs 014, 016, and 017.

To summarize, in the FY 2020 IPPS/LTCH PPS proposed rule, we proposed to: (1) Reassign the four ICD-10-PCS codes for HCT procedures specifying autologous cord blood stem cell as the donor source from MS-DRG 014 to MS-DRGs 016 and 017 (procedure codes 30230X0, 30233X0, 30240X0, 30243X0); and (2) delete the 128 clinically invalid codes from the transfusion table in the ICD-10-PCS Classification describing a transfusion using arterial access that were discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting and listed in Table 6P.1a associated with the proposed rule. As discussed previously, we did not propose to split MS-DRG 014 into the two requested new MS-DRGs that would assign cases according to whether the allogeneic donor source is related or unrelated.

Comment: Commenters supported the proposal to maintain the current structure of MS-DRG 014. Commenters also supported the proposals to (1) reassign the four ICD-10-PCS codes for HCT procedures specifying autologous cord blood stem cell as the donor source from MS-DRG 014 to MS-DRGs 016 and 017 (procedure codes 30230X0, 30233X0, 30240X0, 30243X0); and (2) delete the 128 clinically invalid codes from the transfusion table in the ICD-10-PCS Classification. A commenter specifically expressed their appreciation with CMS' diligence in ensuring the clinical appropriateness of the ICD-10 codes. This commenter also requested that CMS create an edit (similar to what was implemented in the CY 2017 Hospital Outpatient Prospective Payment System final rule, which states outpatient claims assigned to C-APC 5224 with CPT code 38240 must be Start Printed Page 42072reported with revenue code 0815, and if that code is missing, the claim is returned by an edit to the provider) for inpatient claims utilizing ICD-10-PCS codes and revenue code 0815. According to the commenter, this would better inform CMS future ratesetting and reimbursement, as well as provide access to the more robust data in revenue code 0815 which the commenter asserted would allow CMS to do a meaningful analysis on the differences between search and procurement costs for related versus unrelated transplants. The commenter also recommended that CMS look at bone marrow and stem cell transplant services holistically and consider the process that providers must follow in order to correctly code and submit a claim.

Response: We appreciate the commenters' support. With regard to the recommendation that we create a new code edit for ICD-10-PCS codes reported with revenue code 0815 on the claim, as we noted in the proposed rule, the MCE is not designed to include revenue codes for claims editing purposes. Rather, as stated in section II.F.16. of the preamble of this final rule, it is a software program that detects and reports errors in the coding of Medicare claims data. In response to the commenter's recommendation that we consider the process that providers must follow in order to correctly code and submit a claim, we note that, as stated in the proposed rule, and above, we issued instructions as a One-Time Notification, Pub. No. 100-04, Transmittal 3571, Change Request 9674, effective January 1, 2017, which instructs that the appropriate revenue code to report on claims for allogeneic stem cell acquisition/donor services is revenue code 0815. As indicated, we are considering additional revisions as needed to conform the instructions for reporting these codes in the Medicare Claims Processing Manual.

After consideration of the public comments we received, we are finalizing our proposal to (1) reassign the four ICD-10-PCS codes for HCT procedures specifying autologous cord blood stem cell as the donor source from MS-DRG 014 to MS-DRGs 016 and 017 (procedure codes 30230X0, 30233X0, 30240X0, 30243X0); and (2) delete the 128 clinically invalid codes from the transfusion table in the ICD-10-PCS Classification and listed in Table 6P.1a associated with the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) under the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

c. Chimeric Antigen Receptor (CAR) T-Cell Therapies

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19180), we received a request to create a new MS-DRG for procedures involving CAR T-cell therapies. The requestor stated that creation of a new MS-DRG would improve payment for CAR T-cell therapies in the inpatient setting. According to the requestor, while cases involving CAR T-cell therapy may now be eligible for new technology add-on payments and outlier payments, there continue to be significant financial losses by providers. The requestor also suggested that CMS modify its existing payment mechanisms to use a CCR of 1.0 for charges associated with CAR T-cell therapy.

In addition, the requestor included technical and operational suggestions related to CAR T-cell therapy, such as the development of unique CAR T-cell therapy revenue and cost centers for billing and cost reporting purposes. In the proposed rule, we stated that we will consider these technical and operational suggestions in the development of future billing and cost reporting guidelines and instructions.

In the FY 2020 IPPS/LTCH PPS proposed rule, we noted that, currently, procedures involving CAR T-cell therapies are identified with ICD-10-PCS procedure codes XW033C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into peripheral vein, percutaneous approach, new technology group 3) and XW043C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into central vein, percutaneous approach, new technology group 3), which became effective October 1, 2017. In the FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to assign cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-DRG 016 for FY 2019 and to revise the title of this MS-DRG to “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy”. We refer readers to section II.F.2.d. of the preamble of the FY 2019 IPPS/LTCH PPS final rule for a complete discussion of these final policies (83 FR 41172 through 41174).

As stated in the proposed rule and earlier, the current procedure codes for CAR T-cell therapies both became effective October 1, 2017. In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41172 through 41174), we indicated we should collect more comprehensive clinical and cost data before considering assignment of a new MS-DRG to these therapies. We stated in the FY 2020 IPPS/LTCH PPS proposed rule that, while the September 2018 update of the FY 2018 MedPAR data file does contain some claims that include those procedure codes that identify CAR T-cell therapies, the number of cases is limited, and the submitted costs vary widely due to differences in provider billing and charging practices for this therapy. Therefore, while these claims could potentially be used to create relative weights for a new MS-DRG, we stated that we do not have the comprehensive clinical and cost data that we generally believe are needed to do so. Furthermore, we stated in the proposed rule that given the relative newness of CAR T-cell therapy and our proposal to continue new technology add-on payments for FY 2020 for the two CAR T-cell therapies that currently have FDA approval (KYMRIAHTM and YESCARTATM), as discussed in section II.G.4.d. of the preamble of the proposed rule and this final rule, at this time we believe it may be premature to consider creation of a new MS-DRG specifically for cases involving CAR T-cell therapy for FY 2020.

Therefore, we did not propose to modify the current MS-DRG assignment for cases reporting CAR T-cell therapies for FY 2020. We noted that cases reporting ICD-10-PCS codes XW033C3 and XW043C3 would continue to be eligible to receive new technology add-on payments for discharges occurring in FY 2020 if our proposal to continue such payments is finalized. We stated that currently, we expect that, in future years, we would have additional data that exhibit more stability and greater consistency in charging and billing practices that could be used to evaluate the potential creation of a new MS-DRG specifically for cases involving CAR T-cell therapies.

Comment: Several commenters supported our proposal not to modify the current MS-DRG assignment for cases reporting CAR T-cell therapies for FY 2020, stating that CMS should wait until more clinical and cost data are available. Commenters indicated that CMS should wait until claims are coded and billed in a uniform manner so that consistent and accurate claims data is available for rate-setting. MedPAC also stated that incorporating new technologies into the Medicare program by using an existing MS-DRG in conjunction with new technology add-on payments and outlier payments has created incentives for efficiency and risk-sharing between providers and the Medicare program.Start Printed Page 42073

Response: We appreciate the commenters' support for our proposal and agree that incorporating new technologies into the Medicare program by using an existing MS-DRG in conjunction with new technology add-on payments, and outlier payments if applicable, is consistent with our policies regarding how new technologies are incorporated into the IPPS.

Comment: Several other commenters encouraged CMS to develop a new MS-DRG for cases reporting CAR T-cell therapies for FY 2020 in order to adequately cover the costs of treatment and so as not to dis-incentivize hospitals from providing CAR T-cell therapies due to inadequate reimbursement. Most of these commenters recommended alternative payment approaches for the CAR T-cell product if a new MS-DRG were created.

A commenter stated that claims analyses from the FY 2019 IPPS/LTCH PPS proposed rule for the KYMRIAHTM and YESCARTATM new technology add-on payment applications found a significant number of patients who may be eligible for use of these therapies, which may be reflective of the potential growth of these therapies in the future. The commenter also stated that according to the FY 2018 MEDPAR update, other pre-MDC MS-DRGs contain fewer cases than the 386 CAR T-cell discharges that CMS estimated would qualify for new technology add-on payments. The commenter stated that this suggests that there are enough cases for CAR T-cell therapies to be considered for their own MS-DRG assignment. Another commenter stated that in the FY 2019 IPPS/LTCH PPS proposed rule, CMS expressed concern about the potential redistributive effects away from core hospital services over time toward specialized hospitals and how that may affect payment for core services if a new MS-DRG is created. The commenter stated they shared these concerns; however, believed they are mitigated to the extent that CMS creates a new MS-DRG during a time when the volume of CAR T-cell cases is very low. They also noted the technology will likely become less expensive, not more expensive over time, as commonly occurs with expensive new technologies. The commenter urged CMS to create a new MS-DRG specific to CAR T-cell cases for use in FY 2020. The commenter expressed concern that if CMS waits to make an MS-DRG change at a time when volume is higher, but before the CAR T-cell cases have become less expensive, the CAR T-cell cases will draw a higher amount of additional payments at the expense of all other cases.

Response: As discussed in the proposed rule, we continue to believe that we do not have the comprehensive clinical and cost data that we generally believe is needed to create a new MS-DRG. As stated earlier, we also continue to believe that incorporating new technologies into the Medicare program by using an existing MS-DRG in conjunction with new technology add-on payments, and outlier payments if applicable, is consistent with our policies regarding how new technologies are incorporated into the IPPS. We note that we address additional comments relating to the creation of a separate MS-DRG, including potential payment approaches, in the discussion of alternative payment for CAR T-cell therapy cases that follows.

With respect to the number of cases, we note that the new technology add-on payment estimate is a projection of future cases. Our standard practice in determining whether to create a new MS-DRG is to examine the number of cases, and the clinical and cost characteristics of those cases in the historical claims data. We do not have the clinical and cost data about these projected future FY 2020 cases available at this time.

With respect to the commenter who expressed concern that waiting to create a new MS-DRG would draw a higher amount of additional payments at the expense of all other cases, we are unclear as to the specific concern being raised by the commenter. Each year, we calculate the relative weights by dividing the average cost for cases within each MS-DRG by the average cost for cases across all MS-DRGs. Since the relative weight is recalculated each year, the implications for the payments for other cases do not differ based on when a new MS-DRG is created.

Therefore, after consideration of the comments we received, and for the reasons discussed, we are finalizing our proposal not to modify the MS-DRG assignment for cases reporting CAR-T cell therapies for FY 2020. As noted previously, we address additional comments we received relating to the creation of any potential new MS-DRG, including payment under any such MS-DRG, in the discussion that follows.

As part of our solicitation of public comment on the potential creation of a new MS-DRG for CAR-T cell therapy procedures, in the proposed rule we also invited comment on the most appropriate way to develop the relative weight if we were to finalize the creation of a new MS-DRG in future rulemaking. We stated that, while the data are limited, it may be operationally possible to create a relative weight by dividing the average costs of cases that include the CAR T-cell procedures by the average costs of all cases, consistent with our current methodology for setting the relative weights for FY 2020 and using the same applicable data sources used for other MS-DRGs (for FY 2020, the FY 2018 MedPAR data and FY 2016 HCRIS data). We invited public comments on whether this is the most accurate method for determining the relative weight, given the current variation in the claims data for these procedures, and also on how to address the significant number of cases involving clinical trials. We stated in the proposed rule that, while we do not typically exclude cases in clinical trials when developing the relative weights, in this case, the absence of the drug costs on claims for cases involving clinical trial claims could have a significant impact on the relative weight. We also stated that it is unclear whether a relative weight calculated using cases for which hospitals do and do not incur drug costs would accurately reflect the resource costs of caring for patients who are not involved in clinical trials. We stated that a different approach might be to develop a relative weight using an appropriate portion of the average sales price (ASP) for these drugs as an alternative way to reflect the costs involved in treating patients receiving CAR T-cell therapies. We requested public comments on these approaches or other approaches for setting the relative weight if we were to finalize a new MS-DRG. We noted that any such new MS-DRG would be established in a budget neutral manner, consistent with section 1886(d)(4)(C)(iii) of the Act, which specifies that the annual DRG reclassification and recalibration of the relative weights must be made in a manner that ensures that aggregate payments to hospitals are not affected.

Comment: We received many comments on the most appropriate way to develop the relative weight and modify rate setting trims if we were to finalize the creation of a new MS-DRG, including different ways to determine the cost of the CAR T-cell therapy product, such as the use of Average Sales Price data or acquisition cost data, and technical comments on claims inclusion and exclusion criteria related to clinical trials.

Response: As discussed previously in this section, we are finalizing our proposal not to modify the MS-DRG assignment for cases reporting CAR-T cell therapies for FY 2020. We will Start Printed Page 42074consider these comments in connection with any future rulemaking relating to the MS-DRG assignment for the CAR-T cell therapy cases.

As discussed further in section II.G.7. of the preamble to the proposed rule, we also requested public comment on payment alternatives for CAR T-cell cases, including eliminating the use of the CCR in calculating the new technology add-on payment for KYMRIAH® and YESCARTA® by making a uniform add-on payment that equals the proposed maximum add-on payment. We also requested public comments on whether we should consider utilizing a specific CCR for ICD-10-PCS procedure codes used to report the performance of procedures involving the use of CAR T-cell therapies; for example, a CCR of 1.0, when determining outlier payments, when determining the new technology add-on payments, and when determining payments to IPPS-excluded cancer hospitals for CAR T-cell therapies.

We invited public comments on how payment alternatives for CAR T-cell therapy would affect access to care, as well as how they would affect incentives to encourage lower drug prices, which is a high priority for this Administration. As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41172 through 41174) and the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19279), we are considering approaches and authorities to encourage value-based care and lower drug prices. We solicited public comments on how the effective dates of any potential payment methodology alternatives, if any were to be adopted, may intersect and affect future participation in any such alternative approaches.

Comment: Some commenters indicated that CMS should pay for CAR T-cell therapy products based on the Average Sales Price. Some commenters noted that CMS pays for hemophilia blood clotting factors in this manner. A commenter recognized that payment for blood clotting factors in this manner was established by statute, but suggested that CMS may have the statutory authority to pay using this approach, or CMS could seek statutory authority from Congress. Another commenter urged CMS to pay for CAR T-cell therapies at Wholesale Acquisition Cost (WAC) plus six percent. Some commenters suggested that CMS require hospitals to submit on the claim the particular CAR T-cell product's NDC code. Other commenters stated given the similarity of CAR T-cell therapies to solid organ transplants, in that they are high-cost, low-volume services, CMS should pay for CAR T-cell therapies on a reasonable cost basis. Some commenters indicated that CMS should require providers to report value code 86, the actual invoice/acquisition cost, on their claims and include the actual product acquisition cost on the claim for payment purposes.

Several commenters suggested that CMS adopt a CCR of 1.0 for CAR T-cell products for all payment purposes, including new technology add-on payments, outlier payments, and payments to IPPS-excluded cancer hospitals. These commenters stated that utilizing a CCR of 1.0 will ensure uniformity among providers, many of whom are currently marking up the CAR-T charge, which impacts CMS' ability to analyze claims data that are critical for rate setting. These commenters also stated that they believe the use of a CCR of 1.0 would ensure consistent billing practices and payment that would be mutually beneficial for CMS and providers, including eliminating the need for providers to mark-up the CAR T-cell product cost. MedPAC expressed concern about using a CCR of 1.0, which would presume the hospitals charged their actual costs despite what it stated was the clear financial incentive to increase charges. MedPAC also expressed concern that this could set a precedent for other items going forward, and instead recommended the use of a lagged ASP based payment. Another commenter stated that using a CCR of 1.0 is a radical departure from previous payment methods and CMS should carefully consider possible issues that may result.

Many commenters requested structural changes in new technology add-on payments for the drug therapy, including the use of a uniform add-on payment. Many commenters also requested a higher new technology add-on payment percentage for CAR T-cell therapy products, up to 100 percent, rather than our proposed 65 percent for all new technologies, indicating that the proposed 65 percent would result in inadequate payment.

Some commenters suggested that CMS develop and release for comment an outcomes-based payment model for CAR T-cell therapy payments in the future and encouraged CMS to consider a payment alternative for CAR T-cell therapy under which CMS would test a new payment model through the Innovation Center and would pay for these technologies based on outcome and value rather than service.

Response: After a review of the comments received, we continue to believe, similar to last year, that given the relative newness of CAR T-cell therapy, and our continued consideration of approaches and authorities to encourage value-based care and lower drug prices, it would be premature to adopt structural changes to our existing payment mechanisms, either under the IPPS or for IPPS-excluded cancer hospitals, specifically for CAR T-cell therapy. For these reasons, we disagree with the commenters' requested changes to our current payment mechanisms for FY 2020, including, but not limited to, the creation of a pass-through payment; structural changes in new technology add-on payments and/or a differentially higher new technology add-on payment percentage specifically for CAR T-cell products, and changes in the usual cost-to-charge ratios (CCRs) used in ratesetting and payment, including those used in determining new technology add-on payments, outlier payments, and payments to IPPS excluded cancer hospitals. However, as discussed elsewhere in this final rule, we are finalizing a maximum new technology add-on payment percentage of 65 percent of the costs of the new technology for FY 2020, a 30 percent ((0.65/0.50)-1) increase from the current 50 percent. This increase to 65 percent will apply to all approved new technologies (except products designated by the FDA as a Qualified Infectious Disease Products, for which the maximum add-on amount will be 75 percent of the costs of the new technology), including CAR T-cell therapy products.

We stated in the proposed rule that another potential consideration if we were to create a new MS-DRG is the extent to which it would be appropriate to geographically adjust the payment under any such new MS-DRG. Under the methodology for determining the Federal payment rate for operating costs under the IPPS, the labor-related proportion of the national standardized amounts is adjusted by the wage index to reflect the relative differences in labor costs among geographic areas. The IPPS Federal payment rate for operating costs is calculated as the MS-DRG relative weight × [(labor-related applicable standardized amount × applicable wage index) + (nonlabor-related applicable standardized amount × cost-of-living adjustment)]. Given our understanding that the costs for CAR T-cell therapy drugs do not vary among geographic areas, and given that costs for CAR T-cell therapy would likely be an extremely high portion of the costs for the MS-DRG, in the proposed rule we invited public comments on whether we Start Printed Page 42075should not geographically adjust the payment for cases assigned to any potential new MS-DRG for CAR-T cell therapy procedures. We also invited public comments on whether to instead apply the geographic adjustment to a lower proportion of payments under any potential new MS-DRG and, if so, how that lower proportion should be determined. We noted that while the prices of other drugs may also not vary significantly among geographic areas, generally speaking, those other drugs would not have estimated costs as high as those of CAR T-cell therapies, nor would they represent as significant a percentage of the average costs for the case. We invited public comments on the use of our exceptions and adjustments authority under section 1886(d)(5)(I) of the Act (or other relevant authorities) to implement any such potential changes.

Comment: Some commenters stated that CMS should include adjustments for the wage index in a potential future MS-DRG for CAR T-cell therapies, including commenters that expressed concern that not applying the wage index would increase provider losses on these services. Some commenters stated that they did not believe CMS had the statutory flexibility to selectively apply the wage index. Many other commenters stated that CMS should not apply the wage index to the cost of the drug, as the cost does not vary by location, and hospitals with a wage index greater than 1 would be overpaid for the drug, while hospitals with a wage index less than 1 would be underpaid.

Response: We appreciate the commenters' input on the application of the wage index to a potential future MS-DRG for CAR T-cell therapies. We will consider these comments should we develop a proposed MS-DRG for CAR T-cell therapies in the future.

As discussed in the proposed rule, section 1886(d)(5)(B) of the Act provides that prospective payment hospitals that have residents in an approved graduate medical education (GME) program receive an additional payment for a Medicare discharge to reflect the higher patient care costs of teaching hospitals relative to nonteaching hospitals. The regulations regarding the calculation of this additional payment, known as the indirect medical education (IME) adjustment, are located at 42 CFR 412.105. The formula is traditionally described in terms of a certain percentage increase in payment for every 10-percent increase in the resident-to-bed ratio. For some hospitals, this percentage increase can exceed an additional 25 percent or more of the otherwise applicable payment. Some hospitals, sometimes the same hospitals, can also receive a large percentage increase in payments due to the Medicare disproportionate hospital (DSH) adjustment provision under section 1886(d)(5)(F) of the Act. The regulations regarding the calculation of the additional DSH payment are located at 42 CFR 412.106.

In the proposed rule we stated that, given that the payment for cases assigned to a new MS-DRG for CAR T-cell therapy could significantly exceed the historical payment for any existing MS-DRG, these percentage add-on payments could arguably result in unreasonably high additional payments for CAR T-cell therapy cases unrelated in any significant empirical way to the costs of the hospital in providing care. For example, consider a teaching hospital that has an IME adjustment factor of 0.25, and a DSH adjustment factor of 0.10. If we were to create a new MS-DRG for CAR T-cell therapy procedures that resulted in an average IPPS Federal payment rate for operating costs of $400,000, under the current payment mechanism, the hospital would receive an IME payment of $100,000 ($400,000 × 0.25) and a DSH payment of $40,000 ($400,000 × 0.10), such that the total IPPS Federal payment rate for operating costs including IME and DSH payments would be $540,000 ($400,000 + $100,000 + $40,000). We invited public comments on whether the IME and DSH payments should not be made for cases assigned to any new MS-DRG for CAR T-cell therapy. We also invited public comments on whether we should instead reduce the applicable percentages used to determine these add-ons and, if so, how those lower percentages should be determined. We invited public comments on the use of our exceptions and adjustments authority under section 1886(d)(5)(I) of the Act (or other relevant authorities) to implement any potential changes.

Comment: Several commenters stated that CMS should include adjustments for DSH and IME in a potential future MS-DRG for CAR T-cell therapies (as described below); some commenters stated that they did not believe CMS had the statutory flexibility to selectively apply these adjustments. Commenters also expressed concern that not applying these adjustments would increases provider losses on these services. Several commenters stated that the IME adjustment is not based on a requirement that the costs for each service at a teaching hospital are greater than at a non-teaching hospital, but is instead due to the recognition that overall the costs are greater. A commenter stated that teaching hospitals are under considerable financial strain, that they will disproportionately shoulder the burdens of new, higher cost services, and that CMS should consider these costs and burdens before determining that the IME adjustment to CAR T-cell therapy cases would result in a payment that is too high. This commenter also stated that hospitals that receive DSH payments are less profitable than hospitals serving better-insured populations. Therefore, in order for these hospitals to access expensive new technologies, they need to receive a level of reimbursement that can support these services.

Many commenters stated that CMS should not apply the DSH and IME adjustments to the entire MS-DRG payment for CAR T-cell therapy cases, as this would result in a higher than appropriate payment. Several of these commenters also suggested that CMS consider “carving out” payment for CAR T-cell therapy cases to avoid this problem.

Response: We appreciate the commenters' input on the application of the DSH and IME adjustments to a potential future MS-DRG for CAR T-cell therapies. We will consider these comments should we develop a proposed MS-DRG for CAR T-cell therapies in the future.

3. MDC 1 (Diseases and Disorders of the Nervous System): Carotid Artery Stent Procedures

The logic for case assignment to MS-DRGs 034, 035, and 036 (Carotid Artery Stent Procedures with MCC, with CC, and without CC/MCC, respectively) as displayed in the ICD-10 MS-DRG Version 36 Definitions Manual (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html) is comprised of two lists of logic that include procedure codes for operating room (O.R.) procedures involving dilation of a carotid artery (common, internal or external) with intraluminal device(s). The first list of logic is entitled “Operating Room Procedures” and the second list of logic is entitled “Operating Room Procedures with Operating Room Procedures”. In the FY 2020 IPPS/LTCH PPS proposed rule, we identified 46 ICD-10-PCS procedure codes in the second logic list that do not describe dilation of a carotid artery with an intraluminal device. Of these 46 procedure codes, we identified 24 codes describing dilation of a carotid artery without an intraluminal device; 8 codes describing dilation of the vertebral Start Printed Page 42076artery; and 14 codes describing dilation of a vein (jugular, vertebral and face), as shown in the following table.

We examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 034, 035, and 036 and identified cases reporting any one of the 46 ICD-10-PCS procedure codes listed in the tables above. Our findings are shown in the following table.

Start Printed Page 42077

As shown in the table above, we found a total of 863 cases with an average length of stay of 6.8 days and average costs of $27,600 in MS-DRG 034. There were 15 cases reporting at least one of the 46 procedure codes that do not describe dilation of the carotid artery with an intraluminal device in MS-DRG 034 with an average length of stay of 8.8 days and average costs of $36,596. For MS-DRG 035, we found a total of 2,369 cases with an average length of stay of 3 days and average costs of $16,731. There were 52 cases reporting at least one of the 46 procedure codes that do not describe dilation of the carotid artery with an intraluminal device in MS-DRG 035 with an average length of stay of 3.5 days and average costs of $17,815. For MS-DRG 036, we found a total of 3,481 cases with an average length of stay of 1.4 days and average costs of $12,637. There were 67 cases reporting at least one of the 46 procedure codes that do not describe dilation of the carotid artery with an intraluminal device in MS-DRG 036 with an average length of stay of 1.4 days and average costs of $12,621.

In the proposed rule, we noted that our clinical advisors stated that MS-DRGs 034, 035, and 036 are defined to include only those procedure codes that describe procedures that involve dilation of a carotid artery with an intraluminal device. Therefore, we proposed to remove the procedure codes listed in the table above from MS-DRGs 034, 035, and 036 that describe procedures which (1) do not include an intraluminal device; (2) describe procedures performed on arteries other than a carotid; and (3) describe procedures performed on a vein.

We also indicated in the proposed rule that the 46 ICD-10-PCS procedure codes listed in the table above are also assigned to MS-DRGs 037, 038, and 039 (Extracranial Procedures with MCC, with CC, and without CC/MCC, respectively). Therefore, we also examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 037, 038, and 039. Our findings are shown in the following table.

We found a total of 3,612 cases in MS-DRG 037 with an average length of stay of 7.1 days and average costs of $23,703. We found a total of 11,406 cases in MS-DRG 038 with an average length of stay of 3.1 days and average costs of $12,480. We found a total of 22,938 cases in MS-DRG 039 with an average length of stay of 1.5 days and average costs of $8,400.

In the proposed rule, we stated that during our review of claims data for MS-DRGs 037, 038, and 039, we also discovered 96 ICD-10-PCS procedure codes describing dilation of a carotid artery with an intraluminal device that were inadvertently included as a result of efforts to replicate the ICD-9 based MS-DRGs. These procedure codes are also included in the logic for MS-DRGs 034, 035, and 036. Under ICD-9-CM, procedure codes 00.61 (Percutaneous angioplasty of extracranial vessel(s)) and 00.63 (Percutaneous insertion of carotid artery stent(s)) are both required to be reported on a claim to identify that a carotid artery stent procedure was performed and for assignment of the case to MS-DRGs 034, 035, and 036. Procedure code 00.61 is designated as an O.R. procedure, while procedure code 00.63 is designated as a non-O.R. procedure. Under ICD-10-PCS, a carotid artery stent procedure is described by one unique code that includes both clinical concepts of the angioplasty (dilation) and the insertion of the stent (intraluminal device). This “combination code” under ICD-10-PCS is designated as an O.R. procedure. Under ICD-9-CM, procedure code 00.61 reported in the absence of procedure code 00.63 results in assignment to MS-DRGs 037, 038, and 039 according to the MS-DRG logic because procedure code 00.61 has an inclusion term for vertebral vessels, as well as for the carotid vessels. Therefore, when all of the comparable translations of procedure code 00.61 as an O.R. procedure were replicated from the ICD-9 based MS-DRGs to the ICD-10 based MS-DRGs, this replication inadvertently results in the assignment of ICD-10-PCS procedure codes that identify and Start Printed Page 42078describe a carotid artery stent procedure to MS-DRGs 037, 038, and 039. Therefore, we proposed to remove the 96 ICD-10-PCS procedure codes describing dilation of a carotid artery with an intraluminal device from MS-DRGs 037, 038, and 039.

We also found 6 procedure codes describing dilation of a carotid artery with an intraluminal device in MS-DRGs 037, 038, and 039 that are not currently assigned to MS-DRGs 034, 035, and 036. In the proposed rule, we stated that our clinical advisors recommended that these 6 procedure codes be reassigned from MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036 because the 6 procedure codes are consistent with the other procedures describing dilation of a carotid artery with an intraluminal device that are currently assigned to MS-DRGs 034, 035, and 036. We refer readers to Table 6P.1b. associated with the proposed rule (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for the complete list of procedure codes that we proposed to remove from MS-DRGs 037, 038, and 039.

We also noted that, as discussed in the proposed rule and section II.F.14.f. of the preamble of this final rule, we are deleting a number of codes that include the ICD-10-PCS qualifier term “bifurcation” as the result of the finalized proposal discussed at the September 11-12, 2018 ICD-10 Coordination and Maintenance Committee meeting. We refer readers to the website at: https://www.cms.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​ICD-9-CM-C-and-M-Meeting-Materials.html for the committee meeting materials and discussion regarding this proposal. We noted in the proposed rule that, of the 96 procedure codes that we proposed to remove from the logic for MS-DRGs 037, 038, and 039, there are 48 procedure codes that include the qualifier term “bifurcation”. Therefore, we stated in the proposed rule that these 48 procedure codes will be deleted effective October 1, 2019. We stated that the 48 remaining valid procedure codes that do not include the term “bifurcation” that we proposed to remove from MS-DRGs 037, 038, and 039 will continue to be assigned to MS-DRGs 034, 035, and 036.

Lastly, we stated in the proposed rule that, if the applicable proposed MS-DRG changes are finalized, we would make a conforming change to the ICD-10 MS-DRG Version 37 Definitions Manual for FY 2020 by combining all the procedure codes identifying a carotid artery stent procedure within MS-DRGs 034, 035, and 036 into one list entitled “Operating Room Procedures” to better reflect the definition of these MS-DRGs based on the discussion and proposals described above.

Comment: Several commenters supported this proposal stating that only procedures involving dilation of a carotid artery using intraluminal devices should be included in MS-DRGs 034-036 and that procedures that do not involve both a carotid artery and an intraluminal device should be removed from MS-DRGs 034-036. Several commenters also supported our proposal to remove 96 ICD-10 PCS codes describing dilation of a carotid artery with intraluminal device from MS-DRGs 037, 038 and 039 and to delete the 48 procedure codes from MS-DRGs 037, 038, and 039 that include the qualifier term “bifurcation.

Response: We appreciate the commenters' support.

Comment: A commenter expressed concern and disagreed with the proposal to delete the procedure codes that include the qualifier term “bifurcation”. The commenter stated that in vascular surgery, use of the term bifurcation may be used to document when a procedure occurs in a branch vessel.

Response: We appreciate the commenter's suggestion, however, as discussed at the ICD-10 Coordination and Maintenance Committee meeting held on September 11-12, 2018, the qualifier value Bifurcation was proposed (and subsequently finalized) to be deleted from the following ICD-10-PCS tables—037 Dilation of Upper Arteries, 03C Extirpation of Upper Arteries, 047 Dilation of Lower Arteries, 04C Extirpation of Lower Arteries and 04V Restriction of Lower Arteries. The original proposal for the qualifier Bifurcation was intended to capture data specifically regarding procedures on coronary arteries. The term bifurcation describes diagnosis related information, and generally, under ICD-10 PCS we do not include diagnosis related information in the procedure classification.

After consideration of the public comments we received, we are finalizing our proposal to remove the procedure codes listed previously from MS-DRGs 034, 035, and 036 that describe procedures which (1) do not include an intraluminal device; (2) describe procedures performed on arteries other than a carotid; and (3) describe procedures performed on a vein. We are also finalizing our proposal to remove 96 ICD-10 PCS codes describing dilation of a carotid artery with intraluminal device from MS-DRGs 037, 038 and 039 and are finalizing our proposal to reassign the 6 procedure codes discussed above from MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036 because the 6 procedure codes are consistent with the other procedures describing dilation of a carotid artery with an intraluminal device that are currently assigned to MS-DRGs 034, 035, and 036. We refer readers to Table 6P.1b. associated with this final rule (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for the complete list of procedure codes that we removed from MS-DRGs 037, 038, and 039. Additionally, we are finalizing our proposal to delete the 48 procedure codes from MS-DRGs 037, 038, and 039 that include the qualifier term “bifurcation”. Finally, we are finalizing our proposal to make a conforming change to the ICD-10 MS-DRG Version 37 Definitions Manual for FY 2020 by combining all the procedure codes identifying a carotid artery stent procedure within MS-DRGs 034, 035, and 036 into one list entitled “Operating Room Procedures” to better reflect the definition of these MS-DRGs.

4. MDC 4 (Diseases and Disorders of the Respiratory System): Pulmonary Embolism

In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19185), we discussed that we received a request to reassign three ICD-10-CM diagnosis codes for pulmonary embolism with acute cor pulmonale from MS-DRG 176 (Pulmonary Embolism without MCC) to the higher severity level MS-DRG 175 (Pulmonary Embolism with MCC). The three diagnosis codes are identified in the following table.

Start Printed Page 42079

The requestor noted that, in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41231 through 41234), we finalized the proposal to remove the special logic in the GROUPER for processing claims containing a code on the Principal Diagnosis Is Its Own CC or MCC Lists and deleted the relevant tables from the ICD-10 MS-DRG Definitions Manual Version 36, effective October 1, 2018. As a result of this change, cases reporting any one of the three ICD-10-CM diagnosis codes describing a pulmonary embolism with acute cor pulmonale were reassigned from MS-DRG 175 to MS-DRG 176, absent a secondary diagnosis code to trigger assignment to MS-DRG 175. The requestor stated that this change in the MS-DRG assignment for these cases resulted in a reduction in payment for cases involving pulmonary embolism with acute cor pulmonale and that the FY 2019 payment rate for MS-DRG 176 does not appropriately account for the costs and resource utilization associated with these cases because the subset of patients with pulmonary embolism with acute cor pulmonale often represents a more severe set of patients with pulmonary embolism.

The logic for case assignment to MS-DRGs 175 and 176 is displayed in the ICD-10 MS-DRG Version 36 Definitions Manual, which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html.

As indicated in the FY 2020 IPPS/LTCH PPS proposed rule, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 175 and 176 to identify cases reporting diagnosis codes describing pulmonary embolism with acute cor pulmonale as listed above (ICD-10-CM diagnosis codes I26.01, I26.02 or I26.09) as the principal diagnosis or as a secondary diagnosis. Our findings are shown in the following table.

As shown in the table, for MS-DRG 175, there was a total of 24,389 cases with an average length of stay of 5.2 days and average costs of $10,294. Of these 24,389 cases, there were 2,326 cases reporting pulmonary embolism with acute cor pulmonale, with an average length of stay 5.7 days and average costs of $13,034. For MS-DRG 176, there was a total of 30,215 cases with an average length of stay of 3.3 days and average costs of $6,356. Of these 30,215 cases, there were 1,821 cases reporting pulmonary embolism with acute cor pulmonale with an average length of stay of 3.9 days and average costs of $9,630.

As stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41231 through 41234), available ICD-10 data can now be used to evaluate other indicators of resource utilization and, as shown by our claims analysis, the data indicate that the average costs of cases reporting pulmonary embolism or saddle embolus with acute cor pulmonale ($9,630) in MS-DRG 176 are closer to the average costs for all pulmonary embolism cases in MS-DRG 175 ($10,294) as compared to the average costs for all cases in MS-DRG 176 ($6,356). We stated in the proposed rule that our clinical advisors also agreed that this subset of patients with acute cor pulmonale often represents a more severe set of patients and that these cases are more appropriately assigned to the higher severity level “with MCC” MS-DRG. Therefore, in the proposed rule, we proposed to reassign cases reporting diagnosis code I26.01, I26.02, or I26.09 to the higher severity level MS-DRG 175 and to revise the title for MS-DRG 175 to “Pulmonary Embolism with MCC or Acute Cor Pulmonale” to more accurately reflect the diagnoses assigned there.

Comment: Commenters supported our proposed reassignment of diagnosis codes I26.01, I26.02, and I26.09 to the higher severity level MS-DRG 175 and revision of the title for MS-DRG 175 to “Pulmonary Embolism with MCC or Acute Cor Pulmonale” to more accurately reflect the diagnoses.

Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal to reassign cases reporting diagnosis code I26.01, I26.02, or I26.09 to the higher severity level MS-DRG 175 and to revise the title for MS-DRG 175 to “Pulmonary Embolism with MCC or Acute Cor Pulmonale”.Start Printed Page 42080

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

a. Transcatheter Mitral Valve Repair With Implant

As we did for the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28008 through 28010) and for the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 24985 through 24989), for FY 2020, as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19185 through 19193), we received a request to modify the MS-DRG assignment for transcatheter mitral valve repair (TMVR) with implant procedures. ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) identifies and describes this procedure. This request also included the suggestion that CMS give consideration to reclassifying other endovascular cardiac valve repair procedures. Specifically, the requestor recommended that cases reporting procedure codes describing an endovascular cardiac valve repair with implant be reassigned to MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with and without MCC, respectively) and that the MS-DRG titles be revised to Endovascular Cardiac Valve Interventions with Implant with and without MCC, respectively. We refer readers to detailed discussions of the MitraClip® System (hereafter referred to as MitraClip®) for transcatheter mitral valve repair in previous rulemakings, including the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25822) and final rule (76 FR 51528 through 51529), the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27902 through 27903) and final rule (77 FR 53308 through 53310), the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28008 through 28010) and final rule (79 FR 49889 through 49892), the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24356 through 24359) and final rule (80 FR 49363 through 49367), and the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 24985 through 24989) and final rule (81 FR 56809 through 56813), in response to requests for MS-DRG reclassification, as well as the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27547 through 27552), under the new technology add-on payment policy. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50575), we were unable to consider further the application for a new technology add-on payment for MitraClip® because the technology had not received FDA approval by the July 1, 2013 deadline.

In the FY 2015 IPPS/LTCH PPS final rule, we finalized our proposal to not create a new MS-DRG or to reassign cases reporting ICD-9-CM procedure code 35.97 that described procedures involving the MitraClip® to another MS-DRG (79 FR 49889 through 49892). Under a new application, the request for new technology add-on payments for the MitraClip® System was approved for FY 2015 (79 FR 49941 through 49946). The new technology add-on payment for MitraClip® was subsequently discontinued effective FY 2017.

In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49371), we finalized a modification to the MS-DRGs to which procedures involving the MitraClip® were assigned. For the ICD-10 based MS-DRGs to fully replicate the ICD-9-CM based MS-DRGs, ICD-10-PCS code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach), which identifies the MitraClip® technology and is the ICD-10-PCS code translation for ICD-9-CM procedure code 35.97 (Percutaneous mitral valve repair with implant), was assigned to new MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with MCC and without MCC, respectively) and continued to be assigned to MS-DRGs 231 and 232 (Coronary Bypass with PTCA with MCC and without MCC, respectively).

In the FY 2017 IPPS/LTCH PPS proposed and final rules, we also discussed our analysis of MS-DRGs 228, 229, and 230 (Other Cardiothoracic Procedures with MCC, with CC, and without CC/MCC, respectively) with regard to the possible reassignment of cases reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach). We finalized our proposal to collapse these MS-DRGs (228, 229, and 230) from three severity levels to two severity levels by deleting MS-DRG 230 and revising the structure of MS-DRG 229. We also finalized our proposal to reassign ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) from MS-DRGs 273 and 274 to MS-DRG 228 and revised MS-DRG 229 (81 FR 56813).

As we discussed in the proposed rule, according to the requestor, there are substantial clinical and resource differences between the transcatheter mitral valve repair (TMVR) procedure and other procedures currently grouping to MS-DRGs 228 and 229. The requestor noted that, currently, ICD-10-PCS procedure code 02UG3JZ is the only endovascular valve intervention with implant procedure that maps to MS-DRGs 228 and 229. The requestor also noted that other ICD-10-PCS procedure codes describing procedures for endovascular (transcatheter) cardiac valve repair with implant map to MS-DRGs 273 and 274 or to MS-DRGs 216, 217, 218, 219, 220, and 221 (Cardiac Valve and Other Major Cardiothoracic Procedures with and without Cardiac Catheterization with MCC, with CC and without CC/MCC, respectively). The requestor further noted that all ICD-10-PCS procedure codes for endovascular cardiac valve replacement procedures map to MS-DRGs 266 (Endovascular Cardiac Valve Replacement with MCC) and 267 (Endovascular Cardiac Valve Replacement without MCC).

