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Proposed Rule

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2021 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals

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Start Preamble Start Printed Page 32460

AGENCY:

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

ACTION:

Proposed rule.

SUMMARY:

We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2021 and to implement certain recent legislation. We also are proposing to make changes relating to Medicare graduate medical education (GME) for teaching hospitals. 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 2021. We are proposing to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2021. In this FY 2021 IPPS/LTCH PPS proposed rule, we are proposing changes to the new technology add-on payment pathway for certain antimicrobial products and other changes to new technology add-on payment policies, and to collect market-based rate information on the Medicare cost report for cost reporting periods ending on or after January 1, 2021, and requesting comment on a potential market based MS-DRG relative weight methodology beginning in FY 2024 that we may adopt in this rulemaking. We are proposing to establish new requirements or revise existing requirements for quality reporting by acute care hospitals and PPS-exempt cancer hospitals. We also are proposing to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare and Medicaid Promoting Interoperability Programs. We are providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and proposing updated policies for the Hospital Readmissions Reduction Program and the Hospital-Acquired Condition (HAC) Reduction Program.

DATES:

To be assured consideration, comments must be received at one of the addresses provided in the ADDRESSES section, no later than 5 p.m. EDT on July 10, 2020.

ADDRESSES:

In commenting, please refer to file code CMS-1735-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

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

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1735-P, P.O. Box 8013, Baltimore, MD 21244-1850.

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

3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1735-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

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

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

Emily Forrest, (202) 205-1922, Market Based Data Collection and Potential Market Based MS-DRG Relative Weight Methodology 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.

James Poyer, (410) 786-2261, Hospital Readmissions Reduction Program—Readmissions—Measures Issues.

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

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

Julia Venanzi, (410) 786-1471 and Katrina Hoadley, (410) 786-8490, Hospital Inpatient Quality Reporting Program.

Julia Venanzi, (410) 786-1471 and Pamela Brown (410) 786-3940, Hospital Value-Based Purchasing Program.

Katrina Hoadley, (410) 786-8490, 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.

Erin Patton, (410) 786-2437 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.

Dylan Podson (410) 786-5031, Jessica Warren (410) 786-7519, and Elizabeth Holland, (410) 786-1309, Promoting Interoperability Programs.

Steve Rubio, (410) 786-1782, Reimbursement for Submission of Patient Records to Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs) in Electronic Format.Start Printed Page 32461

Maude Shepard, (410) 786-5598, Provider Reimbursement Review Board Electronic Filing.

Kellie Shannon, (410) 786-0416 and Bob Kuhl, (443) 896-8410, Medicare Bad Debt.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

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

Tables Available Through the Internet on the CMS Website

The IPPS tables for this FY 2021 proposed 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 2021 IPPS Proposed Rule Home Page” or “Acute Inpatient—Files for Download.” The LTCH PPS tables for this FY 2021 proposed 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-1735-P. For further details on the contents of the tables referenced in this proposed rule, we refer readers to section VI. of the Addendum to this FY 2021 IPPS/LTCH PPS proposed 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.

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority

This FY 2021 IPPS/LTCH PPS proposed rule would make payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. In addition, it would make payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). This proposed rule also would make policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2021 proposed rule, we are continuing policies to address wage index disparities impacting low wage index hospitals; and including proposals related to new technology add-on payments for certain antimicrobial products, other proposals related to new technology add-on payments, and to collect market-based rate information on the Medicare cost report for cost reporting periods ending on or after January 1, 2021, and requesting comment on a potential market based MS-DRG relative weight methodology beginning in FY 2024 that we may adopt in this rulemaking.

We are proposing to establish new requirements and revise existing requirements for quality reporting by acute care hospitals and PPS-exempt cancer hospitals that participate in Medicare. We also are proposing to establish new requirements and revise existing requirements for eligible hospitals and CAHs participating in the Medicare and Medicaid Promoting Interoperability Programs.

We are providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and proposing updated policies for the Hospital Readmissions Reduction Program and the Hospital-Acquired Condition (HAC) Reduction Program.

Under various statutory authorities, we either discuss continued program implementation or are proposing to make changes to the Medicare IPPS, to the LTCH PPS, and to other related payment methodologies and programs for FY 2021 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 Public Law (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 Start Printed Page 32462Century 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 directs 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.
  • 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. 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. Waiver of the 60-Day Delayed Effective Date for the Final Rule

The United States is responding to an outbreak of respiratory disease caused by a novel (new) coronavirus that has now been detected in more than 190 locations internationally, including in all 50 States and the District of Columbia. The virus has been named “SARS-CoV-2” and the disease it causes has been named “coronavirus disease 2019” (abbreviated “COVID-19”).

Due to the significant devotion of resources to the COVID-19 response, as discussed and for the reasons discussed in section XI.D. of the preamble of this propose rule, we are hereby waiving the 60-day delay in the effective date of the final rule, and replacing it with a 30-day delay in the effective date of the final rule.

3. Summary of the Major Provisions

The following is a summary of the major provisions in this proposed rule. In general, these major provisions are being proposed as 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 in this proposed rule is presented in section I.D. of the preamble of this proposed rule.

a. Proposed 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 2021, we are proposing to make an adjustment of + 0.5 percent to the standardized amount.

b. Proposed Changes to the New Technology Add-On Payment Policy for Certain Antimicrobial Products

In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297), we established an alternative inpatient new technology add-on payment pathway for certain antimicrobial products in light of the significant concerns related to the ongoing public health crisis represented by antimicrobial resistance. Under this alternative pathway, if a medical product receives the FDA's Qualified Infectious Disease Product (QIDP) designation and received FDA marketing authorization, such a 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 will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

In light of recent information that continues to highlight the significant concerns and impacts related to antimicrobial resistance and emphasizes the continued importance of this issue both with respect to Medicare beneficiaries and public health overall, we are proposing changes to the new technology add-on payment policy for certain antimicrobials for FY 2021.

As discussed in section II.G.9.b. of the preamble of this proposed rule, we are proposing to expand our alternative new technology add-on payment pathway for QIDPs to include products approved through FDA's Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD pathway). Under this proposal, for applications received for new technology add-on payments for FY 2022 and subsequent fiscal years, if an antimicrobial product is approved through FDA's LPAD pathway, it will be considered new and not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS, and will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

Under current policy, a new technology must receive FDA marketing Start Printed Page 32463authorization (for example, approval or clearance) by July 1 to be considered in the final rule in order to allow complete review and consideration of all the information to determine if the technology meets the new technology add-on payment criteria. For the reasons discussed in section II.G.9.c. of the preamble of this proposed rule, we are proposing to provide for conditional new technology add-on payment approval for products designated as QIDPs that do not receive FDA marketing authorization by July 1 and products that do not receive approval through FDA's LPAD pathway by July 1 but otherwise meet the applicable add-on payment criteria. Under this proposal, cases involving eligible antimicrobial products would begin receiving the new technology add-on payment sooner, effective for discharges the quarter after the date of FDA marketing authorization provided that the technology receives FDA marketing authorization by July 1 of the particular fiscal year for which the applicant applied for new technology add-on payments.

c. Continuation of the Low Wage Index Hospital Policy

To help mitigate wage index disparities between high wage and low hospitals, in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42326 through 42332), we adopted a policy to provide an opportunity for certain low wage index hospitals to increase employee compensation by increasing the wage index values for certain hospitals with low wage index values (the low wage index hospital policy). This policy was adopted in a budget neutral manner through an adjustment applied to the standardized amounts for all hospitals. We also indicated that this policy would 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. Therefore, for FY 2021, we are continuing the low wage index hospital policy, and also applying this policy in a budget neutral manner by proposing an adjustment to the standardized amounts.

d. Proposed DSH Payment Adjustment and Additional Payment for Uncompensated Care

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

In this proposed rule, we set forth our proposed estimates of the three factors used to determine uncompensated care payments for FY 2021. We are proposing to 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. In addition, we are proposing to use a single year of data on uncompensated care costs from Worksheet S-10 of the FY 2017 cost reports to calculate Factor 3 in the FY 2021 methodology for all eligible hospitals with the exception of Indian Health Service (IHS) and Tribal hospitals and Puerto Rico hospitals. For IHS and Tribal hospitals and Puerto Rico hospitals we are proposing to continue to use the low-income insured days proxy to calculate Factor 3 for these hospitals for 1 more year. Furthermore, we are proposing to calculate Factor 3 for all subsequent fiscal years for all eligible hospitals, except IHS and Tribal hospitals, using the most recent available single year of audited Worksheet S-10 data. We are also making other methodological proposals for calculating Factor 3 for FY 2021.

e. Reduction of Hospital Payments for Excess Readmissions

We are proposing to make 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 2021 IPPS/LTCH PPS proposed rule, we are proposing the following policies: (1) To automatically adopt applicable periods beginning with the FY 2023 program year and all subsequent program years, unless otherwise specified by the Secretary; and (2) to update the definition of applicable period at 42 CFR 412.152 to align with this proposal.

f. 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 2021 IPPS/LTCH PPS proposed rule, we are providing estimated and newly established performance standards for certain measures for the FY 2023 program year, the FY 2024 program year, the FY 2025 program year, and the FY 2026 program year.

g. 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. In this FY 2021 IPPS/LTCH PPS proposed rule, we are proposing the following policies: (1) To automatically adopt applicable periods beginning with the FY 2023 program year and all subsequent program years, unless otherwise specified by the secretary, (2) to make refinements to the process for validation of HAC Reduction Program measure data in alignment with the Hospital IQR Program validation proposals; and (3) to update the definition of applicable period at 42 CFR 412.170 to align with the proposal to automatically adopt applicable periods.

h. Hospital Inpatient Quality Reporting (IQR) Program

Under section 1886(b)(3)(B)(viii) of the Act, subsection (d) hospitals are required to report data on measures Start Printed Page 32464selected 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 2021 IPPS/LTCH PPS proposed rule, we are proposing reporting, submission, and public display requirements for eCQMs, including policies to: (1) Progressively increase the numbers of quarters of eCQM data reported, from one self-selected quarter of data to four quarters of data over a 3-year period, by requiring hospitals to report: (a) Two quarters of data for the CY 2021 reporting period/FY 2023 payment determination; (b) three quarters of data for the CY 2022 reporting period/FY 2024 payment determination; and (c) four quarters of data beginning with the CY 2023 reporting period/FY 2025 payment determination and for subsequent years, while continuing to allow hospitals to report: (i) Three self-selected eCQMs, and (ii) the Safe Use of Opioids eCQM; and (2) begin public display of eCQM data beginning with data reported by hospitals for the CY 2021 reporting period and for subsequent years. The eCQM-related proposals are in alignment with proposals under the Promoting Interoperability Program. We also are proposing to expand the requirement to use EHR technology certified to the 2015 Edition for submitting data on not only the previously finalized Hybrid Hospital-Wide Readmission measure, but all hybrid measures in the Hospital IQR Program.

We also are proposing to make several changes to streamline validation processes under the Hospital IQR Program. We are proposing to: (1) Require the use of electronic file submissions via a CMS-approved secure file transmission process and no longer allow the submission of paper copies of medical records or copies on digital portable media such as CD, DVD, or flash drive; (2) combine the validation processes for chart-abstracted measures and eCQMs by: (a) Aligning data submission quarters; (b) combining hospital selection, including: (i) Reducing the pool of hospitals randomly selected for chart-abstracted measure validation; and (ii) integrating and applying targeting criteria for eCQM validation; (c) removing previous exclusion criteria; and (d) combining scoring processes by providing one combined validation score for the validation of chart-abstracted measures and eCQMs with the eCQM portion of the combined score weighted at zero; and (3) formalize the process for conducting educational reviews for eCQM validation in alignment with current processes for providing feedback for chart-abstracted validation results.

h. PPS-Exempt Cancer Hospital Quality Reporting Program

Section 1866(k)(1) of the Act requires, for purposes of FY 2014 and each subsequent fiscal year, that a hospital described in section 1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH) submit data in accordance with section 1866(k)(2) of the Act with respect to such fiscal year. There is no financial impact to PCH Medicare payment if a PCH does not participate.

In this FY 2021 IPPS/LTCH PPS proposed rule, we are proposing to refine two existing program measures, Catheter-associated Urinary Tract infection (CAUTI) (NQF #0138) and Central Line-associated Bloodstream Infection (CLABSI) (NQF #0139), to adopt the updated SIR calculation methodology developed by the Center for Disease Control and Prevention (CDC) that calculates rates using updated HAI baseline data that are further stratified by patient location. We are also proposing to publicly display the refined versions of the measures beginning in the fall of CY 2022.

i. 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 proposing several changes to the Medicare Promoting Interoperability Program. Specifically, we are proposing: (1) An EHR reporting period of a minimum of any continuous 90-day period in CY 2022 for new and returning participants (eligible hospitals and CAHs); (2) to maintain the Electronic Prescribing Objective's Query of PDMP measure as optional and worth 5 bonus points in CY 2021; (3) to modify the name of the Support Electronic Referral Loops by Receiving and Incorporating Health Information measure; (4) to progressively increase the number of quarters for which hospitals are required to report eCQM data, from the current requirement of one self-selected calendar quarter of data, to four calendar quarters of data, over a 3-year period. Specifically, we propose to require: (a) 2 self-selected calendar quarters of data for the CY 2021 reporting period; (b) 3 self-selected calendar quarters of data for the CY 2022 reporting period; and (c) 4 self-selected calendar quarters of data beginning with the CY 2023 reporting period, where the proposed submission period for the Medicare Promoting Interoperability Program would be the 2 months following the close of the CY 2023 (ending February 28, 2024); (5) to begin publicly reporting eCQM performance data beginning with the eCQM data reported by eligible hospitals and CAHs for the reporting period in CY 2021 on the Hospital Compare and/or data.medicare.gov websites or successor websites; (6) to correct errors and amend regulation text under 495.104(c)(5)(viii)(B) through (D) regarding transition factors under section 1886(n)(2)(E)(i) for the incentive payments for Puerto Rico eligible hospitals; and (7) to correct errors and amend regulation text under § 495.20(e)(5)(iii) and (l)(11)(ii)(C)(1) for regulatory citations for the ONC certification criteria. We are amending our regulation texts as necessary to incorporate these proposed changes.

j. Market-Based MS-DRG Relative Weight Proposed Data Collection and Potential Change in Methodology for Calculating MS-DRG Relative Weights

As discussed in section IV.P. of the preamble of this proposed rule, in order to reduce the Medicare program's reliance on the hospital chargemaster, thereby advancing the critical goals of Executive Orders 13813, Promoting Healthcare Choice and Competition Across the United States and 13890, Protecting and Improving Medicare for Our Nation's Seniors, and to support the development of a market-based approach to payment under the Medicare FFS system, we are proposing that hospitals would be required to report certain market-based payment rate information on their Medicare cost report for cost reporting periods ending on or after January 1, 2021, to be used in a potential change to the methodology for calculating the IPPS MS-DRG relative weights to reflect relative market-based pricing

We are specifically proposing that hospitals would report on the Medicare cost report: (1) The median payer-specific negotiated charge that the hospital has negotiated with all of its Medicare Advantage (MA) organizations (also referred to as MA organizations) payers, by MS-DRG; and (2) the median payer-specific negotiated charge the hospital has negotiated with all of its third-party payers, which would include MA organizations, by MS-DRG. The market-based rate information we are proposing to collect on the Medicare cost report would be the median of the payer-specific negotiated charges by MS-DRG, as described previously, for a hospital's MA organization payers and all of its third party payers. The payer-Start Printed Page 32465specific negotiated charges used by hospitals to calculate these medians would be the payer-specific negotiated charges for service packages that hospitals are required to make public under the requirements we finalized in the Hospital Price Transparency Final Rule (84 FR 65524) that can be cross-walked to an MS-DRG. We believe that because hospitals are already required to publically report payer-specific negotiated charges, in accordance with the Hospital Price Transparency Final Rule, that the additional calculation and reporting of the median payer-specific negotiated charge will be less burdensome for hospitals.

We are also seeking comment on a potential change to the methodology for calculating the IPPS MS-DRG relative weights to incorporate this market-based rate information, beginning in FY 2024, which we may consider adopting in the FY 2021 IPPS/LTCH PPS final rule. This potential MS-DRG relative weight methodology would utilize the proposed median payer-specific negotiated charge information, collected on the cost report, for calculating the MS-DRG relative weights.

4. Summary of Costs and Benefits

  • Proposed 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 2021, we are proposing to make an adjustment of +0.5 percentage point to the standardized amount consistent with the MACRA.

Proposed Changes to the New Technology Add-On Payment Policy for Certain Antimicrobial Products. In light of recent information that continues to highlight the significant concerns and impacts related to antimicrobial resistance and emphasizes the continued importance of this issue both with respect to Medicare beneficiaries and public health overall, we are proposing changes to the new technology add-on payment policy for certain antimicrobials for FY 2021. We are proposing to expand our alternative new technology add-on payment pathway for QIDPs to include products approved through FDA's Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD pathway). Under this proposal, for applications received for new technology add-on payments for FY 2022 and subsequent fiscal years, if an antimicrobial product is approved through FDA's LPAD pathway, it will be considered new and not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS, and will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

We are also proposing to provide for conditional new technology add-on payment approval for products designated as QIDPs that do not receive FDA marketing authorization by July 1 and products that do not receive approval through FDA's LPAD pathway by July 1 (the current deadline for consideration in the final rule) but otherwise meet the applicable add-on payment criteria. Under this proposal, cases involving eligible antimicrobial products would begin receiving the new technology add-on payment sooner, effective for discharges the quarter after the date of FDA marketing authorization provided that the technology receives FDA marketing authorization by July 1 of the particular fiscal year for which the applicant applied for new technology add-on payments. Given the relatively recent introduction of the FDA's LPAD pathway there have not been any drugs that were approved under the FDA's LPAD pathway that applied for a new technology add-on payment under the IPPS. If all of the future LPADs that would have applied for new technology add-on payments would have been approved under existing criteria, this proposal has no impact relative to current policy. To the extent that there are future LPADs 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 proposal is a cost, but that cost is not estimable. Therefore, it is not possible to quantify the impact of these proposed policies.

  • Wage Index Disparities Between High and Low Wage Index Hospitals. As discussed in section III.G.3. of the preamble of this proposed rule, we are continuing to reduce the disparity between high and low wage index hospitals by increasing the wage index values for certain hospitals with low wage index values and proposing to apply a budget neutrality adjustment to the standardized amount so that increase is implemented in a budget neutral manner.
  • Proposed Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. For FY 2021, we are proposing to update our estimates of the three factors used to determine uncompensated care payments. We are proposing to continue to use uninsured estimates produced by OACT as part of the development of the NHEA in the calculation of Factor 2. We also are proposing to use a single year of data on uncompensated care costs from Worksheet S-10 for FY 2017 to determine Factor 3 for FY 2021. 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 proposing to continue to use only data regarding low-income insured days for FY 2013. We project that the amount available to distribute as payments for uncompensated care for FY 2021 would decrease by approximately $534 million, as compared to our estimate of the uncompensated care payments that will be distributed in FY 2020. 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.
  • Proposed Update to the LTCH PPS Payment Rates and Other Payment Policies. Based on the best available data for the 360 LTCHs in our database, we estimate that the proposed changes to the payment rates and factors that we present in the preamble of and Addendum to this proposed rule, which reflect the end of the transition of the statutory application of the site neutral payment rate and the proposed update to the LTCH PPS standard Federal payment rate for FY 2021, would result in an estimated decrease in payments in FY 2021 of approximately $36 million.
  • Changes to the Hospital Readmissions Reduction Program. For FY 2021 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. For the proposed rule, we are not providing updated estimates based on the proxy file due to timing. Instead, we reiterate the information contained in the FY 2020 IPPS/LTCH PPS final rule, in Start Printed Page 32466which we estimated that 2,583 hospitals would have their base operating DRG payments reduced by their FY 2020 hospital-specific payment adjustment factors. As a result, we estimated that the Hospital Readmissions Reduction Program will save approximately $563 million in FY 2020. We will update these estimates in the FY 2021 IPPS/LTCH PPS final rule as the data become available.
  • 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 2021 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 2021 program year and, therefore, the estimated amount available for value-based incentive payments for FY 2021 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. We are making no changes to the scoring methodology, which will continue to use the Winsorized z-score and equal measure weights approaches to determine the worst-performing quartile of hospitals. Any significant impact due to the HAC Reduction Program changes for FY 2021, including which hospitals will receive the adjustment, will depend on the actual experience of hospitals in the Program.
  • Changes to the Hospital Inpatient Quality Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that our proposed changes for the Hospital IQR Program in this proposed rule would result in a total information collection burden increase of 6,533 hours associated with our proposed policies and updated burden estimates and a total cost increase of approximately $253,480, across a 4-year period from the CY 2021 reporting period/FY 2023 payment determination through the CY 2024 reporting period/FY 2026 payment determination.
  • Changes to the Medicare and Medicaid Promoting Interoperability Programs. If our proposals are finalized, we estimate a minor net reduction in burden hours due to correcting a previously mistaken burden calculation in last year's final rule, as well as a slight increase in total cost for the Medicare Promoting Interoperability Program for CY 2021. Unrelated to any of this rule's Promoting Interoperability Program proposals, the increased alteration to the annual information collection's total cost is due to utilizing an updated hourly wage rate for the necessary hospital staff involved in attesting to the objectives and measures under 42 CFR 495.24(e). The Bureau of Labor Statistics (BLS) recently released a 2018 wage rate which, compared to the 2017 rates used in FY 2020 IPPS/LTCH PPS final rule, would result in an estimated increase of $21,022.32 for the annual information collection burden (total cost) in FY 2021. Therefore, multiplying the total annual burden of 21,450 hours by the 2018 BLS labor cost of $69.34, we estimate the Promoting Interoperability Program's total cost to be $1,487,343 for the CY 2021 EHR reporting period (21,450 hours × $69.34).

Market-Based MS-DRG Relative Weight Proposed Data Collection and Potential Change in Methodology for Calculating MS-DRG Relative Weights. In section IV.P.4. of the preamble of this proposed rule, we are seeking comment on a potential methodology for estimating the MS-DRG relative weights beginning in FY 2024 based on the median payer-specific negotiated charge information we are proposing to collect on the cost report and which we may consider adopting in the FY 2021 IPPS/LTCH PPS final rule. We note that the estimated total annual burden hours for this proposal are as follows: 3,189 hospitals times 15 hours per hospital equals 47,835 annual burden hours and $3,096,838. We refer readers to section XI.B.11. of the preamble of this proposed rule for further analysis of this assessment.

B. Background Summary

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

Section 1886(d) of the 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. In general, 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. In addition, certain transformative new devices and certain antimicrobial products may qualify under an alternative inpatient new technology add-on payment pathway by demonstrating that, absent an add-on payment, they 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. Start Printed Page 32467Any 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. 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 from the IPPS. Various sections of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs for IRF hospitals and units, LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)). (We note that the annual updates to the LTCH PPS are included along with the IPPS annual update in this document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, cancer hospitals, hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs continue to be paid solely under a reasonable cost-based system, subject to a rate-of-increase ceiling on inpatient operating costs. 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). 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, effective for LTCH's cost reporting periods beginning in FY 2016 cost reporting period, 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.

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.Start Printed Page 32468

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

1. 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 proposed rule, there are no proposals or updates to the LTCH Quality Reporting Program. We are continuing to maintain 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.

2. 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.

3. Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94)

Section 108 of the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94) provides that, effective for cost reporting periods beginning on or after October 1, 2020, payment to a subsection (d) hospital that furnishes an allogeneic hematopoietic stem cell transplant for hematopoietic stem cell acquisition shall be made on a reasonable cost basis, and that the Secretary shall specify the items included in such hematopoietic stem cell acquisition in rulemaking. This statutory provision also requires that, beginning in FY 2021, the payments made based on reasonable cost for the acquisition costs of allogeneic hematopoietic stem cells be made in a budget neutral manner.

D. Summary of the Provisions of This Proposed Rule

In this proposed rule, we set forth proposed payment and policy changes to the Medicare IPPS for FY 2021 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 2021.

The following is a general summary of the changes that we are proposing to make in this proposed rule.

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

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

  • Proposed changes to MS-DRG classifications based on our yearly review for FY 2021.
  • Proposed adjustment to the standardized amounts under section 1886(d) of the Act for FY 2021 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 2021 status of new technologies approved for add-on payments for FY 2020, a presentation of our evaluation and analysis of the FY 2021 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) for applications not submitted under an alternative pathway, and a discussion of the proposed status of FY 2021 new technology applicants under the alternative pathways for certain medical devices and certain antimicrobial products.
  • Proposed revision to the new technology add-on payment policy where the coding associated with an application for new technology add-on payments or a previously approved technology that may continue to receive new technology add-on payments is proposed to be assigned to a proposed new MS-DRG.
  • Proposed changes to the timing of the IPPS new technology add-on payment for certain antimicrobial products, and proposed expansion of the alternative pathway for certain antimicrobial products.

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

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

  • Proposed changes in the labor market area delineations based on revisions to the OMB Core Based Statistical Area (CBSA) delineations and proposed policies related to the proposed changes in CBSAs.
  • The proposed FY 2021 wage index update using wage data from cost reporting periods beginning in FY 2017.
  • Calculation, analysis, and implementation of the proposed occupational mix adjustment to the wage index for acute care hospitals for FY 2021 based on the 2016 Occupational Mix Survey.
  • Proposed application of the rural floor and the frontier State floor, and continuation of the low wage index hospital policy.
  • 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 2021 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 2021 wage index.

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

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

  • Proposed changes to MS-DRGs subject to the post-acute care transfer policy and special payment policy.
  • Proposed inpatient hospital update for FY 2021.
  • Proposed amendment to address short cost reporting periods during applicable timeframe for establishment of service area for SCHs.
  • Proposed updated national and regional case-mix values and discharges for purposes of determining RRC status, and proposed amendment for hospital cost reporting periods that are longer or shorter than 12 months.Start Printed Page 32469
  • The statutorily required IME adjustment factor for FY 2021.
  • Proposed changes to the methodologies for determining Medicare DSH payments and the additional payments for uncompensated care.
  • Proposed changes to payment for allogeneic hematopoietic stem cell acquisition costs.
  • Proposed payment adjustment for chimeric antigen receptor (CAR) T-cell therapy clinical trial cases.
  • Proposed requirements for payment adjustments under the Hospital Readmissions Reduction Program for FY 2021.
  • The provision of estimated and newly established performance standards for the calculation 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 2021.
  • Proposed policy changes related to medical residents affected by residency program or teaching hospital closure.
  • Discussion of and proposals relating to the implementation of the Rural Community Hospital Demonstration Program in FY 2021.
  • Proposal to collect market-based rate information on the Medicare cost report for cost reporting periods ending on or after January 1, 2021, and request for comment on a potential market-based MS-DRG relative weight methodology beginning in FY 2024, that we may adopt in this rulemaking.