As noted in the proposed rule, the ICD-10-PCS procedure codes describing a transcatheter cardiac valve repair procedure with an implant are listed in the following table.

Start Printed Page 42081

As also noted in the proposed rule, the ICD-10-PCS procedure codes describing a transcatheter cardiac valve replacement procedure are listed in the following table.

Start Printed Page 42082

We noted in the proposed rule that the requestor performed its own analyses, first comparing TMVR procedures (ICD-10-PCS procedure code 02UG3JZ) to other procedures currently assigned to MS-DRGs 228 and 229, as well as to the transcatheter cardiac valve replacement procedures in MS-DRGs 266 and 267. We refer the reader to the ICD-10 MS-DRG Version 36 Definitions Manual for complete documentation of the logic for case assignment to MS-DRGs 228 and 229 (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html). According to the requestor, its findings indicate that TMVR is more closely aligned with MS-DRGs 266 and 267 than MS-DRGs 228 and 229 with regard to average length of stay and average [standardized] costs. The requestor also examined the impact of removing cases reporting a TMVR procedure (ICD-10-PCS procedure code 02UG3JZ) from MS-DRGs 228 and 229 and adding those cases to MS-DRGs 266 and 267. The requestor noted this movement would have minimal impact to MS-DRGs 266 and 267 based on its analysis. In addition, the requestor stated that its request is in alignment with CMS' policy goal of creating and maintaining clinically coherent MS-DRGs.

The requestor acknowledged that CMS has indicated in prior rulemaking that TMVR procedures are not clinically similar to endovascular cardiac valve replacement procedures, and the requestor agreed that they are distinct procedures. However, the requestor also believed that TMVR is more similar to the replacement procedures in MS-DRGs 266 and 267 compared to the other procedures currently assigned to MS-DRGs 228 and 229. The requestor provided the following table of procedures in volume order (highest to lowest) to illustrate the clinical differences between TMVR procedures and other procedures currently assigned to MS-DRGs 228 and 229.

The requestor noted that, among the procedures listed in the table, TMVR is the only procedure that involves treatment of a cardiac valve and is the only procedure that involves implanting a synthetic substitute.

To illustrate the similarities between TMVR procedures and endovascular cardiac valve replacements in MS-DRGs 266 and 267, the requestor provided the following table.

The requestor noted that both TMVR procedures and endovascular cardiac valve replacements use a percutaneous approach, treat cardiac valves, and use an implanted device for purposes of improving the function of the specified valve. The requestor believed that the analyses support the request to group TMVR procedures with endovascular cardiac valve replacements from a resource perspective and an improvement to clinical coherence could be achieved because TMVR procedures are more similar to the endovascular cardiac valve replacements compared to the other procedures in MS-DRGs 228 and 229, where TMVR is currently assigned.

As noted in the proposed rule and earlier in this section, the request also included the suggestion that CMS give consideration to reclassifying other endovascular cardiac valve repair with implant procedures to MS-DRGs 266 and 267; specifically, endovascular cardiac valve repair with implant procedures involving the aortic, pulmonary, tricuspid and other non-TMVR mitral valve procedures that currently group to MS-DRGs 273 and 274 or MS-DRGs 216, 217, 218, 219, 220 and 221. The requestor acknowledged that endovascular cardiac valve repair with implant procedures involving these other cardiac valves have lower volumes in comparison to the TMVR procedure (ICD-10-PCS procedure code 02UG3JZ), which makes analysis of these procedures a little more difficult. However, the requestor suggested that movement of these procedures to MS-DRGs 266 and 267 would enable the ability to maintain clinical coherence for all endovascular cardiac valve interventions. The requestor also stated that there is an anticipated increase in the volume of not only the TMVR procedure described by ICD-10-PCS procedure code 02UG3JZ (which has grown annually since the MitraClip® was approved for new technology add-on payment in FY 2015), but also for the other endovascular cardiac valve repair with implant procedures, such as those involving the tricuspid valve, which are currently under study in the United States and Europe. Based on this anticipated increase in volume for endovascular cardiac valve repair with implant procedures, the requestor believed that it would be advantageous to take this opportunity to restructure the MS-DRGs by moving all the endovascular cardiac valve repair with implant procedures to MS-DRGs 266 and 267 with revised titles as noted previously, to improve clinical consistency beginning in FY 2020. The requestor further noted that while the Start Printed Page 42083requestor believes its request reflects the best approach for appropriate MS-DRG assignment for TMVR and other endovascular cardiac valve repair with implant procedures, the requestor understands that CMS may consider other alternatives.

As indicated in the proposed rule, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for cases reporting ICD-10-PCS procedure code 02UG3JZ in MS-DRGs 228 and 229 as well as cases reporting one of the procedure codes listed above describing a transcatheter cardiac valve repair with implant procedure in MS-DRGs 216, 217, 218, 219, 220, 221, 273, and 274. Our findings are shown in the tables below.

As shown in the table, we found a total of 5,909 cases for MS-DRG 216 with an average length of stay of 16 days and average costs of $70,435. Of those 5,909 cases, there were 48 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 12.6 days and average costs of $72,556. We found a total of 2,166 cases for MS-DRG 217 with an average length of stay of 9.4 days and average costs of $47,299. Of those 2,166 cases, there was a total of 25 cases reporting a procedure for a transcatheter cardiac valve repair with an average length of stay of 3.4 days and average costs of $40,707. We found a total of 268 cases for MS-DRG 218 with an average length of stay of 6.8 days and average costs of $39,501. Of those 268 cases, there were 4 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 1.3 days and average costs of $45,903. We found a total of 15,105 cases for MS-DRG 219 with an average length of stay of 10.9 days and average costs of $55,423. Of those 15,105 cases, there were 55 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 7.1 days and average costs of $65,880. We found a total of 15,889 cases for MS-DRG 220 with an average length of stay of 6.6 days and average costs of $38,313. Of those 15,889 cases, there were 40 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 3 days and average costs of $38,906. We found a total of 2,652 cases for MS-DRG 221 with an average length of stay of 4.7 days and average costs of $33,577. Of those 2,652 cases, there were 13 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 2.2 days and average costs of $29,646.

For MS-DRG 228, we found a total of 5,583 cases with an average length of stay of 9.2 days and average costs of $46,613. Of those 5,583 cases, there were 1,688 cases reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) with an average length of stay of 5.6 days and average costs of $49,569. As noted previously and in the proposed rule, ICD-10-PCS procedure code 02UG3JZ is the only endovascular cardiac valve repair with implant procedure assigned to MS-DRGs 228 and 229. We found a total of 6,593 cases for MS-DRG 229 with an average length of stay of 4.3 days and average costs of $32,322. Of those 6,593 cases, there were 2,018 cases reporting ICD-10-PCS procedure code 02UG3JZ with an average length of stay of 1.7 days and average costs of $38,321.

For MS-DRG 273, we found a total of 7,785 cases with an average length of stay of 6.9 days and average costs of $27,200. Of those 7,785 cases, there were 6 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 7.5 days and average costs of $52,370. We found a total of 20,434 cases in MS-DRG 274 with an average length of stay of 2.3 days and average costs of $22,771. Of those 20,434 cases, there were 7 cases reporting a procedure code for a transcatheter cardiac valve repair with an average length of stay of 1.4 days and average costs of $28,152.

As also indicated in the proposed rule, we also analyzed cases reporting any one of the procedure codes listed above describing a transcatheter cardiac valve replacement procedure in MS-DRGs 266 and 267. Our findings are shown in the table below.

Start Printed Page 42084

As shown in the table, there was a total of 15,079 cases with an average length of stay of 5.6 days and average costs of $51,402 in MS-DRG 266. For MS-DRG 267, there was a total of 20,845 cases with an average length of stay of 2.4 days and average costs of $41,891.

As stated previously and in the proposed rule, the requestor noted that ICD-10-PCS procedure code 02UG3JZ describing a transcatheter mitral valve repair with implant procedure is the only endovascular cardiac valve intervention with implant procedure assigned to MS-DRGs 228 and 229. The data analysis shows that for the cases reporting procedure code 02UG3JZ in MS-DRGs 228 and 229, the average length of stay and average costs are aligned with the average length of stay and average costs of cases in MS-DRGs 266 and 267, respectively.

The data also show that, for MS-DRGs 216, 217, 218, 219, 220, and 221 and for MS-DRG 274, the average length of stay for cases reporting a transcatheter cardiac valve with implant procedure is shorter than the average length of stay for all the cases in their assigned MS-DRG. For MS-DRG 273, the average length of stay for cases reporting a transcatheter cardiac valve with implant procedure is slightly longer (7.5 days versus 6.9 days). In addition, the average costs for the cases reporting a transcatheter cardiac valve with implant procedure are higher when compared to all the cases in their assigned MS-DRG with the exception of MS-DRG 217 ($40,707 versus $47,299) and MS-DRG 221($29,646 versus $33,577).

In the proposed rule, we stated that our clinical advisors continue to believe that transcatheter cardiac valve repair procedures are not the same as a transcatheter (endovascular) cardiac valve replacement. However, we stated that they agreed with the requestor and, based on our data analysis, that these procedures are more clinically coherent in that they also describe endovascular cardiac valve interventions with implants and are similar in terms of average length of stay and average costs to cases in MS-DRGs 266 and 267 when compared to other procedures in their current MS-DRG assignment. For these reasons, we stated that our clinical advisors agreed that we should propose to reassign the endovascular cardiac valve repair procedures (supplement procedures) listed previously to the endovascular cardiac valve replacement MS-DRGs.

We also analyzed the impact of grouping the endovascular cardiac valve repair with implant (supplement) procedures with the endovascular cardiac valve replacement procedures. The following table reflects our findings for the proposed revised endovascular cardiac valve (supplement) procedures with the endovascular cardiac valve replacement MS-DRGs with a 2-way severity level split.

As shown in the table, there was a total of 16,922 cases for the endovascular cardiac valve replacement and supplement procedures with MCC group, with an average length of stay of 5.7 days and average costs of $51,564. There was a total of 22,958 cases for the endovascular cardiac valve replacement and supplement procedures without MCC group, with an average length of stay of 2.4 days and average costs of $41,563. As indicated in the proposed rule, we applied the criteria to create subgroups for the two-way severity level split for the proposed revised MS-DRGs and found that all five criteria were met. For the proposed revised MS-DRGs, there is at least (1) 500 or more cases in the MCC group or in the without MCC subgroup; (2) 5 percent or more of the cases in the MCC group or in the without MCC subgroup; (3) a 20 percent difference in average costs between the MCC group and the without MCC group; (4) a $2,000 difference in average costs between the MCC group and the without MCC group; and (5) a 3-percent reduction in cost variance, indicating that the proposed severity level splits increase the explanatory power of the base MS-DRG in capturing differences in expected cost between the proposed MS-DRG severity level splits by at least 3 percent and thus improve the overall accuracy of the IPPS payment system.

As stated in the proposed rule, during our review of the transcatheter cardiac valve repair (supplement) procedures in MS-DRGs 216, 217, 218, 219, 220, and 221, MS-DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors recommended that we also analyze the claims data to identify other (non-supplement) transcatheter (endovascular) procedures that involve the cardiac valves and are assigned to those same MS-DRGs to determine if additional modifications may be warranted, consistent with our ongoing efforts to refine the ICD-10 MS-DRGs.Start Printed Page 42085

We analyzed the following ICD-10-PCS procedure codes that are currently assigned to MS-DRGs 216, 217, 218, 219, 220, and 221.

We also analyzed ICD-10-PCS procedure code 02TH3ZZ (Resection of pulmonary valve, percutaneous approach) that is currently assigned to MS-DRGs 228 and 229. Lastly, we analyzed the following ICD-10-PCS procedure codes that are currently assigned to MS-DRGs 273 and 274.

We analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for cases reporting any of the above listed procedure codes in MS-DRGs 216, 217, 218, 219, 220, and 221, MS-DRGs 228 and 229, and MS-DRGs 273 and 274. Our findings are shown in the following tables. We noted in the proposed rule that there were no cases found in MS-DRGs 228 and 229 reporting ICD-10-PCS procedure code 02TH3ZZ (Resection of pulmonary valve, percutaneous approach).

Start Printed Page 42086

In the proposed rule, we stated we found that the overall frequency with which cases reporting at least one of the above ICD-10-PCS procedure codes were reflected in the claims data was 2,075 times with an average length of stay of 8.5 days and average costs of $27,838. ICD-10-PCS procedure code 027F3ZZ (Dilation of aortic valve, percutaneous approach) had the highest frequency of 1,720 times with an average length of stay of 8.6 days and average costs of $25,265. We also found that cases reporting ICD-10-PCS procedure code 02WF3KZ (Revision of nonautologous tissue substitute in aortic valve, percutaneous approach) had the highest average costs of $69,030 with an average length of stay of 1 day. While not displayed above, we also noted that, of the 7,785 cases found in MS-DRG 273, from the remaining procedure codes describing procedures other than those performed on a cardiac valve, there were 4,920 cases reporting ICD-10-PCS procedure code 02583ZZ (Destruction of conduction mechanism, percutaneous approach) with an average length of stay of 6.6 days and average costs of $26,800, representing approximately 63 percent of all the cases in that MS-DRG. In addition, of the 20,434 cases in MS-DRG 274, from the remaining procedure codes describing procedures other than those performed on a cardiac valve, there were 9,268 cases reporting ICD-10-PCS procedure code 02583ZZ (Destruction of conduction mechanism, percutaneous approach) with an average length of stay of 3.2 days and average costs of $21,689, and 8,775 cases reporting ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach) with an average length of stay of 1.2 days and average costs of $25,476, representing approximately 88 percent of all the cases in that MS-DRG.

We stated in the proposed rule that after analyzing the claims data to identify the overall frequency with which the other (non-supplement) ICD-10-PCS procedure codes describing a transcatheter (endovascular) cardiac valve procedure were reported and assigned to MS-DRGs 216, 217, 218, 219, 220, and 221, MS-DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors suggested that these other cardiac valve procedures should be grouped together because the procedure codes are describing procedures performed on a cardiac valve with a percutaneous (transcatheter/endovascular) approach, they can be performed in a cardiac catheterization laboratory, they require that the interventional cardiologist have special additional training and skills, and often require additional ancillary procedures and equipment, such as trans-esophageal echocardiography, to be available at the time of the procedure. Our clinical advisors noted that these procedures are generally considered more complicated and resource-intensive, and form a clinically coherent group. They also noted that the majority of procedures currently being reported in MS-DRGs 273 and 274 are procedures other than those involving a cardiac valve and, therefore, believed that reassignment of the other (non-supplement) ICD-10-PCS procedure codes describing a transcatheter (endovascular) cardiac valve procedure would have minimal impact to those MS-DRGs.

We then analyzed the impact of grouping the other transcatheter cardiac valve procedures. The following table reflects our findings for the suggested other endovascular cardiac valve procedures MS-DRGs with a 2-way severity level split.

Start Printed Page 42087

As shown in the table, there were 1,527 cases for the other endovascular cardiac valve procedures with MCC group, with an average length of stay of 9.7 days and average costs of $27,801. There was a total of 560 cases for the other endovascular cardiac valve procedures without MCC group, with an average length of stay of 3.9 days and average costs of $17,027. As stated in the proposed rule, we applied the criteria to create subgroups for the two-way severity level split for the suggested MS-DRGs and found that all five criteria were met. For the suggested MS-DRGs, there is at least (1) 500 or more cases in the MCC group or in the without MCC subgroup; (2) 5 percent or more of the cases in the MCC group or in the without MCC subgroup; (3) a 20 percent difference in average costs between the MCC group and the without MCC group; (4) at least a $2,000 difference in average costs between the MCC group and the without MCC group; and (5) a 3-percent reduction in cost variance, indicating that the proposed severity level splits increase the explanatory power of the base MS-DRG in capturing differences in expected cost between the proposed MS-DRG severity level splits by at least 3 percent and thus improve the overall accuracy of the IPPS payment system.

For FY 2020, we proposed to modify the structure of MS-DRGs 266 and 267 by reassigning the procedure codes describing a transcatheter cardiac valve repair (supplement) procedure from the list above and to revise the title of these MS-DRGs. We also proposed to revise the title of MS-DRGs 266 from “Endovascular Cardiac Valve Replacement with MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC” and the title of MS-DRG 267 from “Endovascular Cardiac Valve Replacement without MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures without MCC”, to reflect the proposed restructuring. In addition, we proposed to create two new MS-DRGs with a two-way severity level split for the remaining (non-supplement) transcatheter cardiac valve procedures listed above. These proposed new MS-DRGs are proposed new MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC) and proposed new MS-DRG 320 (Other Endovascular Cardiac Valve Procedures without MCC), which would also conform with the severity level split of MS-DRGs 266 and 267. We proposed to reassign the procedure codes from their current MS-DRGs to the proposed new MS-DRGs.

Comment: Several commenters agreed with the proposal to reassign the procedure codes describing a transcatheter cardiac valve repair (supplement) procedure from their current MS-DRG assignments as displayed and discussed above, to proposed revised MS-DRGs 266 and 267. Commenters also agreed with our proposal to revise the titles for MS-DRGs 266 and 267 to reflect the proposed restructuring. Commenters noted the procedural technique, skills, staff, equipment and average costs of the transcatheter cardiac valve repair (supplement) procedures closely correspond with other transcatheter valve procedures that are currently classified within MS-DRGs 266 and 267. Commenters stated the proposal ensures that the new MS-DRG assignments accurately capture the resource utilization and clinical coherence for these transcatheter cardiac valve procedures. Commenters stated that the procedure for transcatheter mitral valve repair (TMVR) with implant (e.g., Mitraclip®), identified by ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) has demonstrated evidence-based clinical benefits and the proposal would allow effective treatment options for high risk patients where open heart surgery is not an option. Other commenters commended CMS for reviewing the MS-DRG assignment for transcatheter cardiac valve procedures and proposing to reassign the supplement procedures to MS-DRGs 266 and 267 since, according to the commenters, these MS-DRGs were specifically created to classify these kinds of patients. Commenters also stated that the proposal ensures more appropriate payment to providers for these procedures. A commenter who expressed support for the proposal encouraged CMS to continue to monitor these MS-DRGs as therapies continue to evolve and future modifications may be warranted.

Response: We appreciate the commenters' support. We agree the proposal would accurately capture the resource utilization and clinical coherence for these transcatheter cardiac valve procedures. Consistent with our annual process of reviewing the MS-DRGs, we will continue to monitor cases to determine if any additional adjustments are warranted.

Comment: Some commenters also agreed with the proposal to create new MS-DRGs 319 and 320 for the other transcatheter (non-supplement) cardiac valve procedures and stated this would better reflect the resource consumption for these patients. A commenter who supported the proposal requested that CMS clarify that the procedures can be performed by both interventional cardiologists, as well as cardiothoracic surgeons. This commenter agreed that, regardless of the provider performing the procedure, additional training and skills are required. The commenter also recommended that CMS continue to monitor the claims data for the affected procedure codes to ensure that unintended consequences do not occur and patient access is not at risk.

A few commenters recommended that CMS delay the proposed reassignment of non-supplement transcatheter cardiac valve procedures to proposed new MS-DRGs 319 and 320 until more data informing resource use for non-supplement percutaneous cardiac valve procedures becomes available and further consideration is given to clinical coherence. A commenter believed that reassignment of these procedures at this time is premature and that a decision by CMS to delay the implementation of this proposed policy specific to non-Start Printed Page 42088supplement valve procedures by percutaneous approach would have minimal impact on the adoption and implementation of the proposed separate policy related to the reassignment of transcatheter cardiac valve repair (supplement) procedures to MS-DRGs 266 and 267. Another commenter expressed concern that not all the procedure codes describing non-supplement transcatheter cardiac valve procedures included in the proposed reassignment to proposed new MS-DRGs 319 and 320 appear to be consistent with the rationale presented in the proposed rule nor did the analysis identify all the potentially impacted cases and therefore, according to the commenter, the analysis does not sufficiently estimate the impact on providers for FY 2020.

Response: We thank the commenters for their support and feedback. We wish to clarify that the transcatheter (non-supplement) cardiac valve procedures can be performed by both interventional cardiologists, as well as cardiothoracic surgeons. Our clinical advisors agree with the commenter that regardless of the provider performing the procedure, additional training and skills are required.

We disagree with delaying the proposed reassignment of non-supplement transcatheter cardiac valve procedures to proposed new MS-DRGs 319 and 320 and that reassignment of these procedures at this time is premature. We also disagree with the commenter who expressed concern that not all the procedure codes describing non-supplement transcatheter cardiac valve procedures included in the proposed reassignment to proposed new MS-DRGs 319 and 320 appear to be consistent with the rationale presented in the proposed rule. As discussed in the proposed rule and previously in this section, our clinical advisors, as well as several other commenters, supported grouping these other cardiac valve procedures together because the procedure codes are describing procedures performed on a cardiac valve with a percutaneous (transcatheter/endovascular) approach, they can be performed in a cardiac catheterization laboratory, they require special additional training and skills, and often require additional ancillary procedures and equipment. With regard to the commenter's concern that the analysis did not identify all the potentially impacted cases and therefore does not sufficiently estimate the impact on providers for FY 2020, we note that the analysis we provided was based on the MS-DRGs that were discussed under the proposal for cases that reported any of the non-supplement transcatheter cardiac valve procedures. (If no cases were found to report one of the listed procedure codes describing a non-supplement transcatheter cardiac valve procedure then that procedure code was not reflected in the data analysis table). As stated in the proposed rule, we presented the impact of grouping the transcatheter (non-supplement) cardiac valve procedures with a 2-way severity level split. The analysis was based on the September 2018 update of the FY 2018 MedPAR data and included the proposed changes to the CC/MCC severity level designations. While, as previously noted, we do not generally perform any further MS-DRG analysis of claims data for purposes of the final rule, in response to the commenter's concern regarding whether the analysis identified all potentially impacted cases, we further examined the proposed 2-way severity level split using the March 2019 update of the FY 2018 MedPAR data.

As shown in the table, there were 1,700 cases for the other endovascular cardiac valve procedures with MCC group, with an average length of stay of 10.1 days and average costs of $29,181. There was a total of 624 cases for the other endovascular cardiac valve procedures without MCC group, with an average length of stay of 3.9 days and average costs of $16,706. Similar to our process discussed in the proposed rule, we again applied the criteria to create subgroups for the two way severity level split for the proposed MS-DRGs and found that all five criteria were met. We note that, as discussed in section II.F.14.c.1. of the preamble of this final rule, we are generally not finalizing the proposed changes to the CC/MCC severity level designations that were considered under the comprehensive CC/MCC analysis. Therefore, the above updated analysis reflects the finalized policy.

For the reasons noted previously, we continue to believe it is appropriate to group all the non-supplement transcatheter cardiac valve procedures together, and the updated data analysis also continues to support the two way severity level split. In response to the commenter's recommendation that we monitor the claims data for the affected procedure codes to ensure that unintended consequences do not occur and patient access is not put at risk, consistent with our annual process of reviewing the MS-DRGs, we will continue to monitor cases to determine if any additional modifications are warranted. For the reasons described above and after consideration of the public comments we received, we are finalizing our proposal to modify the structure of MS-DRGs 266 and 267 by reassigning the procedure codes describing a transcatheter cardiac valve repair (supplement) procedure from the list above and to revise the title of MS-DRG 266 from “Endovascular Cardiac Valve Replacement with MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC” and to revise the title of MS-DRG 267 from “Endovascular Cardiac Valve Replacement without MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures without MCC”. In addition, we are finalizing our proposal to create new MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC) and new MS-DRG 320 (Other Endovascular Cardiac Valve Procedures without MCC) and reassigning the non-Start Printed Page 42089supplement transcatheter cardiac valve procedure codes displayed and discussed earlier in this section from their current MS-DRGs to these new MS-DRGs, under the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

b. Revision of Pacemaker Lead

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19193), in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41189 through 41190), we finalized our proposal to maintain the Version 35 ICD-10 MS-DRG GROUPER logic for the Version 36 ICD-10 MS-DRG GROUPER logic within MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device Replacement with MCC, with CC and without CC/MCC, respectively) so that cases reporting any of the ICD-10-PCS procedure codes describing procedures involving pacemakers and related procedures and associated devices would continue to be assigned to those MS-DRGs under MDC 5 because they are reported when a pacemaker device requires revision and they have a corresponding circulatory system diagnosis. We also discussed and finalized the addition of ICD-10-PCS procedure codes 02H63MZ (Insertion of cardiac lead into right atrium, percutaneous approach) and 02H73MZ (Insertion of cardiac lead into left atrium, percutaneous approach) to the GROUPER logic as non-O.R. procedures that impact the MS-DRG assignment when reported as stand-alone codes for the insertion of a pacemaker lead within MS-DRGs 260, 261, and 262 in response to a commenter's suggestion.

After publication of the FY 2019 IPPS/LTCH PPS final rule, it was brought to our attention that ICD-10-PCS procedure code 02H60JZ (Insertion of pacemaker lead into right atrium, open approach) was inadvertently omitted from the GROUPER logic for MS-DRGs 260, 261, and 262. This procedure code is designated as a non-O.R. procedure. However, we note that, within MDC 5, in MS-DRGs 242, 243, and 244, this procedure code is part of a code pair that requires another procedure code (cluster). In the FY 2020 IPPS/LTCH PPS proposed rule, we proposed to add procedure code 02H60JZ to the list of non-O.R. procedures that would impact MS-DRGs 260, 261, and 262 when reported as a stand-alone procedure code, consistent with ICD-10-PCS procedure codes 02H63JZ (Insertion of pacemaker lead into right atrium, percutaneous approach) and 02H64JZ (Insertion of pacemaker lead into right atrium, percutaneous endoscopic approach), which also describe the insertion of a pacemaker lead into the right atrium. We stated in the proposed rule that, if the proposal is finalized, we would make conforming changes to the ICD-10 MS-DRG Definitions Manual Version 37.

Comment: Commenters agreed with the proposal to add procedure code 02H60JZ to the list of non-O.R. procedures that would impact MS-DRGs 260, 261, and 262 when reported as a stand-alone procedure code.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add procedure code 02H60JZ to the list of non-O.R. procedures that would impact MS-DRGs 260, 261, and 262 when reported as a stand-alone procedure code under the ICD-10 MS-DRGs Version 37, effective October 1, 2019, and will make conforming changes to the ICD-10 MS-DRG Definitions Manual Version 37.

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

a. Knee Procedures With Principal Diagnosis of Infection

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19193 through 19199), we received a request to add ICD-10-CM diagnosis codes M00.9 (Pyogenic arthritis, unspecified) and A54.42 (Gonococcal arthritis) to the list of principal diagnoses for MS-DRGs 485, 486, and 487 (Knee Procedure with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively) in MDC 8. The requestor believed that adding diagnosis code M00.9 is necessary to accurately recognize knee procedures that are performed with a principal diagnosis of infectious arthritis, including those procedures performed when the specific infectious agent is unknown. The requestor stated that, currently, only diagnosis codes describing infections caused by a specific bacterium are included in MS-DRGs 485, 486, and 487. The requestor stated that additional diagnosis codes such as M00.9 are indicated for knee procedures performed as a result of infection because pyogenic arthritis can reasonably be diagnosed based on the patient's history and clinical symptoms, even if a bacterial infection is not confirmed by culture. For example, the requestor noted that a culture may present negative for infection if a patient has been treated with antibiotics prior to knee surgery, but other clinical signs may indicate a principal diagnosis of joint infection. In the absence of a culture identifying an infection by a specific bacterium, the requestor stated that ICD-10-CM diagnosis code M00.9 should also be included as a principal diagnosis in MS-DRGs 485, 486, and 487.

The requestor also asserted that ICD-10-CM diagnosis code A54.42 should be added to the list of principal diagnoses for MS-DRGs 485, 486, and 487 because gonococcal arthritis is also an infectious type of arthritis that can be an indication for a knee procedure.

We noted in the proposed rule that, currently, cases reporting ICD-10-CM diagnosis codes M00.9 or A54.42 as a principal diagnosis group to MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of Infection with and without CC/MCC, respectively) when a knee procedure is also reported on the claim.

As indicated in the proposed rule, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for ICD-10-CM diagnosis codes M00.9 and A54.42, which are currently assigned to medical MS-DRGs 548, 549, and 550 (Septic Arthritis with MCC, with CC, and without CC/MCC, respectively) in the absence of a surgical procedure. Our findings are shown in the following table.

Start Printed Page 42090

As shown in the table, we found a total of 2,172 cases in MS-DRGs 548, 549, and 550. A total of 601 cases were reported in MS-DRG 548, with an average length of stay of 8.1 days and average costs of $13,974. Cases in MS-DRG 548 with a principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) accounted for 312 of these 601 cases, and reported an average length of stay of 7.6 days and average costs of $13,177. As we stated in the proposed rule, none of the cases in MS-DRG 548 had a principal diagnosis of gonococcal arthritis (ICD-10-CM diagnosis code A54.42).

The total number of cases reported in MS-DRG 549 was 1,169, with an average length of stay of 5 days and average costs of $8,547. Within this MS-DRG, 686 cases had a principal diagnosis described by ICD-10-CM diagnosis code M00.9, with an average length of stay of 4.7 days and average costs of $7,976. Two of the cases reported in MS-DRG 549 had a principal diagnosis described by ICD-10-CM diagnosis code A54.42. These 2 cases had an average length of stay of 8 days and average costs of $7,070.

The total number of cases reported in MS-DRG 550 was 402, with an average length of stay of 3.5 days and average costs of $6,317. Within this MS-DRG, 260 cases had a principal diagnosis described by ICD-10-CM diagnosis code M00.9 with an average length of stay of 3.2 days and average costs of $6,209. Three of the cases reported in MS-DRG 550 had a principal diagnosis described by ICD-10-CM diagnosis code A54.42. These 3 cases had an average length of stay of 2.3 days and average costs of $3,929.

In summary, for MS-DRGs 548, 549, and 550, there were 1,258 cases that reported ICD-10-CM diagnosis code M00.9 as the principal diagnosis and 5 cases that reported ICD-10-CM diagnosis code A54.42 as the principal diagnosis. We noted that, overall, our data analysis suggests that the MS-DRG assignment for cases reporting ICD-10-CM diagnosis codes M00.9 and A54.42 is appropriate based on the average costs and average length of stay. However, we stated in the proposed rule that it is unclear how many of these cases involved infected knee joints because neither ICD-10-CM diagnosis code M00.9 nor A54.42 is specific to the knee.

We then analyzed claims data for MS-DRGs 485, 486, and 487 (Knee Procedures with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively) and for MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of Infection with and without CC/MCC, respectively). For MS-DRGs 488 and 489, we also analyzed claims data for cases reporting a knee procedure with ICD-10-CM diagnosis code M00.9 or A54.42 as a principal diagnosis, as these are the MS-DRGs to which such cases would currently group. Our findings are shown in the following table.

As shown in the table, we found a total of 1,021 cases reported in MS-DRG 485, with an average length of stay of 9.7 days and average costs of $23,980. We found a total of 2,260 cases reported in MS-DRG 486, with an average length of stay of 6.0 days and average costs of $16,060. The total number of cases reported in MS-DRG 487 was 614, with Start Printed Page 42091an average length of stay of 4.2 days and average costs of $12,396. For MS-DRG 488, we found a total of 2,857 cases with an average length of stay of 4.8 days and average costs of $14,197. Of these 2,857 cases, we found 524 cases that reported a principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code M00.9), with an average length of stay of 7.1 days and average costs of $16,894. There were no cases found that reported a principal diagnosis of gonococcal arthritis (ICD-10-CM diagnosis code A54.42). For MS-DRG 489, we found a total of 2,416 cases with an average length of stay of 2.4 days and average costs of $9,217. Of these 2,416 cases, we found 195 cases that reported a principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code M00.9), with an average length of stay of 4.1 days and average costs of $9,526. We found 1 case that reported a principal diagnosis of gonococcal arthritis (ICD-10-CM diagnosis code A54.42) in MS-DRG 489, with an average length of stay of 8 days and average costs of $10,810.

Upon review of the data, we noted in the proposed rule that the average costs and average length of stay for cases reporting a principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 488 are higher than the average costs and average length of stay for all cases in MS-DRG 488. We found similar results for MS-DRG 489 for the cases reporting diagnosis code M00.9 or A54.42 as the principal diagnosis.

As stated in the proposed rule and earlier, the requestor recommended that ICD-10-CM diagnosis codes M00.9 and A54.42 be added to the list of principal diagnoses in MS-DRGs 485, 486, and 487 to recognize knee procedures that are performed with a principal diagnosis of an infectious type of arthritis. As we stated in the proposed rule, because these diagnosis codes are not specific to the knee in the code description, we examined the ICD-10-CM Alphabetic Index to review the entries that refer and correspond to these diagnosis codes. Specifically, we searched the Index for codes M00.9 and A54.42 and found the following entries.

We stated in the proposed rule that our clinical advisors agreed that the results of our ICD-10-CM Alphabetic Index review combined with the data analysis results support the addition of ICD-10-CM diagnosis code M00.9 to the list of principal diagnoses of infection for MS-DRGs 485, 486, and 487. The entries for diagnosis code M00.9 include infection of the knee, and as discussed above, in our data analysis, we found cases reporting ICD-10-CM diagnosis code M00.9 as a principal diagnosis in MS-DRGs 488 and 489, indicating that knee procedures are, in fact, being performed for an infectious arthritis of the knee. In addition, the average costs for cases reporting a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 488 are similar to the average costs of cases in MS-DRG 486 ($16,894 and $16,060, respectively). We stated in the proposed rule that, because MS-DRG 488 includes cases with a CC or an MCC, we reviewed how many of the 524 cases reporting a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) were reported with a CC or an MCC. We found that there were 361 cases reporting a CC with an average length of stay of 6 days and average costs of $14,092 and 163 cases reporting an MCC with an average length of stay of 9.5 days and average costs of $23,100. Therefore, the cases in MS-DRG 488 reporting a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) with an MCC have average costs that are consistent with the average costs of cases in MS-DRG 485 ($23,100 and $23,980, respectively), and the cases with a CC have average costs that are consistent with the average costs of cases in MS-DRG 486 ($14,092 and $16,060, respectively), as noted above. We also noted that the average length of stay for cases reporting a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) with an MCC in MS-DRG 488 is similar to the average length of stay for cases in MS-DRG 485 (9.5 days and 9.7 days, respectively), and the cases with a CC have an average length of stay that is equivalent to the average length of stay for cases in MS-DRG 486 (6 days and 6 days, respectively). We further noted that the average length of stay for cases reporting a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 489 is similar to the average length of stay for cases in MS-DRG 487 (4.1 days and 4.2 days, respectively). Lastly, the Start Printed Page 42092average costs for cases reporting a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 489 are consistent with the average costs for cases in MS-DRG 487 ($9,526 and $12,396, respectively), with a difference of $2,870. For these reasons, we proposed to add ICD-10-CM diagnosis code M00.9 to the list of principal diagnosis codes for MS-DRGs 485, 486, and 487.

Comment: Commenters agreed with CMS' proposal to add ICD-10-CM diagnosis code M00.9 to the list of principal diagnosis codes for assignment to MS-DRGs 485, 486 and 487. The commenters stated that the proposal was reasonable, given the ICD-10-CM diagnosis code and the information provided.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-CM diagnosis code M00.9 to the list of principal diagnosis codes for assignment to MS-DRGs 485, 486 and 487 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

In the proposed rule, we stated that our clinical advisors did not support the addition of ICD-10-CM diagnosis code A54.42 to the list of principal diagnosis codes for MS-DRGs 485, 486, and 487 because ICD-10-CM diagnosis code A54.42 is not specifically indexed to include the knee or any infection in the knee. Therefore, we did not propose to add ICD-10-CM diagnosis code A54.42 to the list of principal diagnosis codes for these MS-DRGs.

Comment: Commenters did not support CMS' proposal to not add ICD-10-CM diagnosis code A54.42 to the list of codes for these MS-DRGs. Commenters noted that although A54.42 is not specific to the knee, the code is intended to be used for any joint, similar to code M00.9. Commenters also noted that the GROUPER logic for MS-DRGs 485, 486 and 487 that requires the combination of a principal diagnosis code and an ICD-10-PCS procedure code for a knee procedure will ensure that cases that report a principal diagnosis code of A54.42 and a knee procedure are clinically similar to other cases in MS-DRGs 485, 486 and 487.

Response: We agree with commenters that diagnosis code A54.42 would be the appropriate code for a diagnosis of gonococcal arthritis of the knee although the Index entry is not specific. Our clinical advisors reviewed this issue and the ICD-10-CM Alphabetic index and noted that there are no other diagnosis codes in the subcategory A54.- series (Gonococcal infection) that are more specific to the knee. Our clinical advisors noted that although there was only one case reporting gonococcal arthritis as the principal diagnosis with a knee procedure performed in the September 2018 update of the FY 2018 MedPAR file, they agreed that based on the result of further review, including consideration of the commenters' concerns, there is merit in adding A54.42 to MS-DRGs 485, 486 and 487 because diagnosis code A54.42 would be the appropriate code to report a diagnosis of gonococcal arthritis of the knee. We agree with commenters that this reassignment is consistent with the reassignment of ICD-10-CM diagnosis code M00.9 because, although the Index entries do not specifically include the knee or any infection of the knee, diagnosis code A54.42 would also be used to report an infection of the knee. Therefore, after consideration of the public comments that we received and for the reasons described, we are finalizing the assignment of ICD-10-CM diagnosis code A54.42 to the list of principal diagnosis codes for assignment to MS-DRGs 485, 486, and 487 (Knee Procedure with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively) in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that upon review of the existing list of principal diagnosis codes for MS-DRGs 485, 486, and 487, our clinical advisors recommended that we review the following ICD-10-CM diagnosis codes currently included on the list of principal diagnosis codes because the codes are not specific to the knee.

These ICD-10-CM diagnosis codes are currently assigned to medical MS-DRGs 559, 560, and 561 (Aftercare, Musculoskeletal System and Connective Tissue with MCC, with CC, and without CC/MCC, respectively) within MDC 8 in the absence of a surgical procedure. Similar to the process described above, in the proposed rule, we stated that we examined the ICD-10-CM Alphabetic Index to review the entries that refer and correspond to the diagnosis codes shown in the table above. We found the following entries.

Start Printed Page 42093

The Index entries for the ICD-10-CM diagnosis codes listed above reflect terms relating to an infection. However, none of the entries is specific to the knee. In addition, in the proposed rule we noted that there are other diagnosis codes in the subcategory T84.5-series (Infection and inflammatory reaction due to internal joint prosthesis) that are specific to the knee. For example, ICD-10-CM diagnosis code T84.53X- (Infection and inflammatory reaction due to internal right knee prosthesis) or ICD-10-CM diagnosis code T84.54X- (Infection and inflammatory reaction due to internal left knee prosthesis) with the appropriate 7th digit character to identify initial encounter, subsequent encounter or sequela, would be reported to identify a documented infection of the right or left knee due to an internal prosthesis. We further noted that these ICD-10-CM diagnosis codes (T84.53X- and T84.54X-) with the 7th character “A” for initial encounter are currently already in the list of principal diagnosis codes for MS-DRGs 485, 486, and 487.

We stated in the proposed rule that our clinical advisors supported the removal of the above ICD-10-CM diagnosis codes from the list of principal diagnosis codes for MS-DRGs 485, 486, and 487 because they are not specifically indexed to include an infection of the knee and there are other diagnosis codes in the subcategory T84.5-series that uniquely identify an infection and inflammatory reaction of the right or left knee due to an internal prosthesis as noted above.

As indicated in the proposed rule, we also analyzed claims data for MS-DRGs 485, 486 and 487 to identify cases reporting one of the above listed ICD-10-CM diagnosis codes not specific to the knee as a principal diagnosis. Our findings are shown in the following table.

For MS-DRG 485, we found 13 cases reporting one of the diagnosis codes not specific to the knee as a principal diagnosis with an average length of stay of 11.2 days and average costs of $30,765. For MS-DRG 486, we found 43 cases reporting one of the diagnosis codes not specific to the knee as a principal diagnosis with an average length of stay of 6.5 days and average costs of $15,837. For MS-DRG 487, we found 7 cases reporting one of the diagnosis codes not specific to the knee as a principal diagnosis with an average length of stay of 2.6 days and average costs of $11,362.

We stated in the proposed rule that, overall, for MS-DRGs 485, 486, and 487, there were a total of 63 cases reporting one of the ICD-10-CM diagnosis codes not specific to the knee as a principal diagnosis with an average length of stay of 7 days and average costs of $18,421. Of those 63 cases, there were 32 cases reporting a principal diagnosis code from the ICD-10-CM subcategory T84.5-series (Infection and inflammatory reaction due to internal joint prosthesis); 23 cases reporting a principal diagnosis code from the ICD-10-CM subcategory T84.6-series (Infection and inflammatory reaction due to internal fixation device), with 22 of the 23 cases reporting ICD-10-CM diagnosis code T84.69XA (Infection and inflammatory reaction due to internal fixation device of other site, initial encounter) and 1 case reporting ICD-10-CM diagnosis code T84.63XA (Infection and inflammatory reaction due to internal fixation device of spine, initial encounter); and 8 cases reporting ICD-10-CM diagnosis code M86.9 (Osteomyelitis, unspecified) as a principal diagnosis.

We stated in the proposed rule that our clinical advisors believe that there may have been coding errors among the 63 cases reporting a principal diagnosis of infection not specific to the knee. For Start Printed Page 42094example, 32 cases reported a principal diagnosis code from the ICD-10-CM subcategory T84.5-series (Infection and inflammatory reaction due to internal joint prosthesis) that was not specific to the knee and, as stated previously and in the proposed rule, there are other codes in this subcategory that uniquely identify an infection and inflammatory reaction of the right or left knee due to an internal prosthesis.

Based on the results of our claims analysis and input from our clinical advisors, in the FY 2020 IPPS/LTCH PPS proposed rule, we proposed to remove the following ICD-10-CM diagnosis codes that do not describe an infection of the knee from the list of principal diagnosis codes for MS-DRGs 485, 486, and 487: M86.9, T84.50XA, T84.51XA, T84.52XA, T84.59XA, T84.60XA, T84.63XA, and T84.69XA. We did not propose to change the current assignment of these diagnosis codes in MS-DRGs 559, 560, and 561.

Comment: Many commenters agreed with the proposal to remove the eight diagnosis codes that do not describe an infection specific to the knee from the list of principal diagnosis codes for MS-DRGs 485, 486, and 487, and to maintain their current assignment in MS-DRGs 559, 560, and 561. A commenter did not support the proposal and believed the diagnosis of osteomyelitis should continue to be included in MS-DRGs 485, 486 and 487 because osteomyelitis describes an infection of the knee which includes cartilage, ligaments, tendons and bones.

Response: We appreciate the commenters' support. We agree that osteomyelitis as a diagnostic term describes an infection which can include cartilage, ligaments, tendons and bones. However, as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19196), the diagnosis codes that are the subject of this proposal, including diagnosis code M86.9 (Osteomyelitis, unspecified) are not specific to the knee. There are other diagnosis codes in the subcategory M86.-series (Osteomyelitis) that are specific to the knee and will continue to be included in MS-DRGs 485, 486 and 487.

Therefore, after consideration of the comments we received, we are finalizing our proposal to remove ICD-10-CM diagnosis codes M86.9, T84.50XA, T84.51XA, T84.52XA, T84.59XA, T84.60XA, T84.63XA, and T84.69XA from the list of principal diagnosis codes for MS-DRGs 485, 486, and 487, and maintain their current assignment in MS-DRGs 559, 560, and 561 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

In addition, we stated in the proposed rule that our clinical advisors recommended that we add the following ICD-10-CM diagnosis codes as principal diagnosis codes for MS-DRGs 485, 486, and 487 because they are specific to the knee and describe an infection.

As indicated in the proposed rule, ICD-10-CM diagnosis code A18.02 (Tuberculous arthritis of other joints) is currently assigned to medical MS-DRGs 548, 549, and 550 (Septic Arthritis with MCC, with CC, and without CC/MCC, respectively) within MDC 8 and MS-DRGs 974, 975, and 976 (HIV with Major Related Condition with MCC, with CC, and without CC/MCC, respectively) within MDC 25 (Human Immunodeficiency Virus Infections) in the absence of a surgical procedure. ICD-10-CM diagnosis codes M01.X61 (Direct infection of right knee in infectious and parasitic diseases classified elsewhere), M01.X62 (Direct infection of left knee in infectious and parasitic diseases classified elsewhere), and M01.X69 (Direct infection of unspecified knee in infectious and parasitic diseases classified elsewhere) are currently assigned to medical MS-DRGs 548, 549, and 550 (Septic Arthritis with MCC, with CC, and without CC/MCC, respectively) within MDC 8 in the absence of a surgical procedure. ICD-10-CM diagnosis codes M71.061 (Abscess of bursa, right knee), M71.062 (Abscess of bursa, left knee), M71.069 (Abscess of bursa, unspecified knee), M71.161 (Other infective bursitis, right knee), M71.162 (Other infective bursitis, left knee), and M71.169 (Other infective bursitis, unspecified knee) are currently assigned to medical MS-DRGs 557 and 558 (Tendonitis, Myositis and Bursitis with and without MCC, respectively) within MDC 8 in the absence of a surgical procedure.

Similar to the process described above, in the proposed rule we examined the ICD-10-CM Alphabetic Index to review the entries that refer and correspond to the diagnosis codes shown in the table above. We found the following entries.

Start Printed Page 42095

Start Printed Page 42096

We noted that there were no Index entries specifically for ICD-10-CM diagnosis codes M71.061, M71.062, M71.069, M71.161, M71.162, and M71.169. Rather, there were Index entries at the subcategory levels of M71.06- and M71.16-. We found the following entries.

Start Printed Page 42097

We stated that our clinical advisors agreed that the results of our review of the ICD-10-CM Alphabetic Index support the addition of these ICD-10-CM diagnosis codes to MS-DRGs 485, 486, and 487 because the Index entries and/or the code descriptions clearly describe or include an infection that is specific to the knee.

Therefore, we proposed to add the following ICD-10-CM diagnosis codes to the list of principal diagnosis codes for MS-DRGs 485, 486, and 487: A18.02, M01.X61, M01.X62, M01.X69, M71.061, M71.062, M71.069, M71.161, M71.162, and M71.169.

Comment: Commenters agreed with CMS' proposal to add 10 additional ICD-10-CM diagnosis codes that are specific to the knee and describe an infection to the list of principal diagnosis codes for assignment to MS-DRGs 485, 486 and 487. The commenters stated that the proposal was reasonable, given the ICD-10-CM diagnosis codes and the information provided.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-CM diagnosis codes A18.02, M01.X61, M01.X62, M01.X69, M71.061, M71.062, M71.069, M71.161, M71.162, and M71.169 to the list of principal diagnosis codes for assignment to MS-DRGs 485, 486 and 487 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

b. Neuromuscular Scoliosis

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19201 through 19202), we received a request to add ICD-10-CM diagnosis codes describing neuromuscular scoliosis to the list of principal diagnosis codes 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, and without CC/MCC, respectively). As we stated in the proposed rule, excluding the ICD-10-CM diagnosis codes that address the cervical spine, the following ICD-10-CM diagnosis codes are used to describe neuromuscular scoliosis.

The requestor asserted that all levels of neuromuscular scoliosis, except cervical, should group to the non-cervical spinal fusion MS-DRGs for spinal curvature (MS-DRGs 456, 457, and 458). The requestor also noted that the current MS-DRG logic only groups cases reporting neuromuscular scoliosis to MS-DRGs 456, 457, and 458 when neuromuscular scoliosis is reported as a secondary diagnosis. The requestor contended that it would be rare for a diagnosis of neuromuscular scoliosis to be reported as a secondary diagnosis because there is not a “code first” note in the ICD-10-CM Tabular List of Diseases and Injuries indicating to “code first” the underlying cause. We stated in the proposed rule that, according to the requestor, when a diagnosis of neuromuscular scoliosis is the reason for an admission for non-cervical spinal fusion, neuromuscular scoliosis must be sequenced as the principal diagnosis because it is the chief condition responsible for the admission. However, this sequencing, which adheres to the ICD-10-CM Official Guidelines for Coding and Reporting, prevents the admission from grouping to the non-cervical spinal fusion MS-DRGs for spinal curvature caused by neuromuscular scoliosis.

As indicated in the proposed rule, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for cases reporting any of the ICD-10-CM diagnosis codes describing neuromuscular scoliosis (as listed previously) as a principal diagnosis with a non-cervical spinal fusion, which are currently assigned to MS-DRGs 459 and 460 (Spinal Fusion except Cervical with MCC and without MCC, respectively). Our findings are shown in the following table.

The data reveal that there was a total of 56,500 cases in MS-DRGs 459 and 460. We found 3,903 cases reported in MS-DRG 459, with an average length of stay of 8.6 days and average costs of $46,416. Of these 3,903 cases, 3 reported a principal diagnosis code of neuromuscular scoliosis, with an average length of stay of 15.3 days and average costs of $95,745. We found a total of 52,597 cases in MS-DRG 460, with an average length of stay of 3.3 Start Printed Page 42098days and average costs of $28,754. Of these 52,597 cases, 8 cases reported a principal diagnosis code describing neuromuscular scoliosis, with an average length of stay of 4.3 days and average costs of $71,406. We stated in the proposed rule that the data clearly demonstrate that the average costs and average length of stay for the small number of cases reporting a principal diagnosis of neuromuscular scoliosis are higher in comparison to all the cases in their assigned MS-DRG.

We also analyzed claims data 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, and without CC/MCC, respectively) to identify the spinal fusion cases reporting any of the ICD-10-CM codes describing neuromuscular scoliosis (as listed previously) as a secondary diagnosis. Our findings are shown in the following table.

As we noted in the proposed rule, the data indicate that there were 1,344 cases reported in MS-DRG 456, with an average length of stay of 12 days and average costs of $66,012. Of these 1,344 cases, 6 cases reported a secondary diagnosis code describing neuromuscular scoliosis, with an average length of stay of 18.2 days and average costs of $79,809. We found a total of 3,654 cases in MS-DRG 457, with an average length of stay of 6.2 days and average costs of $47,577. Twelve of these 3,654 cases reported a secondary diagnosis code describing neuromuscular scoliosis, with an average length of stay of 4.5 days and average costs of $31,646. Finally, the 1,245 cases reported in MS-DRG 458 had an average length of stay of 3.4 days and average costs of $34,179. Of these 1,245 cases, 6 cases reported neuromuscular scoliosis as a secondary diagnosis, with an average length of stay of 3.3 days and average costs of $31,117.

We reviewed the ICD-10-CM Tabular List of Diseases for subcategory M41.4 and confirmed there is a “Code also underlying condition” note. We also reviewed the ICD-10-CM Official Guidelines for Coding and Reporting for the “code also” note at Section 1.A.12.b., which states: “A `code also' note instructs that two codes may be required to fully describe a condition, but this note does not provide sequencing direction.” We stated in the proposed rule that our clinical advisors agreed that the sequencing of the ICD-10-CM diagnosis codes is determined by which condition leads to the encounter and is responsible for the admission. They also note that there may be instances in which the underlying cause of the diagnosis of neuromuscular scoliosis is not treated or responsible for the admission.

As discussed in the proposed rule and earlier, our review of the claims data shows that a small number of cases reported neuromuscular scoliosis either as a principal diagnosis in MS-DRGs 459 and 460 or as a secondary diagnosis in MS-DRGs 456, 457, and 458. We stated that our clinical advisors agreed that while the volume of cases is small, the average costs and average length of stay for the cases reporting neuromuscular scoliosis as a principal diagnosis with a non-cervical spinal fusion currently grouping to MS-DRGs 459 and 460 are more aligned with the average costs and average length of stay for the cases reporting neuromuscular scoliosis as a secondary diagnosis with a non-cervical spinal fusion currently grouping to MS-DRGs 456, 457, and 458. Therefore, for the reasons described above, we proposed to add the following ICD-10-CM codes describing neuromuscular scoliosis to the list of principal diagnosis codes for MS-DRGs 456, 457, and 458: M41.40, M41.44, M41.45, M41.46, and M41.47.

Comment: Commenters agreed with CMS' proposal to add ICD-10-CM diagnosis codes M41.40, M41.44, M41.45, M41.46, and M41.47 that describe neuromuscular scoliosis to the list of principal diagnosis codes for assignment to MS-DRGs 456, 457 and 458 (Spinal Fusion except Cervical with Spinal Curvature of Malignancy or Infection or Extensive Fusions with MCC, with CC, and without CC/MCC, respectively). The commenters stated that the proposal was reasonable, given the ICD-10-CM diagnosis codes and the information provided. A commenter specifically expressed appreciation for CMS' display of cost and length of stay data in the analysis, in addition to the clinical factors that support our decision making.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-CM diagnosis codes M41.40, M41.44, M41.45, M41.46, and M41.47 to the list of principal diagnosis codes for assignment to MS-DRGs 456, 457 and 458 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

c. Secondary Scoliosis and Secondary Kyphosis

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19202 through 19204), we received a request to add ICD-10-CM diagnosis codes describing secondary scoliosis and secondary kyphosis to the list of principal diagnoses for MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical with Spinal Curvature or Start Printed Page 42099Malignancy or Infection or Extensive Fusions with MCC, with CC, and without CC/MCC, respectively). As we indicated in the proposed rule, excluding the ICD-10-CM diagnosis codes that address the cervical spine, the following ICD-10-CM diagnosis codes are used to describe secondary scoliosis.

Excluding the ICD-10-CM diagnosis codes that address the cervical spine, the following ICD-10-CM diagnosis codes are used to describe secondary kyphosis.

The requestor stated that generally in cases of diagnoses of secondary scoliosis or kyphosis, the underlying cause of the condition is not treated or is not responsible for the admission. If a patient is admitted for surgery to correct non-cervical spinal curvature, it is appropriate to sequence the diagnosis of secondary scoliosis or secondary kyphosis as principal diagnosis. However, reporting a diagnosis of secondary scoliosis or secondary kyphosis as the principal diagnosis with a non-cervical spinal fusion procedure results in the case grouping to MS-DRG 459 or 460 (Spinal Fusion except Cervical with MCC and without MCC, respectively), instead of the spinal fusion with spinal curvature MS-DRGs 456, 457, and 458.

As indicated in the proposed rule, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 459 and 460 to determine the number of cases reporting an ICD-10-CM diagnosis code describing secondary scoliosis or secondary kyphosis as the principal diagnosis. Our findings are shown in the following table.

As shown in the table, we found a total of 3,903 cases in MS-DRG 459, with an average length of stay of 8.6 days and average costs of $46,416. Of these 3,903 cases, we found 4 cases that reported a principal diagnosis of secondary scoliosis, with an average length of stay of 7.3 days and average costs of $56,024. We also found 4 cases that reported a principal diagnosis of secondary kyphosis, with an average length of stay of 5.8 days and average costs of $41,883. For MS-DRG 460, we found a total of 52,597 cases with an average length of stay of 3.3 days and average costs of $28,754. Of these 52,597 cases, we found 34 cases that reported a principal diagnosis of secondary scoliosis, with an average length of stay of 3.6 days and average costs of $34,424. We found 31 cases that reported a principal diagnosis of secondary kyphosis in MS-DRG 460, with an average length of stay of 4.6 days and average costs of $42,315.

We also analyzed claims data for MS-DRGs 456, 457, and 458 to determine the number of cases reporting an ICD-10-CM diagnosis code describing secondary scoliosis or secondary kyphosis as a secondary diagnosis. Our findings are shown in the following table.

Start Printed Page 42100

As we stated in the proposed rule, the data indicate that there were 1,344 cases in MS-DRG 456, with an average length of stay of 12 days and average costs of $66,012. Of these 1,344 cases, there were 37 cases that reported a secondary diagnosis of secondary scoliosis, with an average length of stay of 7.7 days and average costs of $58,009. There were also 52 cases in MS-DRG 456 reporting a secondary diagnosis of secondary kyphosis, with an average length of stay of 12 days and average costs of $78,865. In MS-DRG 457, there was a total of 3,654 cases, with an average length of stay of 6.2 days and average costs of $47,577. Of these 3,654 cases, there were 187 cases that reported secondary scoliosis as a secondary diagnosis, with an average length of stay of 4.9 days and average costs of $37,655. In MS-DRG 457, there were also 114 cases that reported a secondary diagnosis of secondary kyphosis, with an average length of stay of 5.2 days and average costs of $37,357. Finally, there was a total of 1,245 cases in MS-DRG 458, with an average length of stay of 3.4 days and average costs of $34,179. Of these 1,245 cases, there were 190 cases that reported a secondary diagnosis of secondary scoliosis, with an average length of stay of 3 days and average costs of $29,052. There were 39 cases in MS-DRG 458 that reported a secondary diagnosis of secondary kyphosis, with an average length of stay of 3.7 days and average costs of $31,015.

We stated in the proposed rule that our clinical advisors agreed that the average length of stay and average costs for the small number of cases reporting secondary scoliosis or secondary kyphosis as a principal diagnosis with a non-cervical spinal fusion currently grouping to MS-DRGs 459 and 460 are generally more aligned with the average length of stay and average costs for the cases reporting secondary scoliosis or secondary kyphosis as a secondary diagnosis with a non-cervical spinal fusion currently grouping to MS-DRGs 456, 457, and 458. They also noted that there may be instances in which the underlying cause of the diagnosis of secondary scoliosis or secondary kyphosis is not treated or responsible for the admission. Therefore, for the reasons described above, we proposed to add the following ICD-10-CM diagnosis codes describing secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for MS-DRGs 456, 457, and 458: M40.10, M40.14, M40.15, M41.50, M41.54, M41.55, M41.56, and M41.57.

Comment: Commenters agreed with CMS' proposal to add ICD-10-CM diagnosis codes M40.10, M40.14, M40.15, M41.50, M41.54, M41.55, M41.56, and M41.57 that describe secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for assignment to MS-DRGs 456, 457 and 458 (Spinal Fusion except Cervical with Spinal Curvature of Malignancy or Infection or Extensive Fusions with MCC, with CC, and without CC/MCC, respectively). The commenters stated that the proposal was reasonable, given the ICD-10-CM diagnosis codes and the information provided.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-CM diagnosis codes M40.10, M40.14, M40.15, M41.50, M41.54, M41.55, M41.56, and M41.57 that describe secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for assignment to MS-DRGs 456, 457 and 458 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

As also discussed in the proposed rule, during our review of MS-DRGs 456, 457, and 458, we found the following diagnosis codes that describe conditions involving the cervical region.

Start Printed Page 42101

We stated that our clinical advisors noted that because the diagnosis codes shown in the table above describe conditions involving the cervical region, they are not clinically appropriate for assignment to MS-DRGs 456, 457, and 458, which are defined by non-cervical spinal fusion procedures (with spinal curvature or malignancy or infection or extensive fusions). Therefore, our clinical advisors recommended that these codes be removed from the MS-DRG logic for these MS-DRGs. As such, in the FY 2020 IPPS/LTCH PPS proposed rule, we proposed to remove the diagnosis codes that describe conditions involving the cervical region as shown in the table above from MS-DRGs 456, 457, and 458.

Comment: Commenters agreed with the proposal to remove 34 diagnosis codes that describe conditions involving the cervical region from the list of principal diagnosis codes for MS-DRGs 456, 457, and 458, to improve clinical homogeneity and better reflect resource costs since these MS-DRGs are defined by non-cervical spinal fusion procedures. The commenters stated that the proposal was reasonable, given the ICD-10-CM diagnosis codes and the information provided.

Response: We appreciate the commenters' support. Therefore, we are finalizing our proposal to remove the ICD-10-CM diagnosis codes that describe conditions involving the cervical region as shown the table above from the list of principal diagnosis codes for MS-DRGs 456, 457, and 458 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract): Extracorporeal Shock Wave Lithotripsy (ESWL)

As discussed in the FY 2020 IPPS/LTCH PPS (84 FR 19204 through 19210), we received two separate, but related requests to add ICD-10-CM diagnosis code N13.6 (Pyonephrosis) and ICD-10-CM diagnosis code T83.192A (Other mechanical complication of indwelling ureteral stent, initial encounter) to the list of principal diagnosis codes for MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and without CC/MCC, respectively) in MDC 11 so that cases are assigned more appropriately when an Extracorporeal Shock Wave Lithotripsy (ESWL) procedure is performed.

As noted in the proposed rule, ICD-10-CM diagnosis code N13.6 currently groups to MS-DRGs 689 and 690 (Kidney and Urinary Tract Infections with MCC and without MCC, respectively) and ICD-10-CM diagnosis code T83.192A currently groups to MS-DRGs 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC, with CC, and without CC/MCC, respectively).

As stated in the proposed rule, the ICD-10-PCS procedure codes for identifying procedures involving ESWL are designated as non-O.R. procedures and are shown in the following table.

Start Printed Page 42102

Pyonephrosis can be described as an infection of the kidney with pus in the upper collecting system which can progress to obstruction. Patients with an obstruction in the upper urinary tract due to urinary stones (calculi), tumors, fungus balls or ureteropelvic obstruction (UPJ) may also have a higher risk of developing pyonephrosis. If pyonephrosis is not recognized and treated promptly, it can result in serious complications, including fistulas, septic shock, irreversible damage to the kidneys, and death.

As noted in the proposed rule and above, the requestor recommended that ICD-10-CM diagnosis codes N13.6 and T83.192A be added to the list of principal diagnosis codes for MS-DRGs 691 and 692. There are currently four MS-DRGs that group cases for diagnoses involving urinary stones, which are subdivided to identify cases with and without an ESWL procedure: MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with and without CC/MCC, respectively) and MS-DRGs 693 and 694 (Urinary Stones without ESW Lithotripsy with and without MCC, respectively).

The requestor stated that when patients who have been diagnosed with hydronephrosis secondary to renal and ureteral calculus obstruction undergo an ESWL procedure, ICD-10-CM diagnosis code N13.2 (Hydronephrosis with renal and ureteral calculous obstruction) is reported and groups to MS-DRGs 691 and 692. However, if a patient with a diagnosis of hydronephrosis has a urinary tract infection (UTI) in addition to a renal calculus obstruction and undergoes an ESWL procedure, ICD-10-CM diagnosis code N13.6 must be coded and reported as the principal diagnosis, which groups to MS-DRGs 689 and 690. The requestor stated that ICD-10-CM diagnosis code N13.6 should be grouped to MS-DRGs 691 and 692 when reported as a principal diagnosis because this grouping will more appropriately reflect resource consumption for patients who undergo an ESWL procedure for obstructive urinary calculi, while also receiving treatment for urinary tract infections.

With regard to ICD-10-CM diagnosis code T83.192A, the requestor believed that when an ESWL procedure is performed for the treatment of calcifications within and around an indwelling ureteral stent, it is comparable to an ESWL procedure performed for the treatment of urinary calculi. Therefore, the requestor recommended adding ICD-10-CM diagnosis code T83.192A to MS-DRGs 691 and 692 when reported as a principal diagnosis and an ESWL procedure is also reported on the claim.

We stated in the proposed rule that, to analyze these separate, but related requests, we first reviewed the reporting of ICD-10-CM diagnosis code N13.6 within the ICD-10-CM classification. We noted that ICD-10-CM diagnosis code N13.6 is to be assigned for conditions identified in the code range N13.0-N13.5 with infection. (Codes in this range describe hydronephrosis with obstruction.) Infection may be documented by the patient's provider as urinary tract infection (UTI) or as specific as acute pyelonephritis. We agreed with the requestor that if a patient with a diagnosis of hydronephrosis has a urinary tract infection (UTI) in addition to a renal calculus obstruction and undergoes an ESWL procedure, ICD-10-CM diagnosis code N13.6 must be coded and reported as the principal diagnosis, which groups to MS-DRGs 689 and 690. In this case scenario, we stated that the ESWL procedure is designated as a non-O.R. procedure and does not impact the MS-DRG assignment when reported with ICD-10-CM diagnosis code N13.6.

The ICD-10-CM classification instructs that when both a urinary obstruction and a genitourinary infection co-exist, the correct code assignment for reporting is ICD-10-CM diagnosis code N13.6, which is appropriately grouped to MS-DRGs 689 and 690 (Kidney and Urinary Tract Infections with MCC and without MCC, respectively) because it describes a type of urinary tract infection. Therefore, in response to the requestor's suggestion that ICD-10-CM diagnosis code N13.6 be grouped to MS-DRGs 691 and 692 when reported as a principal diagnosis to more appropriately reflect resource consumption for patients who undergo an ESWL procedure for obstructive urinary calculi while also receiving treatment for urinary tract infections, we noted in the proposed rule that the ICD-10-CM classification provides instruction to identify the conditions reported with ICD-10-CM diagnosis code N13.6 as an infection, and not as urinary stones. We stated that our clinical advisors agreed with this classification and the corresponding MS-DRG assignment for diagnosis code N13.6. In addition, our clinical advisors noted that an ESWL procedure is a non-O.R. procedure and we stated that they do not believe that this procedure is a valid indicator of resource consumption for cases that involve an infection and obstruction. We stated that our clinical advisors believe that the resources used for a case that involves an infection and an obstruction are clinically distinct from the cases that involve an obstruction only in the course of treatment. Therefore, our clinical advisors did not agree with the request to add ICD-10-CM diagnosis code N13.6 to the list of principal diagnoses for MS-DRGs 691 and 692.

As also indicated in the proposed rule, we also performed various analyses of claims data to evaluate this request. We analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 689 and 690 to identify cases reporting ICD-10-CM diagnosis code N13.6 as the principal diagnosis with and without an ESWL procedure. Our findings are reflected in the table below.

Start Printed Page 42103

For MS-DRG 689, we found a total of 68,020 cases with an average length of stay of 4.8 days and average costs of $7,873. Of those 68,020 cases, we found 1,024 cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis with an average length of stay of 6.1 days and average costs of $13,809. Of those 1,024 cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis, there were 6 cases that also reported an ESWL procedure with an average length of stay of 14.2 days and average costs of $45,489. For MS-DRG 690, we found a total of 131,999 cases with an average length of stay of 3.5 days and average costs of $5,692. Of those 131,999 cases, we found 4,625 cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis with an average length of stay of 3.6 days and average costs of $5,483. Of those 4,625 cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis, there were 24 cases that also reported an ESWL procedure with an average length of stay of 4.8 days and average costs of $14,837.

As we stated in the proposed rule, the data indicate that the 1,024 cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis in MS-DRG 689 have a longer average length of stay (6.1 days versus 4.8 days) and higher average costs ($13,809 versus $7,873) compared to all the cases in MS-DRG 689. The data also indicate that the 6 cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis that also reported an ESWL procedure have a longer average length of stay (14.2 days versus 4.8 days) and higher average costs ($45,489 versus $7,873) in comparison to all the cases in MS-DRG 689. We found similar results for cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis with an ESWL procedure in MS-DRG 690, where the average length of stay was slightly longer (4.8 days versus 3.5 days) and the average costs were higher ($14,837 versus $5,692).

We then conducted further analysis for the six cases in MS-DRG 689 that reported a principal diagnosis of pyonephrosis with ESWL to determine what factors may be contributing to the longer lengths of stay and higher average costs. Specifically, we analyzed the MCC conditions that were reported across the six cases. Our findings are shown in the table below.

We found seven secondary diagnosis MCC conditions reported among the six cases in MS-DRG 689 that had a principal diagnosis of pyonephrosis with ESWL. We stated that these MCC conditions appear to have contributed to the longer lengths of stay and higher average costs for those six cases. As shown in the table above, the overall Start Printed Page 42104average length of stay for the cases reporting these conditions is 12.8 days with average costs of $39,069, which we stated in the proposed rule is consistent with the average length of stay of 14.2 days and average costs of $45,489 for the cases in MS-DRG 689 that had a principal diagnosis of pyonephrosis with ESWL.

We then analyzed the 24 cases in MS-DRG 690 that reported a principal diagnosis of pyonephrosis with ESWL to determine what factors may be contributing to the longer lengths of stay and higher average costs. Specifically, we analyzed the CC conditions that were reported across the 24 cases. Our findings are shown in the table below.

Start Printed Page 42105

We found 37 secondary diagnosis CC conditions reported among the 24 cases in MS-DRG 690 that had a principal diagnosis of pyonephrosis with ESWL. We stated that these CC conditions appear to have contributed to the longer length of stay and higher average costs for those 24 cases. As shown in the table above, the overall average length of stay for the cases reporting these conditions is 6.6 days with average costs of $18,173, which we stated is higher, although comparable, to the average length of stay of 4.8 days and average costs of $14,837 for the cases in MS-DRG 690 that had a principal diagnosis of pyonephrosis with ESWL. We noted that it appears that 1 of the 24 cases had at least 4 secondary diagnosis CC conditions (F33.1, I48.1, I50.22, and J96.10) with an average length of stay of 12 days and average costs of $55,034, which we believed contributed greatly overall to the longer length of stay and higher average costs for those secondary diagnosis CC conditions reported among the 24 cases.

We stated that our clinical advisors agreed that the resource consumption for the 6 cases in MS-DRG 689 and the 24 cases in MS-DRG 690 that reported a principal diagnosis of pyonephrosis with ESWL cannot be directly attributed to ESWL and believe that it is the secondary diagnosis MCC and CC conditions that are the major contributing factors to the longer average length of stay and higher average costs for these cases.

As also indicated in the proposed rule, we also analyzed claims data for MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and without CC/MCC, respectively) and MS-DRGs 693 and 694 (Urinary Stones without ESW Lithotripsy with MCC and without MCC, respectively) to identify claims reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a secondary diagnosis. Our findings are shown in the following table.

Start Printed Page 42106

As shown in the table above, in MS-DRG 691, there was a total of 140 cases with an average length of stay of 3.9 days and average costs of $11,997. Of those 140 cases, there were 3 cases that reported pyonephrosis as a secondary diagnosis and an ESWL procedure with an average length of stay of 8.0 days and average costs of $24,280. There was a total of 124 cases found in MS-DRG 692 with an average length of stay of 2.1 days and average costs of $8,326. We stated in the proposed rule that there were no cases in MS-DRG 692 that reported pyonephrosis as a secondary diagnosis with an ESWL procedure. For MS-DRG 693, there was a total of 1,315 cases with an average length of stay of 5.1 days and average costs of $9,668. Of those 1,315 cases, there were 16 cases reporting pyonephrosis as a secondary diagnosis with an average length of stay of 5.5 days and average costs of $9,962. For MS-DRG 694, there was a total of 7,240 cases with an average length of stay of 2.7 days and average costs of $5,263. Of those 7,240 cases, there were 89 cases reporting pyonephrosis as a secondary diagnosis with an average length of stay of 3.5 days and average costs of $6,678.

Similar to the process described above, we then conducted further analysis for the three cases in MS-DRG 691 that reported a secondary diagnosis of pyonephrosis with ESWL to determine what factors may be contributing to the longer lengths of stay and higher average costs. Specifically, we analyzed what other MCC and CC conditions were reported across the three cases. We stated in the proposed rule that we found no other MCC conditions reported for those three cases. Our findings for the CC conditions reported for those three cases are shown in the table below.

We found six secondary diagnosis CC conditions reported among the three cases in MS-DRG 691 that had a secondary diagnosis of pyonephrosis with ESWL. We stated in the proposed rule that these CC conditions appear to have contributed to the longer lengths of stay and higher average costs for those three cases. As shown in the table above, the overall average length of stay for the cases reporting these conditions is 6.4 days with average costs of $20,181, which we stated is more consistent with the average length of stay of 8.0 days and average costs of $24,280 for the cases in MS-DRG 691 that had a secondary diagnosis of pyonephrosis with ESWL.

We stated in the proposed rule that our clinical advisors believe that the resource consumption for those three cases cannot be directly attributed to ESWL and that it is the secondary diagnosis CC conditions reported in addition to pyonephrosis, which is also designated as a CC condition, that are the major contributing factors for the longer average lengths of stay and higher average costs for these cases in MS-DRG 691.

As indicated in the proposed rule, we did not conduct further analysis for the 16 cases in MS-DRG 693 or the 89 cases in MS-DRG 694 that reported a secondary diagnosis of pyonephrosis because MS-DRGs 693 and 694 do not include ESWL procedures and the average length of stay and average costs for those cases were consistent with the Start Printed Page 42107data findings for all of the cases in their assigned MS-DRG.

As discussed earlier in this section and the proposed rule, the requestor suggested that ICD-10-CM diagnosis code N13.6 should be grouped to MS-DRGs 691 and 692 when reported as a principal diagnosis because this grouping will more appropriately reflect resource consumption for patients who undergo an ESWL procedure for obstructive urinary calculi, while also receiving treatment for urinary tract infections. However, as we stated in the proposed rule, based on the results of the data analysis and input from our clinical advisors, we believe that cases for which ICD-10-CM diagnosis code N13.6 was reported as a principal diagnosis or as a secondary diagnosis with an ESWL procedure should not be utilized as an indicator for increased utilization of resources based on the performance of an ESWL procedure. Rather, we stated that we believe that the resource consumption is more likely the result of secondary diagnosis CC and/or MCC diagnosis codes.

In the proposed rule, with respect to the requestor's concern that cases reporting ICD-10-CM diagnosis code T83.192A (Other mechanical complication of indwelling ureteral stent, initial encounter) and an ESWL procedure are not appropriately assigned and should be added to the list of principal diagnoses for MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and without CC/MCC, respectively), we stated that our clinical advisors note that ICD-10-CM diagnosis code T83.192A is not necessarily indicative of a patient having urinary stones. As such, they did not support adding ICD-10-CM diagnosis code T83.192A to the list of principal diagnosis codes for MS-DRGs 691 and 692.

As indicated in the proposed rule, we analyzed claims data to identify cases reporting ICD-10-CM diagnosis code T83.192A as a principal diagnosis with ESWL in MS-DRGs 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC, with CC, and without CC/MCC, respectively). Our findings are shown in the following table.

For MS-DRG 698, there was a total of 56,803 cases reported, with an average length of stay of 6.1 days and average costs of $11,220. Of these 56,803 cases, 35 cases reported ICD-10-CM diagnosis code T83.192A as the principal diagnosis, with an average length of stay of 7.1 days and average costs of $14,574. We stated that there were no cases that reported an ESWL procedure with ICD-10-CM diagnosis code T83.192A as the principal diagnosis in MS-DRG 698. For MS-DRG 699, there was a total of 33,693 cases reported, with an average length of stay of 4.2 days and average costs of $7,348. Of the 33,693 cases in MS-DRG 699, there were 63 cases that reported ICD-10-CM diagnosis code T83.192A as the principal diagnosis, with an average length of stay of 4.1 days and average costs of $7,652. We stated that there was only 1 case in MS-DRG 699 that reported ICD-10-CM diagnosis code T83.192A as the principal diagnosis with an ESWL procedure, with an average length of stay of 3 days and average costs of $7,986. For MS-DRG 700, there was a total of 3,719 cases reported, with an average length of stay of 3 days and average costs of $5,356. We stated that there were no cases that reported ICD-10-CM diagnosis code T83.192A as the principal diagnosis in MS-DRG 700. Of the 98 cases in MS-DRGs 698 and 699 that reported a principal diagnosis of other mechanical complication of indwelling ureteral stent (diagnosis code T83.192A), only 1 case also reported an ESWL procedure. Based on the results of our data analysis and input from our clinical advisors, we did not propose to add ICD-10-CM diagnosis code T83.192A to the list of principal diagnosis codes for MS-DRGs 691 and 692.

Comment: Commenters supported CMS' proposal to not add ICD-10-CM diagnosis codes N13.6 and T83.192A to the list of principal diagnosis codes for MS-DRGs 691 and 692. Commenters commended CMS for conducting the analysis and continuing to make further refinements to the MS-DRGs. The commenters stated that the proposal was reasonable, given the ICD-10-CM diagnosis codes and the information provided.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to not add ICD-10-CM diagnosis codes N13.6 and T83.192A to the list of principal diagnosis codes for MS-DRGs 691 and 692 in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule, in connection with these requests, our clinical advisors recommended that we evaluate the frequency with which ESWL is reported in the inpatient setting across all the MS-DRGs. Therefore, we also analyzed claims data from the September 2018 update of the FY 2018 MedPAR file to identify the other MS-DRGs to which claims reporting an ESWL procedure were reported. Our findings are shown in the following table.

Start Printed Page 42108

As noted in the proposed rule, our findings with respect to the cases reporting an ESWL procedure in each of these MS-DRGs, as compared to all cases in the applicable MS-DRG, are shown in the table below.

Start Printed Page 42109

Start Printed Page 42110

We stated in the proposed rule that our data analysis indicates that, generally, the subset of cases reporting an ESWL procedure appear to have a longer average length of stay and higher average costs when compared to all the cases in their assigned MS-DRG. However, we noted in the proposed rule that this same subset of cases also reported at least one O.R. procedure and/or diagnosis designated as a CC or an MCC, which our clinical advisors believe are contributing factors to the longer average lengths of stay and higher average costs, with the exception of the case assigned to MS-DRG 700, which is a medical MS-DRG and has no CC or MCC conditions in the logic. Therefore, we stated that our clinical advisors do not believe that cases reporting an ESWL procedure should be considered as an indication of increased resource consumption for inpatient hospitalizations.

Our clinical advisors also suggested that we evaluate the reporting of ESWL procedures in the inpatient setting over the past few years. We analyzed claims data for MS-DRGs 691 and 692 from the FY 2012 through the FY 2016 MedPAR Start Printed Page 42111files, which were used in our analysis of claims data for MS-DRG reclassification requests effective for FY 2014 through FY 2018. We note that the analysis findings shown in the following table reflect ICD-9-CM, ICD-10-CM and ICD-10-PCS coded claims data.

Start Printed Page 42112

As indicated in the proposed rule, the data show a steady decline in the number of cases reporting urinary stones with an ESWL procedure for the Start Printed Page 42113past 5 years. As previously noted, the total number of cases reporting urinary stones with an ESWL procedure for MS-DRGs 691 and 692 based on our analysis of the September 2018 update of the FY 2018 MedPAR file was 264, which again is a decline from the prior year's figures. As discussed throughout this section and in the proposed rule, an ESWL procedure is a non-O.R. procedure which currently groups to medical MS-DRGs 691 and 692. Therefore, we stated in the proposed rule that because an ESWL procedure is a non-O.R. procedure and due to decreased usage of this procedure in the inpatient setting for the treatment of urinary stones, our clinical advisors believe that there is no longer a clinical reason to subdivide the MS-DRGs for urinary stones (MS-DRGs 691, 692, 693, and 694) based on ESWL procedures.

Therefore, we proposed to delete MS-DRGs 691 and 692 and to revise the titles for MS-DRGs 693 and 694 from “Urinary Stones without ESW Lithotripsy with MCC” and “Urinary Stones without ESW Lithotripsy without MCC”, respectively to “Urinary Stones with MCC” and “Urinary Stones without MCC”, respectively.

Comment: Commenters supported the proposal to delete MS-DRGs 691 and 692 and to revise the titles for MS-DRGs 693 and 694 from “Urinary Stones without ESW Lithotripsy with MCC” and “Urinary Stones without ESW Lithotripsy without MCC”, respectively to “Urinary Stones with MCC” and “Urinary Stones without MCC”. Commenters agreed that deleting MS-DRGs 691 and 692 and revising the titles for MS-DRGs 693 and 694 will better reflect utilization of resources for cases reporting urinary stones with a EWSL procedure as well as provide for appropriate payment for the procedures. The commenters noted that the proposal was reasonable, given the data, the ICD-10-PCS procedure codes, and information provided.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to delete MS-DRGs 691 and 692 and to revise the titles for MS-DRGs 693 and 694 from “Urinary Stones without ESW Lithotripsy with MCC” and “Urinary Stones without ESW Lithotripsy without MCC”, respectively to “Urinary Stones with MCC” and “Urinary Stones without MCC”, in the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

8. MDC 12 (Diseases and Disorders of the Male Reproductive System): Diagnostic Imaging of Male Anatomy

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19210 through 10211), we received a request to review four ICD-10-CM diagnosis codes describing body parts associated with male anatomy that are currently assigned to MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 302 and 303 (Atherosclerosis with MCC and Atherosclerosis without MCC, respectively). The four codes are listed in the following table.