4. Proposed FY 2021 Policy Governing the IPPS for Capital-Related Costs

In section V. of the preamble to this proposed rule, we discuss the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2021.

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

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

  • Proposed changes to payments to certain excluded hospitals for FY 2021.
  • 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 this proposed rule, we set forth—

  • Proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2021.
  • Proposed rebasing and revising of the LTCH PPS market basket.

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

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

  • Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program.
  • Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program).
  • The FY 2021 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. Other Proposals Included in This Proposed Rule

Section IX. of the preamble to this proposed rule includes the following proposals:

  • Proposed changes pertaining to the submission format requirements and reimbursement rates for patient records sent to the Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs).
  • Proposed changes pertaining to allowing for mandatory electronic filing of Provider Reimbursement Review Board appeals.
  • Proposed changes pertaining to and codification of certain longstanding Medicare Bad Debt policies.

9. Other Provisions of This Proposed Rule

Section X. of the preamble preamble to this proposed rule includes our discussion of the MedPAC Recommendations.

Section XI. of the preamble to this proposed rule includes the following:

  • A descriptive listing of the public use files associated with the proposed rule.
  • The collection of information requirements for entities based on our proposals.
  • Information regarding our responses to public comments.
  • Waiver of the 60-day delay in effective date for the final rule.

10. 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 2021 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We are proposing to establish the threshold amounts for outlier cases. In addition, in section IV. of the Addendum to the proposed rule, we address the update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2021 for certain hospitals excluded from the IPPS.

11. 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 2021 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 2021. We are proposing to establish the adjustment for wage levels, including the proposed changes in the CBSAs based on revisions to the OMB labor market area delineations and a proposed adjustment to reflect the expected increases in wages under the IPPS low wage index hospital policy. We are proposing to establish the adjustments for 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.

12. Impact Analysis

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

13. 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 provide our recommendations of the appropriate percentage changes for FY 2021 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 Start Printed Page 32470services provided for LTCH PPS discharges.

14. 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 2020 recommendations concerning hospital inpatient payment policies address the update factor for hospital inpatient operating costs and capital-related costs for hospitals under the IPPS. We address these recommendations in Appendix B of this proposed rule. For further information relating specifically to the MedPAC March 2020 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 and patient access to their health information. 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 across all care settings, CMS continues to explore opportunities to advance electronic exchange of patient information across payers, providers and with patients, including developing systems that use nationally recognized health IT standards such as Logical Observation Identifier Names and Codes (LOINC), Systemized Nomenclature of Medicine-Clinical Terms (SNOMED), and Fast Healthcare Interoperability Recourses (FHIR). In addition, CMS and ONC are collaborating with industry stakeholders via the Post-Acute Care Interoperability Workgroup (PACIO) (to develop FHIR-based standards for post-acute care (PAC) assessment content, which could support the exchange and reuse of patient http://pacioproject.org/​) assessment data derived from the Minimum Data Set (MDS), Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI), Long Term Care Hospital Continuity Assessment Record and Evaluation Data Set (LTCH CARE data set), Outcome Assessment Information Set (OASIS) assessment tools, and other sources. The Data Element Library (DEL) (https://del.cms.gov/​DELWeb/​pubHome) continues to be updated and serves as the authoritative resource for PAC assessment data elements and their associated mappings to health IT standards. These interoperable data elements can reduce provider burden by allowing the use and exchange of healthcare 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 DEL (https://del.cms.gov/​) can be referenced on the CMS website and in the ONC Interoperability Standards Advisory (ISA). The 2020 ISA is available at https://www.healthit.gov/​isa.

In the September 30, 2019 Federal Register, we published a final rule titled, “Medicare and Medicaid Programs; Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies, and Hospital and Critical Access Hospital Changes to Promote Innovation, Flexibility, and Improvement in Patient Care” (84 FR 51836) (“Discharge Planning final rule”), that revises the discharge planning requirements that hospitals (including psychiatric hospitals, long-term care hospitals, and inpatient rehabilitation facilities), critical access hospitals (CAHs), and home health agencies, must meet to participate in Medicare and Medicaid programs. It also revises one provision regarding patient rights in hospitals. The rule supports our interoperability efforts by promoting the exchange of patient information between health care settings, and by ensuring that a patient's necessary medical information is transferred with the patient after discharge from a hospital, CAH, or post-acute care services provider. For more information on the discharge planning requirements, please visit the final rule at: https://www.federalregister.gov/​documents/​2019/​09/​30/​2019-20732/​medicare-and-medicaid-programs-revisions-to-requirements-for-discharge-planning-for-hospitals.

We invite providers to learn more about these important developments and how they are likely to affect LTCHs and encourage the electronic exchange of health data across care settings and with patients.

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

A. Background

Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as diagnosis-related groups (DRGs)) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. (Beginning in FY 2008, CMS adopted the Medicare-Severity DRGs (MS-DRGs) to better recognize severity of illness and resource use based on case complexity.) 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. Adoption of the MS-DRGs and MS-DRG Reclassifications

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).

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 2020 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, 83 FR 41158 through 41258, and 84 FR 42058 through 42165, respectively).Start Printed Page 32471

C. Proposed FY 2021 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 American Taxpayer Relief Act of 2012 (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, FY 2019, and FY 2020 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 adjustment. 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) and in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42057), consistent with the requirements of section 414 of the MACRA, we implemented 0.5 percentage point positive adjustments to the standardized amount for FY 2019 and FY 2020, respectively. We indicated that the FY 2018, FY 2019, and FY 2020 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 2021 through 2023 in future rulemaking.

3. Proposed Adjustment for FY 2021

Consistent with the requirements of section 414 of the MACRA, we are proposing to implement a 0.5 percentage point positive adjustment to the standardized amount for FY 2021. This would constitute a permanent adjustment to payment rates. We plan to propose future adjustments required under section 414 of the MACRA for FYs 2022 through 2023 in future rulemaking.

D. Proposed Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for Proposed FY 2021 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 Start Printed Page 32472Reporting. 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 Proposed FY 2021 MS-DRG Updates

Given the need for more time to carefully evaluate requests and propose updates, as discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38010), we changed the deadline to request updates to the MS-DRGs to November 1 of each year, which provided an additional 5 weeks for the data analysis and review process. Interested parties had to submit any comments and suggestions for FY 2021 by November 1, 2019, and the comments that were submitted in a timely manner for FY 2021 are discussed in this section of the preamble of this proposed rule. As we discuss 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.

With the continued increase in the number and complexity of the requested changes to the MS-DRG classifications since the adoption of ICD-10 MS-DRGs, and in order to consider as many requests as possible, more time is needed to carefully evaluate the requested changes, analyze claims data, and consider any proposed updates. Therefore, we are changing the deadline to request changes to the MS-DRGs to October 20th of each year to allow for additional time for the review and consideration of any proposed updates. Interested parties should submit any comments and suggestions for FY 2022 by October 20, 2020 via the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov.

Based on public comments received in response to the FY 2020 IPPS/LTCH PPS proposed rule, we are providing a test version of the ICD-10 MS-DRG GROUPER Software, Version 38, so that the public can better analyze and understand the impact of the proposals included in this proposed rule. We note that this test software reflects the proposed GROUPER logic for FY 2021. Therefore, it includes the new diagnosis and procedure codes that are effective for FY 2021 as reflected in Table 6A.—New Diagnosis Codes—FY 2021 and Table 6B.—New Procedure Codes—FY 2021 associated with this proposed rule and does not include the diagnosis codes that are invalid beginning in FY 2021 as reflected in Table 6C.—Invalid Diagnosis Codes—FY 2021 associated with this proposed rule. We note that there are not any procedure codes that have been designated as invalid for FY 2021 at the time of the development of this proposed rule. These tables are not published in the Addendum to this proposed 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 proposed rule. Because the diagnosis codes no longer valid for FY 2021 are not reflected in the test software, we are making available a supplemental file in Table 6P.1a that includes the mapped Version 38 FY 2021 ICD-10-CM codes and the deleted Version 37 FY 2020 ICD-10-CM codes that should be used for testing purposes with users' available claims data. Therefore, users will have access to the test software allowing them to build case examples that reflect the proposals included in this proposed rule. In addition, users will be able to view the draft version of the ICD-10 MS-DRG Definitions Manual, Version 38.

The test version of the ICD-10 MS-DRG GROUPER Software, Version 38, the draft version of the ICD-10 MS-DRG Definitions Manual, Version 38, and the supplemental mapping file in Table 6P.1a of FY 2020 and FY 2021 ICD-10-CM diagnosis codes are available at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

Following are the changes that we are proposing to the MS-DRGs for FY 2021. We are inviting public comments on each of the MS-DRG classification proposed changes, as well as our proposals to maintain certain existing MS-DRG classifications discussed in this proposed rule. In some cases, we are proposing changes to the MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. In other cases, we are proposing to maintain the existing MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. For this FY 2021 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data from the September 2019 update of the FY 2019 MedPAR file, which contains hospital bills received through September 30, 2019, for discharges occurring through September 30, 2019. In our discussion of the proposed MS-DRG reclassification changes, we refer to these claims data as the “September 2019 update of the FY 2019 MedPAR file.”

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 (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.

Beginning with this FY 2021 IPPS/LTCH PPS proposed rule, we are proposing to expand the previously Start Printed Page 32473listed criteria to also include the NonCC subgroup. We believe that applying these criteria to the NonCC subgroup would better reflect resource stratification and also promote stability in the relative weights by avoiding low volume counts for the NonCC level MS-DRGs.

Specifically, in our analysis of the MS-DRG classification requests for FY 2021 that we received by November 1, 2019, as well as any additional analyses that were conducted in connection with those requests, we applied these criteria to each of the MCC, CC and NonCC subgroups, as described in the following table. We are providing the following table to better illustrate all five criteria and how they are applied for each CC subgroup, including their application to the NonCC subgroup beginning with this FY 2021 proposed rule. We have revised the order in which the criteria are presented for illustrative purposes.

In general, once the decision has been made to propose to make further modifications to the MS-DRGs as described previously, such as creating a new base MS-DRG, or in our evaluation of a specific MS-DRG classification request to split (or subdivide) an existing base MS-DRG into severity levels, all five criteria must be met for the base MS-DRG to be split (or subdivided) by a CC subgroup. We note that in our analysis of requests to create a new MS-DRG, we evaluate the most recent year of MedPAR claims data available. For example, we stated earlier that for this FY 2021 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data from the September 2019 update of the FY 2019 MedPAR file. However, in our evaluation of requests to split an existing base MS-DRG into severity levels, as noted in prior rulemaking (80 FR 49368), we analyze the most recent 2 years of data. This analysis includes 2 years of MedPAR claims data to compare the data results from 1 year to the next to avoid making determinations about whether additional severity levels are warranted based on an isolated year's data fluctuation and also, to validate that the established severity levels within a base MS-DRG are supported. The first step in our process of evaluating if the creation of a new CC subgroup within a base MS-DRG is warranted is to determine if all the criteria are satisfied for a three way split. If the criteria fail, the next step is to determine if the criteria are satisfied for a two way split. If the criteria for both of the two way splits fail, then a split (or CC subgroup) would generally not be warranted for that base MS-DRG. If the three way split fails on any one of the five criteria and all five criteria for both two way splits (1_23 and 12_3) are met, we would apply the two way split with the highest R2 value. We note that if the request to split (or subdivide) an existing base MS-DRG into severity levels specifies the request is for either one of the two way splits (1_23 or 12_3), in response to the specific request, we will evaluate the criteria for both of the two way splits, however we do not also evaluate the criteria for a three way split.

2. Pre-MDC

a. Bone Marrow Transplants

We received two separate requests that involve the MS-DRGs where bone marrow transplant procedures are assigned. The first request was to redesignate MS-DRG 014 (Allogeneic Bone Marrow Transplant), MS-DRG 016 (Autologous Bone Marrow Transplant with CC/MCC or T-Cell Immunotherapy), and MS-DRG 017 (Autologous Bone Marrow Transplant without CC/MCC) from surgical MS-DRGs to medical MS-DRGs. According to the requestor, bone marrow transplant procedures involve a transfusion of donor cells and do not involve a surgical procedure or require the resources of an operating room (O.R.). The second request involving bone marrow transplant procedures was to split MS-DRG 014 (Allogeneic Bone Marrow Transplant) into two severity levels, based on the presence of a MCC. In this section of this rule, we discuss each request in more detail.

With regard to the first request, the requestor noted that the logic for MS-DRG 014 consists of ICD-10-PCS procedure codes describing allogeneic bone marrow transplants that are designated as non-operating room (non-O.R.) procedures. The requestor also noted that the logic for MS-DRGs 016 and 017 includes ICD-10-PCS procedure codes describing autologous bone marrow transplants where certain Start Printed Page 32474procedure codes are designated as O.R. and other procedure codes are designated as non-O.R. procedures. The requestor stated that redesignating the bone marrow transplant MS-DRGs from surgical to medical would clinically align with the resources utilized in the performance of these procedures.

The requestor is correct that bone marrow transplant procedures are currently assigned to MS-DRGs 014, 016, and 017 which are classified as surgical MS-DRGs under the Pre-MDC category for the ICD-10 MS-DRGs. The requestor is also correct that the logic for MS-DRG 014 consists of ICD-10-PCS procedure codes describing allogeneic bone marrow transplants that are designated as non-operating room (non-O.R.) procedures and that the logic for MS-DRGs 016 and 017 includes ICD-10-PCS procedure codes describing autologous bone marrow transplants where certain procedure codes are designated as O.R. procedures and other procedure codes are designated as non-O.R. procedures. We refer the reader to the ICD-10 MS-DRG Definitions Manual Version 37 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 for complete documentation of the GROUPER logic for MS-DRGs 014, 016, and 017.

We consulted with our clinical advisors and they agreed that bone marrow transplant procedures are similar to a blood transfusion procedure, do not utilize the resources of an operating room, and are not surgical procedures. Our clinical advisors concurred that bone marrow transplants are medical procedures and it is more accurate to designate the MS-DRGs to which these procedures are assigned as medical MS-DRGs versus surgical MS-DRGs. Therefore, we are proposing to redesignate MS-DRGs 014, 016, and 017 as medical MS-DRGs effective October 1, 2020 for FY 2021.

As noted previously, the logic for MS-DRGs 016 and 017 includes ICD-10-PCS procedure codes describing autologous bone marrow transplants and related procedures where certain procedure codes are designated as O.R. and other procedure codes are designated as non-O.R. procedures. During our review of the bone marrow transplant procedures assigned to these MS-DRGs we identified the following 8 procedure codes that are currently designated as O.R procedures.

In connection with our proposal to designate the MS-DRGs to which these procedures are assigned as medical, as well as for clinical consistency with the other procedure codes describing bone marrow transplant procedures, we are proposing to redesignate the listed ICD-10-PCS procedure codes from O.R. to non-O.R. procedures, affecting their current MS-DRG assignment for MS-DRGs 016 and 017, effective October 1, 2020 for FY 2021.

As noted earlier in this section, we also received a request to split MS-DRG 014 (Allogeneic Bone Marrow Transplant) into two severity levels, based on the presence of a MCC. For FY 2020, the requestor had requested that MS-DRG 014 be split into two new MS-DRGs according to donor source. For the reasons discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19176 through 19180) and the FY 2020 IPPS/LTCH PPS final rule (84 FR 42067 through 42072), we did not propose to split MS-DRG 014 into two new MS-DRGs according to donor source. However, according to the requestor, a single (base) MS-DRG for allogeneic bone marrow and stem cell transplants continues to not be as clinically or resource homogeneous as it could be. The requestor conducted its own analysis and stated the results revealed it was appropriate to split MS-DRG 014 based on the presence of a MCC.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRG 014. There were 962 cases found in MS-DRG 014 with an average length of stay of 26.7 days and average costs of $89,586.

Consistent with our established process, we conducted an analysis of MS-DRG 014 to determine if the criteria to create subgroups were met. The process for conducting this type of analysis includes examining 2 years of MedPAR claims data to compare the data results from 1 year to the next to avoid making determinations about whether additional severity levels are warranted based on an isolated year's data fluctuation and also, to validate that the established severity levels within a base MS-DRG are supported. Therefore, we reviewed the claims data for base MS-DRG 014 using the September 2018 update of the FY 2018 MedPAR file and the September 2019 update of the FY 2019 MedPAR file, which were used in our analysis of claims data for MS-DRG reclassification requests for FY 2020 and FY 2021. Our findings are shown in the table.

Start Printed Page 32475

We applied the criteria to create subgroups for each of the two-way severity level splits. As discussed in section II.D.1.b., beginning with this FY 2021 IPPS/LTCH PPS proposed rule, we are proposing to expand the previously listed criteria to also include the NonCC group. The criterion that there be at least 500 cases for each subgroup failed due to low volume, as shown in the table for both years. Specifically, for the “with MCC” and “without MCC” (CC+NonCC) split, there were only 183 (141+42) cases in the “without MCC” subgroup based on the data in the FY 2019 MedPAR file and only 175 (140+35) cases in the “without MCC” subgroup based on the data in the FY 2018 MedPAR file. For the “with CC/MCC” and “without CC/MCC” (NonCC) split, there were only 42 cases in the NonCC subgroup based on the data in the FY 2019 MedPAR file and only 35 cases in the NonCC subgroup based on the data in the FY 2018 MedPAR file. The claims data do not support a two-way severity level split for MS-DRG 014, therefore, we are proposing to maintain the current structure of MS-DRG 014 for FY 2021.

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

We received several requests to create a new MS-DRG for procedures involving CAR T-cell therapies. The requestors stated that creation of a new MS-DRG would improve payment for CAR T-cell therapies in the inpatient setting. Some requestors noted that cases involving CAR T-cell therapies will no longer be eligible for new technology add-on payments in FY 2021 and that this would significantly reduce the overall payment for cases involving CAR T-cell therapies. Some requestors also noted that in the absence of the creation of a new MS-DRG for procedures involving CAR T-cell therapies, outlier payments for these cases would increase significantly, which would increase the share of total outlier payments that are attributable to CAR T-cell therapies.

The requestors stated that the new MS-DRG for CAR T-cell therapies should include cases that report 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) or XW043C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into central vein, percutaneous approach, new technology group 3).

Given the high cost of the CAR T-cell product, some requestors provided recommendations related to the differential treatment of cases where the CAR T-cell product was provided without cost as part of a clinical trial to ensure that the payment amount for the newly created MS-DRG for CAR T-cell therapy cases would appropriately reflect the average cost hospitals incur for providing CAR T-cell therapy outside of a clinical trial. For example, some requestors suggested that CMS make minor adjustments to its usual ratesetting methodology to exclude clinical trial claims from the calculation of the relative weight for any MS-DRG for CAR T-cell therapies. One requestor noted that these adjustments are consistent with CMS' general authority under sections 1886(d)(4)(B) and (C) of the Act. Some requestors also suggested that CMS apply an offset to the MS-DRG payment in cases where the provider does not incur the cost of the CAR T-cell therapy.

Currently, procedures involving CAR T-cell therapies are identified with ICD-10-PCS procedure codes XW033C3 and XW043C3, 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 noted, 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 that we believed 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 those claims could potentially be used to create relative weights for a new MS-DRG, we stated that we did not have the comprehensive clinical and cost data that we generally believe are needed to do so. Furthermore, we stated in the FY 2020 IPPS/LTCH PPS 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), at the time we believed it was premature to consider creation of a new MS-DRG specifically for cases involving CAR T-cell therapy for FY 2020. We stated that in future years we would have additional data that could be used to evaluate the potential creation of a new MS-DRG specifically for cases involving CAR T-cell therapies.

We now have more data upon which to evaluate a new MS-DRG specifically for cases involving CAR T-cell therapies. We agree with the requestors it is appropriate to consider the development of a new MS-DRG using the data that is now available. We examined the claims data from the September 2019 update of the FY 2019 MedPAR data file for cases that reported ICD-10-PCS procedure codes XW033C3 or XW043C3. For purposes of this analysis, we identified clinical trial cases as claims with ICD-10-CM diagnosis code Z00.6 (Encounter for examination for normal comparison and control in clinical research program) which is reported only for clinical trial cases, or with standardized drug charges of less than $373,000, which is the average sales price of KYMRIAH and YESCARTA, which are the two CAR  T-cell medicines approved to treat relapsed/refractory diffuse large B-cell lymphoma as of the time of the Start Printed Page 32476development of this proposed rule. We distinguished between clinical trial and non-clinical trial cases in this analysis because we agree with the requestors who indicated that given the high cost of the CAR T-cell product, it is appropriate to distinguish cases where the CAR T-cell product was provided without cost as part of a clinical trial so that the analysis appropriately reflects the resources required to provide CAR T-cell therapy outside of a clinical trial. We also note that we included cases that would have been identified as statistical outliers under our usual process when examined as part of MS-DRG 016 due to the extreme cost differences between the CAR T-cell therapy claims and other claims in MS-DRG 016, but would not be identified as statistical outliers when examining CAR T-cell therapy claims only. Our findings are shown in the table.

As shown in the table, we found 2,212 cases in MS-DRG 016, with an average length of stay of 18.2 days and average costs of $55,001. Of these 2,212 cases, 262 cases reported ICD-10-PCS procedure codes XW033C3 or XW043C3; these cases had an average length of stay of 16.3 days and average costs of $127,408. Of these 262 cases, 94 were identified as non-clinical trial cases; these cases had an average length of stay of 17.2 days and average costs of $274,952. The remaining 168 cases were identified as clinical trial cases; these cases had an average length of stay of 15.8 days and average costs of $44,853.

The data indicate that the average costs for the non-clinical trial cases that reported ICD-10-PCS procedure codes XW033C3 or XW043C3 are almost five times higher than the average costs for all cases in MS-DRG 016. Our clinical advisors also believe that the cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 can be clinically differentiated from other cases that group to MS-DRG 016, which includes procedures involving autologous bone marrow transplants, once the CAR  T-cell therapy itself is taken into account in the comparison.

As described earlier in this section, in deciding whether to propose to make modifications to the MS-DRGs for particular circumstances brought to our attention, we consider a variety of factors pertaining to resource consumption and clinical characteristics. While we generally prefer not to create a new MS-DRG unless it would include a substantial number of cases, our clinical advisors believe that the vast discrepancy in resource consumption as reflected in the claims data analysis and the clinical differences warrant the creation of a new MS-DRG. We are therefore proposing to assign cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 to a proposed new MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy). If additional procedure codes describing CAR-T cell therapies are approved and finalized, we would use our established process to assign these procedure codes to the most appropriate MS-DRG. Because these cases would no longer group to MS-DRG 016, we are proposing to revise the title for MS-DRG 016 from “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy” to “Autologous Bone Marrow Transplant with CC/MCC.” We refer readers to section II.E.2.b. of the preamble of this proposed rule for a discussion of the proposed relative weight calculation for the proposed new MS-DRG 018 for CAR T-cell Therapy, and to section IV.I. of the preamble of this proposed rule for a discussion of the proposed payment adjustment for CAR T-cell clinical trial cases.

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

a. Carotid Artery Stent Procedures

In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42078), we finalized our proposal to reassign 96 ICD-10-PCS procedure codes describing dilation of carotid artery with an intraluminal device(s) from MS-DRGs 037, 038, and 039 (Extracranial Procedures with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 034, 035, and 036 (Carotid Artery Stent Procedures with MCC, with CC, and without CC/MCC, respectively). We received a request to review six ICD-10-PCS procedure codes describing dilation of a carotid artery (common, internal or external) with drug eluting intraluminal devices(s) using an open approach that are currently assigned to the logic for case assignment to MS-DRGs 037, 038, and 039 that were not included in the list of codes finalized for reassignment in the FY 2020 IPPS/LTCH PPS final rule. The six codes are identified in the following table.

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The logic for case assignment to MS-DRGs 034, 035, and 036 as displayed in the ICD-10 MS-DRG Version 37 Definitions Manual, 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 a list of logic which includes procedure codes for operating room procedures involving dilation of a carotid artery (common, internal or external) with intraluminal device(s). All of the ICD-10-PCS procedure codes in the logic list assigned to MS-DRGs 034, 035, and 036 describe dilation of a carotid artery with an intraluminal device.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 034, 035, and 036 which only include those procedure codes that describe procedures that involve dilation of a carotid artery with an intraluminal device. Our findings are reported in the table.

As shown in the table, we found a total of 1,259 cases in MS-DRG 034 with an average length of stay of 6.9 days and average costs of $28,668. We found a total of 3,367 cases in MS-DRG 035 with an average length of stay of 3.0 days and average costs of $17,114. We found a total of 4,769 cases in MS-DRG 036 with an average length of stay of 1.4 days and average costs of $13,501.

We then examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 037, 038, and 039 and identified cases reporting any one of the 6 procedure codes listed in the table previously to determine the volume of cases impacted and if the average length of stay and average costs are consistent with the average length of stay and average costs for MS-DRGs 034, 035 and 036. Our finding are shown in the following table.

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As shown in the table, we found a total of 3,331 cases with an average length of stay of 7.3 days and average costs of $24,155 in MS-DRG 037. There were 6 cases reporting at least one of the 6 procedure codes that describe dilation of the carotid artery with an intraluminal device using an open approach in MS-DRG 037 with an average length of stay of 7 days and average costs of $22,272. For MS-DRG 038, we found a total of 11,021 cases with an average length of stay of 3 days and average costs of $12,306. There were 33 cases reporting at least one of the 6 procedure codes that describe dilation of the carotid artery with an intraluminal device in MS-DRG 038 with an average length of stay of 2.3 days and average costs of $16,777. For MS-DRG 039, we found a total of 20,854 cases with an average length of stay of 1.4 days and average costs of $8,463. There were 26 cases reporting at least one of the 6 procedure codes that describe dilation of the carotid artery with an intraluminal device in MS-DRG 039 with an average length of stay of 1.2 days and average costs of $14,981.

The data analysis shows that for the cases in MS-DRGs 037, 038, and 039 reporting ICD-10-PCS codes 037H04Z, 037J04Z, 037K04Z, 037L04Z, 037M04Z, or 037N04Z, the average length of stay is shorter and the average costs are higher than the average length of stay and average costs (with the exception of the average costs for the 6 cases in MS-DRG 037 which are slightly less) in the FY 2019 MedPAR file for MS-DRGs 037, 038, and 039 respectively. The data analysis also shows for the cases in MS-DRGs 037, 038, and 039 reporting ICD-10-PCS codes 037H04Z, 037J04Z, 037K04Z, 037L04Z, 037M04Z, and 037N04Z the average length of stay and the average costs are in-line with the average length of stay and average costs in the FY 2019 MedPAR file for MS-DRGs 034, 035, and 036 respectively.

As noted in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19184) and final rule (84 FR 42077), 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 are proposing to reassign the procedure codes listed in the table from MS-DRGs 037, 038, and 039 that describe procedures that involve dilation of the carotid artery with an intraluminal device to MS-DRGs 034, 035, and 036.

In addition to our analysis of the claims data from the September 2019 MedPAR file for MS-DRGs 037, 038, and 039, we conducted an examination of all the MS-DRGs where any one of the 6 procedure codes listed previously were also reported to determine if any one of the 6 procedure codes were included in any other MS-DRG outside of MDC 01, to further assess the current MS-DRG assignments. Our findings are shown in the following table.

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As shown in the table, we found one case reporting any one of these 6 procedure codes in each of MS-DRGs 023, 027, 035, 219, 233, 235 and 252. We note that all of the listed MS-DRGs are assigned to MDC 01 with one exception: MS-DRG 252 (Other Vascular Procedures with MCC) in MDC05 (Diseases and Disorders of the Circulatory System). As a result, we reviewed the logic list for MS-DRGs 252, 253, and 254 (Other Vascular Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 05 and found 36 ICD-10-PCS codes for procedures that describe dilation of the carotid artery with an intraluminal device with an open approach that are not currently assigned in MDC 01. The 36 ICD-10-PCS codes are listed in the following table.

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We then examined the claims data to determine if there were other MS-DRGs in which one of the 36 procedure codes listed in the table were reported. We found 8 cases that grouped to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when a principal diagnosis from MDC 01 was reported with one of the procedure codes in the table that describes dilation of a carotid artery with an intraluminal device, open approach.

As noted previously, in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19184) and final rule (84 FR 42077), our clinical advisors stated that MS-DRGs 034, 035, and 036 are defined to include those procedure codes that describe procedures that involve dilation of a carotid artery with an intraluminal device. Our clinical advisors support adding the 36 ICD-10-PCS codes identified in the table to MS-DRGs 034, 035, and 036 in MDC 01 for consistency to align with the definition of MS-DRGs 034, 035, and 036 and also to permit proper case assignment when a principal diagnosis from MDC 01 is reported with one of the procedure codes in the table that describes dilation of a carotid artery with an intraluminal device, open approach.

Therefore, for FY 2021, we are also proposing to add the 36 ICD-10-PCS codes identified in the table that are currently assigned in MDC 05 to MS-DRGs 252, 253, and 254 to the GROUPER logic for MS-DRGs 034, 035, and 036 in MDC 01.

b. Epilepsy with Neurostimulator

We received a request to reassign cases describing the insertion of a neurostimulator generator into the skull in combination with the insertion of a neurostimulator lead into the brain from MS-DRG 023 (Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator) to MS-DRG 021 (Intracranial Vascular Procedures with PDX Hemorrhage with CC) or to reassign Start Printed Page 32482these cases to another MS-DRG for more appropriate payment. The Responsive Neurostimulator (RNS©) System, a cranially implanted neurostimulator that is a treatment option for persons diagnosed with medically intractable epilepsy, is identified by the reporting of an ICD-10-PCS code combination capturing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain and cases are assigned to MS-DRG 023 when reported with a principal diagnosis of epilepsy.

As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015 through 38019), we finalized our proposal to reassign all cases with a principal diagnosis of epilepsy and one of the following ICD-10-PCS code combinations capturing cases with a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) to MS-DRG 023 even if there is no MCC reported:

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

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

The requestor acknowledged the refinements made to MS-DRG 023 effective for FY 2018, but stated that despite the previously-mentioned changes, cases describing the insertion of a neurostimulator generator into the skull in combination with the insertion of a neurostimulator lead into the brain continue to be underpaid. The requestor performed its own analysis and stated that it found that the average costs of cases describing the insertion of the RNS© neurostimulator were significantly higher than the average costs of all cases in their current assignment to MS-DRG 023, and as a result, cases describing the insertion of the RNS© neurostimulator are not being adequately reimbursed. The requestor suggested the following two options for MS-DRG assignment updates: (1) Reassign cases describing the insertion of a neurostimulator generator into the skull in combination with the insertion of a neurostimulator lead into the brain from MS-DRG 023 to MS-DRG 021 with a change in title to “lntracranial Vascular Procedures with PDX Hemorrhage with CC or Epilepsy with Neurostimulator;” or (2) reassign cases describing the insertion of a neurostimulator generator into the skull in combination with the insertion of a neurostimulator lead into the brain to another higher paying MS-DRG that would provide adequate reimbursement. The requestor stated its belief that MS-DRG 021 is a better fit in terms of average costs and clinical coherence for reassignment of RNS© System cases and recognized that there is likely still not enough volume to warrant the creation of new MS-DRGs for cases describing the insertion of the RNS© neurostimulator.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for all cases in MS-DRG 023 and compared the results to cases representing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) that had a principal diagnosis of epilepsy in MS-DRG 023. The following table shows our findings:

As shown in the table, for MS-DRG 023, we identified a total of 11,938 cases, with an average length of stay of 9.8 days and average costs of $40,264. Of the 11,938 cases in MS-DRG 023, there were 81 cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) that had a principal diagnosis of epilepsy with an average length of stay of 3.3 days and average costs of $52,362. Our clinical advisors reviewed these data, and agreed with the requestor that the number of cases is too small to warrant the creation of a new MS-DRG for these cases, for the reasons discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015 through 38019).

We also examined the reassignment of cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) to MS-DRGs 020, 021, and 022 (Intracranial Vascular Procedures with PDX Hemorrhage with MCC, with CC, and without CC/MCC, respectively). While the request was to reassign these cases to MS-DRG 021, MS-DRG 021 is specifically differentiated according to the presence of a secondary diagnosis with a severity level designation of a complication or comorbidity (CC). Cases with a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) do not always involve the presence of a secondary diagnosis with a severity level designation of a complication or comorbidity (CC), and therefore we reviewed data for all three MS-DRGs. The following table shows our findings:

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As shown in the table, for MS-DRG 020, there were a total of 1,623 cases with an average length of stay of 16.1 days and average costs of $75,668. For MS-DRG 021, there were a total of 409 cases with an average length of stay of 12.3 days and average costs of $55,123. For MS-DRG 022, there were a total of 131 cases with an average length of stay of 6.3 days and average costs of $35,599.

While the cases in MS-DRG 023 describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy have average costs that are similar to the average costs of cases in MS-DRG 021 ($52,362 compared to $55,123), they have an average length of stay that is 9 days shorter (3.3 days compared to 12.3 days), similar to our findings as summarized in the FY 2018 IPPS/LTCH PPS final rule. Our clinical advisors reviewed the clinical issues and the claims data, and did not support reassigning the cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy from MS-DRG 023 to MS-DRGs 020, 021 or 022. As discussed in the FY 2018 IPPS/LTCH PPS final rule, the cases in MS-DRGs 020, 021 and 022 have a principal diagnosis of a hemorrhage. The RNS© neurostimulator generators are not used to treat patients with diagnosis of a hemorrhage. Our clinical advisors continue to believe that it is inappropriate to reassign cases representing a principal diagnosis of epilepsy to a MS-DRG that contains cases that represent the treatment of intracranial hemorrhage, as discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015 through 38019). They also stated that the differences in average length of stay and average costs based on the more recent data continue to support this recommendation.

We then explored alternative options, as was requested. We noted that the 81 cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy had an average length of stay of 3.3 days and average costs of $52,362, as compared to the 11,938 cases in MS-DRG 023 that had an average length of stay of 9.8 days and average costs of $40,264. While these neurostimulator cases had average costs that were $12,098 higher than the average costs of all cases in MS-DRG 023, there were only a total of 81 cases. There may have been other factors contributing to the higher costs.

We further analyzed the data to identify those cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator), with at least one other procedure designated as an O.R. procedure, and a principal diagnosis of epilepsy. This approach can be useful in determining whether resource use is truly associated with a particular procedure or whether the procedure frequently occurs in cases with other procedures with higher than average resource use. Our data findings for MS-DRG 023 demonstrate that of the 81 cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) and a principal diagnosis of epilepsy, 19 reported at least one other procedure designated as an O.R. procedure, and had higher average costs ($72,995 versus $52,362) compared to the average costs of all cases in this subset of MS-DRG 023.

We also reviewed the cases reporting procedures describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator), and a principal diagnosis of epilepsy to identify the secondary diagnosis CC and/or MCC conditions reported in conjunction with these procedures that also may be contributing to the higher average costs for these cases. We reviewed the claims data to identify the number (frequency) and types of principal and secondary diagnosis CC and/or MCC conditions that were reported. Our findings for the cases reporting secondary diagnosis MCC and CC conditions, followed by the top 10 secondary diagnosis MCC and secondary diagnosis CC conditions that were reported within the claims data for this subset of cases are shown in the following tables:

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While the results of the claims analysis as previously summarized indicate that the average costs of cases reporting a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator), and a principal diagnosis of epilepsy are higher compared to the average costs for all cases in their assigned MS-DRG, we cannot ascertain from the claims data the resource use specifically attributable to the procedure during a hospital stay. These data show cases reporting a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator), and a principal diagnosis of epilepsy, can present greater treatment difficulty, and have a need for additional intervention with other O.R. procedures. When reviewing consumption of hospital resources for this subset of cases, the claims data also clearly shows that the patients typically have multiple MCC and CC conditions, and the increased costs appear to be attributable to the severity of illness of the patient.

In summary, we believe that further analysis of cases reporting a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator), and a principal diagnosis of epilepsy is needed prior to proposing any further reassignment of these cases to ensure clinical coherence between these cases and the other cases with which they may potentially be grouped. We expect that, in future years, we would have additional data that exhibit an increased number of cases that could be used to evaluate the potential reassignment of cases reporting a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator), and a principal diagnosis of epilepsy. Therefore, we are not proposing to reassign cases describing a neurostimulator generator inserted into the skull with the insertion of a neurostimulator lead into the brain (including cases involving the use of the RNS© neurostimulator) from MS-DRG 023 to MS-DRG 021. We are also not proposing to reassign Responsive Neurostimulator (RNS©) System cases to another MS-DRG at this time.

4. MDC 3 (Diseases and Disorders of Ear, Nose and Throat): Temporomandibular Joint Replacements

We received a request to consider reassignment of ICD-10-PCS procedure codes 0RRC0JZ (Replacement of right temporomandibular joint with synthetic substitute, open approach) and 0RRD0JZ (Replacement of left temporomandibular joint with synthetic substitute, open approach) from MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R. Procedures with and without CC/MCC, respectively) to MS-DRGs 131 and 132 (Cranial and Facial Procedures with and without CC/MCC, respectively) in MDC 03.

The requestor stated that it is inaccurate for procedure codes 0RRC0JZ and 0RRD0JZ that identify and describe replacement of the temporomandibular joint (TMJ), which involves excision of the TMJ followed by replacement with a prosthesis, to group to MS-DRGs 133 and 134 while excision of the TMJ alone, identified by procedure codes 0RBC0ZZ (Excision of right temporomandibular joint, open approach) and 0RBD0ZZ (Excision of left temporomandibular joint, open Start Printed Page 32485approach), groups to the higher weighted MS-DRGs 131 and 132. According to the requestor, reassignment of procedure codes 0RRC0JZ and 0RRD0JZ to the higher weighted MS-DRGs 131 and 132 is reasonable and the MS-DRG title of “Cranial and Facial Procedures” is more appropriate. However, the requestor also stated that the cost of the prosthesis would continue to be underpaid, despite that recommended reassignment. As an alternative option, the requestor suggested CMS analyze if there may be other higher weighted MS-DRGs that could more appropriately compensate providers for a TMJ replacement with prosthesis procedure.

In addition, the requestor recommended that we analyze all procedures involving the mandible and maxilla and consider reassignment of those procedure codes from MS-DRGs 129 (Major Head and Neck Procedures with CC/MCC or Major Device) and 130 (Major Head and Neck Procedures without CC/MCC) to MS-DRGs 131 and 132 because the codes describe procedures that are performed on facial and cranial structures. Finally, the requestor also suggested another option that included modifying the surgical hierarchy for MDC 03 by sequencing MS-DRGs 131 and 132 above MS-DRGs 129 and 130, which the requestor asserted would provide for more appropriate payment to providers for the performance of multiple facial procedures.

In this section of this proposed rule, we discuss these separate but related requests that involve procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133 and 134 in MDC 03.

To analyze the request involving temporomandibular joint replacements, we first identified the ICD-10-PCS procedure codes that describe the excision or replacement of a temporomandibular joint as shown in the following table.

The requestor is correct that procedure codes 0RRC0JZ and 0RRD0JZ that describe replacement of the right and left TMJ with a prosthesis (synthetic substitute) by an open approach group to MS-DRGs 133 and 134 and procedure codes 0RBC0ZZ and 0RBD0ZZ that describe excision of the right and left TMJ alone by an open approach group to the higher weighted MS-DRGs 131 and 132. We also note that the corresponding related codes as previously listed in the table that describe different approaches (excision procedures) or different types of tissue substitute (replacement procedures) are also assigned to the same respective MS-DRGs.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 133 and 134 to identify cases reporting ICD-10-PCS codes 0RRC0JZ or 0RRD0JZ. Our findings are shown in the following table.

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In MS-DRG 133, we found a total of 1,757 cases with an average length of stay of 5.6 days and average costs of $15,337. Of those 1,757 cases, there were 13 cases reporting ICD-10-PCS code 0RRC0JZ or 0RRD0JZ, with an average length of stay of 3.1 days and average costs of $21,677. In MS-DRG 134, we found a total of 849 cases with an average length of stay of 2.5 days and average costs of $9,512. Of those 849 cases, there were 23 cases reporting ICD-10-PCS code 0RRC0JZ or 0RRD0JZ, with an average length of stay of 2.1 days and average costs of $20,430. The analysis shows that cases reporting ICD-10-PCS procedure codes 0RRC0JZ or 0RRD0JZ in MS-DRGs 133 and 134 have higher average costs ($21,677 versus $15,337 and $20,430 versus $9,512, respectively) and shorter lengths of stay (3.1 days versus 5.6 days and 2.1 days versus 2.5 days, respectively) compared to all the cases in their assigned MS-DRG.

We also examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 131 and 132. Our findings are shown in the following table.

In MS-DRG 131, we found a total of 1,181 cases with an average length of stay of 5.4 days and average costs of $18,875. In MS-DRG 132, we found a total of 464 cases with an average length of stay of 2.5 days and average costs of $11,558.

Overall, the data analysis shows that the average costs for the cases reporting procedure codes 0RRC0JZ and 0RRD0JZ in MS-DRGs 133 and 134 are more aligned with the average costs for all the cases in MS-DRG 131 ($21,677 and $20,430, respectively versus $18,875) compared to MS-DRG 132 where the average costs are not significantly different than the average costs of all the cases in MS-DRG 134 ($11,558 versus $9,512). Our clinical advisors agreed that the replacement of a TMJ with prosthesis procedures (codes 0RRC0JZ or 0RRD0JZ) are more resource intensive and are clinically distinct from the cases reporting procedure codes 0RBC0ZZ and 0RBD0ZZ that involve excision of the TMJ alone. They also agreed that procedure codes 0RRC0JZ and 0RRD0JZ should be reassigned to a higher weighted MS-DRG. However, they recommended we conduct further claims analysis to identify if there are other MS-DRGs in MDC 03 where cases reporting these procedure codes may also be found and to compare that data.

As previously noted, the requestor had also recommended that we analyze all procedures involving the mandible and maxilla and consider reassignment of those procedure codes from MS-DRGs 129 and 130 to MS-DRGs 131 and 132. The requestor did not provide a specific list of the procedure codes involving the mandible and maxilla, therefore, we reviewed the list of procedure codes in MS-DRGs 129 and 130 and identified the following 26 procedure codes describing procedures performed on the mandible. There were no procedure codes describing procedures performed on the maxilla in MS-DRGs 129 and 130.

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Based on the advice of our clinical advisors as previously discussed, we conducted additional analyses for MDC 03 using the same FY 2019 MedPAR data file and found cases reporting procedure code 0RRC0JZ or 0RRD0JZ for the replacement of a TMJ with prosthesis procedure in MS-DRGs 129, 130, 131, and 132. As discussed in section II.D.15. of this proposed rule, cases with multiple procedures are assigned to the highest surgical class in the hierarchy to which one of the procedures is assigned. For example, if procedure code 0RRC0JZ which is assigned to the logic for MS-DRGs 133 and 134 is reported on a claim with procedure code 0NSR04Z (Reposition maxilla with internal fixation device, open approach), which is assigned to the logic for MS-DRGs 131 and 132, the case will group to MS-DRG 131 or 132 (depending on the presence of a CC or MCC) when reported with a principal diagnosis from MDC 03 because MS-DRGs 131 and 132 are sequenced higher in the surgical hierarchy than MS-DRGs 133 and 134. Therefore, since MS-DRGs 129, 130, 131, and 132 are sequenced higher in the surgical hierarchy than MS-DRGs 133 and 134 in MDC 03, cases reporting procedure code 0RRC0JZ or 0RRD0JZ along with another O.R. procedure that is currently assigned to one of those MS-DRGs in the GROUPER logic results in case assignment to one of those higher surgical class MS-DRGs. We also identified cases reporting procedures performed on the mandible from the previously discussed list of procedure codes in MS-DRGs 129 and 130. Our findings are shown in the following table.

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As shown in the table, for MS-DRG 129, there was a total of 2,080 cases with average length of stay of 5.2 days and average costs of $18,091. Of these 2,080 cases, there were 3 cases reporting a TMJ replacement with prosthesis procedure (code 0RRC0JZ or 0RRD0JZ) with an average length of stay of 3 days and average costs of $33,581 and 592 cases reporting a mandible procedure with average length of stay of 6.9 days and average costs of $21,258. For MS-DRG 130, there was a total of 948 cases with average length of stay of 2.7 days and average costs of $11,092. Of these 948 cases, there were 5 cases reporting a TMJ replacement with prosthesis procedure (code 0RRC0JZ or 0RRD0JZ) with an average length of stay of 3.4 days and average costs of $27,396 and 202 cases reporting a mandible procedure with average length of stay of 3.5 days and average costs of $14,712. For MS-DRG 131, there was a total of 1,181 cases with average length of stay of 5.4 days and average costs of $18,875. Of these 1,181 cases there were 4 cases reporting a TMJ replacement with prosthesis procedure (code 0RRC0JZ or 0RRD0JZ) with an average length of stay of 7.3 days and average costs of $31,151. For MS-DRG 132, there was a total of 464 cases with average length of stay of 2.5 days and average costs of $11,558. Of these 464 cases, there were 10 cases reporting a TMJ replacement with prosthesis procedure (code 0RRC0JZ or 0RRD0JZ) with an average length of stay of 3.1 days and average costs of $24,099.

The data analysis demonstrates that the average costs of cases reporting procedure code 0RRC0JZ or 0RRD0JZ for the replacement of a TMJ with prosthesis procedure in MS-DRGs 129, 130, 131, and 132 and the cases reporting procedures performed on the mandible in MS-DRGs 129 and 130 have higher average costs compared to all the cases in their assigned MS-DRGs. While the volume of the cases reporting procedure code 0RRC0JZ or 0RRD0JZ was low with a total of 22 cases across MS-DRGs 129, 130, 131, and 132, similar to the analysis results for MS-DRGs 133 and 134 described earlier, the average costs for the cases are higher ($33,581 versus $18,091; $27,396 versus $11,092; $31,151 versus $18,875; and $24,099 versus $11,558) affirming that replacement of a TMJ with prosthesis procedures are more costly. The analysis also demonstrates that the average length of stay for cases reporting procedure code 0RRC0JZ or 0RRD0JZ across MS-DRGs 130, 131, and 132 is longer (3.4 days versus 2.7 days; 7.3 days versus 5.4 days; and 3.1 days versus 2.5 days) compared to all the cases in their assigned MS-DRGs. For MS-DRG 129, we found that the average length of stay was shorter (3 days versus 5.2 days) for cases reporting procedure code 0RRC0JZ or 0RRD0JZ. The data demonstrated similar results for the cases reporting procedures performed on the mandible in MS-DRGs 129 and 130, where the average costs for the cases are higher ($21,258 versus $18,091 and $14,712 versus $11,092, respectively) and the average length of stay was longer (6.9 days versus 5.2 days and 3.5 days versus 2.7 days, respectively) compared to all the cases in their assigned MS-DRG.

The analysis of MS-DRGs 129, 130, 131, and 132 further demonstrated that the average length of stay and average costs for all cases were almost identical for each of the subgroups. For example, MS-DRG 129 is defined as “with CC/MCC or major device” and MS-DRG 131 is defined as “with CC/MCC” while MS-DRGs 130 and 132 are both defined as “without CC/MCC”. For all of the cases in MS-DRG 129, we found that the average length of stay was 5.2 days with an average cost of $18,091, and for all of the cases in MS-DRG 131, the average length of stay was 5.4 days with an average cost of $18,875. Similarly, for all of the cases in MS-DRG 130, we found that the average length of stay was 2.7 days with an average cost of $11,092, and for MS-DRG 132, we found the average length of stay was 2.5 days with an average cost of $11,558.

As a result of the data analysis performed for MS-DRGs 129, 130, 131, and 132, including the analysis of the procedures describing replacement of a TMJ with prosthesis in MS-DRGs 133 and 134, as well as considering the requestor's suggestion that we examine the appropriateness of modifying the surgical hierarchy for MDC 03 by sequencing MS-DRGs 131 and 132 above MS-DRGs 129 and 130 to enable more appropriate payment for the performance of multiple facial procedures, our clinical advisors recommended evaluating all the procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134 to compare costs, complexity of service and clinical coherence to assess any potential reassignment of these procedures. We refer the reader to the ICD-10 MS-DRG Definitions Manual Version 37, 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, for complete documentation of the GROUPER logic for MS-DRGs 129, 130, 131, 132, 133, and 134.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for cases reporting any of the procedure codes that are currently assigned to MS-DRGs 129, 130, 131, 132, 133, or 134. We refer the reader to Table 6P.2d associated with this 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/​ for the detailed analysis. We note that if a procedure code that is currently assigned to MS-DRGs 129, 130, 131, 132, 133, or 134 is not displayed it is because there were no cases found reporting that code in the assigned MS-DRG.

The data analysis shows that there is wide variation in the volume, length of stay, and average costs of cases reporting procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134. There were several instances in which only one case was found to report a procedure code from MS-DRG 129, 130, 131, 132, 133, or 134, and the average length of stay for these specific cases ranged from 1 day to 31 days. For example, in MS-DRG 131, we found one case reporting procedure code 0NB70ZZ (Excision of occipital bone, open approach) with an average length of stay of 31 days which we consider to be an outlier in comparison to all the other cases reported in that MS-DRG with an average length of stay of 5.4 days. Overall, the average costs of cases in MS-DRGs 129 and 130 range from $4,970 to $38,217, the average costs of cases in MS-DRGs 131 and 132 range from $4,022 to $69,558 and the average costs of cases in MS-DRGs 133 and 134 range from $1,089 to $87,569. As noted previously, the data demonstrate there appear to be similar utilization of hospital resources specifically for cases reported in MS-DRGs 129, 130, 131 and 132.

The highest volume of cases was reported in MS-DRGs 129 and 130 for the procedure codes describing resection of the right and left neck lymphatic. For MS-DRG 129, there was a total of 750 cases reporting procedure code 07T10ZZ (Resection of right neck lymphatic, open approach) with an average length of stay of 4.7 days and average costs of $17,155 and there was a total of 679 cases reporting procedure code 07T20ZZ (Resection of left neck lymphatic, open approach) with an average length of stay of 4.8 days and average costs of $17,857. For MS-DRG 130, there was a total of 358 cases reporting procedure code 07T10ZZ with an average length of stay of 2.6 days and average costs of $10,432 and there was Start Printed Page 32489a total of 331 cases reporting procedure code 07T20ZZ with an average length of stay of 2.5 days and average costs of $10,467. For MS-DRGs 131 and 132, the highest volume of cases was reported for the procedure codes describing repositioning of the maxilla with internal fixation and repositioning of the right and left mandible with internal fixation. For MS-DRG 131, there was a total of 186 cases reporting procedure code 0NSR04Z (Reposition maxilla with internal fixation device, open approach) with an average length of stay of 5.1 days and average costs of $20,500; a total of 114 cases reporting procedure code 0NST04Z (Reposition right mandible with internal fixation device, open approach) with an average length of stay of 5.7 days and average costs of $18,710, and a total of 219 cases reporting procedure code 0NSV04Z (Reposition left mandible with internal fixation device, open approach) with an average length of stay of 6.0 days and average costs of $20,202. For MS-DRG 132, there was a total of 84 cases reporting procedure code 0NSR04Z with an average length of stay of 2.1 days and average costs of $12,991 and a total of 101 cases reporting procedure code 0NSV04Z with an average length of stay of 2.8 days and average costs of $11,386. For MS-DRGs 133 and 134, the highest volume of cases was reported for the procedure codes describing excision of the facial nerve or nasal turbinate. For MS-DRG 133, there was a total of 60 cases reporting procedure code 09BL8ZZ (Excision of nasal turbinate, via natural or artificial opening endoscopic) with an average length of stay of 6.6 days and average costs of $21,253 and for MS-DRG 134, there was a total of 50 cases reporting procedure code 00BM0ZZ (Excision of facial nerve, open approach) with an average length of stay of 1.4 days and average costs of $8,048.