The requestor recommended that the four diagnosis codes shown in this table be considered for assignment to MDC 12 (Diseases and Disorders of the Male Reproductive System), consistent with other diagnosis codes that include the male anatomy. However, the requestor did not suggest a specific MS-DRG assignment within MDC 12.

As indicated in the proposed rule, we examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 302 and 303 to identify any cases reporting a diagnosis code for abnormal radiologic findings on diagnostic imaging of the testicles. We did not find any such cases.

We stated in the proposed rule that our clinical advisors reviewed this request and determined that the assignment of diagnosis codes R93.811, R93.812, R93.813, and R93.819 to MDC 5 in MS-DRGs 302 and 303 was a result of replication from ICD-9-CM diagnosis code 793.2 (Nonspecific (abnormal) findings on radiological and other examination of other intrathoracic organs) which was assigned to those MS-DRGs. Therefore, we stated that our clinical advisors supported reassignment of these codes to MDC 12. Our clinical advisors agreed that this reassignment is clinically appropriate because these diagnosis codes are specific to the male anatomy, consistent with other diagnosis codes in MDC 12 that include the male anatomy. Specifically, we stated in the proposed rule that our clinical advisors suggested reassignment of the four diagnosis codes to MS-DRGs 729 and 730 (Other Male Reproductive System Diagnoses with CC/MCC and without CC/MCC, respectively). Therefore, we proposed to reassign ICD-10-CM diagnosis codes R93.811, R93.812, R93.813, and R93.819 from MDC 5 in MS-DRGs 302 and 303 to MDC 12 in MS-DRGs 729 and 730.

Comment: Commenters supported our proposed reassignment of ICD-10-CM diagnosis codes R93.811, R93.812, R93.813, and R93.819 from MDC 5 to MDC 12.

Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal to reassign ICD-10-CM diagnosis codes R93.811, R93.812, R93.813, and R93.819 from MDC 5 in MS-DRGs 302 and 303 to MDC 12 in MS-DRGs 729 and 730.

9. MDC 14 (Pregnancy, Childbirth and the Puerperium): Reassignment of Diagnosis Code O99.89

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19211 through 19214), we received a request to review the MS-DRG assignment for cases reporting ICD-10-CM diagnosis code O99.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium). The requestor stated that it is experiencing Start Printed Page 42114MS-DRG shifts to MS-DRG 769 (Postpartum and Post Abortion Diagnoses with O.R. Procedure) as a result of the new obstetric MS-DRG logic when ICD-10-CM diagnosis code O99.89 is reported as a principal diagnosis in the absence of a delivery code on the claim (to indicate the patient delivered during that hospitalization), or when there is no other secondary diagnosis code on the claim indicating that the patient is in the postpartum period. As we stated in the proposed rule, according to the requestor, claims reporting ICD-10-CM diagnosis code O99.89 as a principal diagnosis for conditions described as occurring during the antepartum period that are reported with an O.R. procedure are grouping to MS-DRG 769. In the example provided by the requestor, ICD-10-CM diagnosis code O99.89 was reported as the principal diagnosis, with ICD-10-CM diagnosis codes N13.2 (Hydronephrosis with renal and ureteral calculous obstruction) and Z3A.25 (25 weeks of gestation of pregnancy) reported as secondary diagnoses with ICD-10-PCS procedure code 0T68DZ (Dilation of right ureter with intraluminal device, endoscopic approach), resulting in assignment to MS-DRG 769. The requestor noted that, in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41212), we stated “If there was not a principal diagnosis of abortion reported on the claim, the logic asks if there was a principal diagnosis of an antepartum condition reported on the claim. If yes, the logic then asks if there was an O.R. procedure reported on the claim. If yes, the logic assigns the case to one of the proposed new MS-DRGs 817, 818, or 819.” In the requestor's example, there were not any codes reported to indicate that the patient was in the postpartum period, nor was there a delivery code reported on the claim. Therefore, the requestor suggested that a more appropriate assignment for ICD-10-CM diagnosis code O99.89 may be MS-DRGs 817, 818, and 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with CC and without CC/MCC, respectively).

As noted in the proposed rule, in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41202 through 41216), we finalized our proposal to restructure the MS-DRGs within MDC 14 (Pregnancy, Childbirth and the Puerperium) which established new concepts for the GROUPER logic. We stated that, as a result of the modifications made, ICD-10-CM diagnosis code O99.89 was classified as a postpartum condition and is currently assigned to MS-DRG 769 (Postpartum and Post Abortion Diagnoses with O.R. Procedure) and MS-DRG 776 (Postpartum and Post Abortion Diagnoses without O.R. Procedure) under the Version 36 ICD-10 MS-DRGs. As also discussed and displayed in Diagram 2 in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41212 through 41213), we explained in the proposed rule that the logic asks if there was a principal diagnosis of a postpartum condition reported on the claim. If yes, the logic then asks if there was an O.R. procedure reported on the claim. If yes, the logic assigns the case to MS-DRG 769. If no, the logic assigns the case to MS-DRG 776. Therefore, we stated in the proposed rule that the MS-DRG assignment for the example provided by the requestor is grouping accurately according to the current GROUPER logic.

As indicated in the proposed rule, we analyzed claims data from the September 2018 update of the FY 2018 MedPAR file for cases reporting diagnosis code O99.89 in MS-DRGs 769 and 776 as a principal diagnosis or as a secondary diagnosis. Our findings are shown in the following table.

As shown in the table above, we found a total of 91 cases in MS-DRG 769 with an average length of stay of 4.3 days and average costs of $11,015. Of these 91 cases, 7 cases reported ICD-10-CM diagnosis code O99.89 as a principal diagnosis with an average length of stay of 5.6 days and average costs of $19,059, and 61 cases reported ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 12.1 days and average costs of $41,717. For MS-DRG 776, we found a total of 560 cases with an average length of stay of 3.1 days and average costs of $5,332. Of these 560 cases, 57 cases reported ICD-10-CM diagnosis code O99.89 as a principal diagnosis with an average length of stay of 3.5 days and average costs of $6,439. We stated in the proposed rule that there were no cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis in MS-DRG 776.

For MS-DRG 769, the data show that the 68 cases reporting ICD-10-CM diagnosis code O99.89 as a principal or secondary diagnosis have a longer average length of stay and higher average costs compared to all the cases in MS-DRG 769. For MS-DRG 776, the data show that the 57 cases reporting a principal diagnosis of ICD-10-CM diagnosis code O99.89 have a similar average length of stay compared to all the cases in MS-DRG 776 (3.5 days versus 3.1 days) and average costs that are consistent with the average costs of all cases in MS-DRG 776 ($6,439 versus $5,332).

We noted in the proposed rule that the description for ICD-10-CM diagnosis code O99.89 “Other specified diseases and conditions complicating pregnancy, childbirth and the Start Printed Page 42115puerperium”, describes conditions that may occur during the antepartum period (pregnancy), during childbirth, or during the postpartum period (puerperium). In addition, in the ICD-10-CM Tabular List of Diseases, there is an inclusion term at subcategory O99.8- instructing users that the reporting of any diagnosis codes in that subcategory is intended for conditions that are reported in certain ranges of the classification. Specifically, the inclusion term states “Conditions in D00-D48, H00-H95, M00-N99, and Q00-Q99.” There is also an instructional note to “Use additional code to identify condition.” As a result, we stated that ICD-10-CM diagnosis code O99.89 may be reported to identify conditions that occur during the antepartum period (pregnancy), during childbirth, or during the postpartum period (puerperium). However, it is not restricted to the reporting of obstetric specific conditions only. In the example provided by the requestor, ICD-10-CM diagnosis code O99.89 was reported as the principal diagnosis with ICD-10-CM diagnosis code N13.2 (Hydronephrosis with renal and ureteral calculous obstruction) as a secondary diagnosis. In the proposed rule, we stated that ICD-10-CM diagnosis code N13.2 is within the code range referenced earlier in this section (M00-N99) and qualifies as an appropriate condition for reporting according to the instruction.

As noted in the proposed rule and earlier, ICD-10-CM diagnosis code O99.89 is intended to report conditions that occur during the antepartum period (pregnancy), during childbirth, or during the postpartum period (puerperium) and is not restricted to the reporting of obstetric specific conditions only. However, because the diagnosis code description includes three distinct obstetric related stages, we stated in the proposed rule that it is not clear what stage the patient is in by this single code. For example, upon review of subcategory O99.8-, we recognized that the other ICD-10-CM diagnosis code sub-subcategories are expanded to include unique codes that identify the condition as occurring or complicating pregnancy, childbirth or the puerperium. Specifically, sub-subcategory O99.81- (Abnormal glucose complicating pregnancy, childbirth, and the puerperium) is expanded to include the following ICD-10-CM diagnosis codes.

These codes specifically identify at what stage the abnormal glucose was a complicating condition. We stated in the proposed rule that, because each code uniquely identifies a stage, the code can be easily classified under MDC 14 as an antepartum condition (ICD-10-CM diagnosis code O99.810), occurring during a delivery episode (ICD-10-CM diagnosis code O99.814), or as a postpartum condition (ICD-10-CM diagnosis code O99.815). The same is not true for ICD-10-CM diagnosis code O99.89 because it includes all three stages in the single code.

Therefore, we examined the number and type of secondary diagnoses reported with ICD-10-CM diagnosis code O99.89 as a principal diagnosis for MS-DRGs 769 and 776 to identify how many secondary diagnoses were related to other obstetric conditions and how many were related to non-obstetric conditions.

As shown in the table above, there was a total of 59 secondary diagnoses reported with diagnosis code O99.89 as the principal diagnosis for MS-DRG 769. Of those 59 secondary diagnoses, 13 were obstetric (OB) related diagnosis codes (11 antepartum, 1 postpartum and 1 delivery) and 46 were non-obstetric (Non-OB) related diagnosis codes. For MS-DRG 776, there was a total of 376 secondary diagnoses reported with diagnosis code O99.89 as the principal diagnosis. Of those 376 secondary diagnoses, 113 were obstetric (OB) related diagnosis codes (88 antepartum, 19 postpartum and 6 delivery) and 263 were non-obstetric (Non-OB) related diagnosis codes.

The data reflect that, for MS-DRGs 769 and 776, the number of secondary diagnoses identified as OB-related antepartum diagnoses is greater than the number of secondary diagnoses identified as OB-related postpartum diagnoses (99 antepartum diagnoses versus 20 postpartum diagnoses). The data also indicate that, of the 435 secondary diagnoses reported with ICD-10-CM diagnosis code O99.89 as the principal diagnosis, 309 (71 percent) of those secondary diagnoses were non-OB-related diagnosis codes. Because there was a greater number of secondary Start Printed Page 42116diagnoses identified as OB-related antepartum diagnoses compared to the OB-related postpartum diagnoses within the postpartum MS-DRGs when ICD-10-CM diagnosis code O99.89 was reported as the principal diagnosis, we performed further analysis of diagnosis code O99.89 within the antepartum MS-DRGs.

Under the Version 35 ICD-10 MS-DRGs, diagnosis code O99.89 was classified as an antepartum condition and was assigned to MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications). Therefore, we also analyzed claims data for MS-DRGs 817, 818 and 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with CC and without CC/MCC, respectively) and MS-DRGs 831, 832, and 833 (Other Antepartum Diagnoses without O.R. Procedure with MCC, with CC and without CC/MCC, respectively) for cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis. We noted in the proposed rule that the analysis for the proposed FY 2020 ICD-10 MS-DRGs is based upon the September 2018 update of the FY 2018 MedPAR claims data that were grouped through the ICD-10 MS-DRG GROUPER Version 36. Our findings are shown in this table.

As shown in the table above, we found a total of 63 cases in MS-DRG 817 with an average length of stay of 5.7 days and average costs of $14,948. Of these 63 cases, there were 8 cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 10.8 days and average costs of $24,359. For MS-DRG 818, we found a total of 78 cases with an average length of stay of 4.1 days and average costs of $9,343. Of these 78 cases, there were 7 cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 3.4 days and average costs of $14,182. For MS-DRG 819, we found a total of 25 cases with an average length of stay of 2.2 days and average costs of $5,893. Of these 25 cases, there was 1 case reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 1 day and average costs of $4,990.

For MS-DRG 831, we found a total of 747 cases with an average length of stay of 4.8 days and average costs of $7,714. Of these 747 cases, there were 127 cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 5.4 days and average costs of $7,050. For MS-DRG 832, we found a total of 1,142 cases with an average length of stay of 3.6 days and average costs of $5,159. Of these 1,142 cases, there were 145 cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 4.2 days and average costs of $5,656. For MS-DRG 833, we found a total of 537 cases with an average length of stay of 2.6 days and average costs of $3,807. Of these 537 cases, there were 47 cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with an average length of stay of 2.6 days and average costs of $3,307.

As we stated in the proposed rule, overall, there was a total of 335 cases reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis within the antepartum MS-DRGs. Of those 335 cases, 16 cases involved an O.R. procedure and 319 cases did not involve an O.R. procedure. The data indicate that ICD-10-CM diagnosis code O99.89 is reported more often as a secondary diagnosis within the antepartum MS-DRGs (335 cases) than it is reported as a principal or secondary diagnosis within the postpartum MS-DRGs (125 cases).

Further, we stated that our clinical advisors believe that, because ICD-10-CM diagnosis code O99.89 can be reported during the antepartum period (pregnancy), during childbirth, or during the postpartum period (puerperium), there is not a clear clinical indication as to which set of MS-DRGs (antepartum, delivery, or postpartum) would be the most Start Printed Page 42117appropriate assignment for this diagnosis code. They recommended that we collaborate with the National Center for Health Statistics (NCHS) at the Centers for Disease Control and Prevention (CDC), in consideration of a proposal to possibly expand ICD-10-CM diagnosis code O99.89 to become a sub-subcategory that would result in the creation of unique codes with a sixth digit character to specify which obstetric related stage the patient is in. For example, under subcategory O99.8-, a proposed new sub-subcategory for ICD-10-CM diagnosis code O99.89- could include the following proposed new diagnosis codes:

  • O99.890 (Other specified diseases and conditions complicating pregnancy);
  • O99.894 (Other specified diseases and conditions complicating childbirth); and
  • O99.895 (Other specified diseases and conditions complicating the puerperium).

We noted in the proposed rule that, if such a proposal to create this new sub-subcategory and new diagnosis codes were approved and finalized, it would enable improved data collection and more appropriate MS-DRG assignment, consistent with the current MS-DRG assignments of the existing obstetric related diagnosis codes. We stated, for instance, a new diagnosis code described as “complicating pregnancy” would be clinically aligned with the antepartum MS-DRGs, a new diagnosis code described as “complicating childbirth” would be clinically aligned with the delivery MS-DRGs, and a new diagnosis code described as “complicating the puerperium” would be clinically aligned with the postpartum MS-DRGs. (We note that all requests for new diagnosis codes require that a proposal be approved for discussion at a future ICD-10 Coordination and Maintenance Committee meeting.)

We stated in the proposed rule that, while our clinical advisors could not provide a strong clinical justification for classifying ICD-10-CM diagnosis code O99.89 as an antepartum condition versus as a postpartum condition for the reasons described above, they did consider the claims data to be informative as to how the diagnosis code is being reported for obstetric patients. In analyzing both the postpartum MS-DRGs and the antepartum MS-DRGs discussed earlier in this section, they agreed that the data clearly show that ICD-10-CM diagnosis code O99.89 is reported more frequently as a secondary diagnosis within the antepartum MS-DRGs than it is reported as a principal or secondary diagnosis within the postpartum MS-DRGs.

Based on our analysis of claims data and input from our clinical advisors, we proposed to reclassify ICD-10-CM diagnosis code O99.89 from a postpartum condition to an antepartum condition under MDC 14. We stated in the proposed rule that, if finalized, ICD-10-CM diagnosis code O99.89 would follow the logic as described in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41212) which asks if there was a principal diagnosis of an antepartum condition reported on the claim. If yes, the logic then asks if there was an O.R. procedure reported on the claim. If yes, the logic assigns the case to MS-DRG 817, 818, or 819. If no (there was not an O.R. procedure reported on the claim), the logic assigns the case to MS-DRG 831, 832, or 833.

Comment: Commenters supported the proposal to reclassify ICD-10-CM diagnosis code O99.89 from a postpartum condition to an antepartum condition under MDC 14. Commenters also agreed with the recommendation to expand diagnosis code O99.89 to create a new sub-subcategory that would result in the creation of unique codes with a sixth digit character to specify which obstetric related stage the patient is in.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to reclassify ICD-10-CM diagnosis code O99.89 from a postpartum condition to an antepartum condition. For FY 2020, cases reporting diagnosis code O99.89 will follow the logic as previously described in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41212) which asks if there was a principal diagnosis of an antepartum condition reported on the claim. If yes, the logic then asks if there was an O.R. procedure reported on the claim. If yes, the logic assigns the case to MS-DRG 817, 818, or 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with CC and without CC/MCC, respectively). If no (there was not an O.R. procedure reported on the claim), the logic assigns the case to MS-DRG 831, 832, or 833 (Other Antepartum Diagnoses without O.R. Procedure with MCC, with CC and without CC/MCC, respectively).

10. MDC 22 (Burns): Skin Graft to Perineum for Burn

As discussed in the FY 2020 IPPS/LTCH PPS (84 FR 19214 through 19215), we received a request to add seven ICD-10-PCS procedure codes that describe a skin graft to the perineum to MS-DRG 927 (Extensive Burns Or Full Thickness Burns with MV >96 Hours with Skin Graft) and MS-DRGs 928 and 929 (Full Thickness Burn with Skin Graft Or Inhalation Injury with CC/MCC and without CC/MCC, respectively) in MDC 22. The seven procedure codes are listed in the following table.

Start Printed Page 42118

As indicated in the proposed rule, these seven procedure codes are currently assigned to MS-DRGs 746 and 747 (Vagina, Cervix and Vulva Procedures with CC/MCC and without CC/MCC, respectively). In addition, we stated in the proposed rule that when reported in conjunction with a principal diagnosis in MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs), these codes group to MS-DRGs 907, 908, and 909 (Other O.R. Procedures For Injuries with MCC, with CC and without CC/MCC, respectively), and when reported in conjunction with a principal diagnosis in MDC 24 (Multiple Significant Trauma), these codes group to MS-DRGs 957, 958, and 959 (Other O.R. Procedures For Multiple Significant Trauma with MCC, with CC and without CC/MCC, respectively). In addition, we stated that these procedures are designated as non-extensive O.R. procedures and are assigned to MS-DRGs 987, 988 and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when a principal diagnosis that is unrelated to the procedure is reported on the claim.

The requestor provided an example in which it identified one case where a patient underwent debridement and split thickness skin graft (STSG) to the perineum area (only), and expressed concern that the case did not route to MS-DRGs 928 and 929 to recognize operating room resources. (We note that the requestor did not specify the diagnosis associated with this case nor the MS-DRG to which this one case was grouped.) The requestor stated that providers may document various terminologies for this anatomic site, including perineum, groin, and buttocks crease; therefore, when a provider deems a burn to affect the perineum as opposed to the groin or buttock crease, cases should route to MS-DRGs which compensate hospitals for skin grafting operating room resources. Therefore, the requestor recommended that the cited seven ICD-10-PCS codes be added to the list of procedure codes for a skin graft within MS-DRGs 927, 928, and 929.

As noted in the proposed rule, we reviewed this request by analyzing claims data from the September 2018 update of the FY 2018 MedPAR file for cases reporting any of the above seven procedure codes in MS-DRGs 746, 747, 907, 908, 909, 957, 958, 959, 987, 988, and 989. Our findings are shown in the following table.

As shown in the table above, the overall volume of cases reporting a skin graft to the perineum procedure is low, with a total of 6 cases found. In MS-DRG 746, we found a total of 1,344 cases with an average length of stay of 5 days and average costs of $11,847. The single case reporting a skin graft to the perineum procedure in MS-DRG 746 had a length of stay of 2 days and a cost of $10,830. In MS-DRG 907, we found a total of 7,843 cases with an average length of stay of 10 days and average costs of $28,919. The single case reporting a skin graft to the perineum procedure in MS-DRG 907 had a length of stay of 8 days and a cost of $21,909. In MS-DRG 908, we found a total of 9,286 cases with an average length of stay of 5.3 days and average costs of $14,601. The single case reporting a skin graft to the perineum procedure in MS-DRG 908 had a length of stay of 6 days and a cost of $8,410. In MS-DRG 988, we found a total of 8,391 cases with an average length of stay of 5.7 days and average costs of $12,294. The 2 cases reporting a skin graft to the perineum procedure in MS-DRG 988 had an average length of stay of 3 days and average costs of $6,906. In MS-DRG 989, we found a total of 1,551 cases with an average length of stay of 3.1 days and average costs of $8,171. The single case reporting a skin graft to the perineum procedure in MS-DRG 989 had a length of stay of 7 day and a cost of $14,080. We stated that we found no cases reporting a skin graft to the perineum procedure in MS-DRG 747, 909, 957, 958, 959, or 987. Further, we stated that cases reporting a skin graft to the perineum procedure generally had shorter length of stays and lower average costs than those of their assigned MS-DRGs overall.

We then analyzed claims data for MS-DRGs 927, 928, and 929 (the MS-DRGs to which the requestor suggested that these cases group) for all cases reporting a procedure describing a skin graft to the perineum listed in the table above to consider how the resources involved in the cases reporting a procedure describing a skin graft to the perineum compared to those of all cases in MS-DRGs 927, 928, and 929. Our findings are shown in the following table.

Start Printed Page 42119

As shown in the table above, for MS-DRG 927, we found a total of 146 cases with an average length of stay of 30.9 days and average costs of $147,903; no cases reporting a skin graft to the perineum procedure were found. For MS-DRG 928, we found a total of 1,149 cases with an average length of stay of 15.7 days and average costs of $45,523. We found 5 cases reporting a skin graft to the perineum procedure with an average length of stay of 39 days and average costs of $64,041. For MS-DRG 929, we found a total of 296 cases with an average length of stay of 7.9 days and average costs of $21,474; and no cases reporting a skin graft to the perineum procedure were found. We noted in the proposed rule that none of the 5 cases reporting a skin graft to the perineum in MS-DRGs 927, 928, and 929 reported a skin graft to the perineum procedure as the only operating room procedure. Therefore, we stated in the proposed rule that it is not possible to determine how much of the operating room resources for these 5 cases were attributable to the skin graft to the perineum procedure.

We further stated that our clinical advisors reviewed the claims data described above and noted that none of the cases reporting the seven identified procedure codes that grouped to MS-DRGs 746, 907, 908, 988, and 989 (listed in the table above) had a principal or secondary diagnosis of a burn, which suggests that these skin grafts were not performed to treat a burn. We stated that therefore, our clinical advisors believe that it would not be appropriate for these cases that report a skin graft to the perineum procedure to group to MS-DRGs 927, 928, and 929, which describe burns. Our clinical advisors state that the seven ICD-10-PCS procedure codes that describe a skin graft to the perineum are more clinically aligned with the other procedures in MS-DRGs 746 and 747, to which they are currently assigned. Therefore, we did not propose to add the seven identified procedure codes to MS-DRGs 927, 928, and 929 in the proposed rule.

Comment: Commenters did not support the proposal to not add ICD-10-PCS procedure codes 0HR9X73, 0HR9X74, 0HR9XJ3, 0HR9XJ4, 0HR9XJZ, 0HR9XK3, and 0HR9XK4 that describe a skin graft to the perineum to MS-DRGs 927, 928 and 929. The commenters noted that in the hypothetical scenario in which the principal diagnoses code T21.37XA, third degree burn of (female) perineum, or T21.36XA, third degree burn of the (male) perineum, is coded as the principal diagnosis in combination with ICD-10-PCS codes describing skin graft to the perineum, the case would group to MS-DRG 934 (Full Thickness Burn without Skin Graft or Inhalation Injury). A commenter stated that since CMS' DRG tables are referenced nationally by other payers, the GROUPER logic should change in spite of the fact that CMS's data reflects little or no volume for these cases.

Response: We appreciate the commenters' feedback.

In response to public comments, our clinical advisors reviewed the claims data in the September 2018 update of the FY 2018 MedPAR file and again noted that none of the cases reporting the seven identified procedure codes that grouped to MS-DRGs 746, 907, 908, 988, and 989 had a principal or secondary diagnosis of a burn. Therefore, our clinical advisors continue to believe that it would not be appropriate for these cases that report a skin graft to the perineum procedure to group to MS-DRGs 927, 928, and 929, which describe burns, in the absence of MedPAR data indicating that these skin grafts are performed to treat burns. Our clinical advisors believe that the seven ICD-10-PCS procedure codes that describe a skin graft to the perineum are more clinically aligned with the other procedures in MS-DRGs 746 and 747, to which they are currently assigned. As additional claims data becomes available, we can determine if future modifications to the assignment of these procedure codes are warranted at a later date.

Therefore, after consideration of the public comments we received, we are finalizing our proposal to maintain the current structure of MS-DRGs 927, 928 and 929 for FY 2020.

11. MDC 23 (Factors Influencing Health Status and Other Contacts With Health Services): Assignment of Diagnosis Code R93.89

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19216), we received a request to consider reassignment of ICD-10-CM diagnosis code R93.89 (Abnormal finding on diagnostic imaging of other specified body structures) from MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 302 and 303 (Atherosclerosis with and without MCC and Atherosclerosis without MCC, respectively) to MDC 23 (Factors Influencing Health Status and Other Contact with Health Services), consistent with other diagnosis codes that include abnormal findings. However, the requestor did not suggest a specific MS-DRG assignment within MDC 23.

As indicated in the proposed rule, we examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 302 and 303 and identified cases reporting diagnosis code R93.89. Our findings are shown in the following table.

Start Printed Page 42120

As shown in the table, for MS-DRG 302, there was a total of 3,750 cases with an average length of stay of 3.8 days and average costs of $7,956. Of these 3,750 cases, there were 3 cases reporting abnormal finding on diagnostic imaging of other specified body structures, with an average length of stay 7.7 days and average costs of $10,818. For MS-DRG 303, there was a total of 12,986 cases with an average length of stay of 2.3 days and average costs of $4,920. Of these 12,986 cases, there were 10 cases reporting abnormal finding on diagnostic imaging of other specified body structures, with an average length of stay 2 days and average costs of $3,416.

We stated in the proposed rule that our clinical advisors reviewed this request and determined that the assignment of diagnosis code R93.89 to MDC 5 in MS-DRGs 302 and 303 was a result of replication from ICD-9-CM diagnosis code 793.2 (Nonspecific (abnormal) findings on radiological and other examination of other intrathoracic organs), which was assigned to those MS-DRGs. Therefore, they supported reassignment of diagnosis code R93.89 to MDC 23. Our clinical advisors agree this reassignment is clinically appropriate as it is consistent with other diagnosis codes in MDC 23 that include abnormal findings from other nonspecified sites. Specifically, we stated in the proposed rule that our clinical advisors suggested reassignment of diagnosis code R89.93 to MS-DRGs 947 and 948 (Signs and Symptoms with and without MCC, respectively). Therefore, we proposed to reassign ICD-10-CM diagnosis code R93.89 from MDC 5 in MS-DRGs 302 and 303 to MDC 23 in MS-DRGs 947 and 948.

Comment: Commenters supported our proposed reassignment of ICD-10-CM diagnosis code R93.89 from MDC 5 to MDC 23.

Response: We thank the commenters for their support. After consideration of the public comments we received, we are finalizing our proposal to reassign ICD-10-CM diagnosis code R93.89 from MDC 5 in MS-DRGs 302 and 303 to MDC 23 in MS-DRGs 947 and 948.

12. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987 Through 989

a. Adding Procedure Codes and Diagnosis Codes Currently Grouping to 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 cases reporting these 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 use this information to determine which procedure codes and diagnosis codes to examine.

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. We also consider whether it would be more appropriate to move the principal diagnosis codes into the MDC to which the procedure is currently assigned. Based on the results of our review of the claims data from the September 2018 update of the FY 2018 MedPAR file, in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19216 through 19224), we proposed to move the cases reporting the procedures and/or principal diagnosis codes described below 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 or procedure is assigned.

(1) Gastrointestinal Stromal Tumors With Excision of Stomach and Small Intestine

As discussed in the proposed rule, gastrointestinal stromal tumors (GIST) are tumors of connective tissue, and are currently assigned to MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue). The ICD-10-CM diagnosis codes describing GIST are listed in the table below.

Start Printed Page 42121

We stated in the proposed rule that during our review of cases that group to MS-DRGs 981 through 983, we noted that when procedures describing open excision of the stomach or small intestine (ICD-10-PCS procedure codes 0DB60ZZ (Excision of stomach, open approach) and 0DB80ZZ (Excision of small intestine, open approach)) were reported with a principal diagnosis of GIST, the cases group to MS-DRGs 981 through 983. These two excision codes are assigned to several MDCs, as listed in the table below. We stated in the proposed rule that whenever there is a surgical procedure reported on the claim, which is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as “unrelated operating room procedures”.

We first examined cases that reported a principal diagnosis of GIST and ICD-10-PCS procedure code 0DB60ZZ or 0DB80ZZ that currently group to MS-DRGs 981 through 983, as well as all cases in MS-DRGs 981 through 983. Our findings are shown in the table below.

Of the MDCs to which these gastrointestinal excision procedures are currently assigned, we stated that our clinical advisors indicated that cases with a principal diagnosis of GIST that also report an open gastrointestinal excision procedure code would logically be assigned to MDC 6 (Diseases and Disorders of the Digestive System). Within MDC 6, ICD-10-PCS procedures codes 0DB60ZZ and 0DB80ZZ are currently assigned to MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures with MCC, CC, and without CC/MCC, respectively). To understand how the resources associated with the subset of cases reporting a principal diagnosis of GIST and procedure code 0DB60ZZ or 0DB80ZZ compare to those of cases in MS-DRGs 326, 327, and 328 as a whole, we examined the average costs and average length of stay for all cases in MS-DRGs 326, 327, and 328. Our findings are shown in the table below.

Start Printed Page 42122

In the proposed rule, we stated that our clinical advisors reviewed these data and noted that the average length of stay and average costs of this subset of cases were similar to those of cases in MS-DRGs 326, 327, and 328 in MDC 6. To consider whether it was appropriate to move the GIST diagnosis codes from MDC 8, we examined the other procedure codes reported for cases that report a principal diagnosis of GIST and noted that almost all of the O.R. procedures most frequently reported were assigned to MDC 6 rather than MDC 8. Further, we stated that our clinical advisors believe that, given the similarity in resource use between this subset of cases and cases in MS-DRGs 326, 327, and 328, and that the GIST diagnosis codes are gastrointestinal in nature, they would be more appropriately assigned to MS-DRGs 326, 327, and 328 in MDC 6 than their current assignment in MDC 8. Therefore, we proposed to move the GIST diagnosis codes listed above from MDC 8 to MDC 6 within MS-DRGs 326, 327, and 328. We stated that, under our proposal, cases reporting a principal diagnosis of GIST would group to MS-DRGs 326, 327, and 328.

We note that every diagnosis code is assigned to a medical MS-DRG to define the logic of the MS-DRG either as a principal or secondary diagnosis. We also note that, as discussed in section II.F.13.a., certain procedure codes may affect the MS-DRG and result in a surgical MS-DRG assignment. We are clarifying that under this proposal, cases reporting a principal diagnosis of GIST would group to MS-DRGs 326, 327, and 328 only in the presence of a surgical procedure assigned to MS-DRGs 326, 327, and 328; in the absence of a surgical procedure, cases with a principal diagnosis of GIST would group to MS-DRGs 374, 375, and 376 (Digestive Malignancy with MCC, with CC, and without CC/MCC, respectively), which is the medical MS-DRG that contains digestive malignancies, and to which they would be assigned within MDC 6. We refer the reader to the ICD-10 MS-DRG Version 36 Definitions Manual for complete documentation of the logic for case assignment to surgical MS-DRGs 326, 327, and 328 and to medical MS-DRGs 374, 375, and 376 (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html).

Comment: Several commenters supported our proposal. A commenter stated that placing the ICD-10-CM diagnosis codes describing GIST in the proposed DRGs would better reflect the gastrointestinal nature of the underlying GIST disease and the resource use associated with this subset of cases relative to others within the same MDC/DRG groupings.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to move the GIST diagnosis codes listed above from MDC 8 to MDC 6, with the additional clarification that in the absence of a surgical procedure, these cases are assigned to the medical MS-DRGs 374, 375 and 376 under the ICD-10 MS-DRGs Version 37, effective October 1, 2019. As a result, cases reporting a principal diagnosis of GIST and a procedure code that is assigned to MS-DRGs 326, 327, and 328 (such as ICD-10-PCS codes 0DB60ZZ and 0DB80ZZ) will group to MS-DRGs 326, 327, and 328.

(2) Peritoneal Dialysis Catheter Complications

As discussed in the proposed rule, during our review of the cases currently grouping to MS-DRGs 981-983, we noted that cases reporting a principal diagnosis of complications of peritoneal dialysis catheters with procedure codes describing removal, revision, and/or insertion of new peritoneal dialysis catheters group to MS-DRGs 981 through 983. The ICD-10-CM diagnosis codes that describe complications of peritoneal dialysis catheters, listed in the table below, are assigned to MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs). These principal diagnoses are frequently reported with the procedure codes describing removal, revision, and/or insertion of new peritoneal dialysis catheters.

Start Printed Page 42123

The procedure codes in the table below describe removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes and are currently assigned to MDC 6 (Diseases and Disorders of the Digestive System) in MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively).

As indicated in the proposed rule, we examined the claims data from the September 2018 update of the FY 2018 MedPAR file for the average costs and length of stay for cases that report a principal diagnosis of complications of peritoneal dialysis catheters with a procedure describing removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes. Our findings are shown in the table below. We noted in the proposed rule that we did not find any such cases in MS-DRG 983.

Start Printed Page 42124

We stated that our clinical advisors indicated that, within MDC 21, the procedures describing removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes most suitably group to MS-DRGs 907, 908, and 909, which contain all procedures for injuries that are not specific to the hand, skin, and wound debridement. To determine how the resources for this subset of cases compared to cases in MS-DRGs 907, 908, and 909 as a whole, we examined the average costs and length of stay for cases in MS-DRGs 907, 908, and 909. Our findings are shown in the table below.

Further, we stated in the proposed rule that our clinical advisors considered these data and noted that the average costs and length of stay for this subset of cases, most of which group to MS-DRG 981, are lower than the average costs and length of stay for cases of the same severity level in MS-DRGs 907. However, we further stated that our clinical advisors believe that the procedures describing removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes are clearly related to the principal diagnosis codes describing complications of peritoneal dialysis catheters and, therefore, it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. Therefore, we proposed to add the eight procedure codes listed in the table above that describe removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes to MDC 21 (Injuries, Poisonings & Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909. As indicated in the proposed rule, under this proposal, cases reporting a principal diagnosis of complications of peritoneal dialysis catheters with a procedure describing removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes would group to MS-DRGs 907, 908, and 909.

Comment: Commenters supported our proposal to add the eight procedure codes listed in the table above that describe removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes to MDC 21.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add the eight procedure codes listed in the table above that describe removal, revision, and/or insertion of new peritoneal dialysis catheters or revision of synthetic substitutes to MDC 21.

(3) Bone Excision With Pressure Ulcers

As discussed in the proposed rule, during our review of the cases that group to MS-DRGs 981 through 983, we noted that when procedures describing excision of the sacrum, pelvic bones, and coccyx (ICD-10-PCS procedure codes 0QB10ZZ (Excision of sacrum, open approach), 0QB20ZZ (Excision of right pelvic bone, open approach), 0QB30ZZ (Excision of left pelvic bone, open approach), and 0QBS0ZZ (Excision of coccyx, open approach)) are reported with a principal diagnosis of pressure ulcers in MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast), the cases group to MS-DRGs 981 through 983. As noted in the proposed rule, the procedures describing excision of the sacrum, pelvic bones, and coccyx group to several MDCs, which are listed in the table below.

We stated in the proposed rule that, when cases reporting procedure codes describing excision of the sacrum, pelvic bones, and coccyx report a principal diagnosis from MDC 9, the ICD-10-CM diagnosis codes that are most frequently reported as principal diagnoses are listed below.

Start Printed Page 42125

As indicated in the proposed rule, we examined the claims data from the September 2018 update of the FY 2018 MedPAR file for the average costs and length of stay for cases that report procedures describing excision of the sacrum, pelvic bones, and coccyx in conjunction with a principal diagnosis of pressure ulcers.

We stated that our clinical advisors indicated that, given the nature of these procedures, they could not be appropriately assigned to the specific surgical MS-DRGs within MDC 9, which are: Skin graft; skin debridement; mastectomy for malignancy; and breast biopsy, local excision, and other breast procedures. Therefore, we stated in the proposed rule that our clinical advisors believe that these procedures would most suitably group to MS-DRGs 579, 580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, with CC, and without CC/MCC, respectively), which contain procedures assigned to MDC 9 that do not fit within the specific surgical MS-DRGs in MDC 9. Therefore, as indicated in the proposed rule, we examined the claims data for the average length of stay and average costs for MS-DRGs 579, 580, and 581 in MDC 9. Our findings are shown in the table below.

We stated that our clinical advisors reviewed these data and noted that, in this subset of cases, most cases group to MS-DRGs 981 and 982 and have greater average length of stay and average costs than those cases of the same severity level in MS-DRGs 579 and 580. We further stated that the smaller number of cases that group to MS-DRG 983 have lower average costs than cases in MS-DRG 581. However, we stated that our clinical advisors believe that the procedure codes describing excision of the sacrum, pelvic bones, and coccyx are clearly related to the principal diagnosis codes describing pressure ulcers, as these procedures would be performed to treat pressure ulcers in the Start Printed Page 42126sacrum, hip, and buttocks regions. Therefore, we stated in the proposed rule that our clinical advisors believe that it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. Therefore, we proposed to add the ICD-10-PCS procedure codes describing excision of the sacrum, pelvic bones, and coccyx to MDC 9 in MS-DRGs 579, 580, and 581. As noted in the proposed rule, under this proposal, cases reporting a principal diagnosis in MDC 9 (such as pressure ulcers) with a procedure describing excision of the sacrum, pelvic bones, and coccyx would group to MS-DRGs 579, 580, and 581.

Comment: Commenters did not support our proposal to add the ICD-10-PCS procedure codes describing excision of the sacrum, pelvic bones, and coccyx to MDC 9 in MS-DRGs 579, 580, and 581. Commenters stated that it is not appropriate for procedures performed on muscles to be grouped to MS-DRGs for skin and subcutaneous tissues. A commenter stated that once a pressure ulcer extends into the muscle or bone, it is no longer a disease of the skin and subcutaneous tissue, but a disease of the musculoskeletal tissue.

Response: We note that all pressure ulcers, including those that extend to the muscle or bone, are assigned to MDC 9, so that for purposes of DRG assignment, the GROUPER categorizes all pressure ulcers as diseases of the skin and subcutaneous tissue. As noted in the proposed rule, our clinical advisors believe that these procedures would be performed to treat pressure ulcers in the sacrum, hip, and buttocks regions. The surgical MS-DRGs within each MDC that include `other' procedures are intended to encompass procedures that, while not directly related to the MDC, can and do occur with principal diagnoses in that MDC with sufficient frequency.

Comment: A commenter stated that they recognize that CMS may have selected MDC 9 as it includes all pressure ulcers, but recommended that CMS consider MDC 8 instead. A commenter stated that if the debridement is performed to the level of the soft tissue, then the case should group to MS-DRGs 501, 502, and 503 (Soft tissue procedures with MCC, with CC, and without CC/MCC respectively). The commenter stated that they believe it should be the procedure that determines the MDC and DRG to which the case groups.

Response: As explained in the proposed rule, when conducting the review of procedures producing assignment to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, the objective is to 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, or to move the principal diagnosis codes to the MDC in which the procedure falls. During this analysis, we noted that procedures describing excision of the sacrum, pelvic bones, and coccyx group to MS-DRGs 981 through 983 when reported with a principal diagnosis in MDC 9. If we were to add these procedures to MDC 8, that would not address the matter of these procedures producing assignment to MS-DRGs 981 through 983. Since our clinical advisors believe that these procedures are clearly related to the principal diagnoses assigned to MDC 9, our clinical advisors believe that it is appropriate to add these procedures to MDC 9. We also note that, with the exception of the pre-MDC, assignment to MDCs is driven by the principal diagnosis and not by the procedure. Therefore, it is inconsistent with GROUPER logic to determine the MDC based on the procedure.

After consideration of the public comments we received, we are finalizing our proposal to add the ICD-10-PCS procedure codes describing excision of the sacrum, pelvic bones, and coccyx to MDC 9 in MS-DRGs 579, 580, and 581.

(4) Lower Extremity Muscle and Tendon Excision

As discussed in the proposed rule, during the review of the cases that group to MS-DRGs 981 through 983, we noted that when several ICD-10-PCS procedure codes describing excision of lower extremity muscles and tendons are reported in conjunction with ICD-10-CM diagnosis codes in MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), the cases group to MS-DRGs 981 through 983. As indicated in the proposed rule, these ICD-10-PCS procedure codes are listed in the table below, and are assigned to several MS-DRGs, which are also listed below.

Start Printed Page 42127

As noted in the proposed rule, the ICD-10-CM diagnosis codes in MDC 10 that are most frequently reported as the principal diagnosis with a procedure describing excision of lower extremity muscles and tendons are listed in the table below. We stated in the proposed rule that the combination indicates debridement procedures for more complex diabetic ulcers.

To understand the resource use for the subset of cases reporting procedure codes describing excision of lower extremity muscles and tendons that are currently grouping to MS-DRGs 981 through 983, as indicated in the proposed rule, we examined claims data for the average length of stay and average costs for these cases. Our findings are shown in the table below.

We stated in the proposed rule that our clinical advisors examined cases reporting procedures describing excision of lower extremity muscles and tendons with a principal diagnosis in the MS-DRGs within MDC 10 and determined that these cases would most suitably group 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). Therefore, we examined the average length of stay and average costs for cases assigned to MS-DRGs 622, 623, and 624. Our findings are shown in the table below.

Start Printed Page 42128

As indicated in the proposed rule, our clinical advisors reviewed these data and noted that most of the cases reporting procedures describing excision of lower extremity muscles and tendons group to MS-DRGs 981 and 982. For these cases, the average length of stay and average costs are lower than those of cases that currently group to MS-DRGs 622 and 623. However, our clinical advisors believe that these procedures are clearly related to the principal diagnoses in MDC 10, as they would be performed to treat skin-related complications of diabetes and, therefore, it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. Therefore, we proposed to add the procedure codes listed previously describing excision of lower extremity muscles and tendons to MDC 10. We stated in the proposed rule that, under our proposal, cases reporting these procedure codes with a principal diagnosis in MDC 10 would group to MS-DRGs 622, 623, and 624.

Comment: A commenter supported our proposal to add the procedure codes describing excision of lower extremity muscles and tendons to MDC 10.

Response: We appreciate the commenter's support.

Comment: Other commenters did not support our proposal to add the procedure codes describing excision of lower extremity muscles and tendons to MDC 10. Commenters stated that muscle and tendon procedures are more resource intensive than skin procedures. A commenter stated that cases involving tendon excisions should group to MS-DRGs 501, 502, and 503 in MDC 8, and that cases involving excisions of muscle group to MS-DRGs 515, 516, and 517 in MDC 8. This commenter stated that the procedure should drive the MDC and DRGs to which the case is assigned.

Response: Our clinical advisors believe that these procedures are clearly related to the principal diagnoses assigned to MDC 10 with which they are most frequently reported (that is, codes describing diabetes with complications), and are therefore appropriately assigned to MDC 10, and specifically to MS-DRGs 622, 623, and 624, which describe wound debridement. We also note that, with the exception of the pre-MDC, assignment to MDCs is driven by the principal diagnosis and not by the procedure. Therefore, it is inconsistent with the GROUPER logic to determine the MDC based on the procedure.

After consideration of the public comments we received, we are finalizing our proposal to add the procedure codes listed previously describing excision of lower extremity muscles and tendons to MDC 10.

(5) Kidney Transplantation Procedures

As discussed in the proposed rule, during our review of the cases that group to MS-DRGs 981 through 983, we noted that when procedures describing transplantation of kidneys (ICD-10-PCS procedure codes 0TY00Z0 (Transplantation of right kidney, allogeneic, open approach) and 0TY10Z0 (Transplantation of left kidney, allogeneic, open approach)) are reported in conjunction with ICD-10-CM diagnosis codes in MDC 5 (Diseases and Disorders of the Circulatory System), the cases group to MS-DRGs 981 through 983. We stated that the ICD-10-CM diagnosis codes in MDC 5 that are reported with the kidney transplantation codes are I13.0 (Hypertensive heart and chronic kidney disease with heart failure and with stage 1 through stage 4 chronic kidney disease) and I13.2 (Hypertensive heart and chronic kidney disease with heart failure and with stage 5 chronic kidney disease), which group to MDC 5. Procedure codes describing transplantation of kidneys are assigned to MS-DRG 652 (Kidney Transplant) in MDC 11. As indicated in the proposed rule, we examined claims data to identify the average length of stay and average costs for cases reporting procedure codes describing transplantation of kidneys with a principal diagnosis in MDC 5, which are currently grouping to MS-DRGs 981 through 983. Our findings are shown in the table below. We stated in the proposed rule that we did not find any such cases in MS-DRG 983.

We further stated that our clinical advisors examined the MS-DRGs within MDC 5 and indicated that, given the nature of the procedures compared to the specific surgical procedures contained in the other surgical MS-Start Printed Page 42129DRGs in MDC 5, they could not be appropriately assigned to any of the specific surgical MS-DRGs. Therefore, they determined that these cases would most suitably group to MS-DRG 264 (Other Circulatory System O.R. Procedures), which contains a broader range of procedures related to MDC 5 diagnoses. As indicated in the proposed rule, we examined claims data to determine the average length of stay and average costs for cases assigned to MS-DRG 264. We found a total of 10,073 cases, with an average length of stay of 9.3 days and average costs of $22,643.

Our clinical advisors reviewed these data and noted that the average costs for cases reporting transplantation of kidney with a diagnosis from MDC 5 are similar to the average costs of cases in MS-DRG 264 ($22,643 in MS-DRG 264 compared to $25,340 in MS-DRG 981), while the average length of stay is shorter than that of cases in MS-DRG 264 (9.3 days in MS-DRG 264 compared to 6.8 days for this subset of cases in MS-DRG 981). We stated in the proposed rule that our clinical advisors noted that ICD-10-CM diagnosis codes describing hypertensive heart and chronic kidney disease without heart failure (I13.10 (Hypertensive heart and chronic kidney disease without heart failure, with stage 1 through stage 4 chronic kidney disease, or unspecified chronic kidney disease) and I13.11 (Hypertensive heart and chronic kidney disease without heart failure, with stage 5 chronic kidney disease, or end stage renal disease group) group to MS-DRG 652 (Kidney Transplant) in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract)). Our clinical advisors also noted that the counterpart codes describing hypertensive heart and chronic kidney disease with heart failure are as related to the kidney transplantation codes as the codes without heart failure, but because the codes with heart failure group to MDC 5, cases reporting a kidney transplant procedure with a diagnosis code of hypertensive heart and chronic kidney disease with heart failure currently group to MS-DRGs 981 through 983. Therefore, we proposed to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to MS-DRG 264 in MDC 5. We stated in the proposed rule that, under this proposal, cases reporting a principal diagnosis in MDC 5 with a procedure describing kidney transplantation would group to MS-DRG 264 in MDC 5. We also noted in the proposed rule that, because MDC 5 covers the circulatory system and kidney transplants generally group to MDC 11, we invited public comments on whether the procedure codes should instead continue to group to MS-DRGs 981 through 983.

Comment: Commenters opposed our proposal to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to MS-DRG 264 in MDC 5. A commenter stated that the proposed relative weight for MS-DRG 652, where most kidney transplant procedures are grouped, is 3.384, while the proposed weight for MS-DRG 264 is 3.2357. Some commenters stated that this proposal would reduce the reimbursement for kidney transplantation of recipients with serious cardiac conditions by 33 percent. Commenters stated that cases that involve both chronic kidney disease and heart failure should not be paid less than cases that involve patients without serious comorbid conditions. Commenters suggested that CMS instead assign these cases to MDC 652, noting that the length of stay for the vast majority of kidney transplant cases involving serious cardiac conditions approximates the length of stay for kidney transplants in general. Commenters also stated that assigning all kidney transplant cases to the same MS-DRG simplifies collection of cost data, stating that when cases are split among several MS-DRG “families” it complicates the analysis required to determine whether additional severity-based MS-DRGs would be appropriate. Commenters stated that if it was not possible to assign these cases to MS-DRG 652, then the cases should remain in MS-DRGs 981 through 983. Commenters disagreed with assigning these cases to a circulatory DRG because the procedure is performed on the urinary system.

Response: We appreciate the comments and concerns raised on our proposal. Our clinical advisors generally believe that it is preferable to assign these cases to a discrete MS-DRG within the GROUPER rather than allowing them to continue to group to MS-DRGs 981 through 983, which do not contain a group of clinically coherent principal diagnoses, but instead consist of cases from various MDCs that are unrelated to one another. However, we believe it would be appropriate to take additional time to review the concerns raised by commenters consistent with the President's recent Executive Order on Advancing American Kidney Health (see https://www.whitehouse.gov/​presidential-actions/​executive-order-advancing-american-kidney-health/​). Therefore, after consideration of public comments, we are not finalizing our proposal to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to MS-DRG 264 in MDC 5. Accordingly, cases reporting a principal diagnosis in MDC 5 with a procedure describing kidney transplantation (i.e., procedure code 0TY00Z0 or 0TY10Z0) will continue to group to MS-DRGs 981 through 983 under the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

(6) Insertion of Feeding Device

As discussed in the proposed rule, during our review of the cases that group to MS-DRGs 981 through 983, we noted that when ICD-10-PCS procedure code 0DH60UZ (Insertion of feeding device into stomach, open approach) is reported with ICD-10-CM diagnosis codes assigned to MDC 1 (Diseases and Disorders of the Nervous System) or MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), the cases group to MS-DRGs 981 through 983. ICD-10-PCS procedure code 0DH60UZ is currently assigned to MDC 6 (Diseases and Disorders of the Digestive System) in MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures) and MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries). We stated in the proposed rule that we also noticed that: (1) When ICD-10-PCS procedure code 0DH60UZ is reported with a principal diagnosis in MDC 1, the ICD-10-CM diagnosis codes reported with this procedure code describe cerebral infarctions of various etiology and anatomic locations and resulting complications; and (2) when ICD-10-PCS procedure code 0DH60UZ is reported with a principal diagnosis in MDC 10, the ICD-10-CM diagnosis codes reported with this procedure code pertain to dehydration, failure to thrive, and various forms of malnutrition.

As indicated in the proposed rule, we examined claims data to identify the average length of stay and average costs for cases in MS-DRGs 981 through 983 reporting ICD-10-PCS procedure code 0DH60UZ in conjunction with a principal diagnosis from MDC 1 or MDC 10. Our findings are shown in the table below.

Start Printed Page 42130

In the proposed rule we stated that our clinical advisors determined that the feeding tube procedure was related to specific diagnoses within MDC 1 and MDC 10 and, therefore, could be assigned to both MDCs. Therefore, they reviewed the MS-DRGs within MDC 1 and MDC 10. We stated that they determined that the most suitable MS-DRG assignment within MDC 1 would be MS-DRGs 040, 041, and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC, with CC or Peripheral Neurostimulator, and without CC/MCC, respectively), which contain procedures assigned to MDC 1 that describe insertion of devices into anatomical areas that are not part of the nervous system. Our clinical advisors determined that the most suitable MS-DRG assignment within MDC 10 would be MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures with MCC, with CC, and without CC/MCC, respectively), which contain the most clinically similar procedures assigned to MDC 10, such as those describing insertion of infusion pump into subcutaneous tissue and fascia. Therefore, we examined claims data to identify the average length of stay and average costs for cases assigned to MDC 1 in MS-DRGs 040, 041, and 042 and MDC 10 in MS-DRGs 628, 629, and 630. Our findings are shown in the tables below.

Start Printed Page 42131

Our clinical advisors reviewed these data and noted that the average length of stay and average costs for the subset of cases reporting ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis assigned to MDC 1 are higher than those cases in MS-DRGs 040, 041, and 042. For example, the cases reporting ICD-10-PCS procedure code 0DH60UZ and a principal diagnosis in MDC 1 that currently group to MS-DRG 981 have an average length of stay of 19.3 days and average costs of $40,598, while the cases in MS-DRG 040 have an average length of stay of 10.2 days and average costs of $27,096. We stated in the proposed rule that our clinical advisors noted that the average length of stay and average costs for the subset of cases reporting ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis assigned to MDC 10 are more closely aligned with those cases in MS-DRGs 628, 629, and 630. We stated that in both cases, our clinical advisors believe that the insertion of feeding device is clearly related to the principal diagnoses in MDC 1 and MDC 10 and, therefore, it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. Therefore, we proposed to add ICD-10-PCS procedure code 0DH60UZ to MDC 1 and MDC 10. We stated in the proposed rule that, under this proposal, cases reporting procedure code 0DH60UZ with a principal diagnosis in MDC 1 would group to MS-DRGs 040, 041, and 042, while cases reporting ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis in MDC 10 would group to MS-DRGs 628, 629, and 630.

Comment: Commenters supported our proposal to add ICD-10-PCS procedure code 0DH60UZ to MDC 1 and MDC 10.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedure code 0DH60UZ to MDC 1 and MDC 10.

(7) Basilic Vein Reposition in Chronic Kidney Disease

As discussed in the proposed rule, during our review of the cases that group to MS-DRGs 981 through 983, we noted that when procedures codes describing reposition of basilic vein (ICD-10-PCS procedure codes 05SB0ZZ (Reposition right basilic vein, open approach), 05SB3ZZ (Reposition right basilic vein, percutaneous approach), 05SC0ZZ (Reposition left basilic vein, open approach), and 05SC3ZZ (Reposition left basilic vein, percutaneous approach)) are reported with a principal diagnosis in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) (typically describing chronic kidney disease), the cases group to MS-DRGs 981 through 983. We stated in the proposed rule that this code combination suggests a revision of an arterio-venous fistula in a patient on chronic hemodialysis. As indicated in the proposed rule, we examined claims data to identify the average length of stay and average costs for cases reporting procedures describing reposition of basilic vein with a principal diagnosis in MDC 11, which are currently grouping to MS-DRGs 981 through 983. Our findings are shown in the table below.

We stated in the proposed rule that our clinical advisors examined claims data for cases in the MS-DRGs within MDC 11 and determined that cases reporting procedures describing reposition of basilic vein with a principal diagnosis in MDC 11 would most suitably group to MS-DRGs 673, 674, and 675 (Other Kidney and Urinary Tract Procedures with MCC, with CC, and without CC/MCC, respectively), to which MDC 11 procedures describing reposition of veins (other than renal veins) are assigned. Therefore, we examined claims data to identify the average length of stay and average costs for cases assigned to MS-DRGs 673, 674, and 675. Our findings are shown in the table below.

Start Printed Page 42132

As indicated in the proposed rule, our clinical advisors reviewed these data and noted that the average length of stay and average costs for cases reporting procedures describing reposition of basilic vein with a principal diagnosis in MDC 11 with an MCC are significantly lower than for those cases in MS-DRG 673. The average length of stay and average costs are similar for those cases with a CC, while the single case without a CC or MCC had significantly lower costs than the average costs of cases in MS-DRG 675. However, we stated that our clinical advisors believe that when the procedures describing reposition of basilic vein are reported with a principal diagnosis describing chronic kidney disease, the procedure is likely related to arteriovenous fistulas for dialysis associated with the chronic kidney disease. Therefore, we stated in the proposed rule that our clinical advisors believe that it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. Therefore, we proposed to add ICD-10-PCS procedures codes 05SB0ZZ, 05SB3ZZ, 05SC0ZZ, and 05SC3ZZ to MDC 11. We stated that, under our proposal, cases reporting procedure codes describing reposition of basilic vein with a principal diagnosis in MDC 11 would group to MS-DRGs 673, 674, and 675.

Comment: Commenters supported our proposal to add ICD-10-PCS procedures codes 05SB0ZZ, 05SB3ZZ, 05SC0ZZ, and 05SC3ZZ to MDC 11.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedures codes 05SB0ZZ, 05SB3ZZ, 05SC0ZZ, and 05SC3ZZ to MDC 11.

(8) Colon Resection With Fistula

As discussed in the proposed rule, during our review of the cases that group to MS-DRGs 981 through 983, we noted that when ICD-10-PCS procedure code 0DTN0ZZ (Resection of sigmoid colon, open approach) is reported with a principal diagnosis in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract), the cases group to MS-DRGs 981 through 983. We stated that the principal diagnosis most frequently reported with ICD-10-PCS procedure code 0DTN0ZZ in MDC 11 is ICD-10-CM code N32.1 (Vesicointestinal fistula). As indicated in the proposed rule, ICD-10-PCS procedure code 0DTN0ZZ currently groups to several MDCs, which are listed in the table below.

As we stated in the proposed rule, we examined claims data to identify the average length of stay and average costs for cases reporting procedure code 0DTN0ZZ with a principal diagnosis in MDC 11, which are currently grouping to MS-DRGs 981 through 983. Our findings are shown in the table below.

Start Printed Page 42133

Our clinical advisors examined the MS-DRGs within MDC 11 and determined that the cases reporting procedure code 0DTN0ZZ with a principal diagnosis in MDC 11 would most suitably group to MS-DRGs 673, 674, and 675, which contain procedures performed on structures other than kidney and urinary tract anatomy. We note that the claims data describing the average length of stay and average costs for cases in these MS-DRGs are included in a table earlier in this section. Because vesicointestinal fistulas involve both the bladder and the bowel, some procedures in both MDC 6 (Diseases and Disorders of the Digestive System) and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) would be expected to be related to a principal diagnosis of vesicointestinal fistula (ICD-10-CM code N32.1). We stated in the proposed rule that our clinical advisors observed that procedure code 0DTN0ZZ is the second most common procedure reported in conjunction with a principal diagnosis of code N32.1, after ICD-10-PCS procedure code 0TQB0ZZ (Repair bladder, open approach), which is assigned to both MDC 6 and MDC 11. Our clinical advisors reviewed the data and noted that the average length of stay and average costs for this subset of cases are generally higher for this subset of cases than for cases in MS-DRGs 673, 674, and 675. However, we stated that our clinical advisors believe that when ICD-10-PCS procedure code 0DTN0ZZ is reported with a principal diagnosis in MDC 11 (typically vesicointestinal fistula), the procedure is related to the principal diagnosis. Therefore, we proposed to add ICD-10-PCS procedure code 0DTN0ZZ to MDC 11. We stated in the proposed rule that, under our proposal, cases reporting procedure code 0DTN0ZZ with a principal diagnosis of vesicointestinal fistula (diagnosis code N32.1) in MDC 11 would group to MS-DRGs 673, 674, and 675.

Comment: Some commenters supported our proposal to add ICD-10-PCS procedure code 0DTN0ZZ to MDC 11.

Response: We appreciate the commenters' support.

Comment: A commenter opposed our proposal to add ICD-10-PCS procedure code 0DTN0ZZ to MDC 11 in MS-DRGs 673, 674, and 675 because these MS-DRGs does not account for the organ in which the disease originates. This commenter stated that the disease process that causes the formation of a vesicointestinal fistula generally do not originate in the bladder. This commenter recommended that CMS instead consider assigning ICD-10-PCS procedure code 0DTN0ZZ to MS-DRGs 329, 330, and 331 (Major small and large bowel procedures with MCC, with CC, and without CC/MCC, respectively).

Response: As we stated in the proposed rule, ICD-10-PCS procedure code 0DTN0ZZ is already assigned to MDC 6 in MS-DRGs 329, 330, and 331. As described above, when conducting the review of procedures producing assignment to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, the objective is to 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, or to move the principal diagnosis codes to the MDC in which the procedure falls. During this analysis, we noted that ICD-10-PCS procedure code 0DTN0ZZ groups to MS-DRGs 981 through 983 when reported with a principal diagnosis in MDC 11. Given that the only way to address this grouping issue is to move or add the diagnosis code and procedure codes, in this case we proposed to add ICD-10-PCS procedure code 0DTN0ZZ to MDC 11. While the disease process that causes the formation of a vesicointestinal fistula may not originate in the bladder, our clinical advisors believe that when ICD-10-PCS procedure code 0DTN0ZZ is reported in conjunction with the vesicointestinal fistula, it is related to the diagnosis.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedure code 0DTN0ZZ to MDC 11.

b. Reassignment of Procedures Among MS-DRGs 981 Through 983 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, or 987 through 989, to ascertain whether any of those procedures should be reassigned from one of those two groups of MS-DRGs to the other group 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 claims data in the September 2018 update of the FY 2018 MedPAR file, we did not propose to change the current structure of MS-DRGs 981 through 983 and MS-DRGs 987 through 989.

We did not receive any public comments on our maintaining the current structure of MS-DRGs 981 through 983 and MS-DRGs 987 through 989. Therefore, we are finalizing the Start Printed Page 42134current structure of MS-DRGs 981 through 983 and MS-DRGs 987 through 989 without modification.

c. Additions for Diagnosis and Procedure Codes to MDCs

As we did in the FY 2020 IPPS/LTCH PPS proposed rule, below we summarize the requests we received to examine cases found to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989 to determine if it would be appropriate to add procedure codes to one of the surgical MS-DRGs for the MDC into which the principal diagnosis falls or to move the principal diagnosis to the surgical MS-DRGs to which the procedure codes are assigned.

(1) Stage 3 Pressure Ulcers of the Hip

We received a request to reassign cases for a stage 3 pressure ulcer of the left hip when reported with procedures involving excision of pelvic bone or transfer of hip muscle from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRG 579 (Other Skin, Subcutaneous Tissue and Breast Procedures with MCC) in MDC 9. ICD-10-CM diagnosis code L89.223 (Pressure ulcer left hip, stage 3) is used to report this condition and is currently assigned to MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast). We refer readers to section II.F.12.a. of the preamble of this final rule, where we address ICD-10-PCS procedure code 0QB30ZZ (Excision of left pelvic bone, open approach), which was reviewed as part of our ongoing analysis of the unrelated MS-DRGs and which we proposed, and are finalizing, to add to MS-DRGs 579, 580, and 581 in MDC 5. (While the requestor only referred to base MS-DRG 579, in the proposed rule we stated that we believe it is appropriate to assign the cases to MS-DRGs 579, 580, and 581 by severity level.) We stated that ICD-10-PCS procedure codes 0KXP0ZZ (Transfer left hip muscle, open approach) and 0KXN0ZZ (Transfer right hip muscle, open approach) may be reported to describe transfer of hip muscle procedures and are currently assigned to MDC 1 (Diseases and Disorders of the Nervous System) and MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue). We included ICD-10-PCS procedure code 0KXN0ZZ in our analysis because it describes the identical procedure on the right side.

Our analysis of this grouping issue confirmed that, when a stage 3 pressure ulcer of the left hip (ICD-10-CM diagnosis code L89.223) is reported as a principal diagnosis with ICD-10-PCS procedure code 0KXP0ZZ or 0KXN0ZZ, these cases group to MS-DRGs 981, 982, and 983. The reason for this grouping is because whenever there is a surgical procedure reported on a claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as “unrelated operating room procedures.” In the example provided, because ICD-10-CM diagnosis code L89.223 describing a stage 3 pressure ulcer of left hip is classified to MDC 9 and because ICD-10-PCS procedure codes 0KXP0ZZ and 0KXN0ZZ are classified to MDC 1 (Diseases and Disorders of the Nervous System) in MS-DRGs 040, 041, and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC, with CC or Peripheral Neurostimulator, and without CC/MCC, respectively) and MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) in MS-DRGs 500, 501, and 502 (Soft Tissue Procedures with MCC, with CC, and without CC/MCC, respectively), the GROUPER logic assigns this case to the “unrelated operating room procedures” set of MS-DRGs.

For our review of this grouping issue and the request to have procedure code 0KXP0ZZ added to MDC 9, in the proposed rule we examined claims data for cases reporting procedure code 0KXP0ZZ or 0KXN0ZZ in conjunction with a diagnosis code that typically groups to MDC 9. Our findings are shown in the table below.

As indicated in the proposed rule and earlier, the requestor suggested that we move ICD-10-PCS procedure code 0KXP0ZZ to MS-DRG 579. However, we stated that our clinical advisors believe that, within MDC 9, these procedure codes are more clinically aligned with the procedure codes assigned to MS-DRGs 573, 574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC, with CC and without CC/MCC, respectively), which are more specific to the care of stage 3, 4 and unstageable pressure ulcers than MS-DRGs 579, 580, and 581. Therefore, as indicated in the proposed rule, we examined claims data to identify the average length of stay and average costs for cases assigned to MS-DRGs 573, 574, and 575. Our findings are shown in the table below.

Start Printed Page 42135

We noted in the proposed rule that the average costs for cases in MS-DRGs 573 and 574 are higher than the average costs of the subset of cases with the same severity reporting a hip muscle transfer and a principal diagnosis in MDC 9, while the average costs of those cases in MS-DRG 575 are similar to the average costs of those cases that are currently grouping to MS-DRG 983. However, we stated in the proposed rule that our clinical advisors believe that the cases of hip muscle transfer represent a distinct, recognizable clinical group similar to those cases in MS-DRGs 573, 574, and 575, and that the procedures are clearly related to the principal diagnosis codes. Therefore, we stated that they believe that it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. Therefore, we proposed to add ICD-10-PCS procedure codes 0KXP0ZZ and 0KXN0ZZ to MDC 9. We stated in the proposed rule that, under our proposal, cases reporting ICD-10-PCS procedure code 0KXP0ZZ or 0KXN0ZZ with a principal diagnosis in MDC 9 would group to MS-DRGs 573, 574, and 575. We are clarifying that under our proposal, cases reporting ICD-10-PCS codes 0KXP0ZZ or 0KXN0ZZ would also group to MS-DRGs 576, 577, and 578 in the absence of a principal diagnosis of skin ulcer or cellulitis. The reason for this additional assignment is that under the GROUPER logic, all of the procedures assigned to MS-DRGs 573, 574, and 575 are also assigned to MS-DRGs 576, 577, and 578; the presence or absence of a principal diagnosis of skin ulcer or cellulitis determines whether the case groups to MS-DRGs 573, 574, and 575 or to MS-DRGs 576, 577, and 578. We refer the reader to the ICD-10 MS-DRG Version 36 Definitions Manual for complete documentation of the logic for case assignment to MS-DRGs 573, 574, 575, 576, 577, and 578 (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html).

Comment: A commenter supported our proposal to add ICD-10-PCS procedure codes 0KXP0ZZ and 0KXN0ZZ to MDC 9.

Response: We appreciate the commenter's support.

Comment: Other commenters did not support our proposal to add ICD-10-PCS procedure codes 0KXP0ZZ and 0KXN0ZZ to MDC 9. The commenters stated that it is not appropriate for procedures performed on muscles to group to MS-DRGs for skin and subcutaneous tissues. These commenters also stated that transfer procedures are more clinically significant and resource intensive than grafts to the skin and subcutaneous tissue.

Response: Our clinical advisors agree that procedures performed on muscles would not generally be expected to group to MS-DRGs for skin and subcutaneous tissues. However, while they believe that principal diagnoses from MDC 9 would not be the principal diagnoses most often reported with ICD-10-PCS procedure codes 0KXP0ZZ and 0KXN0ZZ, the claims data indicate that there are cases reporting a principal diagnosis assigned to MDC 9, as identified by the requestor. Our clinical advisors continue to believe that these cases involving hip muscle transfer represent a distinct, recognizable clinical group, which is similar to those cases in MS-DRGs 573, 574, and 575, and that the procedures are clearly related to the principal diagnosis codes. With respect to the comment that transfer procedures are more clinically significant and resource intensive than grafts to the skin and subcutaneous tissue, our clinical advisors believe that the transfer procedures are sufficiently similar to procedures involving grafts to the skin and subcutaneous tissue, particularly given that a review of the data presented in the proposed rule and described previously in this section demonstrate that the average costs for MS-DRGs 573, 574, and 575 are generally greater than those of the subset of cases involving hip muscle transfer with a diagnosis in MDC 9. Most of the cases that currently group to MS-DRGs 981 through 983 occur in MS-DRGs 981 and 982, which have average costs of $25,023 and $17,955 respectively, while the MS-DRGs with the same severity level, MS-DRGs 573 and 574, have average costs of $34,549 and $21,251, respectively. We also believe it is preferable to assign these cases to a discrete MS-DRG within the GROUPER logic rather than allowing them to continue to group to MS-DRGs 981 through 983, which do not contain a group of clinically coherent principal diagnoses. MS-DRGs 573, 574, 575, 576, 577, and 578, which are specific to the care of conditions that necessitate skin grafts, represent a group of clinically coherent principal diagnoses to which procedures describing transfer of muscles are more appropriately assigned than those in MS-DRGs 981 through 983.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedure codes 0KXP0ZZ and 0KXN0ZZ to MDC 9.

(2) Gastrointestinal Stromal Tumor

We received a request to reassign cases for gastrointestinal stromal tumor of the stomach when reported with a procedure describing laparoscopic bypass of the stomach to jejunum from MS-DRGs 981, 982, and 983 to MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures with MCC, with CC, and without CC/MCC, respectively) by adding ICD-10-PCS procedure code 0D164ZA (Bypass stomach to jejunum, percutaneous endoscopic approach) to MDC 6. ICD-10-CM diagnosis code C49.A2 (Gastrointestinal stromal tumor of stomach) is used to report this condition and is currently assigned to MDC 8. ICD-10-PCS procedure code 0D164ZA is used to report the stomach bypass procedure and is currently assigned to MDC 5 (Diseases and Disorders of the Circulatory System), MDC 6 (Diseases and Disorders of the Digestive System), MDC 7 (Diseases and Disorders of the Hepatobiliary System and Pancreas), MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), and MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms). We refer readers to section II.F.12.a. of the preamble of this final rule where we discuss our finalized policy to move the listed diagnosis Start Printed Page 42136codes describing gastrointestinal stromal tumors, including ICD-10-CM diagnosis code C49.A2, into MDC 6. Therefore, in the proposed rule, we stated that this proposal, if finalized, would address the cases grouping to MS-DRGs 981 through 983 by instead moving the diagnosis codes to MDC 6, which would result in the diagnosis code and the procedure code referenced by the requestor grouping to the same MDC.

We did not receive comments on our proposal to address this grouping issue by moving the diagnosis codes to MDC 6 rather than moving the procedure codes as requested. We refer the reader to section II.F.12.a. of this final rule for the comments regarding our proposal to move the GIST diagnosis codes to MDC 6, as well as our finalization of this proposal.

(3) Finger Cellulitis

We received a request to reassign cases for cellulitis of the right finger when reported with a procedure describing open excision of the right finger phalanx from MS-DRGs 981, 982, and 983 to MS-DRGs 579, 580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, with CC, and without CC/MCC, respectively). In the proposed rule, we stated that, currently, ICD-10-CM diagnosis code L03.011 (Cellulitis of right finger) is used to report this condition and is currently assigned to MDC 09 in MS-DRGs 573, 574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC, CC, and without CC/MCC, respectively), 576, 577, and 578 (Skin Graft except for Skin Ulcer or Cellulitis with MCC, CC, and without CC/MCC, respectively), and 602 and 603 (Cellulitis with MCC and without MCC, respectively). ICD-10-PCS procedure code 0PBT0ZZ (Excision of right finger phalanx, open approach) is used to identify the excision procedure, and is currently assigned to MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat) in MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R. Procedures with CC/MCC, and without CC/MCC, respectively); MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) in MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively); MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures with MCC, with CC, and without CC/MCC, respectively); MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively); and MDC 24 (Multiple Significant Trauma) in MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively).

Our analysis of this grouping issue confirmed that when a procedure such as open excision of right finger phalanx (ICD-10-PCS procedure code 0PBT0ZZ) is reported with a principal diagnosis from MDC 9, such as cellulitis of the right finger (ICD-10-CM diagnosis code L03.011), these cases group to MS-DRGs 981, 982, and 983. As we stated in the proposed rule, during our review of this issue, we also examined claims data for similar procedures describing excision of phalanges (which are listed in the table below) and noted the same pattern. We further noted that the ICD-10-PCS procedure codes describing excision of phalanx procedures with the diagnostic qualifier “X”, which are used to report these procedures when performed for diagnostic purposes, are already assigned to MS-DRGs 579, 580, and 581 (to which the requestor suggested these cases group). We stated in the proposed rule that our clinical advisors also believe that procedures describing resection of phalanges should be assigned to the same MS-DRG as the excisions, because the resection procedures would also group to MS-DRGs 981, 982, and 983 when reported with a principal diagnosis from MDC 9.

Start Printed Page 42137

As noted in the previous discussion and the proposed rule, whenever there is a surgical procedure reported on the claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as “unrelated operating room procedures”.

We examined the claims data for the three codes describing cellulitis of the finger (ICD-10-CM diagnosis codes L03.011 (Cellulitis of the right finger), L03.012 (Cellulitis of left finger), and L03.019 (Cellulitis of unspecified finger)) to identify the average length of stay and average costs for cases reporting a principal diagnosis of cellulitis of the finger in conjunction with the excision of phalanx procedures listed in the table above. We also noted in the proposed rule that there were no cases reporting a principal diagnosis of cellulitis of the finger in conjunction with the resection of phalanx procedures listed in the table above.

We also examined the claims data to identify the average length of stay and average costs for all cases in MS-DRGs 579, 580, and 581. Our findings are shown in the table in section II.F.12.A.3.of the preamble of this final rule.

We stated in the proposed rule that while our clinical advisors noted that the average length of stay and average costs for cases in MS-DRGs 579, 580, and 581 are generally higher than the average length of stay and average costs for the subset of cases reporting a principal diagnosis of cellulitis of the finger and a procedure describing excision of phalanx, they believe that the procedures are clearly related to the principal diagnosis codes and, therefore, it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses, particularly given that procedures describing excision of phalanx with the diagnostic qualifier “X” are already assigned to these MS-DRGs. In addition, we stated that our clinical advisors believe it is clinically appropriate for the procedures describing resection of phalanx to be assigned to MS-DRGs 579, 580, and 581 as well. Therefore, we proposed to add the procedure codes describing excision and resection of phalanx listed above to MS-DRGs 579, 580, and 581. We stated that, under this proposal, cases reporting one of the excision or resection procedures listed in the table above in conjunction with a principal diagnosis from MDC 9 would group to MS-DRGs 579, 580, and 581.

Comment: A commenter supported our proposal to add the procedure codes describing excision and resection of phalanx listed above to MS-DRGs 579, 580, and 581 in MDC 9.

Response: We appreciate the commenter's support.

Comment: Other commenters did not support our proposal to add the procedure codes describing excision and resection of phalanx listed above to MS-DRGs 579, 580, and 581 in MDC 9. Commenters stated that it does not appear clinically appropriate for bone procedures to be grouped to skin and subcutaneous tissue MS-DRGs, and that the small number of cases suggests that this may be a coding issue.

Response: We note that MS-DRGs 579, 580, and 581 already contain many bone-related procedures, such as those beginning with 0PD, which describe extraction of bone. In addition, our clinical advisors believe that it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses, particularly given that procedures describing excision of phalanx with the diagnostic qualifier “X” are already assigned to these MS-DRGs.

After consideration of the public comments we received, we are finalizing our proposal to add procedure codes describing excision and resection of phalanx listed above to MS-DRGs 579, 580, and 581 in MDC 9.

(4) Multiple Trauma With Internal Fixation of Joints

We received a request to reassign cases involving multiple significant trauma with internal fixation of joints from MS-DRGs 981, 982, and 983 to MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively). The requestor provided an example of several ICD-10-CM diagnosis codes that together described multiple significant trauma in conjunction with ICD-10-PCS procedure codes in tables 0SH and 0RH that describe internal fixation of joints. The requestor provided several suggestions to address this assignment, including: adding all ICD-10-PCS procedure codes in MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) with the exception of codes that group to MS-DRG 956 (Limb Reattachment, Hip and Femur Procedures for Multiple Significant Trauma) to MS-DRGs 957, 958, and 959; adding codes within the ICD-10-PCS tables 0SH and 0RH to MDC 24; and adding ICD-10-PCS procedure codes from all MDCs except those that currently group to MS-DRG 955 (Craniotomy for Multiple Significant Trauma) or MS-DRG 956 (Limb Reattachment, Hip and Femur Procedures for Multiple Significant Trauma) to MS-DRGs 957, 958, and 959.

We stated in the proposed rule that, while we understand the requestor's concern about these multiple significant trauma cases, we believe any potential reassignment of these cases requires significant analysis. We further stated that, similar to our analysis of MDC 14 (initially discussed at 81 FR 56854), there are multiple logic lists in MDC 24 that would need to be reviewed. For example, to satisfy the logic for multiple significant trauma, the logic requires a diagnosis code from the significant trauma principal diagnosis list and two Start Printed Page 42138or more significant trauma diagnoses from different body sites. The significant trauma logic lists for the other body sites (which include head, chest, abdominal, kidney, urinary system, pelvis or spine, upper limb, and lower limb) allow the extensive list of diagnosis codes included in the logic to be reported as a principal or secondary diagnosis. The analysis of the reporting of all the codes as a principal and/or secondary diagnosis within MDC 24, combined with the analysis of all of the ICD-10-PCS procedure codes within MDC 8, is anticipated to be a multi-year effort. Therefore, we stated that we plan to consider this issue for future rulemaking as part of our ongoing analysis of the unrelated procedure MS-DRGs.

(5) Totally Implantable Vascular Access Devices

We received a request to reassign cases for insertion of totally implantable vascular access devices (TIVADs) listed in the table below when reported with principal diagnoses in MDCs other than MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) from MS-DRGs 981 through 983 to a surgical MS-DRG within the appropriate MDC based on the principal diagnosis. The requestor noted that the insertion of TIVAD procedures are newly designated as O.R. procedures, effective October 1, 2018, and are assigned to MDCs 9 and 11. The requestor stated that TIVADs can be placed for a variety of purposes and are used to treat a wide range of malignancies at various sites and, therefore, would likely have a relationship to the principal diagnosis within any MDC. The requestor suggested that procedures describing the insertion of TIVADs group to surgical MS-DRGs within every MDC (other than MDCs 2, 20, and 22, which do not contain surgical MS-DRGs). The requestor further stated that the surgical hierarchy should assign more significant O.R. procedures within each MDC to a higher position than procedures describing the insertion of TIVADs because these procedures consume less O.R. resources than more invasive procedures.

We stated in the proposed rule that, while we agreed that TIVAD procedures may be performed in connection with a variety of principal diagnoses, we note that because these procedures are newly designated as O.R. procedures effective October 1, 2018, we do not yet have sufficient data to analyze this request. We further stated that we plan to consider this issue in future rulemaking as part of our ongoing analysis of the unrelated procedure MS-DRGs.