Our clinical advisors reviewed the procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134 to identify the patient attributes that currently define each of these procedures and to group them with respect to complexity of service and resource intensity. For example, procedures that we believe represent greater treatment difficulty and reflect a class of patients who are similar clinically with regard to consumption of hospital resources were grouped separately from procedures that we believe to be less complex but still reflect patients who are similar clinically with regard to consumption of hospital resources. This approach differentiated the more complex and invasive procedures, such as resection of cervical lymph nodes, repositioning of facial bones, and excision of mandible procedures from the less complex and less invasive procedures such as excisions (biopsies) of lymph nodes and facial nerves, drainage procedures of the upper respiratory system, and tonsillectomies.

After this comprehensive review of all the procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134, in combination with the results of the data analysis discussed previously, our clinical advisors support distinguishing the procedures currently assigned to those MS-DRGs by clinical intensity, complexity of service and resource utilization and also support restructuring of these MS-DRGs accordingly. We note that during the analysis of the procedures currently assigned to MS-DRGs 129 and 130, we recognized the special logic defined as “Major Device Implant” for MS-DRG 129 that identifies procedures describing the insertion of a cochlear implant or other hearing device. Our clinical advisors supported the removal of this special logic from the definition for assignment to any proposed modifications to the MS-DRGs, noting the costs of the device have stabilized over time and the procedures can be appropriately grouped along with other procedures involving devices in any restructured proposed MS-DRGs. We also identified 2 procedure codes currently assigned to MS-DRGs 131 and 132, 00J00ZZ (Inspection of brain, open approach) and 0WJ10ZZ (Inspection of cranial cavity, open approach), that our clinical advisors agreed should not be included in any proposed modifications to the MS-DRGs in MDC 03, stating that they are appropriately assigned to MS-DRGs in MDC 01 (Diseases and Disorders of the Nervous System). We further note that during our analysis of the procedures currently assigned to MS-DRGs 133 and 134, we found 338 procedure codes that were inadvertently included as a result of replication during our transition from the ICD-9 to ICD-10 based MS-DRGs. We refer the reader to Table 6P.2c for a detailed list of these procedure codes that describe procedures performed on various sites, such as the esophagus, stomach, intestine, skin, and thumb that, our clinical advisors agree should be removed from the definition for assignment to any proposed modifications to the MS-DRGs under MDC 03.

As a result of our review, we are proposing the deletion of MS-DRGs 129, 130, 131, 132, 133, and 134, and the creation of six new MS-DRGs. Currently, MS-DRGs 129, 131, and 133 are defined as base MS-DRGs, each of which is split by a two-way severity level subgroup. Our proposal includes the creation of two new base MS-DRGs with a three-way severity level split. Our clinical advisors suggested that based on the analysis of procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134 as described previously, only 2 base MS-DRGs were needed, each divided into 3 levels according to the presence of a CC or MCC. The proposed MS-DRGs were developed consistent with the analysis to differentiate the more complex and invasive procedures from the less complex and less invasive procedures. As noted previously, our analysis of MS-DRGs 129, 130, 131, and 132 demonstrated that the average length of stay and average costs for all cases were almost identical for each of the severity level subgroups and therefore, the procedures assigned to these MS-DRGs were initially reviewed together as one clinical group and then evaluated further in comparison to the procedures currently assigned to MS-DRGs 133 and 134. The objective was to better differentiate procedures by treatment difficulty, clinical similarity, and resource use, and to propose a more appropriate restructuring. For example, based on this analysis, in some instances, we are proposing to reassign procedures described by procedure codes that are currently assigned to MS-DRGs 129 and 130 or MS-DRGs 131 and 132 to what is being defined as the less complex MS-DRGs. We believe the resulting proposed MS-DRG assignments are more clinically homogeneous, coherent and better reflect hospital resource use.

We applied the criteria to create subgroups for the three-way severity level split for the proposed new MS-DRGs and found that all five criteria were met. For the proposed new MS-DRGs, there is at least (1) 500 cases in the MCC group, the CC group and the NonCC group; (2) 5 percent of the cases in the MCC group, the CC group and the NonCC group; (3) a 20 percent difference in average costs between the MCC group, the CC group and the NonCC group; (4) a $2,000 difference in average costs between the MCC group, the CC group and the NonCC 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 Start Printed Page 32490IPPS payment system. The following table reflects our simulation for the proposed new MS-DRGs with a three-way severity level split. Our findings represent what we would expect under the proposed modifications and proposed new MS-DRGs, based on claims data in the FY 2019 MedPAR file.

We are proposing to create two new base MS-DRGs, 140 and 143, with a three-way severity level split for proposed new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) and proposed new MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and without CC/MCC, respectively).

We refer the reader to Table 6P.2a and Table 6P.2b for the list of procedure codes we are proposing for reassignment from MS-DRGs 129, 130, 131, 132, 133, and 134 to each of the proposed new MS-DRGs. As noted, we are also proposing the removal of procedure codes 00J00ZZ and 0WJ10ZZ, and the 338 procedure codes listed in Table 6P.2c from the logic for MDC 03.

We note that discussion of the surgical hierarchy for the proposed modifications is discussed in section II.D.15. of this proposed rule.

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

a. Left Atrial Appendage Closure (LAAC)

In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49363 through 49367) we finalized our proposal to create two new MS-DRGs to classify percutaneous intracardiac procedures. Specifically, we created MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with and without MCC, respectfully) for cases reporting procedure codes describing cardiac ablation and other percutaneous intracardiac procedures. In that discussion, as FY 2016 was the first year of our transition from the ICD-9 based MS-DRGs to the ICD-10 based MS-DRGs, we provided a list of the ICD-9-CM procedure codes that identify and describe the cardiac ablation procedures and other percutaneous intracardiac procedures that were the subject of that MS-DRG classification change request, one of which was ICD-9-CM procedure code 37.90 (Insertion of left atrial appendage device).

Separately, we also discussed a request we received for new technology add-on payments for the WATCHMANTM Left Atrial Appendage Closure (LAAC) device (80 FR 49480 through 49488). In that discussion, we noted that effective October 1, 2004 (FY 2005), ICD-9-CM procedure code 37.90 (Insertion of left atrial appendage device) was created to identify and describe procedures using the WATCHMANTM Left Atrial Appendage (LAA) Closure Technology and that under ICD-10-PCS, procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach) is the comparable translation. We also noted that at the time of the new technology request, under the ICD-9 based MS-DRGs, procedure code 37.90 was assigned to MS-DRGs 250 and 251 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent with MCC and without MCC, respectively). We further noted that, as stated previously, we finalized our proposal to assign procedures performed within the heart chambers using intracardiac techniques, including those identified by ICD-9-CM procedure code 37.90, and its comparable ICD-10-PCS code translations (that specifically identify a percutaneous or percutaneous endoscopic approach), including 02L73DK, to new MS-DRGs 273 and 274.

For this FY 2021 IPPS/LTCH PPS proposed rule, we received two separate, but related requests involving the procedure codes that describe the technology that is utilized in the performance of LAAC procedures. The first request was to reassign ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach) that identifies the WATCHMANTM Left Atrial Appendage Closure (LAAC) device, from MS-DRG 274 (Percutaneous Intracardiac Procedures without MCC) to MS-DRG 273 (Percutaneous Intracardiac Procedures with MCC) and revise the title for MS-DRG 273 to “Percutaneous Intracardiac Procedures with MCC or Major Device Implant for Left Atrial Appendage Closure Procedures”. Cases involving LAAC procedures with a percutaneous or percutaneous endoscopic approach, including cases reporting ICD-10-PCS procedure code 02L73DK, are currently assigned to MS-DRGs 273 and 274.

According to the requestor's analysis, the average cost for LAAC procedures reporting ICD-10-PCS procedure code 02L73DK is $3,405 higher than the average cost for all cases in MS-DRG 274. The requestor stated that based on its analysis, this requested reassignment would have minimal impact on MS-DRGs 273 and 274 and would ensure adequate payments and better resource Start Printed Page 32491coherency. The requestor stated that cases reporting procedure codes describing a LAAC procedure with procedure code 02L73DK within MS-DRG 274 are more clinically similar and costs are more closely aligned to cases within MS-DRG 273.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 273 and 274 to identify cases reporting ICD-10-PCS procedure code 02L73DK. Our findings are shown in the following table.

In MS-DRG 273, we found a total of 7,048 cases with an average length of stay of 6.1 days and average costs of $28,100. Of those 7,048 cases, there were 1,126 cases reporting ICD-10-PCS procedure code 02L73DK, with an average length of stay of 2.7 days and average costs of $29,504. In MS-DRG 274, we found a total of 24,319 cases with an average length of stay of 2.0 days and average costs of $24,048. Of those 24,319 cases, there were 13,423 cases reporting ICD-10-PCS procedure code 02L73DK, with an average length of stay of 1.2 days and average costs of $25,846.

The data analysis demonstrates that the average costs of the cases reporting procedure code 02L73DK in MS-DRG 274 are slightly higher than the average costs of all the cases in MS-DRG 274 ($25,846 versus $24,048), with a difference of approximately $1,798, however, the average length of stay for cases reporting procedure code 02L73DK in MS-DRG 274 is shorter compared to all the cases in MS-DRG 274 (1.2 days versus 2 days). If we were to reassign cases reporting procedure code 02L73DK from MS-DRG 274 to MS-DRG 273, we would be assigning cases with an average length of stay of 1.2 days to a MS-DRG with an average length of stay of 6.1 days, which our clinical advisors did not support. The average costs of the cases reporting procedure code 02L73DK in MS-DRG 274 ($25,846) compared to the average costs of all the cases in MS-DRG 273 ($28,100) show a difference of $2,254. Our clinical advisors did not support reassigning the 13,423 cases reporting procedure code 02L73DK without an MCC from MS-DRG 274 to MS-DRG 273, which includes cases reporting a MCC, noting that it would impact the average costs for all cases in this MS-DRG. Lastly, our clinical advisors expressed concern regarding making proposed MS-DRG changes based on a specific, single technology (WATCHMANTM Left Atrial Appendage Closure (LAAC) device), identified by only one unique procedure code versus considering proposed changes based on a group of related procedure codes that can be reported to describe that same type or class of technology, which is more consistent with the intent of the MS-DRGs. Therefore, for these reasons, we are not proposing to reassign cases reporting ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach) from MS-DRG 274 to MS-DRG 273.

The second request was to create a new MS-DRG specific to all left atrial appendage closure (LAAC) procedures or to map all LAAC procedures to a different cardiovascular MS-DRG that has payment rates aligned with procedural costs. The requestor stated that by creating a new MS-DRG specific to all LAAC procedures or mapping all LAAC procedures to a different cardiovascular MS-DRG, the MS-DRG would more appropriately recognize the clinical characteristics and cost differences in LAAC cases.

The 9 ICD-10-PCS procedure codes that describe LAAC procedures and their corresponding MS-DRG assignment are listed in the following table.

Currently, the MS-DRG assignments for these procedure codes are based on the surgical approach: open approach, percutaneous approach, or percutaneous endoscopic approach. Procedures describing an open approach are assigned to MS-DRGs 250 and 251 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent with and without MCC, respectively); while procedures describing a percutaneous or percutaneous endoscopic approach are assigned to MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures Start Printed Page 32492with and without MCC, respectfully). Of the nine listed ICD-10-PCS procedure codes, three (02L70CK, 02L70DK, and 02l70ZK) describe an open approach and are currently assigned to MS-DRG 250 and 251, and six (02L73CK, 02L73DK, 02L73ZK, 02L74CK, 02L74DK, 02L74ZK) describe a percutaneous or percutaneous endoscopic approach and are currently assigned to MS-DRG 273 and 274.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for cases reporting LAAC procedures with an open approach in MS-DRGs 250 and 251. Our findings are shown in the following table.

In MS-DRG 250, we found a total of 4,192 cases with an average length of stay of 5.0 days and average costs of $18,807. Of those 4,192 cases, there were 21 cases reporting a LAAC procedure with an open approach, with an average length of stay of 7.0 days and average costs of $44,012. In MS-DRG 251, we found a total of 4,941 cases with an average length of stay of 2.6 days and average costs of $12,535. Of those 4,941 cases, there were 74 cases reporting a LAAC procedure with an open approach, with an average length of stay of 3.4 days and average costs of $22,711. The analysis shows that the cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 have higher average costs compared to all cases in MS-DRGs 250 and 251 ($44,012 versus $18,807 and $22,711 versus $12,535, respectively). The analysis also shows that the average length of stay for cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 is longer compared to all cases in MS-DRGs 250 and 251 (7.0 days versus 5.0 days and 3.4 days versus 2.6 days, respectively). Overall, there were a total of 95 (21+74) cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 with an average length of stay of 4.2 days and average costs of $27,420. Based on the results of the claims data described previously, we conducted further analysis for the 95 cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 to determine if there were additional factors that may be contributing to the higher average costs and longer length of stay. Of those 95 cases, we found a total of 20 cases in which there was another O.R. procedure reported on the claim that is also currently assigned to MS-DRGs 250 and MS-DRG 251 and believed to be influencing the average costs and average length of stay, as shown in the following tables.

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As shown in the table, for MS-DRG 250, there were a total of 8 cases reporting another O.R. procedure with a LAAC procedure with an open approach with an average length of stay of 8.9 days and average costs of $63,653. The data shows that the average length of stay for these 8 cases range from 4.0 days to 15.0 days and the average costs range from $20,650 to $235,720.

Overall, the data demonstrates that the 8 cases reporting another O.R. procedure with a LAAC procedure with an open approach in MS-DRG 250 have a longer length of stay (8.9 days versus 7 days) and higher average costs ($63,653 versus $44,012) compared to all 21 cases reporting a LAAC procedure with an open approach in MS-DRG 250.

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As shown in the table, for MS-DRG 251, there were a total of 12 cases reporting another O.R. procedure with a LAAC procedure with an open approach with an average length of stay of 6.5 days and average costs of $31,560. The data shows that the average length of stay for these 12 cases range from 1.0 day to 18.0 days and the average costs range from $11,052 to $89,682.

Overall, the data demonstrates that the 12 cases reporting another O.R. procedure with a LAAC procedure with an open approach in MS-DRG 251 have a longer average length of stay (6.5 days versus 3.4 days) and higher average costs ($31,560 versus $22,711) compared to all 74 cases reporting a LAAC procedure with an open approach in MS-DRG 251. The results of our claims analysis for the 20 cases reporting a LAAC procedure with an open approach and another O.R. procedure in MS-DRGs 250 and 251 indicate that the longer average length of stay and higher average costs of the 95 cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 may be attributed to the resource consumption of the additional O.R. procedures reported in the subset of 20 cases. The claims analysis also shows that the majority of the cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 (75 cases out of 95 cases) were without another O.R. procedure.

As noted in the discussion previously, with respect to the first LAAC MS-DRG request, our analysis of MS-DRG 273 found a total of 7,048 cases with an average length of stay of 6.1 days and average costs of $28,100 and our analysis of MS-DRG 274 found a total of 24,319 cases with an average length of stay of 2.0 days and average costs of $24,048. The average costs and average length of stay for cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 ($44,012 and $22,711, respectively) and (7.0 days and 3.4 days, respectively) appear to be generally more aligned with the average costs and average length of stay for all cases in MS-DRGs 273 and 274 ($28,100 and $24,048, respectively) and (6.1 days and 2.0 days, respectively) as compared to all cases in MS-DRGs 250 and 251 with average costs of $18,807 and $12,535, respectively and an average length of stay of 5.0 days and 2.6 days, respectively. In addition, as also noted previously, the second LAAC MS-DRG request was to create a new MS-DRG specific to all left atrial appendage closure (LAAC) procedures or to map all LAAC procedures to a different cardiovascular MS-DRG that has payment rates aligned with procedural costs. Our clinical advisors suggested that because our review of the cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 demonstrated that these procedures are primarily performed in the absence of another O.R. procedure and generally are not performed with a more intensive open chest procedure, that we should Start Printed Page 32495evaluate cases reporting LAAC procedures with the other approaches in their assigned MS-DRGs.

We then examined claims data from the September 2019 update of the FY 2019 MedPAR file for cases reporting LAAC procedures with a percutaneous or percutaneous endoscopic approach in MS-DRGs 273 and 274. Our findings are shown in the following table.

In MS-DRG 273, we found a total of 7,048 cases with an average length of stay of 6.1 days and average costs of $28,100. Of those 7,048 cases, there were 1,180 cases reporting a LAAC procedure with a percutaneous or percutaneous endoscopic approach, with an average length of stay of 2.9 days and average costs of $29,591. In MS-DRG 274, we found a total of 24,319 cases with an average length of stay of 2.0 days and average costs of $24,048. Of those 24,319 cases, there were 13,774 cases reporting a LAAC procedure with a percutaneous or percutaneous endoscopic approach, with an average length of stay of 1.2 days and average costs of $25,765.

The analysis shows that the cases reporting a LAAC procedure with a percutaneous or percutaneous endoscopic approach in MS-DRGs 273 and 274 have very similar average costs compared to all the cases in MS-DRGs 273 and 274 ($29,591 versus $28,100 and $25,765 versus $24,048, respectively). The analysis also shows that the average length of stay for cases reporting a LAAC procedure with a percutaneous or percutaneous endoscopic approach in MS-DRGs 273 and 274 is shorter compared to all cases in MS-DRGs 273 and 274 (2.9 days versus 6.1 days and 1.2 days versus 2.0 days, respectively). Overall, there were a total of 14,954 (1,180 + 13,774) cases reporting a LAAC procedure with a percutaneous or percutaneous endoscopic approach in MS-DRGs 273 and 274 with an average length of stay of 1.3 days and average costs of $26,067.

Our clinical advisors did not support creating a new MS-DRG for all LAAC procedures for FY 2021. Rather, our clinical advisors believe that ICD-10-PCS codes 02L70CK, 02L70DK, and 02L70ZK that describe a LAAC procedure with an open approach are more suitably grouped to MS-DRGs 273 and 274. They stated this reassignment would allow all LAAC procedures to be grouped together under the same MS-DRGs and would improve clinical coherence. We note that all the procedure codes describing LAAC procedures are designated as non-O.R. procedures that affect the MS-DRG to which they are assigned. Therefore, we are proposing to reassign ICD-10-PCS codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent with and without MCC, respectively) to MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with and without MCC, respectively).

b. Endovascular Cardiac Valve Replacement and Supplement Procedures

We received a request to revise MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement and Supplement Procedures with and without MCC, respectively) by removing the current two-way severity level split and creating a base MS-DRG without any severity level splits. According to the requestor, patients treated with an endovascular cardiac valve replacement procedure have severe heart failure due to a valvular disorder, which may be documented as either an exacerbation of heart failure or as chronic severe heart failure.

The requestor noted that in the cases reporting an endovascular cardiac valve replacement procedure, a secondary diagnosis code describing the specific type of heart failure may be the only MCC reported on the claim and in instances where the heart failure diagnosis code is reported as the principal diagnosis on a claim, it is disregarded from acting as a MCC. In both scenarios, the requestor reported that the heart failure is treated with the endovascular cardiac valve replacement procedure, fluid balance, and medication.

The requestor also stated that providers are challenged in reaching a consensus regarding this subset of patients' symptoms that may be helpful in establishing a diagnosis for exacerbation of heart failure versus chronic severe heart failure and stated that a single, base MS-DRG would assist in the calculation of costs and charges more reliably, regardless of the diagnosis reported in combination with the endovascular cardiac valve replacement procedure.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 266 and 267. Our findings are shown in the following table.

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As shown in the table, there was a total of 19,012 cases with an average length of stay of 5.3 days and average costs of $50,879 in MS-DRG 266. For MS-DRG 267, there was a total of 27,084 cases with an average length of stay of 2.1 days and average costs of $40,471. To evaluate the request to create a single MS-DRG for cases reporting endovascular cardiac valve procedures, we conducted an analysis of base MS-DRG 266. This analysis includes 2 years of MedPAR claims data to compare the data results from 1 year to the next to avoid making determinations about whether additional severity levels are warranted based on an isolated year's data fluctuation and also, to validate that the established severity levels within a base MS-DRG are supported. Therefore, we reviewed the claims data for base MS-DRG 266 using the September 2018 update of the FY 2018 MedPAR file and the September 2019 update of the FY 2019 MedPAR file, which were used in our analysis of claims data for MS-DRG reclassification requests for FY 2020 and FY 2021. Our findings are shown in the table.

As shown in the table, the data reflect that the criteria for a two-way split (“with MCC” and “without MCC”) are satisfied using both the data from the September 2018 update of the FY 2018 MedPAR file and the data from the September 2019 update of the FY 2019 MedPAR file: (1) At least 500 cases are in the MCC group and in the without MCC subgroup; (2) at least 5 percent of the cases in the MS-DRG are in the MCC group and in the without MCC subgroup; (3) at least 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) at least a 3-percent reduction in cost variance, indicating that the current severity level splits increase the explanatory power of the base MS-DRG in capturing differences in expected cost between the current MS-DRG severity level splits by at least 3 percent and thus improve the overall accuracy of the IPPS payment system. Our clinical advisors also did not agree with the requestor's assertion that a single, base MS-DRG would assist in calculating costs more reliably. As shown in the claims data and stated previously, the criteria are satisfied for the current two-way split. We further note that the basis for the MS-DRGs is to better recognize severity and complexity of services, which is accomplished through the CC subgroups.

Based on the results of our analysis, for FY 2021, we are proposing to maintain the current structure of MS-DRGs 266 and 267 with a two-way severity level split and not create a single, base MS-DRG.

c. Insertion of Cardiac Contractility Modulation Device

We received a request to review the MS-DRG assignment for cases that identify patients who receive a cardiac contractility modulation (CCM) device system for congestive heart failure. CCM is indicated for patients with moderate to severe heart failure resulting from either ischemic or non-ischemic cardiomyopathy. CCM utilizes electrical signals which are intended to enhance the strength of the heart and overall cardiac performance. CCM delivery device systems consist of a programmable implantable pulse generator (IPG) and three leads which are implanted in the heart. One lead is implanted into the right atrium and the other two leads are inserted into the right ventricle. The lead in the right atrium detects atrial electric signals and transmits them to the IPG. The IPG, which is usually implanted into the subcutaneous pocket of the pectoral region and secured to the fascia with a non-absorbable suture, processes the atrial signal and generates the CCM signals which are transmitted to the right ventricle via the two ventricular leads. According to the requestor, MS-DRGs 222, 223, 224, 225, 226, and 227 (Cardiac Defibrillator Implant with and without Cardiac Catheterization with and without AMI/HF/Shock with and without MCC, respectively) include code combinations or “code pairs” describing the insertion of contractility modulation devices. Currently however, the MS-DRG GROUPER logic requires the combination of the CCM device codes and a left ventricular lead to map to MS-DRGs 222, 223, 224, 225, 226 and 227. The requestor stated the CCM device is contraindicated in patients with a left ventricular lead. Therefore, using the current V37 MS-DRG GROUPER logic, no case involving insertion of the CCM system can be appropriately mapped to MS-DRGs 222, 223, 224, 225, 226 and 227. Instead, the cases map to MS-DRG 245 (AICD Generator Procedures). According to the requestor, to date, the procedure has been performed on an outpatient basis, but it is expected that some Medicare patients will receive CCM devices on an inpatient basis. The requestor asked that CMS revise the MS-DRG GROUPER logic to group cases reporting the use of the CCM device appropriately.

The ICD-10-PCS procedure code pairs currently assigned to MS-DRGs Start Printed Page 32497222, 223, 224, 225, 226 and 227 that identify the insertion of contractility modulation devices are shown in the following table:

Based on our analysis of cases reporting ICD-10-PCS procedure codes for CCM device systems, we agree with the requestor that a procedure code pair for the insertion of a CCM device and right ventricular and/or right atrial lead does not exist in the logic for MS-DRGs 222, 223, 224, 225, 226 and 227. Our analysis indicates that the ICD-10-PCS procedure code combinations for right ventricular and/or right atrial lead insertion with insertion of contractility modulation devices were inadvertently excluded from MS-DRGs 222, 223, 224, 225, 226 and 227 as a result of replicating the ICD-9 based MS-DRGs.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRG 245 and identified the subset of cases within MS-DRG 245 reporting procedure codes for the insertion of a rechargeable CCM device and the insertion of right ventricular and/or right atrium lead. We found zero cases in MS-DRG 245 reporting a procedure code combination that identifies the insertion of contractility modulation device and the insertion of a cardiac lead into the right ventricle and/or right atrium lead.

Our clinical advisors agree that insertion of a rechargeable CCM system always involves placement of a right-sided lead, and that the code combinations that currently exist in the MS-DRG GROUPER logic are considered clinically invalid. We again examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 222, 223, 224, 225, 226 and 227 for this subset of cases to determine if there were any cases that reported one of the 12 clinically invalid code combinations that exist in the GROUPER logic. Because the combinations of codes that describe the insertion of a rechargeable CCM device and the insertion of left ventricular lead are considered clinically invalid procedures, we would not expect these code combinations to be reported in any claims data. We found zero cases across MS-DRGs 222, 223, 224, 225, 226 and 227 reporting the clinically invalid procedure combination that identifies the insertion of contractility modulation device and the insertion of a cardiac lead into the left ventricle.

While our analysis did not identify any cases reporting a procedure code combination for the insertion of contractility modulation device and the Start Printed Page 32498insertion of a cardiac lead into right ventricle or right atrium, recognizing that it is expected that some Medicare patients will receive CCM devices on an inpatient basis, we are proposing to add the following 24 ICD-10-PCS code combinations to MS-DRGs 222, 223, 224, 225, 226 and 227. We are also proposing to delete the 12 clinically invalid code combinations from the GROUPER logic of MS-DRGs 222, 223, 224, 225, 226 and 227 that describe the insertion of contractility modulation device and the insertion of a cardiac lead into the left ventricle.

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6. MDC 6 (Diseases and Disorders of the Digestive System): Acute Appendicitis

We received a request to add ICD-10-CM diagnosis code K35.20 (Acute appendicitis with generalized peritonitis, without abscess) to the list of complicated principal diagnoses that group to MS-DRGs 338, 339 and 340 (Appendectomy with Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) so that all ruptured/perforated appendicitis codes in MDC 06 (Diseases and Disorders of the Digestive System) group to MS-DRGs 338, 339, and 340. ICD-10-CM diagnosis code K35.20 currently groups to MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). Under current coding conventions, the following inclusion term for subcategory Start Printed Page 32501K35.2 (Acute appendicitis with generalized peritonitis) is: Appendicitis (acute) with generalized (diffuse) peritonitis following rupture or perforation of the appendix. The requestor also noted that diagnosis code K35.32 (Acute appendicitis with perforation and localized peritonitis, without abscess) currently groups to MS-DRGs 338, 339, and 340, however, diagnosis code K35.20 which describes a generalized, more extensive form of peritonitis does not. The requestor stated that ICD-10-CM diagnosis code K35.20 is the only ruptured appendicitis code not included in the list of complicated principal diagnosis codes for MS-DRGs 338, 339 and 340 and stated that it is clinically appropriate for all ruptured/perforated appendicitis diagnosis codes to group to MS-DRGs 338, 339 and 340.