(6) Gastric Band Procedure Complications or Infections

We received a request to reassign cases for infection or complications due to gastric band procedures when reported with a procedure describing revision of or removal of extraluminal device in/from the stomach from MS-DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without MCC/CC, respectively) to MS-DRGs 326, 327, and 328 (Stomach, Esophageal, and Duodenal Procedures with MCC, with CC, and without CC/MCC, respectively). We stated in the proposed rule that ICD-10-CM diagnosis codes K95.01 (Infection due to gastric band procedure) and K95.09 Start Printed Page 42139(Other complications of gastric band procedure) are used to report these conditions and are currently assigned to MDC 6 (Diseases and Disorders of the Digestive System). ICD-10-PCS procedure codes 0DW64CZ (Revision of extraluminal device in stomach, percutaneous endoscopic approach) and 0DP64CZ (Removal of extraluminal device from stomach, percutaneous endoscopic approach) are used to report the revision of, or removal of, an extraluminal device in/from the stomach and are currently assigned to MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 619, 620, and 621 (O.R. Procedures for Obesity with MCC with CC, and without CC/MCC, respectively).

Our analysis of this grouping issue confirmed that when procedures describing the revision of or removal of an extraluminal device in/from the stomach are reported with principal diagnoses in MDC 6 (such as ICD-10-CM diagnosis codes K95.01 and K95.09), in the absence of a procedure assigned to MDC 6, these cases group to MS-DRGs 987, 988, and 989. As noted in the previous discussion and in the proposed rule, whenever there is a surgical procedure reported on the claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as “unrelated operating room procedures”.

As indicated in the proposed rule, we examined the claims data to identify cases involving ICD-10-PCS procedure codes 0DW64CZ and 0DP64CZ reported with a principal diagnosis of K95.01 or K95.09 that are currently grouping to MS-DRGs 987, 988, and 989. Our findings are shown in the table below.

We also examined the data for cases in MS-DRGs 326, 327, and 328, and our findings are provided in a table presented in section II.F.12.a. of the preamble of this final rule. We stated in the proposed rule that, while our clinical advisors noted that the average length of stay and average costs of cases in MS-DRGs 326, 327, and 328 are significantly higher than the average length of stay and average costs for the subset of cases reporting procedure code 0DW64CZ or 0DP64CZ and a principal diagnosis code of K95.01 or K95.09, they believe that the procedures are clearly related to the principal diagnosis and, therefore, it is clinically appropriate for the procedures to group to the same MS-DRGs as the principal diagnoses. In addition, we stated that our clinical advisors believe that because these procedures are intended to treat a complication of a procedure related to obesity, rather than the obesity itself, they are more appropriately assigned to stomach, esophageal, and duodenal procedures (MS-DRGs 326, 327, and 328) in MDC 6 than to procedures for obesity (MS-DRGs 619, 620, and 621) in MDC 10.

Therefore, we proposed to add ICD-10-PCS procedure codes 0DW64CZ and 0DP64CZ to MDC 6 in MS-DRGs 326, 327, and 328. We stated in the proposed rule that, under this proposal, cases reporting procedure code 0DW64CZ or 0DP64CZ in conjunction with a principal diagnosis code of K95.01 or K95.09 would group to MS-DRGs 326, 327, and 328.

Comment: Commenters supported our proposal to add ICD-10-PCS procedure codes 0DW64CZ and 0DP64CZ to MDC 6 in MS-DRGs 326, 327, and 328.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure codes 0DW64CZ and 0DP64CZ to MDC 6 in MS-DRGs 326, 327, and 328.

(7) Peritoneal Dialysis Catheters

We received a request to reassign cases for complications of peritoneal dialysis catheters when reported with procedure codes describing removal, revision, and/or insertion of new peritoneal dialysis catheters from MS-DRGs 981 through 983 to MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 6 by adding the diagnosis codes describing complications of peritoneal dialysis catheters to MDC 6. We stated in the proposed rule that our clinical advisors believe it is more appropriate to add the procedure codes describing removal, revision, and/or insertion of new peritoneal dialysis catheters to MS-DRGs 907, 908, and 909 than to move the diagnosis codes describing complications of peritoneal dialysis catheters to MDC 6 because the diagnosis codes describe complications, rather than initial placement, of peritoneal dialysis catheters, and therefore, are most clinically aligned with the diagnosis codes assigned to MDC 21 (where they are currently assigned). In section II.F.12.a. of the preamble of the proposed rule, we proposed, and as discussed in this final rule, are finalizing, to add procedures Start Printed Page 42140describing removal, revision, and/or insertion of peritoneal dialysis catheters to MS-DRGs 907, 908, and 909 in MDC 21. We refer readers to section II.F.12.a. of the preamble of this final rule in which we describe our analysis of this issue as part of our broader review of the unrelated MS-DRGs.

(8) Occlusion of Left Renal Vein

We received a request to reassign cases for varicose veins in the pelvic region when reported with an embolization procedure from MS-DRGs 981, 982 and 983 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for Malignancy with CC/MCC and without CC/MCC, respectively) and MS-DRGs 717 and 718 (Other Male Reproductive System O.R. Procedures Except Malignancy with CC/MCC and without CC/MCC, respectively) in MDC 12 (Diseases and Disorders of the Male Reproductive System) and to MS-DRGs 749 and 750 (Other Female Reproductive System O.R. Procedures with CC/MCC and without CC/MCC, respectively) in MDC 13 (Diseases and Disorders of the Female Reproductive System). We stated in the proposed rule that ICD-10-CM diagnosis code I86.2 (Pelvic varices) is reported to identify the condition of varicose veins in the pelvic region and is currently assigned to MDC 12 and to MDC 13. ICD-10-PCS procedure code 06LB3DZ (Occlusion of left renal vein with intraluminal device, percutaneous approach) may be reported to describe an embolization procedure performed for the treatment of pelvic varices and is currently assigned to MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively), MDC 6 (Diseases and Disorders of the Digestive System) in MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively), MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/MCC, respectively), and MDC 24 (Multiple Significant Trauma) in MS-DRGs 957, 958, 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively). The requestor also noted that when this procedure is performed on pelvic veins on the right side, such as the ovarian vein, (which is reported with ICD-10-PCS code 06L03DZ (Occlusion of inferior vena cava with intraluminal device, percutaneous approach)) for varicose veins in the right pelvic region, the case groups to MS-DRGs 715 and 716 and MS-DRGs 717 and 718 in MDC 12 (for male patients) or MS-DRGs 749 and 750 in MDC 13 (for female patients). We note that there was an inadvertent error in the proposed rule in which the term “renal vein” was referenced rather than “pelvic veins on the right side” or “ovarian vein”.

Our analysis of this grouping issue confirmed that when ICD-10-CM diagnosis code I86.2 (Pelvic varices) is reported with ICD-10-PCS procedure code 06LB3DZ, the case groups to MS-DRGs 981, 982, and 983. As noted above in previous discussions and in the proposed rule, whenever there is a surgical procedure reported on the claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as “unrelated operating room procedures.”

As indicated in the proposed rule, we examined the claims data to identify cases involving procedure code 06LB3DZ in MS-DRGs 981, 982, and 983 reported with a principal diagnosis code of I86.2. We found no cases in the claims data.

In the absence of data to examine, we indicated that our clinical advisors reviewed this request and agreed with the requestor that when the embolization procedure is performed on the left ovarian vein (reported with ICD-10-PCS procedure code 06LB3DZ), it should group to the same MS-DRGs as when it is performed on the right ovarian vein. Therefore, we proposed to add ICD-10-PCS procedure code 06LB3DZ to MDC 12 in MS-DRGs 715, 716, 717, and 718 and to MDC 13 in MS-DRGs 749 and 750. We stated in the proposed rule that, under this proposal, cases reporting ICD-10-CM diagnosis code I86.2 with ICD-10-PCS procedure code 06LB3DZ would group to MDC 12 (for male patients) or MDC 13 (for female patients).

Comment: A commenter stated that this issue should be reevaluated, because 06L03DZ is not the correct code to report procedures done on the right renal vein; rather, 06L93DZ (Occlusion of right renal vein with intraluminal device, percutaneous approach) would be reported instead.

Response: We appreciate the commenter's request for clarification. We wish to clarify that certain specific pelvic veins do not have their own body part value in the ICD-10-PCS, and the ICD-10-PCS Body Part Key instructs coders to assign the inferior vena cava body part for veins such as the right ovarian vein and the right testicular vein, and to assign the left renal vein body part for veins such as the left ovarian vein and the left testicular vein. Therefore, ICD-10-PCS codes 06L03DZ or 06LB3DZ indeed may be reported to describe an embolization procedure performed for the treatment of pelvic varices of these respective sites. As such, our clinical advisors believe that when the embolization procedure is performed on veins classified to the left renal vein, such as the left ovarian vein and the left testicular vein, it should group to the same MS-DRGs as when it is performed on veins classified to the inferior vena cava, such as the right ovarian vein and the right testicular vein.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedure code 06LB3DZ to MDC 12 in MS-DRGs 715, 716, 717, and 718 and to MDC 13 in MS-DRGs 749 and 750.

13. Operating Room (O.R.) and Non-O.R. Issues

a. Background

Under the IPPS MS-DRGs (and former CMS MS-DRGs), we have a list of procedure codes that are considered operating room (O.R.) procedures. Historically, we developed this list using physician panels that classified each procedure code based on the procedure and its effect on consumption of hospital resources. For example, generally the presence of a surgical procedure which required the use of the operating room would be expected to have a significant effect on the type of hospital resources (for example, operating room, recovery room, and anesthesia) used by a patient, and therefore, these patients were considered surgical. Because the claims data generally available do not precisely indicate whether a patient was taken to the operating room, surgical patients were identified based on the procedures that were performed. Generally, if the procedure was not expected to require the use of the operating room, the patient would be considered medical (non-O.R.).

Currently, each ICD-10-PCS procedure code has designations that determine whether and in what way the presence of that procedure on a claim impacts the MS-DRG assignment. First, each ICD-10-PCS procedure code is either designated as an O.R. procedure for purposes of MS-DRG assignment (“O.R. procedures”) or is not designated Start Printed Page 42141as an O.R. procedure for purposes of MS-DRG assignment (“non-O.R. procedures”). Second, for each procedure that is designated as an O.R. procedure, that O.R. procedure is further classified as either extensive or non-extensive. Third, for each procedure that is designated as a non-O.R. procedure, that non-O.R. procedure is further classified as either affecting the MS-DRG assignment or not affecting the MS-DRG assignment. We refer to these designations that do affect MS-DRG assignment as “non-O.R. affecting the MS-DRG.” For new procedure codes that have been finalized through the ICD-10 Coordination and Maintenance Committee meeting process and are proposed to be classified as O.R. procedures or non-O.R. procedures affecting the MS-DRG, our clinical advisors recommend the MS-DRG assignment which is then made available in association with the proposed rule (Table 6B.—New Procedure Codes) and subject to public comment. These proposed assignments are generally based on the assignment of predecessor codes or the assignment of similar codes. For example, we generally examine the MS-DRG assignment for similar procedures, such as the other approaches for that procedure, to determine the most appropriate MS-DRG assignment for procedures proposed to be newly designated as O.R. procedures. As discussed in section II.F.15. of the preamble of this final rule, we are making Table 6B.—New Procedure Codes—FY 2020 available on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. We also refer readers to the ICD-10 MS-DRG Version 36 Definitions Manual at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html for detailed information regarding the designation of procedures as O.R. or non-O.R. (affecting the MS-DRG) in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index.

In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that, given the long period of time that has elapsed since the original O.R. (extensive and non-extensive) and non-O.R. designations were established, the incremental changes that have occurred to these O.R. and non-O.R. procedure code lists, and changes in the way inpatient care is delivered, we plan to conduct a comprehensive, systematic review of the ICD-10-PCS procedure codes. This will be a multi-year project during which we will also review the process for determining when a procedure is considered an operating room procedure. For example, we may restructure the current O.R. and non-O.R. designations for procedures by leveraging the detail that is now available in the ICD-10 claims data. We refer readers to the discussion regarding the designation of procedure codes in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38066) where we stated that 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, as well as changes in medical practice. 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 with regard to resource utilization, particularly with the implementation of ICD-10. Therefore, as we stated in the proposed rule, we are again soliciting public comments on what factors or criteria to consider in determining whether a procedure is designated as an O.R. procedure in the ICD-10-PCS classification system for future consideration. Commenters should submit their recommendations to the following email address: MSDRGClassificationChange@cms.hhs.gov by November 1, 2019.

We stated in the proposed rule that, as a result of this planned review and potential restructuring, procedures that are currently designated as O.R. procedures may no longer warrant that designation, and conversely, procedures that are currently designated as non-O.R. procedures may warrant an O.R. type of designation. We intend to consider the resources used and how a procedure should affect the MS-DRG assignment. We may also consider the effect of specific surgical approaches to evaluate whether to subdivide specific MS-DRGs based on a specific surgical approach. We plan to utilize our available MedPAR claims data as a basis for this review and the input of our clinical advisors. As part of this comprehensive review of the procedure codes, we also intend to evaluate the MS-DRG assignment of the procedures and the current surgical hierarchy because both of these factor into the process of refining the ICD-10 MS-DRGs to better recognize complexity of service and resource utilization.

We will provide more detail on this analysis and the methodology for conducting this review in future rulemaking. As we noted in the proposed rule, as we continue to develop our process and methodology, as noted above, we are soliciting public comments on other factors to consider in our refinement efforts to recognize and differentiate consumption of resources for the ICD-10 MS-DRGs.

In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19231 through 19235), we addressed requests that we received regarding changing the designation of specific ICD-10-PCS procedure codes from non-O.R. to O.R. procedures, or changing the designation from O.R. procedure to non-O.R. procedure. Below we discuss the process that was utilized for evaluating the requests that were received for FY 2020 consideration. For each procedure, our clinical advisors considered:

  • Whether the procedure would typically require the resources of an operating room;
  • Whether it is an extensive or a nonextensive procedure; and
  • To which MS-DRGs the procedure should be assigned.

We noted in the proposed rule that many MS-DRGs require the presence of any O.R. procedure. As a result, cases with a principal diagnosis associated with a particular MS-DRG would, by default, be grouped to that MS-DRG. Therefore, we do not list these MS-DRGs in our discussion below. Instead, we only discuss MS-DRGs that require explicitly adding the relevant procedures codes to the GROUPER logic in order for those procedure codes to affect the MS-DRG assignment as intended. In cases where we proposed to change the designation of procedure codes from non-O.R. procedures to O.R. procedures, we also proposed one or more MS-DRGs with which these procedures are clinically aligned and to which the procedure code would be assigned.

In addition, cases that contain O.R. procedures will map to MS-DRG 981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-DRG 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when they do not contain a principal diagnosis that corresponds to one of the MDCs to which that procedure is assigned. These procedures need not be assigned to MS-DRGs 981 through 989 in order for this to occur. Therefore, if requestors included some or all of MS-DRGs 981 through 989 in their request or included MS-DRGs that require the presence of any O.R. procedure, we did not specifically Start Printed Page 42142address that aspect in summarizing their request or our response to the request in the section below.

For procedures that would not typically require the resources of an operating room, our clinical advisors determined if the procedure should affect the MS-DRG assignment.

As indicated in the proposed rule, we received several requests to change the designation of specific ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures, or to change the designation from O.R. procedures to non-O.R. procedures. Below, as we did in the proposed rule, in this final rule, we detail and respond to some of those requests and, further, summarize and respond to the public comments we received in response to our proposals, if applicable. With regard to the remaining requests, as stated in the proposed rule, our clinical advisors believe it is appropriate to consider these requests as part of our comprehensive review of the procedure codes discussed above.

b. O.R. Procedures to Non-O.R. Procedures

(1) Bronchoalveolar Lavage

Bronchoalveolar lavage (BAL) is a diagnostic procedure in which a bronchoscope is passed through the patient's mouth or nose into the lungs. A small amount of fluid is squirted into an area of the lung and then collected for examination. Two requestors identified 13 ICD-10-PCS procedure codes describing BAL procedures that generally can be performed at bedside and would not require the resources of an operating room. In the ICD-10 MS-DRG Version 36 Definitions Manual, these 13 ICD-10-PCS procedure codes are currently recognized as O.R. procedures for purposes of MS-DRG assignment.

In the proposed rule, we stated that we agreed with the requestors that these procedures do not typically require the resources of an operating room. Therefore, we proposed to remove the following 13 procedure codes from the FY 2020 ICD-10 MS-DRGs Version 37 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. We stated in the proposed rule that, under this proposal, these procedures would no longer impact MS-DRG assignment.

Comment: Some commenters supported our proposal to designate the 13 procedure codes above as non-O.R. procedures.

Response: We appreciate the commenters' support.

Comment: Other commenters opposed our proposal to designate the 13 procedure codes above as non-O.R. procedures. A commenter stated that due to the complexity of the procedures being performed, they should continue to be designated as an O.R. procedure, while another commenter stated that CMS should not reassign any procedures as O.R. or non-O.R. until it has completed its comprehensive review.

Response: As indicated in the proposed rule, our clinical advisors believe that these procedures do not typically require the resources of an operating room. The commenter did not provide information to the contrary. We also do not agree with the commenter who stated that we should not reassign any procedures as O.R. or non-O.R; rather, while some requests may involve a broader review of additional ranges of ICD-10-PCS codes, such that we believe they are more appropriately considered as part of our comprehensive review of procedure codes, we generally believe it is more accurate to address requests to change the designation of procedures as OR or non-OR as they arise rather than waiting for the comprehensive review, which is a multiyear project.

After consideration of the public comments we received, we are finalizing our policy to designate the 13 codes above as non-O.R.

(2) Percutaneous Drainage of Pelvic Cavity

One requestor identified two ICD-10-PCS procedure codes that describe procedures involving percutaneous drainage of the pelvic cavity. The two ICD-10-PCS procedure codes are: 0W9J3ZX (Drainage of pelvic cavity, percutaneous approach, diagnostic) and 0W9J3ZZ (Drainage of pelvic cavity, percutaneous approach).

ICD-10-PCS procedure code 0W9J3ZX is currently recognized as an O.R. procedure for purposes of MS-DRG assignment, while the nondiagnostic ICD-10-PCS procedure code 0W9J3ZZ is not recognized as an O.R. procedure Start Printed Page 42143for purposes of MS-DRG assignment. The requestor stated that percutaneous drainage procedures of the pelvic cavity for both diagnostic and nondiagnostic purposes are not complex procedures and both types of procedures are usually performed in a radiology suite. The requestor stated that both procedures should be classified as non-O.R. procedures.

We stated in the proposed rule that we agreed with the requestor that these procedures do not typically require the resources of an operating room. Therefore, we proposed to remove procedure code 0W9J3ZX from the FY 2020 ICD-10 MS-DRG Version 37 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. We stated that, under this proposal, this procedure would no longer impact MS-DRG assignment.

Comment: Commenters supported the proposal to change the designation of 0W9J3ZX to a non-O.R. procedure. The commenters stated that the proposal was reasonable, given the data and information provided.

A commenter stated that CMS should not consider any requests to modify the designation of procedures as O.R. or non-O.R. for FY 2020. As stated in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19230), CMS plans to conduct a comprehensive systematic review of the ICD-10-PCS procedure codes. The commenter suggested that reassignment requests should be held until the review has been completed.

Response: We appreciate the commenters' support. We do not agree with the commenter who stated that we should not reassign any procedures as O.R. or non-O.R; rather, while some requests may involve a broader review of additional ranges of ICD-10-PCS codes, such that we believe they are more appropriately considered as part of our comprehensive review of procedure codes, we generally believe it is more accurate to address requests to change the designation of procedures as OR or non-OR as they arise rather than waiting for the comprehensive review, which is a multiyear project. After consideration of the public comments we received, we are finalizing our proposal to change the designation of 0W9J3ZX from an O.R. procedure to non-O.R. procedure, effective October 1, 2019.

(3) Percutaneous Removal of Drainage Device

One requestor identified two ICD-10-PCS procedure codes that describe procedures involving the percutaneous placement and removal of drainage devices from the pancreas. These two ICD-10-PCS procedure codes are: 0FPG30Z (Removal of drainage device from pancreas, percutaneous approach) and 0F9G30Z (Drainage of pancreas with drainage device, percutaneous approach). ICD-10-PCS procedure code 0FPG30Z is currently recognized as an O.R. procedure for purposes of MS-DRG assignment, while ICD-10-PCS procedure code 0F9G30Z is not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor stated that percutaneous placement of drains is typically performed in a radiology suite under image guidance and removal of a drain would not be more resource intensive than its placement.

We stated in the proposed rule that we agreed with the requestor that these procedures do not typically require the resources of an operating room. Therefore, we proposed to remove ICD-10-PCS procedure code 0FPG30Z from the FY 2020 ICD-10 MS-DRG Version 37 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. We stated that, under this proposal, this procedure would no longer impact MS-DRG assignment.

Comment: Commenters supported the proposal to change the designation of 0FPG30Z to a non-O.R. procedure. The commenters stated that the proposal was reasonable, given the data and information provided.

A commenter stated that CMS should not consider any requests to modify the designation of procedures as O.R. or non-O.R. for FY 2020. As stated in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19230), CMS plans to conduct a comprehensive systematic review of the ICD-10-PCS procedure codes. The commenter suggested that reassignment requests should be held until the review has been completed.

Response: We appreciate the commenters' support. We do not agree with the commenter who stated that we should not reassign any procedures as O.R. or non-O.R; rather, while some requests may involve a broader review of additional ranges of ICD-10-PCS codes, such that we believe they are more appropriately considered as part of our comprehensive review of procedure codes, we generally believe it is more accurate to address requests to change the designation of procedures as OR or non-OR as they arise rather than waiting for the comprehensive review, which is a multiyear project. After consideration of the public comments we received, we are finalizing our proposal to change the designation of 0FPG30Z from an O.R. procedure to a non-O.R. procedure, effective October 1, 2019.

c. Non-O.R. Procedures to O.R. Procedures

(1) Percutaneous Occlusion of Gastric Artery

One requestor identified two ICD-10-PCS procedure codes that describe percutaneous occlusion and restriction of the gastric artery with intraluminal device, ICD-10-PCS procedure codes 04L23DZ (Occlusion of gastric artery with intraluminal device, percutaneous approach) and 04V23DZ (Restriction of gastric artery with intraluminal device, percutaneous approach), that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor noted that transcatheter endovascular embolization of the gastric artery with intraluminal devices uses comparable resources to transcatheter endovascular embolization of the gastroduodenal artery. The requestor stated that ICD-10-PCS procedure codes 04L33DZ (Occlusion of hepatic artery with intraluminal device, percutaneous approach) and 04V33DZ (Restriction of hepatic artery with intraluminal device, percutaneous approach) are recognized as O.R. procedures for purposes of MS-DRG assignment, and ICD-10-PCS procedure codes 04L23DZ and 04V23DZ should therefore also be recognized as O.R. procedures for purposes of MS-DRG assignment. We note that, contrary to the requestor's statement, ICD-10-PCS procedure code 04V23DZ is already recognized as an O.R. procedure for purposes of MS-DRG assignment.

We stated in the proposed rule that we agreed with the requestor that ICD-10-PCS procedure code 04L23DZ typically requires the resources of an operating room. Therefore, we proposed to add this code to the FY 2020 ICD-10 MS-DRG Version 37 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, CC, without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the Circulatory System); MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures, with MCC, CC, without CC/MCC, respectively) in MDC 06 (Diseases and Disorders of the Digestive System); MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs); and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, Start Printed Page 42144CC, without CC/MCC, respectively) in MDC 24 (Multiple Significant Trauma).

Comment: Commenters supported the proposal to change the designation of 04L23DZ from a non-O.R. to O.R. procedure. The commenters stated that the proposal was reasonable, given the data and information provided. A commenter noted that this change better reflects the resources required to perform the procedure and better aligns its designation with the designation of other procedures of similar technical difficulty.

A commenter stated that CMS should not consider any requests to modify the designation of procedures as O.R. or non-O.R. for FY 2020. As stated in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19230), CMS plans to conduct a comprehensive systematic review of the ICD-10-PCS procedure codes. The commenter suggested that reassignment requests should be held until the review has been completed.

Response: We appreciate the commenters' support. We do not agree with the commenter who stated that we should not reassign any procedures as O.R. or non-O.R; rather, while some requests may involve a broader review of additional ranges of ICD-10-PCS codes, such that we believe they are more appropriately considered as part of our comprehensive review of procedure codes, we generally believe it is more accurate to address requests to change the designation of procedures as OR or non-OR as they arise rather than waiting for the comprehensive review, which is a multiyear project. After consideration of the public comments we received, we are finalizing our proposal to change the designation of 04L23DZ from non-O.R. procedure to O.R. procedure, effective October 1, 2019.

(2) Endoscopic Insertion of Endobronchial Valves

As noted in the FY 2020 IPPS/LTCH PPS proposed rule, in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41257), we discussed a comment we received in response to the FY 2019 IPPS/LTCH PPS proposed rule regarding eight ICD-10-PCS procedure codes that describe endobronchial valve procedures that the commenter believed should be designated as O.R. procedures. The codes are identified in the following table.

The commenter stated that these procedures are most commonly performed in the O.R., given the need for better monitoring and support through the process of identifying and occluding a prolonged air leak using endobronchial valve technology. The commenter also noted that other endobronchial valve procedures have an O.R. designation. We noted that, in the ICD-10 MS-DRGs Version 35, these eight ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. The commenter requested that these eight procedure codes be assigned to MS-DRG 163 (Major Chest Procedures with MCC) due to similar cost and resource use. As discussed in the FY 2019 IPPS/LTCH PPS final rule, our clinical advisors disagreed with the commenter that the eight identified procedures typically require the use of an operating room, and believed that these procedures would typically be performed in an endoscopy suite. Therefore, we did not finalize a change to the eight procedure codes describing endoscopic insertion of an endobronchial valve listed in the table above for FY 2019 under the ICD-10 MS-DRGs Version 36.

After publication of the FY 2019 IPPS/LTCH PPS final rule, we received feedback from several stakeholders expressing continued concern with the designation of the eight ICD-10-PCS procedure codes describing the endoscopic insertion of an endobronchial valve listed in the table Start Printed Page 42145above, including requests to reconsider the designation of these codes for FY 2020. Some requestors stated that while they appreciated CMS' attention to the issue, they believed that important clinical and financial factors had been overlooked. The requestors noted that while the site of care is an important consideration for MS-DRG assignment, there are other clinical factors such as case complexity, patient health risk and the need for anesthesia that also affect hospital resource consumption and should influence MS-DRG assignment. With regard to complexity, the requestors stated that many of these patients are high-risk, often recovering from major lung surgery and have significantly compromised respiratory function. According to one requestor, these patients may have major comorbidities, such as cancer or emphysema contributing to longer lengths of stay in the hospital. This requestor acknowledged that procedures performed for the endoscopic insertion of an endobronchial valve are often, but not always, performed in the O.R., however, the requestor also noted this should not preclude the designation of these procedures as O.R. procedures since there have been other examples of reclassification requests where the combination of factors, such as treatment difficulty, resource utilization, patient health status, and anesthesia administration were considered in the decision to change the designation for a procedure from non-O.R. to O.R. Another requestor stated that CMS' current designation of a procedure involving the endoscopic insertion of an endobronchial valve as a non-O.R. procedure is not reflective of actual practice and this designation has payment consequences that may affect access to the treatment for a vulnerable patient population, with limited treatment options. The requestor recommended that procedures involving the endoscopic insertion of an endobronchial valve should be designated as O.R. procedures and assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC and without CC/MCC, respectively). In addition, a few of the requestors also conducted their own analyses and indicated that if procedures involving the endoscopic insertion of an endobronchial valve were to be assigned to MS-DRGs 163, 164, and 165, the average costs of the cases reporting a procedure code describing the endoscopic insertion of an endobronchial valve would still be higher compared to all the cases in the assigned MS-DRG.

As indicated in the FY 2020 IPPS/LTCH PPS proposed rule, we examined claims data from the September 2018 update of the FY 2018 MedPAR file for MS-DRGs 163, 164 and 165 to identify cases reporting any one of the eight procedure codes listed in the above table describing the endoscopic insertion of an endobronchial valve. We stated that cases reporting one of these procedure codes would be assigned to MS-DRG 163, 164, or 165 if at least one other procedure that is designated as an O.R. procedure and assigned to these MS-DRGs was also reported on the claim. In addition, cases reporting a procedure code describing the endoscopic insertion of an endobronchial valve with a different surgical approach are assigned to MS-DRGs 163, 164, and 165. Our findings are shown in the following table.

We found a total of 10,812 cases in MS-DRG 163 with an average length of stay of 11.6 days and average costs of $33,433. Of those 10,812 cases, we found 49 cases reporting a procedure for the endoscopic insertion of an endobronchial valve with an average length of stay of 21.1 days and average costs of $53,641. For MS-DRG 164, we found a total of 14,800 cases with an average length of stay of 5.6 days and average costs of $18,202. Of those 14,800 cases, we found 23 cases reporting a procedure for the endoscopic insertion of an endobronchial valve with an average length of stay of 14 days and average costs of $37,287. For MS-DRG 165, we found a total of 7,907 cases with an average length of stay of 3.3 days and average costs of $13,408. Of those 7,907 cases, we found 3 cases reporting a procedure for the endoscopic insertion of an endobronchial valve with an average length of stay of 18.3 days and average costs of $39,249.

We also examined claims data to identify any cases reporting any one of the eight procedure codes listed in the table above describing the endoscopic insertion of an endobronchial valve within MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). We further stated that cases reporting one of these procedure codes would be assigned to MS-DRG 166, 167, or 168 if at least one other procedure that is designated as an O.R. procedure and assigned to these MS-DRGs was also reported on the claim. In addition, MS-DRGs 166, 167, and 168 are the other Start Printed Page 42146surgical MS-DRGs where cases reporting a respiratory diagnosis within MDC 4 would be assigned. Our findings are shown in the following table.

We found a total of 16,050 cases in MS-DRG 166 with an average length of stay of 10.6 days and average costs of $26,645. Of those 16,050 cases, we found 11 cases reporting a procedure for the endoscopic insertion of an endobronchial valve with an average length of stay of 25.7 days and average costs of $71,700. For MS-DRG 167, we found a total of 8,165 cases with an average length of stay of 5.3 days and average costs of $13,687. Of those 8,165 cases, we found 4 cases reporting a procedure for the endoscopic insertion of an endobronchial valve with an average length of stay of 10 days and average costs of $28,847. For MS-DRG 168, we found a total of 2,430 cases with an average length of stay of 2.8 days and average costs of $9,645. Of those 2,430 cases, we indicated that we did not find any cases reporting a procedure for the endoscopic insertion of an endobronchial valve.

The results of our data analysis indicate that cases reporting a procedure for the endoscopic insertion of an endobronchial valve in MS-DRGs 163, 164, 165, 166, and 167 have a longer length of stay and higher average costs when compared to all the cases in their assigned MS-DRG. We stated in the proposed rule that because the data are based on surgical MS-DRGs 163, 164, 165, 166 and 167, and the procedure codes for endoscopic insertion of an endobronchial valve are currently designated as non-O.R. procedures, there was at least one other O.R. procedure reported on the claim resulting in case assignment to one of those MS-DRGs. Our clinical advisors indicated that because there was another O.R. procedure reported, the insertion of the endobronchial valve procedure may or may not have been the main determinant of resource use for those cases. Therefore, we conducted further analysis to evaluate cases for which no other O.R. procedure was performed with the endoscopic insertion of an endobronchial valve and case assignment resulted in a medical MS-DRG. Our findings are shown in the following table.

Start Printed Page 42147

We further stated in the proposed rule that the data indicate that there is a wide variation in the average length of stay and average costs for cases reporting a procedure for the endoscopic insertion of an endobronchial valve, with volume generally low across MS-DRGs. As shown in the table, for several of the medical MS-DRGs, there was only one case reporting a procedure for the endoscopic insertion of an endobronchial valve. The highest volume of cases reporting a procedure for the endoscopic insertion of an endobronchial valve was found in MS-DRG 199 (Pneumothorax with MCC) with a total of 28 cases with an average length of stay of 16.4 days and average costs of $38,384. The highest average costs and longest average length of stay for cases reporting a procedure for the endoscopic insertion of an endobronchial valve was $67,299 in MS-DRG 207 (Respiratory System Diagnosis with Ventilator Support >96 Hours or Peripheral Extracorporeal Membrane Oxygenation (ECMO)) where 4 cases were found with an average length of stay of 20 days. Overall, there was a total of 91 cases reporting the insertion of an endobronchial valve procedure with an average length of stay of 13.7 days and average costs of $33,377 across the medical MS-DRGs.

Our clinical advisors agreed that the subset of patients who undergo endoscopic insertion of an endobronchial procedure are complex and may have multiple comorbidities such as severe underlying lung disease that impact the hospital length of stay. We stated that they also believe that, as we begin the process of refining how procedure codes may be classified under ICD-10-PCS, including designation of a procedure as O.R. or non-O.R., we should take into consideration whether the procedure is driving resource use for the admission. (We refer the reader to section II.F.13.a. of the preamble of this final rule for the discussion of our plans to conduct a comprehensive review of the ICD-10-PCS procedure codes). Based on the claims data analysis, which show a wide variation in average costs for cases reporting endoscopic insertion of an endobronchial valve without an O.R. procedure, we stated that our clinical advisors are not convinced that endoscopic insertion of an endobronchial valve is a key contributing factor to the consumption of resources as reflected in the data. We stated that they also believe, in review of the procedures that are currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168, that further refinement of these MS-DRGs may be warranted. For these reasons, we stated in the proposed rule that, at this time, our clinical advisors do not support designating endoscopic insertion of an endobronchial valve as an O.R. procedure, nor do they support assignment of these procedures to MS-DRGs 163, 164, and 165 until additional analyses can be performed for this subset of patients as part of the comprehensive procedure code review.

For the reasons described above and in the proposed rule, we did not propose to change the current non-O.R. designation of the eight ICD-10-PCS procedure codes that describe endoscopic insertion of an endobronchial valve. However, we stated that because we agreed that endoscopic insertion of an endobronchial valve procedures are performed on clinically complex patients, we believe it may be Start Printed Page 42148appropriate to consider designating these procedures as non-O.R. affecting specific MS-DRGs for FY 2020. Therefore, we requested public comment on designating these procedure codes as non-O.R. procedures affecting the MS-DRG assignment, including the specific MS-DRGs that cases reporting the endoscopic insertion of an endobronchial valve should affect for FY 2020. As we noted in the proposed rule, it is not clear based on the claims data to what degree the endoscopic insertion of an endobronchial valve is a contributing factor for the consumption of resources for these clinically complex patients and given the potential refinement that may be needed for MS-DRGs 163, 164, 165, 166, 167, and 168, we solicited comment on whether cases reporting the endoscopic insertion of an endobronchial valve should affect any of these MS-DRGs or other MS-DRGs.

Comment: Several commenters disagreed with our proposal to not designate the eight procedure codes describing endoscopic insertion of an endobronchial valve procedure as an O.R. procedure until additional analyses can be performed as part of the comprehensive procedure code review. Commenters urged CMS to include the eight procedure codes discussed above in the GROUPER logic for MS-DRGs 163, 164, and 165 based on the analysis that was presented in the proposed rule effective FY 2020. A commenter noted that the analysis showed that cases in surgical MS-DRGs 163, 164, 165, 166 and 167 reporting the endoscopic insertion of an endobronchial valve had longer length of stays and higher average costs than other cases in those MS-DRGs. The commenter stated that the analysis showed that most cases in the medical MS-DRGs reporting the endoscopic insertion of an endobronchial valve had costs significantly higher than the relative weights of the medical DRGs. This commenter also stated that the skill level required for placement, anesthesia (even if performed outside the O.R.), and the severity level of the patient increase costs beyond that recognized within the medical MS-DRGs. The commenter further stated that because CMS's data supports a higher severity level, higher costs, and longer length of stays for patients who undergo endoscopic insertion of an endobronchial valve, they recommended reclassifying the eight procedure codes to O.R. status effective FY 2020, and grouping to MS-DRGs 163, 164 and 165 within MDC 4, to MS-DRG 853 when sepsis is principal diagnosis, and to MS-DRGs 981, 982, and 983 when there is an unrelated principal diagnosis. The commenter stated their belief that further delay of a relative weight increase for these procedures is not warranted nor supported. Another commenter commended CMS for soliciting comments on whether to consider any of the eight procedure codes describing the endoscopic insertion of an endobronchial valve procedure as non-O.R. impacting the MS-DRG assignment. This commenter recommended assigning all eight procedure codes identifying the endoscopic insertion of an endobronchial valve without another O.R. procedure to MS-DRGs 163, 164, and 165 for clinical coherence. According to the commenter, there are currently no medical MS-DRGs with clinically similar procedures or costs, therefore, assignment to MS-DRGs 163, 164 and 165 would ensure adequate payment to providers for these procedures. This commenter also stated that the costs associated with the endoscopic insertion of an endobronchial valve are a significant contributing factor to the higher average costs and length of stay in comparison to clinically similar cases that do not involve the endoscopic insertion of an endobronchial valve.

Response: We appreciate the commenters' feedback on the designation of the eight procedure codes describing the endoscopic insertion of an endobronchial valve. We agree with the commenter that the analysis in the proposed rule showed that cases reporting a procedure for the endoscopic insertion of an endobronchial valve in MS-DRGs 163, 164, 165, 166, and 167 have a longer length of stay and higher average costs when compared to all the cases in their assigned MS-DRG. As noted above, we stated in the proposed rule that because the data are based on surgical MS-DRGs 163, 164, 165, 166 and 167, there was at least one other O.R. procedure reported on the claim resulting in case assignment to one of those MS-DRGs. We also acknowledge that the analysis in the proposed rule showed that most cases in the medical MS-DRGs reporting the endoscopic insertion of an endobronchial valve demonstrated costs higher than the relative weights of the medical DRGs. While our clinical advisors continue to believe it is unclear (based on the claims data) to what degree the endoscopic insertion of an endobronchial valve is a contributing factor for the consumption of resources for these clinically complex patients, they agree, as noted in the proposed rule, that the subset of patients who undergo endoscopic insertion of an endobronchial procedure are complex and may have multiple comorbidities such as severe underlying lung disease that impact the hospital length of stay. Our clinical advisors also continue to believe that further refinement of surgical MS-DRGs 163, 164, 165, 166 and 167 may be warranted because there are other procedure codes describing the insertion of endobronchial valve procedures by various approaches that are currently assigned to MS-DRGs 163, 164, and 165 and are designated as O.R. procedures, which our clinical advisors believe may require further analysis with respect to utilization of resources and designation as O.R. versus non-O.R. There are also other procedure codes currently assigned to MS-DRGs 163, 164 and 165 that describe procedures being performed on body parts other than those related to the chest. For example, we found codes describing laser interstitial thermal therapy (LITT) of several gastrointestinal body parts that do not appear to be clinically coherent. With regard to MS-DRGs 166 and 167, our clinical advisors believe that these MS-DRGs may require further consideration for potential restructuring in connection with the ongoing evaluation of severity level designations and also as a result of the finalized policy (as discussed in section II.F.3. of the preamble of this final rule) regarding the deletion of several procedure codes that contain the qualifier “bifurcation” which are currently assigned to MS-DRGs 166 and 167 (as well as MS-DRG 168). For these reasons, our clinical advisors believe additional analysis of these surgical MS-DRGs is needed. In response to the commenter who suggested that cases reporting one of the eight procedure codes describing the endoscopic insertion of an endobronchial procedure should group to MS-DRG 853 (Infectious & Parasitic Diseases with O.R. Procedure with MCC) when sepsis is the principal diagnosis, and to MS-DRGs 981, 982, and 983 when there is an unrelated principal diagnosis, we note that, as shown in the proposed rule and above, our analysis of the cases reporting the endoscopic insertion of an endobronchial valve in a medical MS-DRG did not result in any cases being found in MS-DRG 853 and our clinical advisors do not agree with assignment of these procedures to that MS-DRG in the absence of further analysis. We also note that, because our clinical advisors continue to believe that endoscopic insertion of an endobronchial valve Start Printed Page 42149should not be designated as an O.R. procedure, they do not support the recommendation for assignment to MS-DRGs 981, 982, and 983 as those MS-DRGs are defined by procedures designated as extensive O.R. procedures. We refer the reader to section II.F.13.a. of the preamble in this final rule, for detailed information on how the designation of each ICD-10-PCS procedure code on a claim impacts the MS-DRG assignment.

In the proposed rule we stated that we agreed that endoscopic insertion of an endobronchial valve procedures are performed on clinically complex patients and that we believed it may be appropriate to consider designating these procedures as non-O.R. affecting specific MS DRGs for FY 2020. Our clinical advisors support the commenters' recommendation for the assignment of cases reporting the endoscopic insertion of an endobronchial valve to MS-DRGs 163, 164, and 165 under the current structure of the ICD-10 MS-DRGs for clinical coherence with the other insertion of endobronchial valve procedures currently assigned to those MS-DRGs and based on the data analysis. Our clinical advisors acknowledge that the data analysis presented in the proposed rule demonstrated that cases reporting a procedure for the endoscopic insertion of an endobronchial valve in MS-DRGs 163, 164, 165, 166, and 167 have a longer length of stay and higher average costs when compared to all the cases in their assigned MS-DRG, however, the average costs and length of stay for those cases are more aligned with MS-DRGs 163, 164 and 165 than MS- DRGs 166, 167, and 168 or any other MS-DRGs within MDC 4 at this time. (As noted in the proposed rule, we did not find any cases reporting a procedure for the insertion of an endobronchial valve in MS-DRG 168).

After consideration of the public comments we received and for the reasons described above, we are finalizing the designation of the eight procedure codes listed earlier in this section that describe the endoscopic insertion of an endobronchial valve as non-O.R. affecting MS-DRGs 163, 164 and 165 (Major Chest Procedures with MCC, with CC and without CC/MCC, respectively) under the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

14. Changes to the MS-DRG Diagnosis Codes for FY 2020

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. Overview of Comprehensive CC/MCC Analysis

In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described our process for establishing three different levels of CC severity into which we would subdivide the diagnosis codes. The categorization of diagnoses as an MCC, a CC, or a non-CC was accomplished using an iterative approach in which each diagnosis was evaluated to determine the extent to which its presence as a secondary diagnosis resulted in increased hospital resource use. We refer readers to the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion of our approach. Since this comprehensive analysis was completed for FY 2008, we have evaluated diagnosis codes individually when receiving requests to change the severity level of specific diagnosis codes. However, given the transition to ICD-10-CM and the significant changes that have occurred to diagnosis codes since this review, we stated in the proposed rule that we believe it is necessary to conduct a comprehensive analysis once again. We further stated that we had completed this analysis and we were discussing our findings in the proposed rule. We used the same methodology utilized in FY 2008 to conduct this analysis, as described below.

For each secondary diagnosis, we measured the impact in resource use for the following three subsets of patients:

(1) Patients with no other secondary diagnosis or with all other secondary diagnoses that are non-CCs.

(2) Patients with at least one other secondary diagnosis that is a CC but none that is an MCC.

(3) Patients with at least one other secondary diagnosis that is an MCC.

Numerical resource impact values were assigned for each diagnosis as follows:

Start Printed Page 42150

Each diagnosis for which Medicare data were available was 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 cost for each subset of cases was compared to the expected cost for cases in that subset. The following format was used to evaluate each diagnosis:

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 cost 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 a major CC. The C3 value reflects a patient with at least one other secondary diagnosis that is a major CC. 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).

These mathematical constructs are used as guides in conjunction with the judgment of our clinical advisors to classify each secondary diagnosis reviewed as an MCC, a CC, or a non-CC. Our clinical advisors reviewed the resource use impact reports and suggested modifications to the initial CC subclass assignments when clinically appropriate.

c. Changes to Severity Levels

(1) General

As discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235 through 19246), the diagnosis codes for which we proposed a change in severity level designation as a result of the analysis described in that proposed rule were shown in Table 6P.1c. associated with that proposed rule (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html). Using the method described above to perform our comprehensive CC/MCC analysis, our clinical advisors recommended a change in the severity level designation for 1,492 ICD-10-CM diagnosis codes. As shown in Table 6P.1c. associated with the FY 2020 IPPS/LTCH PPS proposed rule, the proposed changes to severity level resulting from our comprehensive analysis moved some diagnosis codes to a higher severity level designation and other diagnosis codes to a lower severity level designation, as indicated in the two columns which display CMS' FY 2019 classification in column C and the proposed changes for FY 2020 in column D. We refer readers to the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235 through 19246) for a complete discussion of our proposals, including a summary of the proposed changes and illustrations of proposed severity level changes.

We invited public comments on our proposed severity level designations for the diagnosis codes as shown in Table 6P.1c associated with the proposed rule. We received many comments on the proposals, with the majority of commenters requesting that the adoption of the proposed changes be delayed in order to provide additional time to evaluate given the broad scope of the proposed changes. As discussed in more detail below, after consideration of the public comments we received, we are generally not finalizing our proposed changes to the severity level designations for the ICD-10-CM diagnosis codes as shown in Table 6P.1c associated with the proposed rule, with the exception of the proposed changes to the codes related to antimicrobial resistance as discussed in greater detail below. Below we provide a summary of the comments we received and our response.

Comment: Commenters expressed support for a limited number of the proposed changes in severity level, including the proposed change in severity level designation for diagnosis codes E83.39 (Other disorders of phosphorus metabolism), E83.51 (Hypocalcemia), R62.7 (Adult failure to thrive), R63.3 (Feeding difficulties), Z16.12 (Extended spectrum beta lactamase (ESBL) resistance), Z16.21 (Resistance to vancomycin), Z16.24 (Resistance to multiple antibiotics), and Z16.39 (Resistance to other specified antimicrobial drug) from a non-CC to a CC. Commenters stated their belief that these proposals were reasonable and reflect the resource utilization for these diagnoses.

However, many commenters expressed concern with the proposed severity level designation changes overall and recommended CMS conduct further analysis prior to finalizing any proposals. Specifically, commenters expressed concern that the extensive changes proposed to the severity level designations for the ICD-10-CM diagnosis codes as shown in Table 6P.1c, the majority of which would be a lower severity level (for example, CC to a non-CC), would no longer appropriately reflect resource use for patient care and could have a significant unintended or improper adverse financial impact. In addition, some commenters believed there was not sufficient time to review the nearly 1,500 diagnosis codes for which a change to the severity designation was proposed, noting that CMS engaged in its analysis for over a year before making any comprehensive proposals, and because there have been significant changes that have occurred to diagnosis codes since the transition to ICD-10-CM, in particular the exponential increase in the number of codes. Other general themes reflected in the comments included desire for more transparency and stakeholder Start Printed Page 42151engagement, the belief that clinical severity was not consistently reflected in the proposed severity level designations, and concern regarding the impact on Medicaid and private payers, stating such payers often base their payment amount on Medicare.

Some commenters stated that the information provided was not sufficient to adequately explain the proposed changes in severity level designations for certain diagnosis codes or families of codes. Other commenters were concerned that CMS' stated criteria were not met for some of the proposed changes to severity designations and specifically noted instances where diagnoses that appear to be clinically less severe (and therefore require less resources) were proposed to be assigned a higher severity level designation than other diagnoses that they believe require more resources. Another commenter recommended that any changes be phased in to allow time to assess the impacts such modifications would have on hospitals and patients.

Response: We thank commenters for their comments on our proposed changes. After consideration of the public comments we received, and for the reasons discussed below, we agree it would be premature to adopt broad changes to the severity designations at this time. We agree with commenters that there have been significant changes to the scope and complexity of diagnosis codes since the transition to ICD-10-CM. We also believe that at this time it would be prudent to further examine the proposed severity designations to ensure they would appropriately reflect resource use based on review of the data as well as consideration of relevant clinical factors (for example, the clinical nature of each of the secondary diagnoses and the severity level of clinically similar diagnoses, as explained above) and improve the overall accuracy of the IPPS payments. Postponing the adoption of comprehensive changes in severity level designations will allow us to incorporate review of additional ICD-10 claims data as it becomes available and to fully consider the technical feedback provided from the public on the proposed rule. This would also allow further opportunity to provide additional background to the public on the methodology utilized and clinical rationale applied across diagnostic categories to assist the public in its review, such as making a test GROUPER publicly available to allow for impact testing. In addition, we can consider further whether it is appropriate to propose to make such comprehensive changes all at once or in phases, as suggested by some commenters.

Furthermore, this will afford an opportunity for us to explore additional means of eliciting feedback on the current severity level designations after the final rule and prior to the November 1, 2019 deadline for MS-DRG requests, comments and suggestions for FY 2021, such as holding an open door forum to solicit additional feedback. When providing additional feedback or comments, we encourage the public to provide a detailed explanation of why a specific severity level designation for a diagnosis code would ensure that designation appropriately reflects resource use. We also invite feedback regarding other possible ways we can approach the implementation of our proposed comprehensive changes to severity level designations, such as a phased-in approach or changes by specific code categories or MDCs. In summary, for the reasons discussed above, we are generally not finalizing our proposed changes to the severity designations for the ICD-10-CM diagnosis codes as shown in Table 6P.1c associated with the proposed rule, other than the changes to the severity level designations for the diagnosis codes in category Z16- (Resistance to antimicrobial drugs) from a non-CC to a CC, as discussed in more detail below.

Comment: As noted above, we received comments supporting our proposed change in severity level designation for diagnosis codes related to antimicrobial resistance (that is, Z16.12 (Extended spectrum beta lactamase (ESBL) resistance), Z16.21 (Resistance to vancomycin), Z16.24 (Resistance to multiple antibiotics), and Z16.39 (Resistance to other specified antimicrobial drug) from a non-CC to a CC. These commenters stated that they agree that patients with an ICD-10-CM secondary diagnosis code indicating that they were treated for an infection resistant to antibiotics should be, at a minimum, assigned a CC severity level designation. They asserted that the resources required to treat patients suffering from antimicrobial resistant infections should warrant a higher severity designation, and indicated that caring for patients with these complications is more resource intensive, including the need for stronger, different, or extra antibiotics. Commenters further indicated that the higher resources required to treat patients suffering from antimicrobial resistant infections are particularly relevant with respect to Medicare beneficiaries because they are vulnerable to drug-resistant infections due to greater exposure to resistant bacteria (e.g., via catheter infection or from other chronic diseases). These commenters expressed significant concerns related to the public health crisis represented by antimicrobial resistance and urged CMS to also apply the change in the severity level designation from non-CC to CC to the other ICD 10-CM diagnosis codes specifying antimicrobial drug resistance. A few of these commenters made recommendations for certain ICD-10-CM diagnosis codes that specify antimicrobial drug resistance either in addition to or in lieu of the codes included in our proposal. However, many of these commenters recommended that we also apply the change in the severity level designation from non-CC to CC to the other ICD-10-CM diagnosis codes specifying antimicrobial drug resistance (that is, the other diagnosis codes in category Z16-(Resistance to antimicrobial drugs).

Response: We understand the concerns expressed by commenters related to the public health crisis that antimicrobial resistance represents. Addressing these concerns is consistent with the Administration's key priorities, and we have taken into consideration their statements that it clinically requires greater resources to treat patients suffering from antimicrobial resistant infections. For example, antimicrobial resistance results in a substantial number of additional hospital days for Medicare beneficiaries (estimated to be more than 600,000 additional days in the hospital each year), resulting in additional costs and resources to care for these patients.[1] For these reasons, while we are continuing to examine the implementation of broader comprehensive changes to the CC/MCC designations, we believe it is appropriate to finalize the change in the severity level designations from non-CC to CC for the ICD-10-CM diagnosis codes specifying antimicrobial drug resistance. We also agree with the commenters that the change in severity level designation should also apply to the other ICD-10-CM diagnosis codes that specify antimicrobial drug resistance. We believe this would be consistent with our proposal because these codes, which identify the resistance and non-responsiveness of a condition to antimicrobial drugs, are in the same family of codes (Z16) as the previously listed diagnosis codes related to antimicrobial resistance (that is, Z16.12, Z16.21, Z16.24, and Z16.39). Therefore, we are finalizing a change to the severity level designation for all of Start Printed Page 42152the codes in category Z16- (Resistance to antimicrobial drugs), which are listed below, from a non-CC to a CC designation.

(We refer readers to sections II.H.8. and II.H.9. of the preamble of this final rule for a discussion of new technology add-on payment policies related to antimicrobial resistance.)

d. Requested Changes to Severity Levels

In the FY 2020 IPPS/LTCH PPS proposed rule (19246 through 19250) we discussed the external requests we received to make changes for the severity level designations of diagnosis codes in seven specific groups which included (1) Acute Right Heart Failure, (2) Chronic Right Heart Failure, (3) Ascites in Alcoholic Liver Disease and Toxic Liver Disease, (4) Factitious Disorder Imposed on Self, (5) Nonunion and Malunion of Physeal Metatarsal Fractures, (6) Other Encephalopathy, and (7) Obstetrics Chapter Codes. As these requests were external requests we discussed them separately from the comprehensive CC/MCC analysis, however, we utilized the same approach and methodology, consistent with our annual process of reviewing requested changes to severity levels. We note that, for the seven groups of external requests we received, we did not propose any changes to the severity levels of the diagnosis codes based on the results of our data analysis and the input of our clinical advisors, with the exception of group (7) Obstetrics Chapter Codes. We also note that we solicited comments on, but did not specifically propose changes for, the diagnosis codes discussed from group (1) Acute Right Heart Failure.

Some commenters disagreed with our decision not to propose changes in the severity level designation for certain groups of codes, for example the acute right heart failure and ascites codes, and recommended that we finalize changes to the severity levels, stating that the resources required are similar to the existing codes. Other commenters specifically recommended that we postpone any decisions related to the obstetrics chapter codes and work with a panel of provider stakeholders. As we indicated in the proposed rule, given the limited number of cases reporting ICD-10-CM obstetrical codes in the Medicare claims data, we are considering use of datasets other than MedPAR cost data for future evaluation of severity level designation for the ICD-10-CM diagnosis codes from the Obstetrics chapter of the ICD-10-CM classification.

As discussed above, after consideration of the public comments received, we are generally not finalizing our proposed changes to the severity level designations for the ICD-10-CM diagnosis codes that were reviewed as part of the comprehensive CC/MCC analysis and shown in Table 6P.1c associated with the proposed rule. Similarly, we are not finalizing any proposed changes to the obstetric chapter diagnosis codes for FY 2020, to allow for further consideration of these codes as part of our comprehensive analysis as well as further consideration of the use of additional data sets for these particular codes, given the limited number of cases reported in the Medicare claims data. We are also finalizing our proposals to maintain the current severity level designations for the remaining six groups of diagnosis codes listed above for FY 2020. We will continue to consider the public comments received on the external requests for changes to severity level designations as we review and consider the public comments on our comprehensive CC/MCC analysis.

e. Additions and Deletions to the Diagnosis Code Severity Levels for FY 2020

The following tables identify the additions and deletions to the diagnosis code MCC severity levels list and the Start Printed Page 42153additions and deletions to the diagnosis code CC severity levels list for FY 2020 and are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

Table 6I.1—Additions to the MCC List—FY 2020;

Table 6I.2—Deletions to the MCC List—FY 2020;

Table 6J.1—Additions to the CC List—FY 2020; and

Table 6J.2—Deletions to the CC List—FY 2020.

f. CC Exclusions List for FY 2020

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.

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.

The ICD-10 MS-DRGs Version 36 CC Exclusion List is included as Appendix C in the ICD-10 MS-DRG Definitions Manual, which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html, and includes two lists identified as Part 1 and Part 2. Part 1 is the list of all diagnosis codes that are defined as a CC or MCC when reported as a secondary diagnosis. If the code designated as a CC or MCC is allowed with all principal diagnoses, the phrase “NoExcl” (for no exclusions) follows the CC or MCC designation. For example, ICD-10-CM diagnosis code A17.83 (Tuberculous neuritis) has this “NoExcl” entry. For all other diagnosis codes on the list, a link is provided to a collection of diagnosis codes which, when used as the principal diagnosis, would cause the CC or MCC diagnosis to be considered as a non-CC. Part 2 is the list of diagnosis codes designated as a MCC only for patients discharged alive; otherwise, they are assigned as a non-CC. After publication of the proposed rule, we found inconsistencies in the assignment of this “NoExcl” entry to the diagnoses designated as a CC or MCC. Generally, each CC or MCC diagnosis excludes itself from acting as a CC or MCC diagnosis, however, there are approximately 229 diagnosis codes we identified in Appendix C that have the phrase “NoExcl” and should instead contain a link to exclude themselves from acting as a CC or MCC. Therefore, we have corrected the list of diagnosis codes for the ICD-10 MS-DRG Definitions Manual Version 37, Appendix C—Complications or Comorbidities Exclusion List by providing a link to a collection of diagnosis codes which, when used as the principal diagnosis, will cause the CC or MCC to be considered as only a non-CC, for each of the 229 diagnosis codes identified. We have also removed the sentence that states, “If the CC or MCC is allowed with all principal diagnoses, then the phrase NoExcl follows the CC/MCC indicator” as there are no longer any entries for which this phrase applies. We note that these corrections to Appendix C do not represent a change in MS-DRG assignment (or IPPS payment) and are being made to conform the appendix and tables to current policy. We also note these corrections are reflected for Table 6K.—Complete List of CC Exclusions—FY 2020.

In the FY 2020 IPPS/LTCH PPS proposed rule, for FY 2020, we proposed changes to the ICD-10 MS-DRGs Version 37 CC Exclusion List. Therefore, we developed Table 6G.1.—Proposed Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2020; Table 6G.2.—Proposed Principal Diagnosis Order Additions to the CC Exclusions List—FY 2020; Table 6H.1.—Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2020; and Table 6H.2.—Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2020. For Table 6G.1, each secondary diagnosis code proposed for addition to the CC Exclusion List is shown with an asterisk and the principal diagnoses proposed to exclude the secondary diagnosis code are provided in the indented column immediately following it. For Table 6G.2, each of the principal diagnosis codes for which there is a CC exclusion is shown with an asterisk and the conditions proposed for addition to the CC Exclusion List that will not count as a CC are provided in an indented column immediately following the affected principal diagnosis. For Table 6H.1, each secondary diagnosis code proposed for deletion from the CC Exclusion List is shown with an asterisk followed by the principal diagnosis codes that currently exclude it. For Table 6H.2, each of the principal diagnosis codes is shown with an asterisk and the proposed deletions to the CC Exclusions List are provided in an indented column immediately following the affected principal diagnosis. Tables 6G.1., 6G.2., 6H.1., and 6H.2. associated with the proposed rule are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

The proposed CC Exclusions for a subset of the diagnosis codes as set forth in Tables 6G.1, 6G.2, 6H.1 and 6H.2 associated with the FY 2020 IPPS/LTCH PPS proposed rule reflected the proposed severity level designations as discussed in section II.F.14.c.1. of the preamble of the proposed rule which were based on our comprehensive CC/MCC analysis. As discussed in section II.F.14.c.1. of the preamble of this final rule, we are not finalizing the proposed changes to the severity level designations after consideration of the public comments received (with the exception of the specified ICD-10-CM diagnosis codes in category Z16-Resistance to antimicrobial drugs). Therefore, the finalized CC Exclusions List as displayed in Tables 6G.1, 6G.2, Start Printed Page 421546H.1, 6H.2. and 6K. associated with this final rule reflect the severity levels under Version 36 of the ICD-10 MS-DRGs for a subset of the diagnosis codes.

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

To identify new, revised and deleted diagnosis and procedure codes, for FY 2020, we have developed Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, Table 6D.—Invalid Procedure Codes, Table 6E.—Revised Diagnosis Code Titles, and Table 6F.—Revised Procedure Code Titles for this final rule.

These tables are not published in the Addendum to the proposed rule or final rule, but are available via the internet on the CMS website 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.18. 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 2020 IPPS/LTCH PPS proposed rule (84 FR 19250) we proposed the MDC and MS-DRG assignments for the new diagnosis codes and procedure codes as set forth in Table 6A.—New Diagnosis Codes and Table 6B.—New Procedure Codes. We also stated that the proposed severity level designations for the new diagnosis codes were set forth in Table 6A. and the proposed O.R. status for the new procedure codes were set forth in Table 6B.

Comment: A commenter expressed support for the proposed MS-DRG assignments under MDC 5 (Diseases and Disorders of the Circulatory System) for new procedure codes describing the insertion, removal, and revision of subcutaneous defibrillator leads via open and percutaneous approaches as reflected in Table 6B.—New Procedure Codes, that was associated with the proposed rule. However, the commenter stated it was not clear why MS-DRGs 040 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC), 041 (Peripheral, Cranial Nerve and Other Nervous System Procedures with CC or Peripheral Neurostimulator), and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures without CC/MCC) under MDC 1 (Diseases and Disorders of the Nervous System) were also proposed as MS-DRG assignments for the procedures describing removal and revision of subcutaneous defibrillator lead. The commenter requested that CMS provide information in the FY 2020 IPPS/LTCH PPS final rule regarding those proposed MS-DRG assignments, including the diagnosis and procedure codes that would result in assignment to those MS-DRGs. The commenter provided the following table to display the proposed MS-DRG assignments as reflected in Table 6B- New Procedure Codes that was associated with the proposed rule.

Response: We thank the commenter for their support. With regard to why MS-DRGs 040, 041, and 042 under MDC 1 were also proposed as MS-DRG assignments for the procedures describing removal and revision of subcutaneous defibrillator lead, we note that, as described in section II.F.2.a. of the preamble of this final rule, consistent with our annual process of assigning new procedure codes to MDCs and MS-DRGs, and designating a procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor procedure code assignment. The predecessor procedure codes for the above listed removal and revision of subcutaneous defibrillator lead procedure codes are procedure codes 0JPT0PZ (Removal of cardiac rhythm related device from trunk subcutaneous Start Printed Page 42155tissue and fascia, open approach), 0JPT3PZ (Removal of cardiac rhythm related device from trunk subcutaneous tissue and fascia, percutaneous approach), 0JWT0PZ (Revision of cardiac rhythm related device in trunk subcutaneous tissue and fascia, open approach) and 0JWT3PZ (Revision of cardiac rhythm related device in trunk subcutaneous tissue and fascia, percutaneous approach) which are currently assigned to MS-DRGs 040, 041, and 042 under MDC 1. We also note that, in each MDC there is usually a medical and a surgical class referred to as “other medical diseases” and “other surgical procedures,” respectively. The “other” medical and surgical classes are not as precisely defined from a clinical perspective. The other classes would include diagnoses or procedures which were infrequently encountered or not well defined clinically. The “other” surgical category contains surgical procedures which, while infrequent, could still reasonably be expected to be performed for a patient in the particular MDC. Within MDC 1, MS-DRGs 040, 041, and 042 are defined as a set of the “other” surgical classes as indicated in their MS-DRG titles with the “Other Nervous System Procedures” terminology. With regard to the diagnosis codes, we note that the diagnoses in each MDC correspond to a single organ system or etiology and in general are associated with a particular medical specialty. As such, the diagnoses assigned to MDC 1 correspond to the central nervous system. While we agree that it would be rare for a diagnosis related to a disease or disorder of the nervous system to be reported with a procedure that involves the removal or revision of a subcutaneous defibrillator lead, we note that, as discussed and displayed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41184), cases with procedure codes that identify the insertion of a cardiac rhythm related device (the predecessor code for insertion of subcutaneous defibrillator lead procedures) were previously assigned to MS-DRGs 040, 041, and 042 and a small number of cases were found to be reported in those MS-DRGs, thus indicating that the combination of a diagnosis code from MDC 1 and one of the procedures describing the insertion of a cardiac rhythm related device did occur. While we did not specifically conduct analysis of claims data for the procedures describing a removal or revision of a cardiac rhythm related device, our clinical advisors continue to support assignment of the new procedure codes describing removal and revision of subcutaneous defibrillator lead procedures to MS-DRGs 040, 041, and 042 as reflected in Table 6B. New Procedure Codes, associated with this final rule.

Additionally, as discussed in section II.F.2.a. of the preamble of this final rule, in our discussion of the annual process for assigning new procedure codes to MS-DRGs, a similar process is also utilized for assigning new diagnosis codes to MS-DRGs that involves review of the predecessor diagnosis code's MDC and MS-DRG assignment and severity level designation. However, this process does not automatically result in the new diagnosis code being assigned (or proposed for assignment) to the same severity level and/or MS-DRG and MDC as the predecessor code. There are several factors to consider during this process that our clinical advisors take into account.

The proposed severity level designations for a subset of the new diagnosis codes as set forth in Table 6A associated with the FY 2020 IPPS/LTCH PPS proposed rule reflected the proposed severity level designations as discussed in section II.F.14.c.1. of the preamble of the proposed rule which were based on our comprehensive CC/MCC analysis. For example, new diagnosis codes in the category L89- series describing pressure-induced deep tissue damage of various anatomical sites were proposed to be designated at a CC severity level. However, as discussed in section II.F.14.c.1. of the preamble of this final rule, we are not finalizing the proposed changes to the severity level designations based on our comprehensive CC/MCC analysis after consideration of the public comments received (with the exception of the specified ICD-10-CM diagnosis codes in category Z16-Resistance to antimicrobial drugs). Therefore, consistent with our annual process for assigning new diagnosis codes to MDCs and MS-DRGs and designating a new diagnosis code as an MCC, a CC or a non-CC, we reviewed the predecessor code MDC and MS-DRG assignments and the severity level designations for for these new codes and determined the appropriate severity level designation for these codes is the same severity level as the predecessor code under Version 36 of the ICD-10 MS-DRGs. The finalized severity level designations for these new diagnosis codes as set forth in Table 6A associated with this final rule therefore reflect the same severity level as the predecessor code under Version 36 of the ICD-10 MS-DRGs.

We also note that after publication of the proposed rule we identified procedures identified by procedure codes beginning with the prefix 0D1 describing bypass procedures of the small and large intestines in Table 6B.—New Procedure Codes that were inadvertently proposed for assignment to MS-DRGs 829 and 830 (Myeloproliferative Disorders Or Poorly Differentiated Neoplasms with Other Procedure with CC/MCC and without CC/MCC, respectively). Assignment of these procedures to MS-DRGs 829 and 830 is not applicable because the procedures would not result in assignment to these MS-DRGs due to the logic of the surgical hierarchy. Therefore, we have removed MS-DRGs 829 and 830 from the list of MS-DRGs to which these bypass procedures of the small and large intestine are assigned for FY 2020 as reflected in Table 6B.—New Procedure Codes associated with this final rule.

We are finalizing 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, the finalized O.R. status for the new procedure codes are set forth in Table 6B. We are making available on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html the following tables associated with this final rule:

  • Table 6A.—New Diagnosis Codes-FY 2020;
  • Table 6B.—New Procedure Codes-FY 2020;
  • Table 6C.—Invalid Diagnosis Codes-FY 2020;
  • Table 6D.—Invalid Procedure Codes-FY 2020;
  • Table 6E.—Revised Diagnosis Code Titles-FY 2020;
  • Table 6F.—Revised Procedure Code Titles-FY 2020;
  • Table 6G.1.—Secondary Diagnosis Order Additions to the CC Exclusions List-FY 2020;
  • Table 6G.2.—Principal Diagnosis Order Additions to the CC Exclusions List-FY 2020;
  • Table 6H.1.—Secondary Diagnosis Order Deletions to the CC Exclusions List-FY 2020;
  • Table 6H.2.—Principal Diagnosis Order Deletions to the CC Exclusions List-FY 2020;
  • Table 6I.—Complete MCC List-FY 2020;
  • Table 6I.1.—Additions to the MCC List-FY 2020;
  • Table 6I.2.-Deletions to the MCC List-FY 2020;
  • Table 6J.—Complete CC List-FY 2020;
  • Table 6J.1.—Additions to the CC List-FY 2020;Start Printed Page 42156
  • Table 6J.2.—Deletions to the CC List-FY 2020; and
  • Table 6K.—Complete List of CC Exclusions-FY 2020

16. 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 2019 IPPS/LTCH PPS final rule (83 FR 41220), we made available the FY 2019 ICD-10 MCE Version 36 manual file. The link to this MCE manual file, along with the link to the mainframe and computer software for the MCE Version 36 (and ICD-10 MS-DRGs) are posted on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html.

In the FY 2020 IPPS/LTCH PPS proposed rule, we addressed the MCE requests we received by the November 1, 2018 deadline. We also discussed the proposals we were making based on internal review and analysis. In this FY 2020 IPPS/LTCH PPS final rule, we present a summation of the comments we received in response to the MCE requests and proposals presented based on internal reviews and analyses in the proposed rule, our responses to those comments, and our finalized policies.

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 are making available the FY 2020 ICD-10 MCE Version 37 Manual file, along with the link to the mainframe and computer software for the MCE Version 37 (and ICD-10 MS-DRGs), on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html.

a. Age Conflict Edit: Maternity Diagnoses

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 0-17 years inclusive (for example, Reye's syndrome, routine child health exam).
  • Maternity—Age range is 12-55 years inclusive (for example, diabetes in pregnancy, antepartum pulmonary complication).
  • Adult—Age range is 15-124 years inclusive (for example, senile delirium, mature cataract).

Under the ICD-10 MCE, the maternity diagnoses category for the Age conflict edit considers the age range of 12 to 55 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.

We stated in the proposed rule that we received a request to reconsider the age range associated with the maternity diagnoses category for the Age conflict edit. According to the requestor, pregnancies can and do occur prior to age 12 and after age 55. The requestor suggested that a more appropriate age range would be from age 9 to age 64 for the maternity diagnoses category.

We agreed with the requestor that pregnancies can and do occur prior to the age of 12 and after the age of 55. We further stated in the proposed rule that we also agreed that the suggested range, age 9 to age 64, is an appropriate age range. Therefore, we proposed to revise the maternity diagnoses category for the Age conflict edit to consider the new age range of 9 to 64 years inclusive.

Comment: Commenters agreed with CMS' proposal to revise the maternity diagnoses category for the Age conflict edit by expanding the age range.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to revise the maternity diagnoses category for the Age conflict edit to consider the new age range of 9 to 64 years inclusive under the ICD-10 MCE Version 37, effective October 1, 2019.

b. Sex Conflict Edit: Diagnoses for Females Only 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.

As discussed in section II.F.15. of the preamble of this final rule, Table 6A.—New Diagnosis Codes which is associated with this final rule (and is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) lists the new diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2019. We stated in the proposed rule that ICD-10-CM diagnosis code N99.85 (Post endometrial ablation syndrome) is a new code that describes a condition consistent with the female sex. We proposed to add this diagnosis code to the Diagnoses for Females Only edit code list under the Sex conflict edit.

Comment: Commenters agreed with the proposal to add diagnosis code N99.85 to the Diagnoses for Females Only edit code list under the Sex conflict edit.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add diagnosis code N99.85 (Post endometrial ablation syndrome) to the Diagnoses for Females Only edit code list under the Sex conflict edit under the ICD-10 MCE Version 37, effective October 1, 2019.Start Printed Page 42157

c. 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.

In the proposed rule we stated that ICD-10-CM diagnosis codes I46.2 (Cardiac arrest due to underlying cardiac condition) and I46.8 (Cardiac arrest due to other underlying condition) are codes that clearly specify cardiac arrest as being due to an underlying condition. Also, in the ICD-10-CM Tabular List, there are instructional notes to “Code first underlying cardiac condition” at ICD-10-CM diagnosis code I46.2 and to “Code first underlying condition” at ICD-10-CM diagnosis code I46.8. Therefore, we proposed to add ICD-10-CM diagnosis codes I46.2 and I46.8 to the Unacceptable Principal Diagnosis Category edit code list.

As discussed in section II.F.15. of the preamble of this final rule, Table 6A.—New Diagnosis Codes associated with this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) lists the new diagnosis codes that have been approved to date that will be effective with discharges occurring on and after October 1, 2019.

As indicated in the proposed rule, we proposed to add the new ICD-10-CM diagnosis codes listed in the following table to the Unacceptable Principal Diagnosis Category edit code list, as these codes are consistent with other ICD-10-CM diagnosis codes currently included on the Unacceptable Principal Diagnosis Category edit code list.

Comment: Commenters agreed with our proposal to add diagnosis codes I46.2 and I46.8, as well as the new ICD-10-CM diagnosis codes listed in the table above, to the Unacceptable Principal Diagnosis Category edit code list.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add diagnosis codes I46.2 and I46.8 to the Unacceptable Principal Diagnosis Category edit code list. We are also finalizing our proposal to add the new ICD-10-CM diagnosis codes previously listed in the table to the Unacceptable Principal Diagnosis Category edit code list under the ICD-10 MCE Version 37, effective October 1, 2019.Start Printed Page 42158

d. Non-Covered Procedure Edit

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 website 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.

As discussed in section II.F.15. of the preamble of this final rule, Table 6D.—Invalid Procedure Codes associated with this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) lists the procedure codes that are no longer effective as of October 1, 2019. Included in this table are the following ICD-10-PCS procedure codes listed on the Non-Covered Procedure edit code list.

In the proposed rule, we proposed to remove these codes from the Non-Covered Procedure edit code list.

In addition, as discussed in section II.F.2.b. of the preamble of the proposed rule, a number of ICD-10-PCS procedure codes describing bone marrow transplant procedures were the subject of a proposal discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting, to be deleted effective October 1, 2019. We proposed that if the applicable proposal is finalized, we would delete the subset of those ICD-10-PCS procedure codes that are currently listed on the Non-Covered Procedure edit code list as shown in the following table.

Comment: Commenters agreed with our proposal to remove the ICD-10-PCS procedure codes previously listed in the tables from the Non-Covered Procedure edit code list.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to remove the ICD-10-PCS procedure codes previously listed in the tables that are no longer valid from the Non-Covered Procedure edit code list within the ICD-10 MCE Version 37 effective October 1, 2019. We note that the proposal involving ICD-10-PCS procedure codes describing bone marrow transplant procedures was finalized after the March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting, as reflected in Table 6D.—Invalid Procedure Codes associated with this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html).

e. Future Enhancement

In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through 38054), we noted the importance of ensuring accuracy of the coded data from the reporting, collection, processing, coverage, payment, and analysis aspects. We have engaged a contractor to assist in the review of the limited coverage and noncovered procedure edits in the MCE that may also be present in other claims processing systems that are utilized by our MACs. The MACs must adhere to criteria specified within the National Coverage Determinations (NCDs) and may implement their own edits in addition to what are already incorporated into the MCE, resulting in duplicate edits. The objective of this review is to identify where duplicate edits may exist and to determine what the impact might be if these edits were to be removed from the MCE.

We have noted that the purpose of the MCE is to ensure that errors and inconsistencies in the coded data are recognized during Medicare claims Start Printed Page 42159processing. As we indicated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41228), we are considering whether the inclusion of coverage edits in the MCE necessarily aligns with that specific goal because the focus of coverage edits is on whether or not a particular service is covered for payment purposes and not whether it was coded correctly.

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 have discussed in prior rulemaking, we recognize a need to further examine the current list of edits and the definitions of those edits. As noted in the FY 2020 IPPS/LTCH PPS proposed rule, 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, 2019 for FY 2021 rulemaking.

17. 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.

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 final 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.

Based on the changes that we proposed to make in the FY 2020 IPPS/LTCH PPS proposed rule, as discussed in section II.F.5.a. of the preamble of this final rule, in the proposed rule we proposed to revise the surgical hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System) as follows: In MDC 5, we proposed to sequence proposed new MS-DRGs 319 and 320 (Other Endovascular Cardiac Valve Procedures with and without MCC, respectively) above MS-DRGs 222, 223, 224, 225, 226, and 227 (Cardiac Defibrillator Implant with and without Cardiac Catheterization with and without AMI/HF/Shock with and without MCC, respectively) and below MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with and without MCC, respectively). We also note that, as discussed in section II.F.5.a. of the preamble of this final rule, we proposed to revise the titles for MS-DRGs 266 and 267 to “Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC” and “Endovascular Cardiac Valve Replacement and Supplement Procedures without MCC”, respectively.

Our proposal for Appendix D—MS-DRG Surgical Hierarchy by MDC and MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 37 is illustrated in the following table.

Start Printed Page 42160

Comment: Commenters supported our proposal to sequence proposed new MS-DRGs 319 and 320 above MS-DRGs 222, 223, 224, 225, 226, and 227, and below MS- DRGs 266 and 267. However, a commenter proposed an alternate option upon reviewing Table 5.—List Of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, And Geometric And Arithmetic Mean Length Of Stay—FY 2020 associated with the proposed rule. The commenter noted that because multiple procedures may be performed during an encounter and MS-DRGs 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 231, 232, 233, 234, 235, and 236 (MS-DRG 230 was deleted effective FY 2017) are weighted higher than the proposed new MS-DRGs 319 and 320, sequencing proposed new MS-DRGs 319 and 320 above MS-DRGs 239, 240, and 241 (Amputation for Circulatory System Disorders except Upper Limb & Toe with MCC, with CC, and without CC/MCC, respectively) and below MS-DRG 270, 271 and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively) appeared more appropriate to result in the most resource intensive MS-DRG assignment when multiple cardiac procedures are performed.

Response: We thank the commenters for their support. As discussed in section II.F.5.a. of the preamble of this final rule, we are finalizing our proposal to create new MS-DRGs 319 and 320. In response to the commenter's suggestion that we sequence new MS-DRGs 319 and 320 above MS-DRGs 239, 240, and 241 and below MS-DRGs 270, 271 and 272, we reviewed the surgical hierarchy once again. Upon our review, we agree that the initial proposed sequencing did not adequately account for the most resource intensive MS-DRG assignment. However, our clinical advisors also did not completely agree with the suggested alternative option offered by the commenter and recommended that new MS-DRGs 319 and 320 be sequenced above MS-DRGs 270, 271 and 272 and below MS-DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with and without MCC, respectively) because they believe this sequencing more appropriately reflects resource utilization when multiple cardiac procedures are performed and will result in the most suitable MS-DRG assignment.

After consideration of the public comments we received and the input of our clinical advisors, we are finalizing the below changes to the surgical hierarchy for new MS-DRGs 319 and 320 within Appendix D—MS-DRG Surgical Hierarchy by MDC and MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 37 as illustrated in the following table.

As with other MS-DRG related issues, we encourage commenters to submit requests to examine ICD-10 claims pertaining to the surgical hierarchy via the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov by November 1, 2019 for consideration for FY 2021.

18. Maintenance of 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 website 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 website 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 Start Printed Page 42161recommendations, which then must be approved by the agencies.

The Committee presented proposals for coding changes for implementation in FY 2020 at a public meeting held on September 11-12, 2018, and finalized the coding changes after consideration of comments received at the meetings and in writing by November 13, 2018.

The Committee held its 2019 meeting on March 5-6, 2019. The deadline for submitting comments on these code proposals was April 5, 2019. It was announced at this meeting that any new diagnosis and procedure codes for which there was consensus of public support and for which complete tabular and indexing changes would be made by May 2019 would be included in the October 1, 2019 update to the ICD-10-CM diagnosis and ICD-10-PCS procedure code sets. As discussed in earlier sections of the preamble of 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 this final rule, which are available via the internet on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. The code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we make the code titles available for the IPPS proposed rule, they are not subject to comment in the proposed rule. Because of the length of these tables, they are not published in the Addendum to the proposed rule. Rather, they are available via the internet as discussed in section VI. of the Addendum to the proposed rule.

Live Webcast recordings of the discussions of the diagnosis and procedure codes at the Committee's September 11-12, 2018 meeting can be obtained from the CMS website at: http://cms.hhs.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​index.html?​redirect=​/​icd9ProviderDiagnosticCodes/​03_​meetings.asp. The live webcast recordings of the discussions of the diagnosis and procedure codes at the Committee's March 5-6, 2019 meeting can be obtained from the CMS website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​C-and-M-Meeting-Materials.html.

The materials for the discussions relating to diagnosis codes at the September 11-12, 2018 meeting and March 5-6, 2019 meeting can be found at: http://www.cdc.gov/​nchs/​icd/​icd10cm_​maintenance.html. These websites 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 submitted via 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 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 3 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 website. A complete addendum describing details of all diagnosis and procedure coding changes, both tabular and index, is published on the CMS and NCHS websites 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 also established the following process for making these determinations. Topics considered during the Fall ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting are considered for an April 1 update if a strong and convincing case is made by the requestor at the Committee's public Start Printed Page 42162meeting. 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 materials and live webcast 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. We indicated in the proposed rule that there were not any requests approved for an expedited April l, 2019 implementation of a code at the September 11-12, 2018 Committee meeting. Therefore, there were not any new codes for implementation on April 1, 2019.