We analyzed claims data from the September 2019 update of the FY 2019 MedPAR file for cases in MS-DRGs 341, 342, and 343 and claims reporting ICD-10-CM diagnosis code K35.20 as a principal diagnosis. Our findings are shown in the following table.

As shown in the table, we found a total of 718 cases with an average length of stay of 5.9 days and average costs of $17,270 in MS-DRG 341. Of those 718 cases, there were 62 cases reporting a principal diagnosis code of K35.20 with an average length of stay of 7.8 days, and average costs of $20,244. We found a total of 2,184 cases with an average length of stay of 3.4 days and average costs of $10,611 in MS-DRG 342. Of those 2,184 cases there were 183 cases reporting a principal diagnosis code of K35.20 with an average length of stay of 4.2 days, and average costs of $10,952. We found a total of 2,329 cases with an average length of stay of 2.0 days and average costs of $8,298 in MS-DRG 343. Of those 2,329 cases, there were 137 cases reporting a principal diagnosis code of K35.20 with an average length of stay of 2.6 days, and average costs of $8,088.

We also analyzed claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 338, 339, and 340. Our findings are shown in the following table.

As shown in the table, we found a total of 685 cases with an average length of stay of 8.1 days and average costs of $20,930 in MS-DRG 338. We found a total of 2,245 cases with an average length of stay of 5.0 days and average costs of $12,705 in MS-DRG 339. We found a total of 1,840 cases, average length of stay 2.9 days, and average costs of $9,101 in MS-DRG 340.

Our clinical advisors agreed that the presence of an abscess would clinically determine whether a diagnosis of acute appendicitis would be considered a complicated principal diagnosis. As diagnosis code K35.20 is described as “without” an abscess, our clinical advisors recommended that it not be added to the list of principal diagnoses for MS-DRGS 338, 339, and 340 (Appendectomy with Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). We believe that while the average costs for cases reporting diagnosis code K35.20 are similar to the cases in MS-DRGs 338, 339, and 340, diagnosis codes describing acute appendicitis that do not indicate the presence of an abscess should remain in MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for clinical consistency. Therefore, we are not proposing to reassign diagnosis code K35.20 from MS-DRGs 341, 342, and 343 to MS-DRGs 338, 339, and 340.

As noted previously, the requestor pointed out that diagnosis K35.32 (Acute appendicitis with perforation and localized peritonitis, without abscess) currently groups to MS-DRGs 338, 339, and 340 (Appendectomy with Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). Therefore, we identified all the diagnosis codes describing acute appendicitis within the ICD-10-CM classification under subcategory K35.2 (Acute appendicitis with generalized peritonitis) and subcategory K35.3 (Acute appendicitis with localized Start Printed Page 32502peritonitis) and reviewed their respective MS-DRG assignments for clinical coherence. The diagnosis codes in these subcategories are shown in the following table.

We analyzed claims data from the September 2019 update of the FY 2019 MedPAR file for cases reporting any one of the ICD-10-CM diagnosis codes as previously listed as a principal diagnosis in MS-DRGs 338, 339, 340, 341, 342, and 343. Our findings are shown in the following table.

As shown in the table, the diagnosis codes describing “with abscess” (K35.21 and K35.33) are currently assigned to MS-DRGs 338, 339, and 340. In addition, the diagnosis codes describing “without abscess” (K35.20, K35.30, and K35.31) are currently assigned to MS-DRGs 341, 342, and 343. Our clinical advisors believe that cases reporting ICD-10-CM diagnosis codes describing “with abscess” are associated with higher severity of illness and resource consumption because of extended lengths of stay and treatment with intravenous antibiotics. Therefore, our clinical advisors determined that diagnosis code K35.32 should also be assigned to MS-DRGs 341, 342, and 343 for clinical consistency.

Accordingly, we are proposing to reassign diagnosis code K35.32 to MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Start Printed Page 32503Diagnosis with MCC, with CC, and without CC/MCC, respectively).

The ICD-10 MS-DRG Version 37 Definitions Manual currently lists the following ICD-10-CM diagnosis codes as Complicated Principal Diagnoses in MS-DRGs 338, 339, 340, 341, 342, and 343: C18.1 (Malignant neoplasm of appendix); C7A.020 (Malignant carcinoid tumor of the appendix); K35.21 (Acute appendicitis with generalized peritonitis, with abscess); K35.32 (Acute appendicitis with perforation and localized peritonitis, without abscess) and K35.33 (Acute appendicitis with perforation and localized peritonitis, with abscess). For the same reasons discussed previously, we are proposing to remove diagnosis code K35.32 from the complicated principal diagnosis list to be clinically consistent.

Therefore, for the reasons discussed, we are proposing to (1) maintain the current assignment of diagnosis code K35.20 (Acute appendicitis with generalized peritonitis, without abscess) in MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively); (2) reassign diagnosis code K35.32 from MS-DRGs 338, 339, and 340 to MS-DRGs 341, 342, and 343; and (3) remove diagnosis code K35.32 from the complicated principal diagnosis list in MS-DRGs 338, 339, and 340 as listed in the ICD-10 MS-DRG Version 37 Definitions Manual.

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

a. Cervical Radiculopathy

We received a request to reassign ICD-10-CM diagnosis codes M54.11 (Radiculopathy, occipito-atlanto-axial region), M54.12, (Radiculopathy, cervical region) and M54.13 (Radiculopathy, cervicothoracic region) from MDC 01 (Diseases and Disorders of the Nervous System) to MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue). The requestor stated that when one of these diagnosis codes describing radiculopathy in the cervical/cervicothoracic area of the spine is reported as a principal diagnosis in combination with a cervical spinal fusion procedure code, the case currently groups to MDC 01 in MS-DRG 028 (Spinal Procedures with MCC), MS-DRG 029 (Spinal Procedures with CC or Spinal Neurostimulators), and MS-DRG 030 (Spinal Procedures without CC/MCC). The requestor acknowledged that radiculopathy results from nerve impingement, however, the requestor noted it typically also results from a musculoskeletal spinal disorder such as spondylosis or stenosis. According to the requestor, the underlying musculoskeletal cause should be reported as the principal diagnosis if documented. The requestor stated that when the medical record documentation to support a musculoskeletal cause is not available, cases reporting a cervical spinal fusion procedure with a principal diagnosis of cervical radiculopathy would be more consistent with other cervical spinal fusion procedures if they grouped to MDC 08 in MS-DRGs 471, 472, and 473 (Cervical Spinal Fusion with MCC, with CC, and without CC/MCC, respectively). The requestor stated that the following diagnosis codes describing radiculopathy of the thoracic and lumbar areas of the spine are currently assigned to MDC 08 and therefore, group appropriately to the spinal fusion MS-DRGs in MDC 08.

The requestor is correct that when diagnosis codes M54.11, M54.12 or M54.13 are reported as a principal diagnosis in combination with a cervical spinal fusion procedure, the case currently groups to MDC 01 in MS-DRG 028, MS-DRG 029, and MS-DRG 030. This grouping occurs because the diagnosis codes describing radiculopathy in the cervical/cervicothoracic area of the spine are assigned to MDC 01 and the procedure codes describing a cervical spinal fusion procedure are assigned to MDC 01 in MS-DRGs 028, 029 and 030. The requestor is also correct that diagnosis codes describing radiculopathy of the thoracic and lumbar areas of the spine (M54.14, M54.15, M54.16 and M54.17) are currently assigned to MDC 08 and therefore, group to the spinal fusion MS-DRGs in MDC 08 consistent with the GROUPER logic definitions. The MS-DRGs that involve spinal fusion procedures of the cervical or lumbar regions that are currently assigned in MDC 01 and MDC 08 are listed in the following table.

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We refer the reader to the ICD-10 MS-DRG Version 37 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 for complete documentation of the GROUPER logic for the listed MS-DRGs.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for all cases in MS-DRGs 028, 029, and 030 and for cases reporting any one of the diagnosis codes describing radiculopathy of the cervical/cervicothoracic area of the spine (M54.11, M54.12, or M54.13) in combination with a cervical spinal fusion procedure. We refer the reader to Table 6P.1b associated with this 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/​ for the list of procedure codes describing a cervical spinal fusion procedure. Our findings are shown in the following table.

As shown in the table, there were a total of 2,105 cases with an average length of stay of 11.9 days and average costs of $40,866 in MS-DRG 028. Of those 2,105 cases, there were 22 cases reporting a principal diagnosis of cervical radiculopathy with a cervical spinal fusion procedure with an average length of stay of 8.2 days and average costs of $44,980. For MS-DRG 029, there were a total of 3,574 cases with an average length of stay of 6 days and average costs of $24,026. Of those 3,574 cases, there were 176 cases reporting a principal diagnosis of cervical Start Printed Page 32505radiculopathy with a cervical spinal fusion procedure with an average length of stay of 2.6 days and average costs of $24,852. For MS-DRG 030, there were a total of 1,338 cases with an average length of stay of 3.1 days and average costs of $17,393. Of those 1,338 cases, there were 166 cases reporting a principal diagnosis of cervical radiculopathy with a cervical spinal fusion procedure with an average length of stay of 1.7 days and average costs of $23,003.

We also reviewed the claims data for MS-DRGs 471, 472, and 473. Our findings are shown in the following table.

As shown in the table, there were a total of 3,327 cases with an average length of stay of 9 days and average costs of $36,941 in MS-DRG 471. There were a total of 15,298 cases with an average length of stay of 3.3 days and average costs of $22,539 in MS-DRG 472. There were a total of 11,144 cases with an average length of stay of 2 days and average costs of $18,748 in MS-DRG 473.

Based on the claims data, the average costs of the cases reporting a principal diagnosis of cervical radiculopathy with a cervical spinal fusion procedure are consistent with the average costs of all the cases in MS-DRGs 028, 029, and 030 in MDC 01. We also note that the average costs of all the cases in MS-DRGs 028, 029, and 030 in MDC 01 are also comparable to the average costs of all the cases in MS-DRGs 471, 472, and 473, respectively; ($40,886 versus $36,941; $24,026 versus $22,539; and $17,393 versus $18,748).

Our clinical advisors do not support reassigning diagnosis codes M54.11, M54.12, and M54.13 that describe radiculopathy in the cervical/cervicothoracic area of the spine from MDC 01 to MDC 08 until further analysis of the appropriate assignment of these and other diagnosis codes describing radiculopathy. As the requestor pointed out, the diagnosis codes describing radiculopathy of the thoracic and lumbar areas of the spine (M54.14, M54.15, M54.16 and M54.17) are currently assigned to MDC 08. There are also two other codes to identify radiculopathy within the classification, diagnosis code M54.10 (Radiculopathy, site unspecified) and M54.18 (Radiculopathy, sacral and sacrococcygeal region), both of which are currently assigned to MDC 01. Our clinical advisors recommend maintaining the current assignment of diagnosis codes describing cervical radiculopathy in MDC 01 until further analysis of whether all the diagnosis codes describing radiculopathy of a specified or unspecified site should be assigned to the same MDC and if so, whether those codes should be assigned to MDC 01 or MDC 08. As part of this analysis, they also recommend soliciting further input from the public on the appropriate assignment for all of the diagnosis codes describing radiculopathy, including from professional societies and national associations for neurology and orthopedics. For these reasons, we are not proposing to reassign diagnosis codes M54.11, M54.12, and M54.13 from MDC 01 to MDC 08 at this time.

b. Hip and Knee Joint Replacements

We received a request to restructure the MS-DRGs for total joint arthroplasty that utilize an oxidized zirconium bearing surface implant in total hip replacement and total knee replacement procedures. According to the requestor, several international joint replacement registries, retrospective claims review, and published clinical studies show compelling short-term, mid-term and long-term clinical outcomes for patients receiving these implants. The requestor stated that without specific MS-DRGs, beneficiary access to these implants is restricted and the benefit to patients and cost savings cannot be recognized.

The requestor noted that effective October 1, 2017, new ICD-10-PCS procedure codes describing hip and knee replacement procedures with an oxidized zirconium bearing surface implant were established, which allow greater specificity and provide the ability to track costs and clinical outcomes for the patients who receive the implant. The requestor provided 3 options for CMS to consider as part of its request which are summarized in this section of this rule.

The first option provided by the requestor was to create a new MS-DRG by reassigning cases reporting a hip or knee replacement procedure with an oxidized zirconium bearing surface implant from MS-DRG 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC) to the suggested new MS-DRG. The requestor conducted its own analysis and noted that there were approximately 18,000 cases reporting a hip or knee replacement with an oxidized zirconium bearing surface implant and the average length of stay for these cases was shorter in comparison to the cases reporting hip and knee replacement procedures without an oxidized zirconium bearing surface implant. The requestor suggested that patients receiving an oxidized zirconium bearing surface implant may be walking earlier after surgery and the risk of infection may be reduced as a result of the shorter hospitalization.

The requestor stated that separating out these cases reporting the use of an oxidized zirconium bearing surface implant is clinically justified because the implants are designed for increased longevity. The requestor also stated that oxidized zirconium is an entirely distinct material from traditional ceramic or metal implants, as it is made through a unique thermal oxidation process which creates a ceramicised surface while maintaining the biocompatible zirconium alloy substrate. According to the requestor, this process creates an implant with the unique properties of both metals and ceramics: Durability, strength and friction resistance. Conversely, the requestor stated that cobalt chrome used in metal implants contains up to 143x Start Printed Page 32506more nickel (<0.5% vs <0.0035%) than oxidized zirconium and that nickel is the leading cause of negative reactions in patients with metal sensitivities.

The requestor asserted that creating a new MS-DRG for hip and knee replacement procedures with an oxidized zirconium bearing surface implant would be a logical extension of the unique procedure codes that CMS finalized and stated that other countries have established higher government reimbursement for these implants to reflect the increased value of the technology. The requestor also asserted that multiple joint replacement registries have reported excellent hip replacement results, including a statistically significant 33 percent reduced risk of revision (p<0.001) for oxidized zirconium on highly cross-linked polyethylene (XLPE), from three months compared to the most common bearing surface of metal/XLPE.

Lastly, the requestor stated that multiple U.S. data sources, including Medicare claims, show strong short-term outcomes, reduced 30-day readmissions, fewer discharges to skilled nursing facilities (SNFs), shorter LOS, and more frequent discharges to home, resulting in less costly post-acute care.

The second option provided by the requestor was to create a new MS-DRG by reassigning all cases in MS-DRG 470 reporting a hip replacement procedure (excluding those with an oxidized zirconium bearing surface implant) with a principal diagnosis of hip fracture and all hip replacement procedures with an oxidized zirconium bearing surface implant, with or without a principal diagnosis of hip fracture to the suggested new MS-DRG. The requestor stated that based on its own analysis, this proposed new MS-DRG would have approximately 58,000 cases with an estimated relative weight between the current MS-DRGs for total joint arthroplasty (MS-DRGs 469 and 470) to reflect the increased resource consumption of total hip replacement procedures performed due to a hip fracture, while also reflecting a higher resource grouping for oxidized zirconium bearing surface implants used in total hip replacement procedures, and lastly, to reflect statistically significant reductions in revision of total hip replacement procedure rates.

The requestor also indicated that a new MS-DRG for total hip replacement procedures with a hip fracture would correspond to differentials recognized in the Comprehensive Care for Joint Replacement (CJR) program, which established a separate target 90-day episode price for total hip replacement procedures performed due to hip fracture cases, as these are typically higher severity patients with longer lengths of stay than hip replacement procedures absent a hip fracture.

The requestor conducted its own analysis of Medicare claims data (Q4 2017-Q3 2018) for total hip replacement procedures and compared cases with an oxidized zirconium bearing surface implant to cases without an oxidized zirconium bearing surface implant. The requestor reported that it found statistically reduced SNF costs, hospital length of stay, 90-day episode costs, and 55% decreased mortality at 180 days for the oxidized zirconium bearing surface implant cases. The requestor urged CMS to recognize this technology with a differentiated payment in the form of a new MS-DRG, based on its findings of excellent clinical outcomes for total hip replacement procedures that utilize an oxidized zirconium bearing surface implant.

The third option provided by the requestor was to reassign all cases reporting a total hip replacement procedure using an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture from MS-DRG 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC) to MS-DRG 469 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement). The requestor stated this option would maintain the two existing MS-DRGs for total joint arthroplasty and would only involve moving a small subset of cases (approximately 300) from MS-DRG 470 to MS-DRG 469.

The requestor acknowledged that the third option was more limited than the first two options, however, the requestor stated that it was the least disruptive since the two MS-DRGs and estimated relative weights would remain essentially the same. The requestor also stated that reassigning cases reporting a total hip replacement procedure using an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture from MS-DRG 470 to MS-DRG 469 would encourage hospitals to use these high-quality, proven implants.

The requestor also asserted that the third option focuses the suggested payment changes on the population of patients that benefit the most from the technology. According to the requestor, the analysis of Medicare claims data suggests that there is potential to improve care for the older population of patients who receive a total hip replacement by encouraging providers to use an oxidized zirconium bearing surface implant for hip fracture cases. In addition, the requestor stated that long-term Medicare solvency concerns impel consideration of incentives as a means to drive better outcomes at lower cost. Specifically, the requestor asserted that if all of the approximately 150,000 total hip replacement procedures performed annually in the U.S. for hip fracture achieved 90-day episode cost savings observed in Medicare claims for oxidized zirconium bearing surface implants, based on the requestor's analysis, potential annual savings of more than $650 million could be realized, in addition to longer-term savings achieved through reduced revisions.

The requestor also welcomed additional analysis by CMS of the claims data and consideration of alternative configurations that might better align patient severity, clinical value and payment.

As indicated by the requestor, October 1, 2017, new ICD-10-PCS procedure codes describing hip and knee replacement procedures with an oxidized zirconium bearing surface implant were created. The procedure codes are as follows:

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We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRGs 469 and 470 where hip and knee replacement procedures are currently assigned for cases reporting the use of an oxidized zirconium bearing surface implant to address the three options provided by the requestor.

To evaluate the first option provided by the requestor, we analyzed the cases reporting a total hip or total knee replacement procedure with an oxidized zirconium bearing surface implant in MS-DRG 470 to determine if a new MS-DRG is warranted. To evaluate the second option provided by the requestor, we analyzed the cases reporting a total hip replacement procedure without an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture and cases reporting a total hip replacement procedure with an oxidized zirconium implant with or without a principal diagnosis of hip fracture in MS-DRG 470 to determine if a new MS-DRG is warranted. We refer the reader to Table 6P.1c for a list of the procedure codes that describe a hip replacement without an oxidized zirconium bearing surface implant and to Table 6P.1e for a list of the diagnosis codes describing a hip fracture that were provided by the requestor for consideration of options 2 and 3. To evaluate the third option provided by the requestor, we analyzed the cases reporting a total hip replacement procedure with an oxidized zirconium bearing surface implant and a principal diagnosis of fracture in MS-DRG 470 to determine if the cases warrant reassignment to MS-DRG 469. Our findings are shown in the following table.

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As shown in the table, there was a total of 25,701 cases with an average length of stay of 5.9 days and average costs of $22,126 in MS-DRG 469. For MS-DRG 470, there was a total of 386,221 cases with an average length of stay of 2.3 days and average costs of $14,326. Of those 386,221 cases in MS-DRG 470, there was a total of 18,898 cases reporting a total hip replacement or total knee replacement procedure with an oxidized zirconium bearing surface implant with an average length of stay of 2.1 days and average costs of $14,808; a total of 47,316 cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture with an average length of stay of 4.5 days and average costs of $16,077; a total of 7,241 cases reporting a total hip replacement procedure with an oxidized zirconium bearing surface implant with or without a principal diagnosis of hip fracture with an average length of stay of 1.9 days and average costs of $13,875; and a total of 316 cases reporting a total hip replacement procedure with an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture with an average length of stay of 4 days and average costs of $18,304.

The data analysis performed to evaluate the first option provided by the requestor indicates that the 18,898 cases reporting a total hip replacement or total knee replacement procedure with an oxidized zirconium bearing surface implant in MS-DRG 470 have a similar average length of stay (2.1 days versus 2.3 days) and similar average costs ($14,808 versus $14,326) compared to all the cases in MS-DRG 470. The results are also consistent with the requestor's findings that there were approximately 18,000 cases reporting a hip or knee replacement with an oxidized zirconium bearing surface implant. Based on the claims analysis, our clinical advisors stated that the data does not support creating a new MS-DRG for these procedures. Our clinical advisors also believe that the characteristics of the patients and resources used for a case that involves a total hip replacement or total knee replacement procedure with an oxidized zirconium bearing surface implant are not clinically distinct from the characteristics of the patients and resources used for the cases reporting a total hip replacement or total knee replacement procedure without an oxidized zirconium bearing surface implant. Therefore, in consideration of the first option provided by the requestor, we are not proposing to create a new MS-DRG for cases reporting a total hip or knee replacement procedure with an oxidized zirconium bearing surface implant.

The data analysis performed to evaluate the second option provided by the requestor indicates that the 47,316 cases reporting a total hip replacement procedure without an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 470 (4.5 days versus 2.3 days) and the average costs are higher when compared to all the cases in MS-DRG 470 ($16,077 versus Start Printed Page 32509$14,326). For the 7,241 cases reporting a total hip replacement procedure with an oxidized zirconium bearing surface implant with or without a principal diagnosis of hip fracture, the average length of stay is shorter than the average length of stay for all the cases (1.9 days versus 2.3 days) and the average costs are slightly lower when compared to all the cases in MS-DRG 470 ($13,875 versus $14,326). Our analysis of the combined total number of cases identified for the second option provided by the requestor indicates that the 54,557 cases (47,316 + 7,241) have a longer average length of stay compared to the average length of stay for all the cases in MS-DRG 470 (4.2 days versus 2.3 days) and the average costs are slightly higher ($15,785 versus $14,326) when compared to all the cases in MS-DRG 470. The results are also consistent with the requestor's findings that there were approximately 58,000 cases reporting a total hip replacement procedure without an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture or a total hip replacement procedure with an oxidized zirconium bearing surface implant with or without a principal diagnosis of hip fracture. Our clinical advisors believe that the data does not support creating a new MS-DRG for the subset of cases as suggested by the requestor. They noted the variation in the volume (47,316 cases and 7,241 cases), average length of stay (4.5 days and 1.9 days), and the average costs ($16,077 and $13,875) for each subset of option 2 and that the total average cost for the combined cases identified for the second option ($15,785) is very similar to the costs of all the cases in MS-DRG 470 ($14,326). Therefore, in consideration of the second option provided by the requestor, we are not proposing to create a new MS-DRG for cases reporting a total hip replacement procedure without an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture and cases reporting a total hip replacement procedure with an oxidized zirconium implant with or without a principal diagnosis of hip fracture.

The data analysis performed to evaluate the third option provided by the requestor indicates that the 316 cases reporting a total hip replacement procedure with an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture have a longer average length of stay (4.0 days versus 2.3 days) and higher average costs ($18,304 versus $14,326) compared to all the cases in MS-DRG 470. The results are also consistent with the requestor's findings that there were approximately 300 cases reporting a total hip replacement procedure with an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture. Our clinical advisors noted that while the data shows a longer length of stay and higher average costs for these cases under option 3, the analysis of the cases reporting a total hip replacement procedure without an oxidized zirconium bearing surface implant with a principal diagnosis of hip fracture under option 2 also demonstrated a longer length of stay and higher average costs. They therefore recommended we conduct further review specifically of those cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture, with or without an oxidized zirconium bearing surface implant.

Based on the advice of our clinical advisors and in connection with the request for CMS to examine the claims data and consider alternative configurations, we performed additional analysis of those cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture for both MS-DRGs 469 and 470. The procedure codes for the hip replacement procedures included in this additional analysis are displayed in Table 6P.1d and the diagnosis codes for hip fracture included in this additional analysis are displayed in Table 6P.1e. Our findings are shown in the following table.

As shown in the table, there was a total of 14,163 cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture with an average length of stay of 7.2 days and average costs of $21,951 in MS-DRG 469. There was a total of 47,632 cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture with an average length of stay of 4.5 days and average costs of $16,092 in MS-DRG 470. The average length of stay for the cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture in MS-DRGs 469 and 470 were longer (7.2 days versus 5.9 days and 4.5 versus 2.3 days, respectively) compared to all the cases in their assigned MS-DRGs. The average costs of the cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture in MS-DRG 469 were approximately $175 less when compared to the average costs of all Start Printed Page 32510cases in MS-DRG 469 ($21,951 versus $22,126) and slightly more for MS-DRG 470 ($16,092 versus $14,326). Our clinical advisors support differentiating the cases reporting a total hip replacement procedure with a principal diagnosis of hip fracture from those cases without a hip fracture by assigning them to a new MS-DRG. They noted that clinically, individuals who undergo hip replacement following hip fracture tend to require greater resources for effective treatment than those without hip fracture. They further noted that the increased complexity associated with hip fracture patients can be attributed to the post traumatic state and the stress of pain, possible peri-articular bleeding, and the fact that this subset of patients, most of whom have fallen as the cause for their fracture, may be on average more frail than those who require hip replacement because of degenerative joint disease.

We applied the criteria to create subgroups in a base MS-DRG as discussed in section II.D.1.b. of this FY 2021 IPPS/LTCH PPS proposed rule. As shown in the table that follows, a three-way split of this base MS-DRG failed to meet the criterion that there be at least a 20% difference in average costs between the CC and NonCC subgroup and also failed to meet the criterion that there be at least a $2,000 difference in average costs between the CC and NonCC subgroup. The following table illustrates our findings.

We then applied the criteria for a two-way split for the “with MCC and without MCC” subgroups and found that all five criteria were met. For the proposed new MS-DRGs, there is at least (1) 500 cases in the MCC subgroup and 500 cases in the without MCC subgroup; (2) 5 percent of the cases in the MCC group and 5 percent 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. The following table illustrates our findings.

For FY 2021, we are proposing to create new MS-DRG 521 (Hip Replacement with Principal Diagnosis of Hip Fracture with MCC) and new MS-DRG 522 (Hip Replacement with Principal Diagnosis of Hip Fracture without MCC). We refer the reader to Table 6P.1d for the list of procedure codes describing hip replacement procedures and to Table 6P.1e for the list of diagnosis codes describing hip fracture diagnoses that we are proposing to define in the logic for these proposed new MS-DRGs.

We also note that the Comprehensive Care for Joint Replacement (CJR) model includes episodes triggered by MS-DRG 469 with hip fracture and MS-DRG 470 with hip fracture. Given the proposal to create proposed new MS-DRG 521 and MS-DRG 522, we seek comment on the effect this proposal would have on the CJR model and whether to incorporate MS-DRG 521 and MS-DRG 522, if finalized, into the CJR model's proposed extension to December 31, 2023. As discussed in the CJR proposed rule “Comprehensive Care for Joint Replacement Model Three-Year Extension and Changes to Episode Definition and Pricing” (85 FR 10516), we proposed to extend the duration of the CJR model. This extension, if finalized, would revise certain aspects of the CJR model including, but not limited to, the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements and the appeals process. Additionally, the CJR proposed rule would allow time to test the proposed changes by extending the length of the CJR model through December 31, 2023, for certain participant hospitals. The comment period for the CJR proposed rule closes on June 23, 2020 (85 FR 22978).

8. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract)

a. Kidney Transplants

We received two separate but related requests to review the MS-DRG assignment for procedures describing the transplantation of kidneys. The first request was to designate kidney transplants as a Pre-MDC MS-DRG in the same manner that other organ transplants are. The requestor performed its own analysis and stated that it found that cases with a principal diagnosis from MDC 05 (Diseases and Disorders of the Circulatory System), for example I13.2 (Hypertensive heart and chronic kidney disease with heart failure and with stage 5 chronic kidney disease, or end stage renal disease), reported with a kidney transplant from Start Printed Page 32511MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract), grouped to MS-DRG 981 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC). The requestor stated it did not appear appropriate that a kidney transplant would group to MS-DRG 981 when diagnosis code I13.2 is a legitimate principal diagnosis for this procedure. This requestor also suggested that if there was a proposal for designating the MS-DRG for kidney transplants as a Pre-MDC MS-DRG, that a severity level split should also be proposed.

As discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42128 through 42129), during our review of 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 05 (Diseases and Disorders of the Circulatory System), the cases group to MS-DRGs 981 through 983. For the reasons discussed, we proposed to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to MS-DRG 264 in MDC 05. As summarized in the FY 2020 IPPS/LTCH PPS final rule, commenters opposed our proposal to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to MS-DRG 264 in MDC 05. Commenters suggested that CMS instead assign these cases to MS-DRG 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. After consideration of public comments, we did not finalize our proposal to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to MS-DRG 264 in MDC 05. We stated that we believed it would be appropriate to take additional time to review the concerns raised by commenters consistent with the President's Executive Order on Advancing American Kidney Health (see https://www.whitehouse.gov/​presidential-actions/​executive-order-advancing-american-kidney-health/​). Accordingly, cases reporting a principal diagnosis in MDC 05 with a procedure describing kidney transplantation (that is, procedure code 0TY00Z0 or 0TY10Z0) continue to group to MS-DRGs 981 through 983 under the ICD-10 MS-DRGs Version 37, effective October 1, 2019.

In response to these public comments and the request we received on this topic for FY 2021 consideration, we examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS-DRG 652. In MS-DRG 652, there were 11,324 cases reporting one of the procedure codes listed describing a kidney transplant procedure, with an average length of stay of 6 days and average costs of $25,424.

We then analyzed claims data for cases reporting one of the procedure codes listed describing the transplantation of kidney reported in MS-DRGs 981, 982, and 983. We did not find any such cases in MS-DRG 983.

Of the 366 cases reporting procedures describing kidney transplants in MS-DRGs 981 and 982, all of the cases reported a principal diagnosis from MDC 05. The diagnoses reported are reflected in the table.

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Our clinical advisors reviewed these data. As indicated previously, in MS-DRG 652, there were 11,324 cases reporting one of the procedure codes listed describing a kidney transplant procedure, with an average length of stay of 6 days and average costs of $25,424. Our clinical advisors noted that the average costs for cases reporting transplantation of kidney with a diagnosis from MDC 05 listed previously are generally similar to the average costs of cases in MS-DRG 652. The diagnoses assigned to MDC 05 reflect conditions associated with the circulatory system. Our clinical advisors agreed that although these diagnoses might also be a reasonable indication for kidney transplant procedures, it would not be appropriate to move these diagnoses into MDC 11 because it could inadvertently cause cases reporting these same MDC 05 diagnoses with a circulatory system procedure to be assigned to an unrelated MS-DRG.

To further examine the impact of moving MDC 05 diagnoses into MDC 11, we analyzed claims data for cases reporting a circulatory system O.R. procedure and MDC 05 ICD-10-CM diagnosis code I13.2 (Hypertensive heart and chronic kidney disease with heart failure and with stage 5 chronic kidney disease, or end stage renal disease). Diagnosis code I13.2 was selected since this diagnosis was the MDC 05 diagnosis most frequently reported with kidney transplant procedures. Our findings are reflected in the following table:

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As shown in the table, if we were to move diagnosis code I13.2 to MDC 11, 4,366 cases would be assigned to the surgical class referred to as “unrelated operating room procedures” as an unintended consequence. Therefore, as an alternate option, we are proposing to modify the GROUPER logic for MS-DRG 652 by allowing the presence of a procedure code describing transplantation of the kidney to determine the MS-DRG assignment independent of the MDC of the principal diagnosis in most instances. The logic for MDC 24 (Multiple Significant Trauma) and MDC 25 (Human Immunodeficiency Virus Infections) will remain unchanged, meaning there would be two exceptions to the proposed modification of the GROUPER logic for MS-DRG 652. If a principal diagnosis of trauma and at least two significant traumas of different body sites are present, the appropriate MS-DRG in MDC 24 would be assigned based on the principal diagnosis and procedures reported, instead of MS-DRG 652. Also, if either a principal diagnosis of HIV infection or a secondary diagnosis of HIV infection with a principal diagnosis of a significant HIV related condition are present, the appropriate MS-DRG in MDC 25 would be assigned based on the principal diagnosis and procedures reported instead of MS-DRG 652. The diagram found towards the end of this discussion illustrates how the proposed MS-DRG logic for MS-DRG 652 (Kidney Transplant) would function.

We recognize MS-DRG 652 is one of the only transplant MS-DRGs not currently defined as a Pre-MDC. Pre-MDCs were an addition to Version 8 of the Diagnosis Related Groups. This was the first departure from the use of principal diagnosis as the initial variable in DRG and subsequently MS-DRG assignment. For Pre-MDC DRGs, the initial step in DRG assignment is not the principal diagnosis, but instead certain surgical procedures with extremely high costs such as heart transplant, liver transplant, bone marrow transplant, and tracheostomies performed on patients on long-term ventilation. When added in Version 8, these types of services were viewed as being very resource intensive. Our clinical advisors have noted, however, that treatment practices have shifted since the inception of Pre-MDCs. The current proposed refinements to MS-DRG 652 represent the first step in investigating how we may consider introducing this concept of allowing certain procedures to affect the MS-DRG assignment regardless of the MDC from which the diagnosis is reported in the future, with the possibility of removing the Pre-MDC category entirely. In other words, we would consider having the resource intensive procedures currently assigned to the Pre-MDC MS-DRGs determine assignment to MS-DRGs within the clinically appropriate MDC. We are making concerted efforts to continue refining the ICD-10 MS-DRGs and we believe that it is important to include the Pre-MDC category as part of our comprehensive review.

In response to the request for a severity level split, since the request to designate kidney transplants as a Pre-MDC MS-DRG did not involve a revision of the existing GROUPER logic for MS-DRG 652, we applied the five criteria as described in section II.D1.b. of the preamble of this proposed rule to determine if it would be appropriate to subdivide cases currently assigned to MS-DRG 652 into severity levels. This analysis includes 2 years of MedPAR claims data to compare the data results from 1 year to the next to avoid making determinations about whether additional severity levels are warranted based on an isolated year's data fluctuation and also, to validate that the established severity levels within a base MS-DRG are supported. Therefore, we reviewed the claims data for base MS-DRG 652 using the September 2018 update of the FY 2018 MedPAR file and the September 2019 update of the FY 2019 MedPAR file, which were used in our analysis of claims data for MS-DRG reclassification requests for FY 2020 and FY 2021. Our findings are shown in the table:

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We applied the criteria to create subgroups for the three-way severity level split. As discussed in section II.D.1.b., beginning with this FY 2021 IPPS/LTCH PPS proposed rule, we are proposing to expand the previously listed criteria to also include the Non-CC group. We found that the criterion that there be at least a 20% difference in average costs between subgroups failed for the average costs between the MCC and CC subgroups based on the data in both the FY 2018 and FY 2019 MedPAR files. The criterion that there be at least 500 cases for each subgroup also was not met, as shown in the table for both years. Specifically, for the “with MCC”, “with CC”, and “without CC/MCC” split, there were only 356 cases in the “without CC/MCC” subgroup based on the data in the FY 2019 MedPAR file and only 464 cases in the “without CC/MCC” subgroup based on the data in the FY 2018 MedPAR file. We then applied the criteria to create subgroups for the two-way severity level splits and found that the criterion that there be at least a 20 percent difference in average costs between the “with MCC” subgroup and the “without MCC” group failed for both years. The criterion that there be at least a 3-percent reduction in cost variance between the “with CC/MCC” and “without CC/MCC” subgroups also failed for both years, indicating that the current base MS-DRG 652 maintains the overall accuracy of the IPPS payment system. The claims data do not support a three-way or a two-way severity level split for MS-DRG 652, therefore for FY 2021, we are not proposing to subdivide MS-DRG 652 into severity levels.

As discussed earlier in this section we received two separate but related requests. The second request was that a new MS-DRG be created for kidney transplant cases where the patient received dialysis during the inpatient stay and after the date of the transplant. According to the requestor, transplant hospitals incur higher costs related to post-transplant care of patients who receive kidneys from “medically complex donors” (defined by the requestor as coming from organ donors over aged 60 and donors after circulatory death). The requestor also stated that their research indicated that studies consistently identified organ donors over the age of 60 and donors after circulatory death as the most significant areas for growth in increasing the number of organ transplantations, but this growth is hampered by the underutilization of these types of organs. The requestor performed its own data analysis and stated that total standardized costs were 32 percent higher for cases where the beneficiary received dialysis during the inpatient stay and after the date of transplant compared to all other kidney transplant cases currently in MS-DRG 652 (Kidney Transplant), with the additional costs serving as a disincentive to the use of viable kidneys for donation. The requestor asserted that this financially disadvantages transplant centers from using such organs, contributing to the kidney discard rate.

The following ICD-10-PCS procedure codes identify the performance of hemodialysis.

We acknowledge that the request was to review the costs of dialysis performed after kidney transplantation during the same inpatient admission, however our clinical advisors pointed out, that while not routine, it is not uncommon for a patient to require dialysis while admitted for kidney transplantation before the procedure is performed due to factors related to the availability of the organ, nor is it uncommon for a kidney that has been removed from the donor, transported, and then implanted to require dialysis before it returns to optimal function. Therefore, we examined claims data from the September 2019 update of the FY 2019 MedPAR file for all cases in MS-DRG 652 and compared the results to cases representing kidney transplantation with dialysis performed during the same inpatient admission either before or after the date of kidney transplantation. The following table shows our findings:

As shown by the table, for MS-DRG 652, we identified a total of 11,324 cases, with an average length of stay of 6.0 days and average costs of $25,424. Of the 11,324 cases in MS-DRG 652, there were 3,254 cases describing the performance of hemodialysis in an admission where the patient received a kidney transplant with an average length of stay of 7.6 days and average costs of $30,606. Our clinical advisors noted that the average length of stay and average costs of cases in MS-DRG 652 describing the performance of hemodialysis in an admission where the patient received a kidney transplant were higher than the average length of stay and average costs for all cases in the same MS-DRG.

In further analyzing this issue, noting that patients can require a simultaneous Start Printed Page 32516pancreas/kidney transplant procedure, we also examined claims data from the September 2019 update of the FY 2019 MedPAR file for all cases in Pre-MDC MS-DRG 008 (Simultaneous Pancreas/Kidney Transplant) and compared the results to cases representing simultaneous pancreas/kidney transplantation with dialysis performed during the same inpatient admission either before or after the date of kidney transplantation. The following table shows our findings:

As shown by the table, for Pre-MDC MS-DRG 008, we identified a total of 374 cases, with an average length of stay of 10.9 days and average costs of $41,926. Of the 374 cases in Pre-MDC MS-DRG 008, there were 84 cases describing the performance of hemodialysis during an admission where the patient received a simultaneous pancreas/kidney transplant with an average length of stay of 13.4 days and average costs of $49,001. Our clinical advisors again noted that the average length of stay and average costs of cases in Pre-MDC MS-DRG 008 describing the performance of hemodialysis during an admission where the patient received a simultaneous pancreas/kidney transplant were higher than the average length of stay and average costs for all cases in the same Pre-MDC MS-DRG.

Our clinical advisors believe that these hemodialysis procedures either performed before or after kidney transplant or before or after simultaneous pancreas/kidney transplant contribute to increased resource consumption for these transplant patients. While there is not a large number of cases describing a simultaneous pancreas/kidney transplant with hemodialysis procedures either performed before or after transplant represented in the Medicare data, and we generally prefer not to create a new MS-DRG unless it would include a substantial number of cases, we believe creating separate MS-DRGs for these cases would appropriately address the differential in resource consumption consistent with the President's Executive Order on Advancing American Kidney Health (see https://www.whitehouse.gov/​presidential-actions/​executive-order-advancing-american-kidney-health/​). For these reasons, we are proposing to create new MS-DRGs for the performance of hemodialysis during an admission where the patient received a kidney transplant or simultaneous pancreas/kidney transplant.

To compare and analyze the impact of our suggested modifications, we ran a simulation using the Version 37 ICD-10 MS-DRG GROUPER and the claims data from the September 2019 update of the FY 2019 MedPAR file. The following table reflects our findings for all 3,254 cases representing kidney transplantation with dialysis performed during the same inpatient admission either before or after the date of kidney transplantation with a two-way severity level split.

As shown in the table, there was a total of 2,195 cases for the kidney transplant with hemodialysis with MCC subgroup, with an average length of stay of 8.0 days and average costs of $32,360. There was a total of 1,059 cases for the kidney transplant with hemodialysis without MCC subgroup, with an average length of stay of 6.8 days and average costs of $26,972. We applied the criteria to create subgroups for the two-way severity level split for the proposed MS-DRGs, including our proposed expansion of the criteria to also include the nonCC group, and found that all five criteria were met. For the proposed MS-DRGs, there is (1) at least 500 cases in the MCC subgroup and in the without MCC subgroup; (2) at least 5 percent of the cases are in the MCC subgroup and in the without MCC subgroup; (3) at least a 20 percent difference in average costs between the MCC subgroup and the without MCC subgroup; (4) at least a $2,000 difference in average costs between the MCC subgroup and the without MCC subgroup; and (5) at least 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.Start Printed Page 32517

For the cases describing the performance of hemodialysis during an admission where the patient received a simultaneous pancreas/kidney transplant, we identified a total of 84 cases, so the criterion that there are at least 500 or more cases in any subgroup could not be met. Therefore, for FY 2021, we are not proposing to subdivide the proposed new Pre-MDC MS-DRG for the performance of hemodialysis in an admission where the patient received a simultaneous pancreas/kidney transplant into severity levels.

In summary, for FY 2021, taking into consideration that it clinically requires greater resources to perform hemodialysis during an admission where the patient received a kidney or simultaneous pancreas/kidney transplant, we are proposing to create a new Pre-MDC MS-DRG for cases describing the performance of hemodialysis during an admission where the patient received a simultaneous pancreas/kidney transplant. We are also proposing to create two new MS-DRGs with a two-way severity level split for cases describing the performance of hemodialysis in an admission where the patient received a kidney transplant in MDC 11. These proposed new MS-DRGs are proposed new Pre-MDC MS-DRG 019 (Simultaneous Pancreas/Kidney Transplant with Hemodialysis), proposed new MS-DRG 650 (Kidney Transplant with Hemodialysis with MCC) and proposed new MS-DRG 651 (Kidney Transplant with Hemodialysis without MCC). We are proposing to add the procedure codes from current Pre-MDC MS-DRG 008 to the proposed new Pre-MDC MS-DRG 019 with the procedure codes describing a hemodialysis procedure. Similarly, we are also proposing to add the procedure codes from current MS-DRG 652 to the proposed new MS-DRGs 650 and 651 with the procedure codes describing a hemodialysis procedure. We note that the procedure codes describing hemodialysis procedures are designated as non-O.R. procedures, therefore, as part of the logic for these proposed new MS-DRGs, we are also proposing to designate these codes as non-O.R. procedures affecting the MS-DRG.

The diagram illustrates how the proposed MS-DRG logic for Kidney Transplants would function. The diagram (Diagram 1.) begins by asking if the criteria for a Pre-MDC MS-DRG is met. If yes, the logic asks if the criteria for Pre-MDC MS-DRGs 018, 001-006, 014 or 007 is met. If yes, the logic directs the case to either Pre-MDC MS-DRG 018, 001-006, 014 or 007 based on the principal diagnosis and/or procedures reported. If no, the logic asks if there is a simultaneous pancreas/kidney transplant with a qualifying diagnosis reported on the claim. If no, the logic directs the case to either Pre-MDC MS-DRGs 016, 017, or 010-013 based on the principal diagnosis and/or procedures reported. If yes, the logic asks if there was a hemodialysis procedure reported on the claim. If yes, the logic assigns the case to proposed new Pre-MDC MS-DRG 019 (Simultaneous Pancreas/Kidney Transplant with Hemodialysis). If no, the logic assigns the case to existing Pre-MDC MS-DRG 008 (Simultaneous Pancreas/Kidney Transplant).

If the criteria for a Pre-MDC MS-DRG were not met at the first step, the GROUPER logic asks if there was a principal diagnosis of trauma and at least two significant traumas of different body sites. If yes, the logic directs the case to the appropriate MS-DRG in MDC 24 based on the principal diagnosis and procedures reported. If no, the logic asks if there was either a principal diagnosis of HIV infection or a secondary diagnosis of HIV infection with a principal diagnosis of a significant HIV related condition. If yes, the logic directs the case to the appropriate MS-DRG in MDC 25 based on the principal diagnosis and procedures reported. If no, the logic asks if there is kidney transplant procedure reported on the claim. If no, the logic directs the case to the appropriate MDC and MS-DRG based on the principal diagnosis and procedures reported. If yes, the logic asks if there was a hemodialysis procedure reported on the claim. If yes, the logic assigns the case to proposed new MS-DRGs 650 or 651 (Kidney Transplant with Hemodialysis with MCC or without MCC, respectively). If no, the logic assigns the case to existing MS-DRG 652 (Kidney Transplant).

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b. Proposed Addition of Diagnoses to Other Kidney and Urinary Tract Procedures Logic

We received a request to add 29 ICD-10-CM diagnosis codes to the list of principal diagnoses assigned to MS-DRGs 673, 674, and 675 (Other Kidney and Urinary Tract Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) when reported with procedure codes describing the insertion of totally implantable vascular access devices (TIVADs) and tunneled vascular access devices. The list of 29 ICD-10-CM diagnosis codes submitted by the requestor, as well as their current MDC assignments, are found in the table:

The requestor stated that by adding the codes listed, cases reporting principal diagnosis codes describing complications of dialysis access sites and principal diagnosis codes describing kidney disease in the setting of diabetes or hypertension, would group to MS-DRGs 673, 674, and 675 when a TIVAD or tunneled vascular access device is inserted. The requestor stated that patients who have kidney transplant complications or dialysis catheter complications typically also have chronic kidney disease, end stage renal disease (ESRD) or resolving acute tubular necrosis (ATN) but ICD-10-CM coding guidelines require a complication code to be sequenced first. The requester stated that when reporting a diagnosis code describing ESRD and diabetes, a diabetes code from ICD-10-CM Chapter 4 (Endocrine, Nutritional and Metabolic Diseases) must be sequenced first and when coding ESRD, hypertension, and heart failure, the combination code I13.2 (Hypertensive heart and chronic kidney disease with heart failure and with stage 5 chronic kidney disease or end stage renal disease) must be sequenced first per coding guidelines. The requestor pointed out that code I13.11 (Hypertensive heart and chronic kidney disease without heart failure with stage 5 CKD or ESRD) is currently one of the qualifying principal diagnoses in MS-DRGs 673, 674, and 675 when reported with procedure codes describing the insertion of TIVADs or tunneled vascular access devices; therefore, according to the requestor, diagnosis code I13.2 should reasonably be added.

To begin our analysis, we reviewed the GROUPER logic for MS-DRGs 673, 674, and 675 including the special logic in MS-DRGs 673, 674, and 675 for certain MDC 11 diagnoses reported with procedure codes for the insertion of tunneled or totally implantable vascular access devices. As discussed in the FY 2003 IPPS/LTCH PPS final rule (67 FR Start Printed Page 3252049993 through 49994), the procedure code for the insertion of totally implantable vascular access devices was added to the GROUPER logic of DRG 315 (Other Kidney and Urinary Tract O.R. Procedures), the predecessor DRG of MS-DRGs 673, 674, and 675, when combined with principal diagnoses specifically describing renal failure, recognizing that inserting these devices as an inpatient procedure for the purposes of hemodialysis can lead to higher average charges and longer lengths of stay for those cases.

We next reviewed the 29 ICD-10-CM codes submitted by the requestor. Our clinical advisors noted that ICD-10-CM diagnosis codes E10.21, E11.21, and E13.21 describing diabetes mellitus with diabetic nephropathy; codes E10.29, E11.29, and E13.29 describing diabetes mellitus with other diabetic kidney complication; T80.211A, T80.212A, and T80.218A describing infection due to central venous catheters; and codes T82.7XXA, T82.818A, T82.828A, T82.838A, T82.848A, T82.858A, T82.868A, and T82.898A describing complications of cardiac and vascular prosthetic devices, implants and grafts, are not necessarily indicative of a patient having renal (kidney) failure requiring the insertion of a TIVAD or a tunneled vascular access device to allow access to the patient's blood for hemodialysis purposes. TIVADs and tunneled vascular access devices are widely used to provide central venous access for the administration of intravenous antibiotics, chemotherapeutic agents, parenteral nutrition and other treatments. They are used in a variety of disease groups, and in both children and adults. As such, our clinical advisors do not support adding these diagnoses to the list of principal diagnosis codes in MS-DRG 673, 674, and 675 when reported with procedure codes describing the insertion of TIVADs and tunneled vascular access devices. They noted that TIVADs and tunneled vascular access devices may be inserted for a variety of principal diagnoses, and that adding these 17 diagnoses that are not specific to renal failure would not maintain the clinical coherence with other cases in this subset of cases in MS-DRGs 673, 674, and 675.

Our clinical advisors also do not support adding ICD-10-CM diagnosis code I13.2 (Hypertensive heart and chronic kidney disease with heart failure and with stage 5 chronic kidney disease, or end stage renal disease) to the special logic in MS-DRGs 673, 674, and 675. As discussed previously, code I13.2 is assigned to MDC 05 (Diseases and Disorders of the Circulatory System). Our clinical advisors agreed it would not be appropriate to move this diagnosis into MDC 11 because it would inadvertently cause cases reporting this same MDC 05 diagnosis with circulatory system procedures to be assigned to an unrelated MS-DRG.

Therefore, for the reasons described previously, we are not proposing to add the following 18 ICD-10-CM codes to the list of principal diagnosis codes for MS-DRGs 673, 674, and 675 when reported with a procedures code describing the insertion of a TIVAD or a tunneled vascular access device: E10.21, E10.29, E11.21, E11.29, E13.21, E13.29, I13.2, T80.211A, T80.212A, T80.218A, T82.7XXA, T82.818A, T82.828A, T82.838A, T82.848A, T82.858A, T82.868A, and T82.898A.

We then reviewed the remaining 11 diagnosis codes submitted by the requestor. Codes T82.41XA, T82.42XA, T82.43XA and T82.49XA describe mechanical complications of vascular dialysis catheters. Our clinical advisors believe the insertion of TIVADs or tunneled vascular access devices for the purposes of hemodialysis is clearly clinically related to diagnosis codes describing a mechanical complication of a vascular dialysis catheter and that for clinical coherence, these cases should be grouped with the subset of cases that report the insertion of totally implantable vascular access devices or tunneled vascular access devices as an inpatient procedure for the purposes of hemodialysis for renal failure.

Codes T82.41XA, T82.42XA, T82.43XA and T82.49XA that describe mechanical complications of vascular dialysis catheters are currently assigned to MDC 05 and would require reassignment to MDC 11 in MS-DRGs 673, 674, and 675 to group with the subset of cases that report the insertion of totally implantable vascular access devices or tunneled vascular access devices as an inpatient procedure for the purposes of hemodialysis for renal failure. We examined claims data from the September 2019 update of the FY 2019 MedPAR file for all cases reporting procedures describing the insertion of TIVADs or tunneled vascular access devices with a principal diagnosis from the T82.4- series in MDC 05 and compared this data to cases in MS-DRGs 673, 674 and 675. The following table shows our findings:

Start Printed Page 32521

As shown in the table, there were 13,068 cases in MS-DRG 673 with an average length of stay of 11 days and average costs of $26,528. There were 1,025 cases reporting a principal diagnosis describing a mechanical complication of vascular dialysis catheter, with a secondary diagnosis of MCC, and a procedure code for the insertion of a TIVAD or tunneled vascular access device with an average length of stay of 4.6 days and average costs of $14,882. There were 6,592 cases in MS-DRG 674 with an average length of stay of 7.6 days and average costs of $17,491. There were 2 cases reporting a principal diagnosis describing a mechanical complication of vascular dialysis catheter, with a secondary diagnosis of CC, and a procedure code for the insertion of a TIVAD or tunneled vascular access device with an average length of stay of 6 days and average costs of $15,016. There were 437 cases in MS-DRG 675 with an average length of stay of 3.4 days and average costs of $12,506. There was one case reporting a principal diagnosis describing a mechanical complication of vascular dialysis catheter, without a secondary diagnosis of CC or MCC, and a procedure code for the insertion of a TIVAD or tunneled vascular access device with a length of stay of 3 days and costs of $9,317. Our clinical advisors noted that the average length of stay and average costs of cases reporting a diagnosis describing a mechanical complication of a vascular dialysis catheter and the insertion of a TIVAD or a tunneled vascular access device are lower than for all cases in MS-DRGs 673, 674, and 675, respectively.