ICD-9-CM addendum and code title information is published on the CMS website 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 website at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​index.html. 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.

Information on ICD-10-CM diagnosis codes, along with the Official ICD-10-CM Coding Guidelines, can also be found on the CDC website at: http://www.cdc.gov/​nchs/​icd/​icd10.htm. Additionally, information on new, revised, and deleted ICD-10-CM diagnosis and ICD-10-PCS procedure codes is provided to the AHA for publication in the Coding Clinic for ICD-10. AHA also distributes coding update information to publishers and software vendors.

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.

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.

19. Replaced Devices Offered Without Cost or With a Credit

a. Background

In the FY 2008 IPPS final rule with comment period (72 FR 47246 through 47251), we discussed the topic of Medicare payment for devices that are replaced without cost or where credit for a replaced device is furnished to the hospital. We implemented a policy to reduce a hospital's IPPS payment for certain MS-DRGs where the implantation of a device that subsequently failed or was recalled determined the base MS-DRG assignment. At that time, we specified that we will reduce a hospital's IPPS payment for those MS-DRGs where the hospital received a credit for a replaced device equal to 50 percent or more of the cost of the device.

In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through 51557), we clarified this policy to state that the policy applies if the hospital received a credit equal to 50 percent or more of the cost of the replacement device and issued instructions to hospitals accordingly.

b. Changes for FY 2020

As discussed in the FY 2020 IPPS/LTCH proposed rule (84 FR 19255 through 19257), for FY 2020, we proposed to create new MS-DRGs 319 and 320 (Other Endovascular Cardiac Valve Procedures with and without MCC, respectively) and to revise the title for MS-DRG 266 from “Endovascular Cardiac Valve Replacement with MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC” and the title for MS-DRG 267 from “Endovascular Cardiac Valve Replacement without MCC” to “Endovascular Cardiac Valve Start Printed Page 42163Replacement and Supplement Procedures without MCC”.

We noted in the proposed rule, as stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24409), we generally map new MS-DRGs onto the list when they are formed from procedures previously assigned to MS-DRGs that are already on the list. Currently, MS-DRGs 216 through 221 are on the list of MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit as shown in the table below. A subset of the procedures currently assigned to MS-DRGs 216 through 221 was proposed for assignment to proposed new MS-DRGs 319 and 320. Therefore, we proposed that if the applicable proposed MS-DRG changes are finalized, we also would add proposed new MS-DRGs 319 and 320 to the list of MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit and make conforming changes to the titles of MS-DRGs 266 and 267 as reflected in the table below. We also proposed to continue to include the existing MS-DRGs currently subject to the policy as also displayed in the table below.

Start Printed Page 42164

Start Printed Page 42165

As discussed in section II.F.5.a. of the preamble of this final rule, we are finalizing our proposal to add new MS-DRGs 319 and 320. We did not receive any public comments opposing our proposal to add MS-DRGs 319 and 320 to the policy for replaced devices offered without cost or with credit, make conforming changes to the titles of MS-DRGs 266 and 267 as reflected in the table above or to continue to include the existing MS-DRGs currently subject to the policy. Therefore, we are finalizing the list of MS-DRGs in the table included in the proposed rule and above that will be subject to the replaced devices offered without cost or with a credit policy effective October 1, 2019.

The final list of MS-DRGs subject to the IPPS policy for replaced devices offered without cost or with a credit will also be issued to providers in the form of a Change Request (CR).

20. Out of Scope Public Comments Received

We received public comments regarding a number of MS-DRG and related issues that were outside the scope of the proposals included in the FY 2020 IPPS/LTCH PPS proposed rule.

Because we consider these public comments to be outside the scope of the proposed rule, we are not addressing them in this final rule. As stated in section II.F.1.b. of the preamble of this final rule, we encourage individuals with comments about MS-DRG classification to submit these comments no later than November 1 of each year so that they can be considered for possible inclusion in the annual proposed rule. We will consider these public comments for possible proposals in future rulemaking as part of our annual review process.

G. Recalibration of the FY 2020 MS-DRG Relative Weights

1. Data Sources for Developing the Relative Weights

In developing the FY 2020 system of weights, we proposed to use two data sources: Claims data and cost report data. As in previous years, the claims data source is the MedPAR file. This file is based on fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2018 MedPAR data used in this final rule include discharges occurring on October 1, 2017, through September 30, 2018, based on bills received by CMS through March 31, 2019, from all hospitals subject to the IPPS and short-term, acute care hospitals in Maryland (which at that time were under a waiver from the IPPS). The FY 2018 MedPAR file used in calculating the relative weights includes data for approximately 9,514,788 Medicare discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in a Medicare Advantage managed care plan are excluded from this analysis. These discharges are excluded when the MedPAR “GHO Paid” indicator field on the claim record is equal to “1” or when the MedPAR DRG payment field, which represents the total payment for the claim, is equal to the MedPAR “Indirect Medical Education (IME)” payment field, indicating that the claim was an “IME only” claim submitted by a teaching hospital on behalf of a beneficiary enrolled in a Medicare Advantage managed care plan. In addition, the December 31, 2018 update of the FY 2018 MedPAR file complies with version 5010 of the X12 HIPAA Transaction and Code Set Standards, and includes a variable called “claim type.” Claim type “60” indicates that the claim was an inpatient claim paid as fee-for-service. Claim types “61,” “62,” “63,” and “64” relate to encounter claims, Medicare Advantage IME claims, and HMO no-pay claims. Therefore, the calculation of the relative weights for FY 2020 also excludes claims with claim type values not equal Start Printed Page 42166to “60.” The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. We note that the FY 2020 relative weights are based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes from the FY 2018 MedPAR claims data, grouped through the ICD-10 version of the FY 2020 GROUPER (Version 37).

The second data source used in the cost-based relative weighting methodology is the Medicare cost report data files from the HCRIS. Normally, we use the HCRIS dataset that is 3 years prior to the IPPS fiscal year. Specifically, we used cost report data from the March 31, 2018 update of the FY 2017 HCRIS for calculating the FY 2020 cost-based relative weights.

2. Methodology for Calculation of the Relative Weights

As we explain in section II.E.2. of the preamble of this final rule, we calculated the FY 2020 relative weights based on 19 CCRs, as we did for FY 2019. The methodology we proposed to use to calculate the FY 2020 MS-DRG cost-based relative weights based on claims data in the FY 2018 MedPAR file and data from the FY 2017 Medicare cost reports is as follows:

  • To the extent possible, all the claims were regrouped using the FY 2020 MS-DRG classifications discussed in sections II.B. and II.F. of the preamble of this final rule.
  • The transplant cases that were used to establish the relative weights for heart and heart-lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare-approved transplant centers that have cases in the FY 2018 MedPAR file. (Medicare coverage for heart, heart-lung, liver and/or intestinal, and lung transplants is limited to those facilities that have received approval from CMS as transplant centers.)
  • Organ acquisition costs for kidney, heart, heart-lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis. Because these acquisition costs are paid separately from the prospective payment rate, it is necessary to subtract the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average cost for each MS-DRG and before eliminating statistical outliers.
  • Claims with total charges or total lengths of stay less than or equal to zero were deleted. Claims that had an amount in the total charge field that differed by more than $30.00 from the sum of the routine day charges, intensive care charges, pharmacy charges, implantable devices charges, supplies and equipment charges, therapy services charges, operating room charges, cardiology charges, laboratory charges, radiology charges, other service charges, labor and delivery charges, inhalation therapy charges, emergency room charges, blood and blood products charges, anesthesia charges, cardiac catheterization charges, CT scan charges, and MRI charges were also deleted.
  • At least 92.3 percent of the providers in the MedPAR file had charges for 14 of the 19 cost centers. All claims of providers that did not have charges greater than zero for at least 14 of the 19 cost centers were deleted. In other words, a provider must have no more than five blank cost centers. If a provider did not have charges greater than zero in more than five cost centers, the claims for the provider were deleted.
  • Statistical outliers were eliminated by removing all cases that were beyond 3.0 standard deviations from the geometric mean of the log distribution of both the total charges per case and the total charges per day for each MS-DRG.
  • Effective October 1, 2008, because hospital inpatient claims include a POA indicator field for each diagnosis present on the claim, only for purposes of relative weight-setting, the POA indicator field was reset to “Y” for “Yes” for all claims that otherwise have an “N” (No) or a “U” (documentation insufficient to determine if the condition was present at the time of inpatient admission) in the POA field.

Under current payment policy, the presence of specific HAC codes, as indicated by the POA field values, can generate a lower payment for the claim. Specifically, if the particular condition is present on admission (that is, a “Y” indicator is associated with the diagnosis on the claim), it is not a HAC, and the hospital is paid for the higher severity (and, therefore, the higher weighted MS-DRG). If the particular condition is not present on admission (that is, an “N” indicator is associated with the diagnosis on the claim) and there are no other complicating conditions, the DRG GROUPER assigns the claim to a lower severity (and, therefore, the lower weighted MS-DRG) as a penalty for allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy goals of encouraging quality care and generates program savings, it presents an issue for the relative weight-setting process. Because cases identified as HACs are likely to be more complex than similar cases that are not identified as HACs, the charges associated with HAC cases are likely to be higher as well. Therefore, if the higher charges of these HAC claims are grouped into lower severity MS-DRGs prior to the relative weight-setting process, the relative weights of these particular MS-DRGs would become artificially inflated, potentially skewing the relative weights. In addition, we want to protect the integrity of the budget neutrality process by ensuring that, in estimating payments, no increase to the standardized amount occurs as a result of lower overall payments in a previous year that stem from using weights and case-mix that are based on lower severity MS-DRG assignments. If this would occur, the anticipated cost savings from the HAC policy would be lost.

To avoid these problems, we reset the POA indicator field to “Y” only for relative weight-setting purposes for all claims that otherwise have an “N” or a “U” in the POA field. This resetting “forced” the more costly HAC claims into the higher severity MS-DRGs as appropriate, and the relative weights calculated for each MS-DRG more closely reflect the true costs of those cases.

In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013 and subsequent fiscal years, we finalized a policy to treat hospitals that participate in the Bundled Payments for Care Improvement (BPCI) initiative the same as prior fiscal years for the IPPS payment modeling and ratesetting process without regard to hospitals' participation within these bundled payment models (77 FR 53341 through 53343). Specifically, because acute care hospitals participating in the BPCI Initiative still receive IPPS payments under section 1886(d) of the Act, we include all applicable data from these subsection (d) hospitals in our IPPS payment modeling and ratesetting calculations as if the hospitals were not participating in those models under the BPCI initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule for a complete discussion on our final policy for the treatment of hospitals participating in the BPCI initiative in our ratesetting process. For additional information on the BPCI initiative, we refer readers to the CMS' Center for Medicare and Medicaid Innovation's website at: http://innovation.cms.gov/​initiatives/​Bundled-Payments/​index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/LTCH PPS final rule (77 FR 53341 through 53343).Start Printed Page 42167

The participation of hospitals in the BPCI initiative concluded on September 30, 2018. The participation of hospitals in the Bundled Payments for Care Improvement (BPCI) Advanced model started on October 1, 2018. The BPCI Advanced model, tested under the authority of section 3021 of the Affordable Care Act (codified at section 1115A of the Act), is comprised of a single payment and risk track, which bundles payments for multiple services beneficiaries receive during a Clinical Episode. Acute care hospitals may participate in BPCI Advanced in one of two capacities: As a model Participant or as a downstream Episode Initiator. Regardless of the capacity in which they participate in the BPCI Advanced model, participating acute care hospitals will continue to receive IPPS payments under section 1886(d) of the Act. Acute care hospitals that are Participants also assume financial and quality performance accountability for Clinical Episodes in the form of a reconciliation payment. For additional information on the BPCI Advanced model, we refer readers to the BPCI Advanced web page on the CMS Center for Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/​initiatives/​bpci-advanced/​. As noted in the proposed rule, consistent with our policy for FY 2019, and consistent with how we have treated hospitals that participated in the BPCI Initiative, for FY 2020, we continue to believe it is appropriate to include all applicable data from the subsection (d) hospitals participating in the BPCI Advanced model in our IPPS payment modeling and ratesetting calculations because, as noted above, these hospitals are still receiving IPPS payments under section 1886(d) of the Act.

The charges for each of the 19 cost groups for each claim were standardized to remove the effects of differences in area wage levels, IME and DSH payments, and for hospitals located in Alaska and Hawaii, the applicable cost-of-living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in geographic adjustment factors, cost-of-living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS-DRG for each of the 19 cost groups so that each MS-DRG had 19 standardized charge totals. Statistical outliers were then removed. These charges were then adjusted to cost by applying the national average CCRs developed from the FY 2017 cost report data.

The 19 cost centers that we used in the relative weight calculation are shown in the following table. The table shows the lines on the cost report and the corresponding revenue codes that we used to create the 19 national cost center CCRs. We stated in the proposed rule that, if stakeholders had comments about the groupings in this table, we may consider those comments as we finalize our policy. However, we did not receive any comments on the groupings in this table, and therefore, we are finalizing the groupings as proposed.

We invited public comments on our proposals related to recalibration of the FY 2020 relative weights and the changes in relative weights from FY 2019.

Comment: Several commenters expressed concern about significant reductions to the relative weight for MS-DRG 215. Commenters stated that the reduction in the proposed relative weight was 29 percent, which is the largest decrease of any MS-DRG; commenters also noted that the cumulative decrease to the relative weight for MS-DRG 215 would be 43% since FY 2017. Commenters stated that the proposed relative weights would result in significant underpayments to facilities, which would in turn limit access to heart assist devices.

Some commenters specifically referenced the Impella®, one of the heart assist devices used to provide ventricular support. Commenters also stated that the proposed reduction in the relative weight resulted from several coding changes and a new FDA indication for the Impella®, for the treatment of cardiomyopathy with cardiogenic shock. The commenters stated that these changes in coding guidance are still not reflected in claims for the FY 2020 proposed rule, and that 68% of claims for procedures utilizing the Impella® device did not have a charge for the Impella® in the Other Implants revenue center. Other commenters stated that 22% of claims did not have a charge for the device. Some commenters stated that they expect the future claims data to result in an increase to the relative weight for MS-DRG 215 for FY 2021.

Commenters requested that CMS maintain the relative weight at the FY 2018 relative weight for any MS-DRG that was held harmless last year and continues to face a 20% or greater reduction from its FY 2018 relative weight. Commenters stated that a hold harmless policy is consistent with prior rulemaking, in which CMS provided for transition periods for changes that have significant payment implications.

Response: As we indicated in the FY 2018 IPPS/LTCH final rule (82 FR 38103), and in response to similar comments in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41273), we do not believe it is normally appropriate to address relative weight fluctuations that appear to be driven by changes in the underlying data. Nevertheless, after reviewing the comments received and the data used in our ratesetting calculations, we acknowledge an outlier circumstance where the weight for an MS-DRG is seeing a significant reduction for each of the 3 years since CMS began using the ICD-10 data in calculating the relative weights. While we would ordinarily consider this weight change to be appropriately driven by the underlying data, given the comments received and the potential for these declines to be associated with the implementation of ICD-10, we are adopting a temporary one-time measure for FY 2020 for an MS-DRG where the FY 2018 relative weight declined by 20 percent from the FY 2017 relative weight and the FY 2020 relative weight would have declined by 20 percent or more from the FY 2019 relative weight, which was maintained at the FY 2018 relative weight. Specifically, for an MS-DRG meeting this criterion, we will continue the current policy of maintaining the relative weight at the FY 2018 level. In other words, the FY 2020 relative weight will be set equal to the FY 2019 relative weight, which was in turn set equal to the FY 2018 relative weight.

We believe this policy is consistent with our general authority to assign and update appropriate weighting factors under sections 1886(d)(4)(B) and (C) of the Act. We also believe that it appropriately addresses the situation in which the reduction to the FY 2020 relative weights may potentially continue to be associated with the implementation of ICD-10. We continue to believe that changes in relative weights that are not of this outlier magnitude over the 3 years since we first incorporated the ICD-10 data in our ratesetting are appropriately being driven by the underlying data and not associated with the implementation of ICD-10.

Start Printed Page 42168

Start Printed Page 42169

Start Printed Page 42170

Start Printed Page 42171

Start Printed Page 42172

Start Printed Page 42173

Start Printed Page 42174

Start Printed Page 42175

Start Printed Page 42176

Start Printed Page 42177

Start Printed Page 42178

3. Development of National Average CCRs

We developed the national average CCRs as follows:

Using the FY 2017 cost report data, we removed CAHs, Indian Health Service hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland because we include their charges in our claims database. We then created CCRs for each provider for each cost center (see prior table for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. We then took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the Start Printed Page 42179standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-3 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare-specific charges for each line item from Worksheet D-3. Once each hospital's Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs.

After we multiplied the total charges for each MS-DRG in each of the 19 cost centers by the corresponding national average CCR, we summed the 19 “costs” across each MS-DRG to produce a total standardized cost for the MS-DRG. The average standardized cost for each MS-DRG was then computed as the total standardized cost for the MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The average cost for each MS-DRG was then divided by the national average standardized cost per case to determine the relative weight.

The FY 2020 cost-based relative weights were then normalized by an adjustment factor of 1.789031 so that the average case weight after recalibration was equal to the average case weight before recalibration. The normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.

The 19 national average CCRs for FY 2020 are as follows:

Since FY 2009, the relative weights have been based on 100 percent cost weights based on our MS-DRG grouping system.

When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We proposed to use that same case threshold in recalibrating the MS-DRG relative weights for FY 2020. Using data from the FY 2018 MedPAR file, there were 8 MS-DRGs that contain fewer than 10 cases. For FY 2020, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for these low-volume MS-DRGs, we proposed to compute relative weights for the low-volume MS-DRGs by adjusting their final FY 2019 relative weights by the percentage change in the average weight of the cases in other MS-DRGs from FY 2019 to FY 2020. The crosswalk table is shown below.

Start Printed Page 42180

After consideration of the comments we received, we are finalizing our proposals, with the modification for recalibrating the relative weights for FY 2020 for an MS-DRG where the FY 2018 relative weight declined by 20 percent from the FY 2017 relative weight and the FY 2020 relative weight would have declined by 20 percent or more from the FY 2019 relative weight, which was maintained at the FY 2018 relative weight.

H. Add-On Payments for New Services and Technologies for FY 2020

1. Background

Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as “new technologies”) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that a new medical service or technology may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate. We note that, beginning with discharges occurring in FY 2008, CMS transitioned from CMS- DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these provisions and specify three criteria for a new medical service or technology to receive the additional payment: (1) The medical service or technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies. In this final rule, we highlight some of the major statutory and regulatory provisions relevant to the new technology add-on payment criteria, as well as other information. For a complete discussion on the new technology add-on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51572 through 51574).

Under the first criterion, as reflected in § 412.87(b)(2), a specific medical service or technology will be considered “new” for purposes of new medical service or technology add-on payments until such time as Medicare data are available to fully reflect the cost of the technology in the MS-DRG weights through recalibration. We note that we do not consider a service or technology to be new if it is substantially similar to one or more existing technologies. That is, even if a medical product receives a Start Printed Page 42181new FDA approval or clearance, it may not necessarily be considered “new” for purposes of new technology add-on payments if it is “substantially similar” to another medical product that was approved or cleared by FDA and has been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814), we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically: (1) Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a product is assigned to the same or a different MS-DRG; and (3) whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered “new” for purposes of new technology add-on payments. For a detailed discussion of the criteria for substantial similarity, we refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 47352), and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814).

Under the second criterion, § 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the MS-DRG prospective payment rate otherwise applicable to discharges involving the new medical service or technology must be assessed for adequacy. Under the cost criterion, consistent with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess the adequacy of payment for a new technology paid under the applicable MS-DRG prospective payment rate, we evaluate whether the charges for cases involving the new technology exceed certain threshold amounts. The MS-DRG threshold amounts used in evaluating new technology add-on payment applications for FY 2020 are presented in a data file that is available, along with the other data files associated with the FY 2019 IPPS/LTCH PPS final rule and correction notice, on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​FY2019-IPPS-Final-Rule-Home-Page-Items/​FY2019-IPPS-Final-Rule-Data-Files.html?​DLPage=​1&​DLEntries=​10&​DLSort=​0&​DLSortDir=​ascending. As finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275), beginning with FY 2020, we include the thresholds applicable to the next fiscal year (previously included in Table 10 of the annual IPPS/LTCH PPS proposed and final rules) in the data files associated with the prior fiscal year. Accordingly, the final thresholds for applications for new technology add-on payments for FY 2021 are presented in a data file that is available on the CMS website, along with the other data files associated with this FY 2020 final rule, by clicking on the FY 2020 IPPS Final Rule Home Page at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

In the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed the issue of whether the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims information that providers submit with applications for new medical service or technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this issue.

Under the third criterion, § 412.87(b)(1) of our existing regulations provides that a new technology is an appropriate candidate for an additional payment when it represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. For example, a new technology represents a substantial clinical improvement when it reduces mortality, decreases the number of hospitalizations or physician visits, or reduces recovery time compared to the technologies previously available. (We refer readers to the September 7, 2001 final rule for a more detailed discussion of this criterion (66 FR 46902). We also refer readers to section II.H.8. of the preamble of this final rule for a discussion of our final policy regarding an alternative inpatient new technology add-on payment pathway for transformative new devices. We also refer readers to section II.H.10. of the preamble of this final rule for a discussion of our final policy regarding an alternative inpatient new technology add-on payment pathway for certain antimicrobials.)

The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. Under § 412.88, if the costs of the discharge (determined by applying cost-to-charge ratios (CCRs) as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 50 percent of the estimated costs of the new technology or medical service (if the estimated costs for the case including the new technology or medical service exceed Medicare's payment); or (2) 50 percent of the difference between the full DRG payment and the hospital's estimated cost for the case. Unless the discharge qualifies for an outlier payment, the additional Medicare payment is limited to the full MS-DRG payment plus 50 percent of the estimated costs of the new technology or medical service. We refer readers to section II.H.9. of the preamble of this final rule for a discussion of our final policy regarding the change to the calculation of the new technology add-on payment beginning in FY 2020, including our finalized amendments to § 412.88 of the regulations.

Section 503(d)(2) of Public Law 108-173 provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, in accordance with section 503(d)(2) of Public Law 108-173, add-on payments for new medical services or technologies for FY 2005 and later years have not been subjected to budget neutrality.

In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulations at § 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. We amended § 412.87(c) to specify that all applicants for new technology add-on payments must have FDA approval or clearance by July 1 of the year prior to the beginning of the fiscal year for which the application is being considered.

The Council on Technology and Innovation (CTI) at CMS oversees the agency's cross-cutting priority on coordinating coverage, coding and payment processes for Medicare with respect to new technologies and Start Printed Page 42182procedures, including new drug therapies, as well as promoting the exchange of information on new technologies and medical services between CMS and other entities. The CTI, composed of senior CMS staff and clinicians, was established under section 942(a) of Public Law 108-173. The Council is co-chaired by the Director of the Center for Clinical Standards and Quality (CCSQ) and the Director of the Center for Medicare (CM), who is also designated as the CTI's Executive Coordinator.

The specific processes for coverage, coding, and payment are implemented by CM, CCSQ, and the local Medicare Administrative Contractors (MACs) (in the case of local coverage and payment decisions). The CTI supplements, rather than replaces, these processes by working to assure that all of these activities reflect the agency-wide priority to promote high-quality, innovative care. At the same time, the CTI also works to streamline, accelerate, and improve coordination of these processes to ensure that they remain up to date as new issues arise. To achieve its goals, the CTI works to streamline and create a more transparent coding and payment process, improve the quality of medical decisions, and speed patient access to effective new treatments. It is also dedicated to supporting better decisions by patients and doctors in using Medicare-covered services through the promotion of better evidence development, which is critical for improving the quality of care for Medicare beneficiaries.

To improve the understanding of CMS' processes for coverage, coding, and payment and how to access them, the CTI has developed an “Innovator's Guide” to these processes. The intent is to consolidate this information, much of which is already available in a variety of CMS documents and in various places on the CMS website, in a user friendly format. This guide was published in 2010 and is available on the CMS website at: https://www.cms.gov/​Medicare/​Coverage/​CouncilonTechInnov/​Downloads/​Innovators-Guide-Master-7-23-15.pdf.

As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we invite any product developers or manufacturers of new medical services or technologies to contact the agency early in the process of product development if they have questions or concerns about the evidence that would be needed later in the development process for the agency's coverage decisions for Medicare.

The CTI aims to provide useful information on its activities and initiatives to stakeholders, including Medicare beneficiaries, advocates, medical product manufacturers, providers, and health policy experts. Stakeholders with further questions about Medicare's coverage, coding, and payment processes, or who want further guidance about how they can navigate these processes, can contact the CTI at CTI@cms.hhs.gov.

In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19274), we noted that applicants for add-on payments for new medical services or technologies for FY 2021 must submit a formal request, including a full description of the clinical applications of the medical service or technology and, as applicable, the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement, along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Complete application information, along with final deadlines for submitting a full application, will be posted on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​newtech.html. To allow interested parties to identify the new medical services or technologies under review before the publication of the proposed rule for FY 2021, the CMS website also will post the tracking forms completed by each applicant. We note that the burden associated with this information collection requirement is the time and effort required to collect and submit the data in the formal request for add-on payments for new medical services and technologies to CMS. The aforementioned burden is subject to the PRA; it is currently being revised based on the finalized policies discussed in this section of the final rule and approved under OMB control number 0938-1347, which expires on December 31, 2020.

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

Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of Public Law 108-173, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement or advancement. The process for evaluating new medical service and technology applications requires the Secretary to—

  • Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries;
  • Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending;
  • Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement; and
  • Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS.

In order to provide an opportunity for public input regarding add-on payments for new medical services and technologies for FY 2020 prior to publication of the FY 2020 IPPS/LTCH PPS proposed rule, we published a notice in the Federal Register on October 5, 2018 (83 FR 50379), and held a town hall meeting at the CMS Headquarters Office in Baltimore, MD, on December 4, 2018. In the announcement notice for the meeting, we stated that the opinions and presentations provided during the meeting would assist us in our evaluations of applications by allowing public discussion of the substantial clinical improvement criterion for each of the FY 2020 new medical service and technology add-on payment applications before the publication of the FY 2020 IPPS/LTCH PPS proposed rule.

We stated in the FY 2020 IPPS/LTCH PPS proposed rule that approximately 100 individuals registered to attend the town hall meeting in person, while additional individuals listened over an open telephone line. We also live-streamed the town hall meeting and posted the morning and afternoon sessions of the town hall on the CMS YouTube web page at: https://www.youtube.com/​watch?​v=​4z1AhEuGHqQ and https://www.youtube.com/​watch?​v=​m26Xj1EzbIY, respectively. We considered each applicant's presentation made at the town hall meeting, as well as written comments submitted on the applications that were received by the due date of December 14, 2018, in our evaluation of the new technology add-on payment applications for FY 2020 in the Start Printed Page 42183development of the FY 2020 IPPS/LTCH PPS proposed rule.

In response to the published notice and the December 4, 2018 New Technology Town Hall meeting, we received written comments regarding the applications for FY 2020 new technology add-on payments. (We refer readers to section II.H.2. of the preamble of the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19275) for summaries of the comments we received in response to the published notice and the New Technology Town Hall meeting and our responses.) We also noted in the FY 2020 IPPS/LTCH PPS proposed rule that we do not summarize comments that are unrelated to the “substantial clinical improvement” criterion. As explained earlier and in the Federal Register notice announcing the New Technology Town Hall meeting (83 FR 50379 through 50381), the purpose of the meeting was specifically to discuss the substantial clinical improvement criterion in regard to pending new technology add-on payment applications for FY 2020. Therefore, we did not summarize those written comments in the proposed rule that are unrelated to the substantial clinical improvement criterion. In section II.H.5. of the preamble of the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19284 through 19367), we summarized comments regarding individual applications, or, if applicable, indicated that there were no comments received in response to the New Technology Town Hall meeting notice or New Technology Town Hall meeting, at the end of each discussion of the individual applications.

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

As discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49434), the ICD-10-PCS includes a new section containing the new Section “X” codes, which began being used with discharges occurring on or after October 1, 2015. Decisions regarding changes to ICD-10-PCS Section “X” codes will be handled in the same manner as the decisions for all of the other ICD-10-PCS code changes. That is, proposals to create, delete, or revise Section “X” codes under the ICD-10-PCS structure will be referred to the ICD-10 Coordination and Maintenance Committee. In addition, several of the new medical services and technologies that have been, or may be, approved for new technology add-on payments may now, and in the future, be assigned a Section “X” code within the structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS website at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​2016-ICD-10-PCS-and-GEMs.html, including guidelines for ICD-10-PCS Section “X” codes. We encourage providers to view the material provided on ICD-10-PCS Section “X” codes.

4. FY 2020 Status of Technologies Approved for FY 2019 New Technology Add-On Payments

a. Defitelio® (Defibrotide)

Jazz Pharmaceuticals submitted an application for new technology add-on payments for FY 2017 for defibrotide (Defitelio®), a treatment for patients who have been diagnosed with hepatic veno-occlusive disease (VOD) with evidence of multi-organ dysfunction. VOD, also known as sinusoidal obstruction syndrome (SOS), is a potentially life-threatening complication of hematopoietic stem cell transplantation (HSCT), with an incidence rate of 8 percent to 15 percent. Diagnoses of VOD range in severity from what has been classically defined as a disease limited to the liver (mild) and reversible, to a severe syndrome associated with multi-organ dysfunction or failure and death. Patients who have received treatment involving HSCT who develop VOD with multi-organ failure face an immediate risk of death, with a mortality rate of more than 80 percent when only supportive care is used. The applicant asserted that Defitelio® improves the survival rate of patients who have been diagnosed with VOD with multi-organ failure by 23 percent.

Defitelio® received Orphan Drug Designation for the treatment of VOD in 2003 and for the prevention of VOD in 2007. It has been available to patients as an investigational drug through an Expanded Access Program since 2006. The applicant's New Drug Application (NDA) for Defitelio® received FDA approval on March 30, 2016. The applicant confirmed that Defitelio® was not available on the U.S. market as of the FDA NDA approval date of March 30, 2016. According to the applicant, commercial packaging could not be completed until the label for Defitelio® was finalized with FDA approval, and that commercial shipments of Defitelio® to hospitals and treatment centers began on April 4, 2016. Therefore, we agreed that, based on this information, the newness period for Defitelio® begins on April 4, 2016, the date of its first commercial availability.

The applicant received approval to use unique ICD-10-PCS procedure codes to describe the use of Defitelio®, with an effective date of October 1, 2016. The approved ICD-10-PCS procedure codes are: XW03392 (Introduction of defibrotide sodium anticoagulant into peripheral vein, percutaneous approach); and XW04392 (Introduction of defibrotide sodium anticoagulant into central vein, percutaneous approach).

After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for Defitelio® and consideration of the public comments we received in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved Defitelio® for new technology add-on payments for FY 2017 (81 FR 56906). With the new technology add-on payment application, the applicant estimated that the average Medicare beneficiary would require a dosage of 25 mg/kg/day for a minimum of 21 days of treatment. The recommended dose is 6.25 mg/kg given as a 2-hour intravenous infusion every 6 hours. Dosing should be based on a patient's baseline body weight, which is assumed to be 70 kg for an average adult patient. All vials contain 200 mg at a cost of $825 per vial. Therefore, we determined that cases involving the use of the Defitelio® technology would incur an average cost per case of $151,800 (70 kg adult × 25 mg/kg/day × 21 days = 36,750 mg per patient/200 mg vial = 184 vials per patient × $825 per vial = $151,800). Under existing § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment amount for a case involving the use of Defitelio® is $75,900 for FY 2019.

Our policy is that a medical service or technology may continue to be considered “new” for purposes of new technology add-on payments within 2 or 3 years after the point at which data begin to become available reflecting the inpatient hospital code assigned to the new service or technology. Our practice has been to begin and end new technology add-on payments on the basis of a fiscal year, and we have generally followed a guideline that uses a 6-month window before and after the start of the fiscal year to determine whether to extend the new technology add-on payment for an additional fiscal year. In general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the fiscal year (70 FR 47362).

With regard to the newness criterion for Defitelio®, we considered the Start Printed Page 42184beginning of the newness period to commence on the first day Defitelio® was commercially available (April 4, 2016). Because the 3-year anniversary date of the entry of the Defitelio® onto the U.S. market (April 4, 2019) would occur during FY 2019, in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19276), we proposed to discontinue new technology add-on payments for this technology for FY 2020. We invited public comments on our proposal to discontinue new technology add-on payments for Defitelio® for FY 2020.

Comment: A commenter supported CMS' proposal to discontinue new technology add-on payments for FY 2020 for Defitelio®.

Response: We appreciate the commenter's support. After consideration of the public comments we received, we are finalizing our proposal to discontinue new technology add-on payments for Defitelio® for FY 2020.

b. Ustekinumab (Stelara®)

Janssen Biotech submitted an application for new technology add-on payments for the Stelara® induction therapy for FY 2018. Stelara® received FDA approval on September 23, 2016 as an intravenous (IV) infusion treatment for adult patients who have been diagnosed with moderately to severely active Crohn's disease (CD) who have failed or were intolerant to treatment using immunomodulators or corticosteroids, but never failed a tumor necrosis factor (TNF) blocker, or failed or were intolerant to treatment using one or more TNF blockers. Stelara® IV is intended for induction—subcutaneous prefilled syringes are intended for maintenance dosing. Stelara® must be administered intravenously by a health care professional in either an inpatient hospital setting or an outpatient hospital setting.

Stelara® for IV infusion is packaged in single 130 mg vials. Induction therapy consists of a single IV infusion dose using the following weight-based dosing regimen: Patients weighing 55 kg or less than (<) 55 kg are administered 260 mg of Stelara® (2 vials); patients weighing more than (>) 55 kg, but 85 kg or less than (<) 85 kg are administered 390 mg of Stelara® (3 vials); and patients weighing more than (>) 85 kg are administered 520 mg of Stelara® (4 vials). An average dose of Stelara® administered through IV infusion is 390 mg (3 vials). Maintenance doses of Stelara® are administered at 90 mg, subcutaneously, at 8-week intervals and may occur in the outpatient hospital setting.

CD is an inflammatory bowel disease of unknown etiology, characterized by transmural inflammation of the gastrointestinal (GI) tract. Symptoms of CD may include fatigue, prolonged diarrhea with or without bleeding, abdominal pain, weight loss and fever. CD can affect any part of the GI tract including the mouth, esophagus, stomach, small intestine, and large intestine. Most commonly used pharmacologic treatments for CD include antibiotics, mesalamines, corticosteroids, immunomodulators, tumor necrosis alpha (TNFα) inhibitors, and anti-integrin agents. Surgery may be necessary for some patients who have been diagnosed with CD in which conventional therapies have failed.

After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for Stelara® and consideration of the public comments we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we approved Stelara® for new technology add-on payments for FY 2018 (82 FR 38129). Cases involving Stelara® that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure code XW033F3 (Introduction of other New Technology therapeutic substance into peripheral vein, percutaneous approach, new technology group 3). With the new technology add-on payment application, the applicant estimated that the average Medicare beneficiary would require a dosage of 390 mg (3 vials) at a hospital acquisition cost of $1,600 per vial (for a total of $4,800). Under existing § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment amount for a case involving the use of Stelara® is $2,400 for FY 2019.

With regard to the newness criterion for Stelara®, we considered the beginning of the newness period to commence when Stelara® received FDA approval as an IV infusion treatment for Crohn's disease (CD) on September 23, 2016. Because the 3-year anniversary date of the entry of Stelara® onto the U.S. market (September 23, 2019) will occur during FY 2019, in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19276 through 19277), we proposed to discontinue new technology add-on payments for this technology for FY 2020. We invited public comments on our proposal to discontinue new technology add-on payments for Stelara® for FY 2020.

Comment: A commenter supported CMS' proposal to discontinue new technology add-on payments for FY 2020 for Stelara®.

Response: We appreciate the commenter's support. After consideration of the public comments we received, we are finalizing our proposal to discontinue new technology add-on payments for Stelara® for FY 2020.

c. Bezlotoxumab (ZINPLAVATM)

Merck & Co., Inc. submitted an application for new technology add-on payments for ZINPLAVATM for FY 2018. ZINPLAVATM is indicated as a treatment to reduce recurrence of Clostridium difficile infection (CDI) in adult patients who are receiving antibacterial drug treatment for a diagnosis of CDI and who are at high risk for CDI recurrence. ZINPLAVATM is not indicated for the treatment of the presenting episode of CDI and is not an antibacterial drug. ZINPLAVATM should only be used in conjunction with an antibacterial drug treatment for CDI.

Clostridium difficile (C-diff) is a disease-causing anaerobic, spore forming bacterium that affects the gastrointestinal (GI) tract. Some people carry the C-diff bacterium in their intestines, but never develop symptoms of an infection. The difference between asymptomatic colonization and disease is caused primarily by the production of an enterotoxin (Toxin A) and/or a cytotoxin (Toxin B). The presence of either or both toxins can lead to symptomatic CDI, which is defined as the acute onset of diarrhea with a documented infection with toxigenic C-diff. The GI tract contains millions of bacteria, commonly referred to as “normal flora” or “good bacteria,” which play a role in protecting the body from infection. Antibiotics can kill these good bacteria and allow C-diff to multiply and release toxins that damage the cells lining the intestinal wall, resulting in a CDI. CDI is a leading cause of hospital-associated gastrointestinal illnesses. Persons at increased risk for CDI include people who are currently on or who have recently been treated with antibiotics, people who have encountered current or recent hospitalization, people who are older than 65 years, immunocompromised patients, and people who have recently had a diagnosis of CDI. CDI symptoms include, but are not limited to, diarrhea, abdominal pain, and fever. CDI symptoms range in severity from mild (abdominal discomfort, loose stools) to severe (profuse, watery diarrhea, severe abdominal pain, and high fevers). Severe CDI can be life-threatening and, Start Printed Page 42185in rare cases, can cause bowel rupture, sepsis and organ failure. CDI is responsible for 14,000 deaths per year in the United States.

C-diff produces two virulent, pro-inflammatory toxins, Toxin A and Toxin B, which target host colonic endothelial cells by binding to endothelial cell surface receptors via combined repetitive oligopeptide (CROP) domains. These toxins cause the release of inflammatory cytokines leading to intestinal fluid secretion and intestinal inflammation. The applicant asserted that ZINPLAVATM targets Toxin B sites within the CROP domain rather than the C-diff organism itself. According to the applicant, by targeting C-diff Toxin B, ZINPLAVATM neutralizes Toxin B, prevents large intestine endothelial cell inflammation, symptoms associated with CDI, and reduces the recurrence of CDI.

ZINPLAVATM received FDA approval on October 21, 2016, as a treatment to reduce the recurrence of CDI in adult patients receiving antibacterial drug treatment for CDI and who are at high risk of CDI recurrence. As previously stated, ZINPLAVATM is not indicated for the treatment of CDI. ZINPLAVATM is not an antibacterial drug, and should only be used in conjunction with an antibacterial drug treatment for CDI. ZINPLAVATM became commercially available on February 10, 2017. Therefore, the newness period for ZINPLAVATM began on February 10, 2017. The applicant submitted a request for a unique ICD-10-PCS procedure code and was granted approval for the following procedure codes: XW033A3 (Introduction of bezlotoxumab monoclonal antibody, into peripheral vein, percutaneous approach, new technology group 3) and XW043A3 (Introduction of bezlotoxumab monoclonal antibody, into central vein, percutaneous approach, new technology group 3).

After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for ZINPLAVATM and consideration of the public comments we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we approved ZINPLAVATM for new technology add-on payments for FY 2018 (82 FR 38119). With the new technology add-on payment application, the applicant estimated that the average Medicare beneficiary would require a dosage of 10 mg/kg of ZINPLAVATM administered as an IV infusion over 60 minutes as a single dose. According to the applicant, the WAC for one dose is $3,800. Under existing § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50