For the reasons discussed, our clinical advisors believe that it is clinically appropriate for the four ICD-10-CM diagnosis codes describing a mechanical complication of a vascular dialysis catheter to group to the subset of GROUPER logic that recognizes the insertion of totally implantable vascular access devices or tunneled vascular access devices as an inpatient procedure for the purposes of hemodialysis. Therefore, we are proposing to reassign ICD-10-CM diagnosis codes T82.41XA, T82.42XA, T82.43XA, and T82.49XA from MDC 05 in MS-DRGs 314, 315, and 316 (Other Circulatory System Diagnoses with MCC, with CC, and without CC/MCC, respectively) to MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) assigned to MS-DRGs 673, 674, and 675 (Other Kidney and Urinary Tract Procedures with MCC, with CC, and without CC/MCC, respectively) and 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC, with CC, and without CC/MCC, respectively).

In reviewing ICD-10-CM codes E10.22, E11.22, and E13.22 describing diabetes mellitus with diabetic chronic kidney disease, we noted that related ICD-10-CM diagnosis code E09.22 (Drug or chemical induced diabetes mellitus with diabetic chronic kidney disease) is also not included in the current list of diagnosis codes included in the special logic in MS-DRGs 673, 674, and 675 for certain MDC 11 diagnoses reported with procedure codes for the insertion of tunneled or totally implantable vascular access devices, and therefore we included E09.22 in our review. ICD-10-CM assumes a causal relationship between diabetes mellitus and chronic kidney disease. According to the ICD-10-CM Official Guidelines for Coding and Reporting, the word “with” or “in” should be interpreted to mean “associated with” or “due to” when it appears in a code title, the Alphabetic Index (either under a main term or subterm), or an instructional note in the Tabular List, meaning these conditions should be coded as related even in the absence of provider documentation explicitly linking them, unless the documentation clearly states the conditions are unrelated. To code diabetic chronic kidney disease in ICD-10-CM, instructional notes direct to “code first any associated diabetic chronic kidney disease” (that is, E09.22, E10.22, E11.22, and E13.22) with a second code from subcategory of N18 Start Printed Page 32522listed after the diabetes code to specify the stage of chronic kidney disease. Recognizing that coding guidelines instruct to code E09.22, E10.22, E11.22, and E13.22 before codes that specify the stage of chronic kidney disease, our clinical advisors recommend adding diabetic codes E09.22, E10.22, E11.22, and E13.22 when reported with a secondary diagnosis of either N18.5 Chronic kidney disease, stage 5) or N18.6 (End stage renal disease) to the special logic in MS-DRGs 673, 674, and 675 since these diagnosis code combinations describe an indication that could require the insertion of a totally implantable vascular access device or a tunneled vascular access device to allow access to the patient's blood for hemodialysis purposes.

ICD-10-CM codes T86.11, T86.12, T86.13, and T86.19 describe complications of kidney transplant and are currently assigned to MDC 11. Our clinical advisors believe these diagnoses are also indications for hemodialysis and these cases represent a distinct, recognizable clinical group similar to those cases in the subset of cases assigned to the special logic in MS-DRGs 673, 674, and 675 when reported with procedure codes describing the insertion of totally implantable vascular access devices or tunneled vascular access devices for hemodialysis.

In summary, we are proposing to add ICD-10-CM codes E09.22, E10.22, E11.22, and E13.22, when reported with a secondary diagnosis of N18.5 or N18.6, to the list of principal diagnosis codes in the subset of GROUPER logic in MS-DRGs 673, 674, and 675 that recognizes the insertion of totally implantable vascular access devices or tunneled vascular access devices as an inpatient procedure for the purposes of hemodialysis. We are also proposing to add ICD-10-CM codes T86.11, T86.12, T86.13, and T86.19 to the list of principal diagnosis codes in this subset of GROUPER logic in MS-DRGs 673, 674, and 675.

Lastly, we reviewed the current list of 20 MDC 11 diagnoses assigned to the special logic in MS-DRGs 673, 674, and 675 when reported with procedure codes for the insertion of tunneled or totally implantable vascular access devices. The list of MDC 11 diagnosis codes currently included in the special logic of MS-DRGs 673, 674, and 675 are found in the following table:

Our clinical advisors pointed out that ICD-10-CM codes I12.9, I13.10, N18.1, N18.2, N18.3, N18.4, and N18.9 do not describe renal failure and they do not describe indications that would generally require the insertion of totally implantable vascular access devices or tunneled vascular access devices for the purposes of hemodialysis. Our advisors Start Printed Page 32523note hemodialysis replicates the function of the kidneys. In cases of acute kidney failure and anuria, hemodialysis is indicated to prevent urea and other waste material from building up in the blood until the kidneys return to normal function. A diagnosis of chronic kidney disease stages 1 through 4, however, means the kidneys still have the ability to filter waste and extra fluid out of the blood. Dialysis is not often not initiated in chronic kidney disease until the chronic kidney disease progresses to stage 5 or ESRD, which is defined as when kidney function drops to 15 percent or less. Our clinical advisors stated that these seven codes do not describe indications requiring the insertion of totally implantable vascular access devices or tunneled vascular access devices for hemodialysis and recommended these codes be removed from the special logic in MS-DRGs 673, 674, and 675.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for MS—DRGs 673, 674, and 675 for this subset of cases to determine if there were any cases that reported one of the seven ICD-10-CM codes in the special logic of MS-DRGs 673, 674, and 675 that do not necessarily describe indications requiring the insertion of totally implantable vascular access devices or tunneled vascular access devices for hemodialysis, the frequency with which they were reported and the relative resource use as compared with all cases assigned to the special logic in MS-DRGs 673, 674, and 675. The following table shows our findings:

As shown by the table, for MS-DRG 673, we identified a total of 7,391 cases assigned to the special logic within this MS-DRG with an average length of stay of 12.1 days and average costs of $28,273. Of these 7,391 cases in the subset of MS-DRG 673, there were 34 cases describing insertion of a TIVAD or tunneled vascular access device with a principal diagnosis of I12.9, I13.10, N18.1, N18.2, N18.3, N18.4, or N18.9 with an average length of stay of 14.2 days and average costs of $27,844. For MS-DRG 674, we identified a total of 3,055 cases assigned to the special logic within this MS-DRG with an average length of stay of 7.8 days and average costs of $17,107. Of these 3,055 cases in the subset of MS-DRG 674, there were 30 cases describing insertion of a TIVAD or tunneled vascular access device with a principal diagnosis of I12.9, I13.10, N18.1, N18.2, N18.3, N18.4, or N18.9 with an average length of stay of 7.2 days and average costs of $11,227. For MS-DRG 675, we identified a total of 58 cases assigned to the special logic within this MS-DRG with an average length of stay of 6.1 days and average costs of $12,582. Of these 58 cases in the subset of MS-DRG 675, there was one case describing insertion of a TIVAD or tunneled vascular access device with a principal diagnosis of I12.9, I13.10, N18.1, N18.2, N18.3, N18.4, or N18.9 with a length of stay of 4 days and costs of $6,549. Overall, for MS-DRGs 673, 674 and 675, there were a relatively small number of cases reporting a principal diagnosis of I12.9, I13.10, N18.1, N18.2, N18.3, N18.4, or N18.9 and a procedure code describing the insertion of a TIVAD or tunneled vascular access device demonstrating Start Printed Page 32524that these conditions are not typically addressed by insertion of these devices.

As stated previously, TIVADs and tunneled vascular access devices may be inserted for a variety of principal diagnoses. Our clinical advisors believe that continuing to include these seven diagnoses that are not specific to renal failure or that do not otherwise describe indications requiring the insertion of totally implantable vascular access devices or tunneled vascular access devices for hemodialysis would not maintain clinical coherence with other cases in this subset of cases in MS-DRGs 673, 674, and 675. Therefore, for the reasons stated, we are proposing to remove ICD-10-CM codes I12.9, I13.10, N18.1, N18.2, N18.3, N18.4, and N18.9 from the subset of GROUPER logic in MS-DRGs 673, 674, and 675 that recognizes the insertion of totally implantable vascular access devices or tunneled vascular access devices as an inpatient procedure for the purposes of hemodialysis.

9. MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms): Inferior Vena Cava Filter Procedures

We received a request to review the GROUPER logic in MDC 17. The requester stated that cases reporting the introduction of a high dose chemotherapy agent, or reporting a chemotherapy principal diagnosis with a secondary diagnosis describing acute leukemia, are assigned to medical MS-DRGs 837 (Chemotherapy with Acute Leukemia as Secondary Diagnosis or with High Dose Chemotherapy Agent with MCC), MS-DRG 838 (Chemotherapy with Acute Leukemia as Secondary Diagnosis with CC or High Dose Chemotherapy Agent), and MS-DRG 839 (Chemotherapy with Acute Leukemia as Secondary Diagnosis without CC/MCC). However, when procedure codes describing the placement of an inferior vena cava (IVC) filter, namely 06H03DZ (Insertion of intraluminal device into inferior vena cava, percutaneous approach), are also reported with the same codes describing the introduction of a high dose chemotherapy agent or report a chemotherapy principal diagnosis with a secondary diagnosis describing acute leukemia, the cases are assigned to surgical MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedure with and without CC/MCC, respectively). According to the requestor, the additional resources used by the hospital to place an IVC filter should not result in assignment to lower-weighted MS-DRGs.

The ICD-10-PCS codes that describe the insertion of an infusion device or the insertion of an intraluminal device into the inferior vena cava are listed in the following table.

Our analysis of this grouping issue confirmed that, when procedure code 06H03DZ (Insertion of intraluminal device into inferior vena cava, percutaneous approach) is reported with a procedure code describing the introduction of a high dose chemotherapy agent, or when it is reported with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia, these cases group to surgical MS-DRGs 829 and 830. ICD-10-PCS procedure code 06H03DZ identifies the placement of an IVC filter and is designated as an extensive O.R. procedure for purposes of MS-DRG assignment. We then examined the GROUPER logic for medical MS-DRGs 837, 838 and 839. The GROUPER logic for MS-DRGs 837, 838, and 839 is defined by a principal diagnosis of chemotherapy identified with ICD-10-CM diagnosis codes Z08 (Encounter for follow-up examination after completed treatment for malignant neoplasm), Z51.11 (Encounter for antineoplastic chemotherapy) or Z51.112 (Encounter for antineoplastic immunotherapy) along with a secondary diagnosis of acute leukemia or a procedure code for the introduction of a high dose chemotherapy agent as reflected in the logic table:

Start Printed Page 32525

We refer the reader to the ICD-10 MS-DRG Version 37 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 for complete documentation of the GROUPER logic for the listed MS-DRGs.

We examined claims data from the September 2019 update of the FY 2019 MedPAR file for all cases in MS-DRGs 829 and 830 and for cases reporting the insertion of an IVC filter (procedure codes 06H00DZ, 06H03DZ, and 06H04DZ) with a procedure code describing the introduction of a high dose chemotherapy agent, or with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia. Our findings are shown in the following table.

As shown in the table, there were a total of 1,697 cases with an average length of stay of 9.2 days and average costs of $24,188 in MS-DRG 829. Of those 1,697 cases, there were 18 cases reporting procedure code 06H03DZ with a procedure code describing the introduction of a high dose chemotherapy agent, or with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia with an average length of stay of 25.6 days and average costs of $83,861. We note that there were no cases reporting procedure codes 06H00DZ or 06H04DZ. For MS-DRG 830, there were a total of 311 cases with an average length of stay of 2.9 days and average costs of $10,885. We found zero cases in MS-DRG 830 reporting a procedure code for the insertion of an IVC filter with a procedure code describing the introduction of a high dose chemotherapy agent, or with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia. Based on the claims data, the cases reporting procedure code 06H03DZ with a procedure code describing the introduction of a high dose chemotherapy agent, or with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia have higher average costs ($83,861 versus $24,188) and a longer average length of stay (25.6 Start Printed Page 32526days versus 9.2 days) than all the cases in MS-DRG 829.

We also reviewed the claims data for MS-DRGs 837, 838, and 839. Our findings are shown in the following table.

As shown in the table, there were a total of 1,776 cases with an average length of stay of 17 days and average costs of $40,667 in MS-DRG 837. There were a total of 1,172 cases with an average length of stay of 7.3 days and average costs of $16,594 in MS-DRG 838. There were a total of 810 cases with an average length of stay of 5 days and average costs of $10,994 in MS-DRG 839. Based on the claims data, the cases reporting procedure code 06H03DZ with a procedure code describing the introduction of a high dose chemotherapy agent, or with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia again have higher average costs ($83,861 versus $40,667, $16,594, and $10,994 respectively) and a longer average length of stay (25.6 days versus 17 days, 7.3 days and 5 days, respectively) than all the cases in MS-DRG 837, 838, and 839. Our clinical advisors reviewed the claims data and noted there were only a small number of cases reporting procedure code 06H03DZ with a procedure code describing the introduction of a high dose chemotherapy agent, or with a chemotherapy principal diagnosis code with a secondary diagnosis code describing acute leukemia, and believe there may have been other factors contributing to the higher costs for these cases. Our clinical advisors stated the procedure to insert an IVC filter is not surgical in nature and recommended further analysis.

We performed further analysis on the other ICD-10-PCS codes describing the insertion of a device into the inferior vena cava to identify if they have a similar extensive O.R. designations and noted inconsistencies among the O.R. and non-O.R. designations. In Version 37 of the ICD-10 MS-DRGs, ICD-10-PCS procedure codes 06H003T, 06H003Z, 06H033T, 06H033Z, and 06H043Z identify the insertion of an infusion device into the inferior vena cava with various approaches and are classified as Non-O.R. procedures. ICD-10-PCS procedure codes 06H00DZ, 06H03DZ, and 06H04DZ identify the insertion of an intraluminal device into the inferior vena cava (IVC filter procedure) with various approaches and are classified as extensive O.R. procedures. Our clinical advisors indicated that codes 06H00DZ, 06H03DZ, and 06H04DZ describing the insertion of an intraluminal device into the inferior vena cava do not require the resources of an operating room, that the procedure to insert an IVC filter is not surgical in nature and that these procedures are comparable to the related ICD-10-PCS procedure codes that describe the insertion of infusion devices into the inferior vena cava that are currently designated as Non-O.R. procedures. Our clinical advisors believe that, given the similarity in factors such as complexity, resource utilization, and lack of a requirement for anesthesia administration between all procedures describing insertion of a device into the inferior vena cava, it would be more appropriate to designate these three ICD-10-PCS codes describing the insertion of an intraluminal device into the inferior vena cava as Non-O.R. procedures. Therefore, we are proposing to remove ICD-10-PCS procedure codes 06H00DZ, 06H03DZ, and 06H04DZ from the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under this proposal, these procedures would no longer impact MS-DRG assignment.

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

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 (Non-Extensive 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.

In addition to this internal review, we also consider requests that we receive 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.

Based on the results of our review of the claims data from the September 2019 update of the FY 2019 MedPAR file, as well as our review of the requests that we received to examine cases found to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, we are proposing to move the cases reporting the procedures and/or principal diagnosis codes described in this section of this rule 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.Start Printed Page 32527

a. Horseshoe Abscess With Drainage

We received a request to reassign cases reporting a principal diagnosis of a horseshoe abscess with a procedure involving open drainage of perineum subcutaneous tissue and fascia from MS-DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 06. ICD-10-CM diagnosis code K61.31 (Horseshoe abscess) is used to report a horseshoe abscess and is currently assigned to MDC 06 (Diseases and Disorders of the Digestive System). A horseshoe abscess is a specific type of ischiorectal abscess caused by an abscessed anal gland located in the posterior midline of the anal canal with suppuration found in the ischiorectal fossae. ICD-10-PCS procedure code 0J9B0ZZ (Drainage of perineum subcutaneous tissue and fascia, open approach) may be reported to describe drainage of an abscess in the ischiorectal space and is currently assigned to MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue), MDC 09 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast), MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) and MDC 24 (Multiple Significant Trauma).

Our analysis of this grouping issue confirmed that, when a horseshoe abscess is reported as a principal diagnosis with ICD-10-PCS procedure code 0J9B0ZZ, these cases group to MS-DRGs 987, 988, and 989. As previously noted, 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 to identify cases reporting procedure code 0J9B0ZZ with a principal diagnosis of K61.31 that are currently grouping to MS-DRGs 987, 988, and 989. Our findings are shown in this table:

As previously noted, the requestor asked that we reassign these cases to MS-DRGs 356, 357, and 358. We therefore examined the data for all cases in MS-DRGs 356, 357, and 358. Our findings are shown in this table:

While our clinical advisors noted that the average length of stay and average costs of cases in MS-DRGs 356, 357, and 358 are higher than the average length of stay and average costs for the small subset of cases reporting procedure code 0J9B0ZZ and a principal diagnosis code of K61.31 in MS-DRGs 987, 988, and 989, they believe that the procedure is clearly clinically related to the principal diagnosis and is a logical accompaniment of the diagnosis. Therefore, they believe it is clinically appropriate for the procedure to group to the same MS-DRGs as the principal diagnosis.

Therefore, we are proposing to add ICD-10-PCS procedure code 0J9B0ZZ to MDC 06 in MS-DRGs 356, 357, and 358. Under this proposal, cases reporting procedure code 0J9B0ZZ in conjunction with a principal diagnosis from MDC 06, such as diagnosis code K61.31, would group to MS-DRGs 356, 357, and 358.

b. Chest Wall Deformity With Supplementation

We received a request to reassign cases reporting a principal diagnosis of acquired deformity of chest and rib with a procedure involving the placement of a biological or synthetic material that supports or strengthens the body part 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-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 08.

ICD-10-CM diagnosis code M95.4 (Acquired deformity of chest and rib) is used to report this condition and is currently assigned to MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue). ICD-10-PCS procedure codes 0WU807Z (Supplement chest wall with autologous tissue substitute, open approach), 0WU80JZ (Supplement chest wall with synthetic substitute, open approach) Start Printed Page 32528and 0WU80KZ (Supplement chest wall with nonautologous tissue substitute, open approach) may be reported to describe procedures to supplement or reinforce the chest wall with biologic or synthetic material. ICD-10-PCS procedure codes 0WU807Z and 0WU80KZ are currently assigned to MDC 04 (Diseases and Disorders of the Respiratory System). We note that ICD-10-PCS procedure code 0WU80JZ is already assigned to MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) as well as MDC 04 (Diseases and Disorders of the Respiratory System), so these cases already group to MS-DRGs 515, 516, and 517 when reported with a principal diagnosis of ICD-10-CM diagnosis code M95.4.

Our analysis of this grouping issue confirmed that when diagnosis code M95.4 is reported as a principal diagnosis with ICD-10-PCS procedure codes 0WU807Z or 0WU80KZ, these cases group to MS-DRGs 981, 982, and 983. As noted in the previous discussion, 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 to identify cases reporting procedure codes 0WU807Z or 0WU80KZ with principal diagnosis code M95.4 that are currently grouping to MS-DRGs 981, 982, and 983. Our analysis showed one case reporting a principal diagnosis of code M95.4 with procedure code 0WU807Z, with a length of stay of 2.0 days and average costs of $11,594 in MS-DRG 983. We found zero cases in MS-DRGs 981 and 982 reporting procedure codes 0WU807Z or 0WU80KZ and a principal diagnosis of M95.4.

We also examined the data for cases in MS-DRGs 515, 516, and 517, and our findings are shown in this table.

While there is only one case reporting procedure codes 0WU807Z or 0WU80KZ with principal diagnosis M95.4 in MS-DRGs 981, 982, and 983, our clinical advisors reviewed this request and believe that the cases involving procedures of chest wall supplementation with a principal diagnosis of acquired deformity of chest and rib represent a distinct, recognizable clinical group similar to those cases in MS-DRGs 515, 516, and 517, and that procedures reporting 0WU80JZ and 0WU80KZ are clearly related to the principal diagnosis code. They believe that it is clinically appropriate for the three ICD-10-PCS codes describing procedures to supplement or reinforce the chest wall with biologic or synthetic material to group to the same MS-DRGs as the principal diagnoses.

Therefore, we are proposing to add ICD-10-PCS procedure codes 0WU807Z and 0WU80KZ to MDC 08 in MS-DRGs 515, 516, and 517. Under this proposal, cases reporting procedure codes 0WU807Z or 0WU80KZ in conjunction with a principal diagnosis code from MDC 08 would group to MS-DRGs 515, 516, and 517.

c. Hepatic Malignancy With Hepatic Artery Embolization

We received a request to reassign cases for hepatic malignancy when reported with procedures involving the embolization of a hepatic artery from MS-DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 423, 424, and 425 (Other Hepatobiliary or Pancreas Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 08.

ICD-10-PCS procedure code 04V33DZ (Restriction of hepatic artery with intraluminal device, percutaneous approach) may be reported to describe embolization procedures to narrow or partially occlude a hepatic artery with an intraluminal device and is currently assigned to MDC 05 (Diseases and Disorders of the Circulatory System). ICD-10-PCS procedure code 04L33DZ (Occlusion of hepatic artery with intraluminal device, percutaneous approach) may be reported to describe embolization procedures to completely close off a hepatic artery with an intraluminal device and is currently assigned to MDC 05 (Diseases and Disorders of the Circulatory System) and MDC 06 (Diseases and Disorders of the Digestive System).

The requestor did not provide an ICD-10-CM diagnosis code in its request so we reviewed ICD-10-CM diagnosis codes in the C00 through D49 code range to identify conditions that describe hepatic malignancies. We identified the following fourteen ICD-10-CM diagnosis codes, all currently assigned to MDC 07 (Diseases and Disorders of the Hepatobiliary System & Pancreas):

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Our analysis of this grouping issue confirmed that, when one of the fourteen hepatic malignancy ICD-10-CM diagnosis codes previously listed is reported as a principal diagnosis with ICD-10-PCS procedure code 04L33DZ, these cases group to MS-DRGs 987, 988, and 989. However, we noted that when one of these fourteen hepatic malignancy ICD-10-CM diagnosis codes is reported as a principal diagnosis with ICD-10-PCS procedure code 04V33DZ, these cases currently group to MS DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). As noted in the previous discussion, 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”.

To understand the resource use for the subset of cases reporting procedure code 04V33DZ with a principal diagnosis of hepatic malignancy that are currently grouping to MS-DRGs 981, 982, and 983, we examined claims data for the average length of stay and average costs for these cases. Our findings are shown in the following table:

We then examined the claims data to identify cases reporting procedure code 04L33DZ reported with a principal diagnosis of hepatic malignancy that are currently grouping to MS-DRGs 987, 987, and 989. Our findings are shown in the following table:

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We also examined the data for cases in MS-DRGs 423, 424, and 425, and our findings are shown in the following table:

While the average lengths of stay of cases in MS-DRGs 423, 424, and 425 are longer than the average lengths of stay for the subset of cases reporting procedure codes 04V33DZ or 04L33DZ and a principal diagnosis of hepatic malignancy, the average costs of these same cases are generally similar. Our clinical advisors also believe that these procedures are clearly related to the principal diagnoses, as they are an appropriate treatment for a number of hepatobiliary diagnoses, including cancer and it is clinically appropriate for the procedures to group to the same MDC as the principal diagnoses.

Therefore, we are proposing to add ICD-10-PCS procedure codes 04V33DZ and 04L33DZ to MDC 07 in MS-DRGs 423, 424 and 425. Under this proposal, cases reporting procedure codes 04V33DZ or 04L33DZ in conjunction with a principal diagnosis code for a hepatic malignancy from MDC 07 would group to MS-DRGs 423, 424 and 425.

d. Hemoptysis With Percutaneous Artery Embolization

We received a request to reassign cases for hemoptysis when reported with a procedure describing percutaneous embolization of an upper artery with an intraluminal device 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-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 04. Hemoptysis is the expectoration of blood from some part of the respiratory tract. ICD-10-CM diagnosis code R04.2 (Hemoptysis) is used to report this condition and is currently assigned to MDC 04 (Diseases and Disorders of the Respiratory System). ICD-10-PCS procedure code 03LY3DZ (Occlusion of upper artery with intraluminal device, percutaneous approach) may be reported to describe percutaneous embolization of an upper artery with an intraluminal device and is currently assigned to MDC 05 (Diseases and Disorders of the Circulatory System), MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) and MDC 24 (Multiple Significant Trauma).

Our analysis of this grouping issue confirmed that when a procedure describing percutaneous embolization of an upper artery with an intraluminal device (such as ICD-10-PCS procedure code 03LY3DZ) is reported with a principal diagnosis from MDC 04, such as R04.2, these cases group to MS-DRGs 981, 982, and 983. During our review of this issue, we also examined claims data for similar procedures 03LY0DZ (Occlusion of upper artery with intraluminal device, open approach) and 03LY4DZ (Occlusion of upper artery with intraluminal device, percutaneous endoscopic approach) and noted the same pattern. As noted in the previous discussion, 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 to identify cases reporting procedure codes 03LY0DZ, 03LY3DZ or 03LY4DZ with a principal diagnosis from MDC 04 that are currently grouping to MS-DRGs 981, 982, and 983. Our findings are shown in this table:

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As indicated earlier, the requestor suggested that we move ICD-10-PCS procedure code 03LY3DZ to MS-DRGs 163, 164, and 165. However, our clinical advisors believe that, within MDC 04, procedure codes describing percutaneous embolization of an upper artery with an intraluminal device are more clinically aligned with the procedure codes assigned to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC and without CC/MCC, respectively), as these procedures would not be considered major chest procedures. Therefore, we examined claims data to identify the average length of stay and average costs for cases assigned to MS-DRGs 166, 167 and 168. Our findings are shown in the following table.

While our clinical advisors noted that the average costs of cases in MS-DRGs 166, 167, and 168 are lower than the average costs for the subset of cases reporting procedure codes 03LY0DZ, 03LY3DZ or 03LY4DZ and a principal diagnosis code from MDC 04, they believe that these procedures are clearly related to the principal diagnoses as these procedures are appropriate for certain respiratory tract diagnoses. Therefore, it is clinically appropriate for the procedures to group to the same MDC as the principal diagnoses.

Therefore, we are proposing to add ICD-10-PCS procedure codes 03LY0DZ, 03LY3DZ and 03LY4DZ to MDC 04 in MS-DRGs 166, 167, and 168. Under this proposal, cases reporting procedure codes 03LY0DZ, 03LY3DZ or 03LY4DZ in conjunction with a principal diagnosis code from MDC 04 such as hemoptysis (R04.2) would group to MS-DRGs 166, 167, and 168.

e. Acquired Coagulation Factor Deficiency With Percutaneous Artery Embolization

We received a request to reassign cases for acquired coagulation factor deficiency when reported with a procedure describing the complete occlusion of an artery with an intraluminal device 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-DRGs 252, 253 and 254 (Other Vascular Procedures with MCC, with CC, and without CC/MCC, respectively) or 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the Circulatory System). The requestor asked that we reassign ICD-10-CM diagnosis code D68.4 (Acquired coagulation factor deficiency) from MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, Immunologic Disorders) in MS-DRG 813 (Coagulation Disorders), to MDC 05. The requestor provided the following list of 59 ICD-10-PCS procedure codes describing the complete occlusion of an artery with an intraluminal device in its request for consideration to reassign the ICD-10-CM diagnosis code for acquired coagulation factor deficiency to MDC 05. The requester noted that the diagnosis of Hemorrhage, not elsewhere classified ( ICD-10-CM diagnosis code R58) groups to MS-DRGs 252, 253 and 254 or 270, 271, and 272 in MDC 05 when reported with one of the 59 ICD-10-PCS procedure codes listed and requested that cases reporting a diagnosis describing acquired coagulation factor deficiency also group to those MS-DRGs when reported with one of the 59 ICD-10-PCS procedure codes listed.

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Our analysis of this grouping issue confirmed that, when diagnosis code D68.4 is reported as a principal diagnosis with one of the 59 ICD-10-PCS procedure codes provided by the requestor, these cases group to MS-DRGs 981, 982, and 983. As noted in the previous discussion, 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 to identify cases involving the 59 procedure codes in MDC 05 reported with a principal diagnosis of code D68.4 that are currently grouping to MS-DRGs 981, 982, and 983. Our analysis showed one case reported a principal diagnosis of D68.4 with a procedure code in MDC 05, with a length of stay of 2.0 days and costs of $21,890 in MS-DRG 981. We found zero cases in MS-DRGs 982 and 983 reporting a procedure code from MDC 05 and a principal diagnosis of code M95.4.

Overall, for MS-DRGs 981, 982, and 983, there was a total of one case reporting a principal diagnosis of acquired coagulation factor deficiency with any of the procedures from MDC 05 provided by the requestor, demonstrating that acquired coagulation factor deficiency is not typically corrected surgically by occlusion of an artery with an intraluminal device.

We also examined the data for cases in MS-DRG 813, and our findings are shown in this table:

As shown in this table, there were a total of 16,680 cases in MS-DRG 813, with an average length of stay of 4.7 days and average costs of $11,286. In MS-DRG 813, we found 142 cases reporting a principal diagnosis of an acquired coagulation factor deficiency with an average length of stay of 6.41 days and average costs of $17,822. We note that the average costs for the subset of cases in MS-DRG 813 reporting a principal diagnosis of an acquired coagulation factor deficiency are higher than the average costs of all cases that currently group to MS-DRG 813. However, our clinical advisors believe that diagnosis code D68.4 describes acquired bleeding disorders in which the affected person lacks the necessary coagulation factors for proper clot formation and wound healing, and therefore, is most clinically aligned with the diagnosis codes assigned to MDC 16 (where it is currently assigned). Our clinical advisors further note that a diagnosis of an acquired bleeding disorder is not comparable to conditions described by the ICD-10-CM code R58 (Hemorrhage, not elsewhere classified) as suggested by the requestor. Diagnoses described by codes from Chapter 18 (Symptoms, Signs and Abnormal Clinical and Laboratory Findings) of ICD-10-CM, such as R58, can be the result of a variety of underlying conditions, or describe conditions of an unexplained etiology. As an ill-defined condition, our clinical advisors do not believe it is appropriate to equate this diagnosis code with a bleeding disorder. Therefore, we are not proposing to reassign ICD-10-CM diagnosis code D68.4 from MDC 16 to MDC 05.

f. Epistaxis With Percutaneous Artery Embolization

We received a request to consider adding cases for a hemorrhage of the nose when reported with a procedure describing percutaneous arterial embolization to MDC 03 (Disease 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). ICD-10-CM diagnosis code R04.0 (Epistaxis) is used to describe a hemorrhage of the nose or “nosebleed” and is currently assigned to MDC 03. ICD-10-PCS procedure codes Start Printed Page 32534describing percutaneous arterial embolization may be reported with procedure codes 03LM3DZ (Occlusion of right external carotid artery with intraluminal device, percutaneous approach), 03LN3DZ (Occlusion of left external carotid artery with intraluminal device, percutaneous approach), or 03LR3DZ (Occlusion of face artery with intraluminal device, percutaneous approach) and are currently assigned to several MS-DRGs in five MDCs as illustrated in the table.

According to the requestor, when diagnosis code R04.0 is reported as a principal diagnosis with any one of the procedure codes describing a percutaneous arterial embolization (03LM3DZ, 03LN3DZ, or 03LR3DZ), these cases are grouping to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively).

Our analysis of this grouping issue confirmed that, when epistaxis (ICD-10-CM diagnosis code R04.0) is reported as a principal diagnosis with ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, or 03LR3DZ, 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.”

For our review of this grouping issue and the request to have cases reporting procedure codes 03LM3DZ, 03LN3DZ, or 03LR3DZ added to MDC 03 in MS-DRGs 133 through 134, we examined claims data from September 2019 update of the FY 2019 MedPAR file for cases reporting ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, or 03LR3DZ with a principal diagnosis of R0.40 from MDC 03 that currently group to MS-DRGs 981 through 983. Our findings are shown in the following table.

We then examined the claims data to identify the average length of stay and average costs for all cases in MS-DRGs 133 and 134. Our findings are shown in the table.

As shown in the table, for MS-DRG 133, there were a total of 1,757 cases with an average length of stay of 5.6 days and average costs of $15,337. For MS-DRG 134, there were a total of 849 cases with an average length of stay of 2.5 days and average costs of $9,512. Our clinical advisors believe that procedure codes 03LM3DZ, 03LN3DZ, Start Printed Page 32535and 03LR3DZ are appropriate procedures to treat commonly occurring ear, nose, and throat bleeding diagnoses and expressed support for these procedure codes to group to MDC 03.

We note that, as discussed in section II.D.4 of the preamble of this proposed rule, we are proposing to delete MS-DRGs 133 and 134 and create proposed new MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth and Throat O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). Therefore, we are proposing to add ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, and 03LR3DZ to MDC 03 in proposed new MS-DRGs 143, 144, and 145, if finalized. Under this proposal, cases reporting ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, or 03LR3DZ with a principal diagnosis from MDC 03 would group to proposed new MS-DRGs 143, 144, and 145.

The following table reflects our simulation for ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, and 03LR3DZ in proposed new MS-DRGs 143, 144, and 145.

g. Revision or Removal of Synthetic Substitute in Peritoneal Cavity

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 revision or removal of synthetic substitute in the peritoneal cavity are reported in conjunction with ICD-10-CM diagnosis codes in MDC 01 (Diseases and Disorders of the Nervous System), such as complications of intracranial shunts, the cases group to MS-DRGs 981 through 983. ICD-10-PCS procedure codes 0WWG0JZ (Revision of synthetic substitute in peritoneal cavity, open approach), 0WWG4JZ (Revision of synthetic substitute in peritoneal cavity, percutaneous endoscopic approach), and 0WPG0JZ (Removal of synthetic substitute from peritoneal cavity, open approach) are currently assigned to MDC 06 (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).

We examined cases that reported a principal diagnosis in MDC 01 and procedure code 0WWG0JZ, 0WWG4JZ, or 0WPG0JZ that currently group to MS-DRGs 981 through 983. Our findings are shown in the following table.

Within MDC 01, our clinical advisors believe that these procedures, which describe revision or removal of synthetic substitute in peritoneal cavity, are most clinically similar to those in MS-DRGs 031, 032, and 033 (Ventricular Shunt Procedures with MCC, with CC, and without CC/MCC, respectively). We therefore examined the data for all cases in MS-DRGS 031, 032, and 033.

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The average costs for the subset of cases in MS-DRGs 981, 982, and 983 that report procedures describing revision or removal of synthetic substitute in the peritoneal cavity with a principal diagnosis from MDC 01 are lower than the average costs of cases in MS-DRGs 031, 032, and 033 as a whole, and the average length of stay for this subset of cases is also lower in two of the MS-DRGs and higher in one. Our clinical advisors believe the procedure codes describing revision or removal of synthetic substitute in the peritoneal cavity are clearly related to the principal diagnosis codes describing complications of intracranial shunts and, therefore, it is clinically appropriate for the procedures to group to the same MS-DRGs (031, 032, and 033) as the principal diagnoses describing complications of intracranial shunts. We are proposing to add ICD-10-PCS procedure codes 0WWG0JZ, 0WWG4JZ, and 0WPG0JZ to MDC 01 (Diseases and Disorders of the Nervous System) in MS-DRGs 031, 032, and 033.

h. Revision of Totally Implantable Vascular Access Devices

During the review of the cases that group to MS-DRGs 981 through 983, we noted that when procedure codes describing Totally Implantable Vascular Access Devices (TIVADs) are reported with ICD-10-CM diagnosis codes assigned to MDC 04 (Diseases and Disorders of the Respiratory System), MDC 06 (Diseases and Disorders of the Digestive System), MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas), MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue), MDC 13 (Diseases and Disorders of the Female Reproductive System), or MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, Immunologic Disorders), the cases group to MS-DRGs 981 through 983.

TIVADs are port catheter devices inserted for chemotherapy treatment. The nine ICD-10-PCS procedure codes describing TIVADs are listed in this table.

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 codes describing TIVADs in conjunction with a principal diagnosis from MDCs 04, 06, 07, 08, 13, or 16. Our findings are shown in the following table.

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Our clinical advisors believe that cases reporting TIVADs with a principal diagnosis in MDCs 04, 06, 07, 08, 13, or 16 would most suitably group to the MS-DRGs describing “Other” procedures for each of these MDCs. These TIVAD procedures cannot be assigned to the specific surgical MS-DRGs within these MDCs since they are not performed on the particular anatomical areas described by each of the specific surgical MS-DRGs. For example, in MDC 04, TIVADs could not be assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC, respectively) because they are not major chest procedures.

We therefore examined the claims data for each of these MS-DRGs. Our findings are shown in the following table.

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We note that while the average costs and length of stay are similar in some cases and in some cases vary between the subset of cases currently grouping to MS-DRGs 981 through 983 and the cases currently grouping to the MS-DRGs describing “Other” procedures as set forth in the table, our clinical advisors noted that TIVADs are frequently inserted in order to administer chemotherapy for a variety of malignancies. MDCs 04, 06, 07, 08, 13, or 16 each contain ICD-10-CM diagnosis codes that describe a variety of malignancies. Therefore, our clinical advisors believe that the TIVAD procedures are clearly related to the principal diagnoses within MDCs 04, 06, 07, 08, 13, and 16. For the reasons previously indicated, our clinical advisors believe that cases reporting TIVADs with a principal diagnosis in MDCs 04, 06, 07, 08, 13, or 16 would mostly suitably group to the MS-DRGs describing “Other” procedures for each of these MDCs.

Therefore, we are proposing to add the nine ICD-10-PCS procedure codes describing TIVADs as set forth in the table to the MS-DRGs describing “Other” procedures within each of MDCs 04, 06, 07, 08, 13, and 16, specifically: MDC 04 in MS-DRGs 166, 167, and 168, MDC 06 in MS-DRGs 356, 357, and 358, MDC 07 in MS-DRGs 423, 424, and 425, MDC 08 in MS-DRGs 515, 516, and 517, MDC 13 in MS-DRGs 749 and 750, and MDC 16 in MS-DRGs 802, 803, and 804. Under this proposal, cases reporting a principal diagnosis in MDCs 04, 06, 07, 08, 13, or 16 with a TIVAD procedure would group to the respective MS-DRGs within the MDC.

i. Multiple Trauma With Internal Fixation of Joints

For FY 2020, we received a request to reassign cases involving diagnoses that identify multiple significant trauma combined with internal fixation of joint procedures 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-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively) in MDC 24 (Multiple Significant Trauma). 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 beginning with the prefix “0RH” and “0SH” that describe internal fixation of upper and lower joints. The requestor provided several suggestions to address this reassignment, including: Adding all ICD-10-PCS procedure codes from MDC 08 (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 with the prefix “0RH” and “0SH” 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 in MDC 24. In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that we believe any potential reassignment of these cases requires significant analysis. We therefore did not propose any changes to the cases identified by the requestor.

For FY 2021, as the first step of the comprehensive analysis needed to assess the reassignment of cases involving diagnoses that identify multiple significant trauma combined with internal fixation of joint procedures, our clinical advisors reviewed the list of procedure codes in the “0RH” and “0SH” code ranges, as Start Printed Page 32539suggested by the requestor. Our clinical advisors identified 161 ICD-10-PCS codes, which are listed in table 6P.1f., that they believe are clinically related to diagnoses assigned to MDC 24. We examined the claims data for cases that would be assigned to MDC 24 based on their diagnoses, but currently group to MS-DRGs 981 through 983 based on the presence of procedure codes in the “0RH” and “0SH” code ranges. Our findings are shown in this table.

We note that we found only 8 claims, with varying lengths of stay and average costs. We also examined the claims data for all cases in MS-DRGs 957, 958, and 959. Our findings are shown in this table.

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The very small number of claims we identified for cases that would be assigned to MDC 24 based on their diagnoses, but grouped to MS-DRGs 981 through 983 based on the presence of procedure codes in the “0RH” and “0SH” code ranges, have varying resource use relative to MS-DRGs 957, 958, and 959 as a whole. The average costs of the cases found in MS-DRGs 981-983 range from $7,015 to $72,331 with average lengths of stay ranging from 3 days to 14 days. The average costs of the cases found in MS-DRGs 957-959 range from $20,563 to $54,771 with average lengths of stay ranging from 5 days to 13.2 days. Given the nature of trauma cases, the resource use would be expected to vary based on the nature of the patient's injuries. In addition, as noted, our clinical advisors believe that these procedure codes are clinically related to the diagnoses in MDC 24. Therefore, we are proposing to add the 161 ICD-10-PCS codes shown in Table 6P.1f to MDC 24 in MS-DRGs 957, 958, and 959. Under this proposal, cases that would be assigned to MDC 24 based on their diagnoses, that also report one of the 161 ICD-10-PCS codes included in table 6P.1f, will group to MDC 24 in MS-DRGs 957, 958, and 959, rather than to MS-DRGs 981 through 983.

We note that while we are making this proposal to address the grouping issue for internal fixation of upper and lower joint procedures identified by the requestor, our clinical advisors believe that a more comprehensive analysis is required within MDC 24 to address the differences in severity level of diagnoses as well as the assignment of procedure codes to the MS-DRGs within MDC 24. We plan to continue this comprehensive analysis in future rulemaking.

j. 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 2019 update of the FY 2019 MedPAR file, we are proposing to reassign three procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively). We are also proposing to reassign three procedure codes from MS-DRGs 987, 988, and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively) to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively).

In conducting our review of the request to designate ICD-10-PCS procedure code 0W3G0ZZ (Control bleeding in peritoneal cavity, open approach) as an O.R. procedure (as described in section II.D.11.c.5. of this proposed rule), our clinical advisors noted that ICD-10-PCS codes 0W3G3ZZ (Control bleeding in peritoneal cavity, percutaneous approach) and 0W3G4ZZ (Control bleeding in peritoneal cavity, endoscopic approach) are currently assigned to MS-DRGs 981 through 983 when reported with a principal diagnosis that is not assigned to one of the MDCs to which these procedure codes are assigned. Our clinical advisors believe that these procedures would be more appropriately assigned to MS-DRGs 987 through 989 because they are on average less complex and difficult than the same procedure performed by an open approach, and therefore should be assigned to the “less extensive” DRG. Therefore, we are proposing to reassign ICD-10-PCS codes 0W3G3ZZ and 0W3G4ZZ from MS-DRGs 981 through 983 to 987 through 989.

In conducting our review of the request to designate ICD-10-PCS procedure codes 0WBC4ZX (Excision of mediastinum, percutaneous endoscopic Start Printed Page 32541approach, diagnostic) and 0WBC3ZX (Excision of mediastinum, percutaneous approach, diagnostic) as O.R. procedures (as described in section II.D.11.c.1. of this proposed rule), our clinical advisors noted that ICD-10-PCS code 0WBC0ZX (Excision of mediastinum, open approach, diagnostic) is currently assigned to MS-DRGs 981 through 983 when reported with a principal diagnosis that is not assigned to one of the MDCs to which the procedure code is assigned. Our clinical advisors believe that this procedure would be more appropriately assigned to MS-DRGs 987 through 989 because this assignment is consistent with the assignment of other procedures that describe excision of the mediastinum performed by an open, percutaneous, or percutaneous endoscopic approach, and is consistent with the proposal for procedure codes 0WBC4ZX and 0WBC3ZX (with diagnostic qualifier) as discussed in section II.D.11.c.1. of this proposed rule. Therefore, we are proposing to reassign ICD-10-PCS code 0WBC0ZX from MS-DRGs 981 through 983 to 987 through 989.

We received a request to examine cases reporting a procedure describing the open excision of gastrointestinal body parts in the gastrointestinal body system. The requester stated that when procedures describing the open excision of a specific gastrointestinal body part in the gastrointestinal body system are reported with a principal diagnosis such as C49.A3 (Gastrointestinal stromal tumor of small intestine (GIST)), the cases 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). However, when procedures describing the excision of a general gastrointestinal body part in the gastrointestinal body system are reported with the same principal diagnosis of GIST, the cases are assigned to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). The requestor stated that procedures describing a specific body part value should be assigned to the same MS-DRG as procedures describing a general body part value.

The requestor provided four ICD-10-PCS procedure codes in its request. These four ICD-10-PCS procedure codes, as well as their MDC assignments, are listed in the table:

We note that in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42120 through 42122), we finalized our proposal to move seven ICD-10-CM diagnosis codes describing gastrointestinal stromal tumors (GIST), including C49.A3, from MDC 08 to MDC 06, 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 MDC 06 (such as ICD-10-PCS codes 0DBA0ZZ, 0DBB0ZZ, 0DB80ZZ, and 0DB90ZZ) now group to MS-DRGs in MDC 06.

Our analysis of this grouping issue found that these four ICD-10-PCS codes describing related procedures have dissimilar designations that determine whether and in what way the presence of the procedure impacts the MS-DRG assignment. ICD-10-PCS code 0DB80ZZ is classified as an extensive O.R. procedure and ICD-10-PCS codes 0DB90ZZ, 0DBA0ZZ, and 0DBB0ZZ are classified as non-extensive O.R. procedures. As a result, whenever ICD-10-PCS code 0DB80ZZ is reported with a principal diagnosis that is assigned to a different MDC than the procedure code, the case would be assigned to MS-DRGs 981 through 983. When ICD-10-PCS codes 0DB90ZZ, 0DBA0ZZ, or 0DBB0ZZ are reported with a principal diagnosis that is assigned to a different MDC than the procedure code, the case would be assigned to MS-DRGs 987 through 989.

We examined the claims data to identify cases reporting procedure code 0DB80ZZ that are currently grouping to MS-DRGs 981, 982 and 983. Our findings are shown in this table:

Start Printed Page 32542

We also examined the claims data to identify cases reporting procedure codes 0DB90ZZ, 0DBA0ZZ, and 0DBB0ZZ that are currently grouping to MS-DRGs 987, 988 and 989. Our findings are shown in this table:

The results of our data analysis indicate that cases reporting procedure codes 0DB90ZZ, 0DBA0ZZ, and 0DBB0ZZ describing the open excision of a specific gastrointestinal body part in MS-DRGs 987, 988, and 989 generally have a longer length of stay and higher average costs when compared to all the cases in their assigned MS-DRG. The subset of cases reporting 0DB90ZZ, 0DBA0ZZ, and 0DBB0ZZ and the subset of cases in MS-DRGs 981, 982 and 983 reporting 0DB80ZZ are more closely aligned in terms of the lengths of stay and average costs. Our clinical advisors believe that, given the similarity in resource use required for procedures describing an open excision of a gastrointestinal body part in terms of the use of an operating room, anesthesia and skills required, for clinical coherence and consistency in assignment with ICD-10-PCS code 0DB80ZZ, it would be appropriate to also designate ICD-10-PCS codes 0DB90ZZ, 0DBA0ZZ, and 0DBB0ZZ as extensive O.R. procedures.

Therefore, we are proposing to change the designation of ICD-10-PCS codes 0DB90ZZ, 0DBA0ZZ and 0DBB0ZZ from non-extensive O.R. procedures to extensive O.R. procedures for FY 2021. Under this proposal, cases reporting procedure codes 0DB90ZZ, 0DBA0ZZ and 0DBB0ZZ, which are unrelated to the MDC to which the case would otherwise be assigned based on the principal diagnosis, will group to MS-DRGs 981, 982 and 983.

11. 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 Start Printed Page 32543of 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 as 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.D.13 of the preamble of this proposed rule, we are making Table 6B.—New Procedure Codes—FY 2021 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 37 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, we are again soliciting feedback 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 October 20, 2020.

We discussed in the FY 2020 IPPS/LTCH PPS 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 FY 2020 IPPS/LTCH PPS rulemaking, as we continue to develop our process and methodology, as previously noted, we are soliciting recommendations on other factors to consider in our refinement efforts to recognize and differentiate consumption of resources for the ICD-10 MS-DRGs.

In this proposed rule, we are addressing 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. In this section of the rule we discuss the process that was utilized for evaluating the requests that were received for FY 2021 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 note 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 in this section of this rule. Instead, we only discuss MS-DRGs that require explicitly adding the relevant procedure codes to the GROUPER logic in order for those procedure codes to affect the MS-DRG assignment as intended. In cases where Start Printed Page 32544we are proposing to change the designation of procedure codes from non-O.R. procedures to O.R. procedures, we also are proposing 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 address that aspect in summarizing their request or our response to the request in this section of this rule.

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.

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. In this section of this rule, we detail and respond to some of those requests. With regard to the remaining requests, our clinical advisors believe it is appropriate to consider these requests as part of our comprehensive review of the procedure codes as previously discussed.

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

(1) Endoscopic Revision of Feeding Devices

One requestor identified three ICD-10-PCS procedure codes that describe endoscopic revision of feeding devices, shown in the following table.

In the ICD-10 MS-DRG Version 37 Definitions Manual, these three ICD-10-PCS procedure codes are currently recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor noted that these procedures would not require the resources of an operating room and that they consume resources comparable to related ICD-10-PCS procedure codes describing the endoscopic insertion of feeding tubes that currently are designated as Non-O.R. procedures.

We agree with the requestors that these procedures do not typically require the resources of an operating room, and are not surgical in nature. Therefore, we are proposing to remove 0DW08UZ, 0DW68UZ, 0DWD8UZ from the FY 2021 ICD-10 MS-DRGs Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under this proposal, these procedures would no longer impact MS-DRG assignment.

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

(1) Percutaneous/Endoscopic Biopsy of Mediastinum

One requestor identified ICD-10-PCS procedure code 0WBC4ZX (Excision of mediastinum, percutaneous endoscopic approach, diagnostic) that describes a percutaneous endoscopic biopsy of the mediastinum that the requestor stated is performed in the operating room under general anesthesia, requires an incision through the chest wall, insertion of a mediastinoscope in the space between the lungs and involves removal of a tissue sample. The requestor recommended that all procedures performed within the mediastinum by an open or percutaneous endoscopic approach, regardless of whether it is a diagnostic or therapeutic procedure, should be designated as O.R. procedures because the procedures require great skill and pose risks to patients due to the structures contained within the mediastinum. The requestor noted that the mediastinum contains loose connective tissue, the heart and great vessels, esophagus, trachea, nerves, and lymph nodes. The requestor further noted that redesignating these procedures from non-O.R. to O.R. would provide compensation for operating room resources and general anesthesia.

We note that under the ICD-10-PCS procedure classification, biopsy procedures are identified by the 7th digit qualifier value “diagnostic” in the code description. In response to the requestor's suggestion that all procedures performed within the mediastinum by an open or percutaneous endoscopic approach, regardless of whether it is a diagnostic or therapeutic procedure should be designated as an O.R. procedure, we examined the following procedure codes:

Start Printed Page 32545

In the ICD-10 MS-DRGs Definitions Manual Version 37, procedure codes 0WBC0ZX, 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ are currently designated as O.R. procedures, however, procedure codes 0WBC3ZX and 0WBC4ZX are not recognized as O.R. procedures for purposes of MS-DRG assignment. We agree with the requestor that procedure code 0WBC4ZX would typically require the resources of an operating room. Our clinical advisors also agree that procedure code 0WBC3ZX would typically require the resources of an operating room. Therefore, we are proposing to add these 2 procedure codes to the FY 2021 ICD-10 MS-DRGs Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures, assigned to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 04 (Diseases and Disorders of the Respiratory System); MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders); MS-DRGs 820, 821, and 822 (Lymphoma and Leukemia with Major O.R. Procedure with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 826, 827, and 828 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Major O.R. Procedure with MCC, with CC, and without CC/MCC, respectively) in MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms); and to MS-DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without MCC/CC, respectively).

As previously noted, procedure codes 0WBC0ZX, 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ are currently designated as O.R. procedures. As displayed in the FY 2020 ICD-10 MS-DRGs Version 37 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index, these procedure codes are assigned to several MS-DRGs across many MDCs. During our process of reviewing potential MDC and MS-DRG assignments for procedure codes 0WBC3ZX and 0WBC4ZX, our clinical advisors recommended that we reassign procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ from their current MS-DRG assignments in MDC 04 (Diseases and Disorders of the Respiratory System). Procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ are currently assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC, respectively) and procedure code 0WBC0ZX is assigned to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). According to our clinical advisors, procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ would be more appropriately and clinically aligned with the same MS-DRG assignment as procedure code 0WBC0ZX, which is also consistent with the assignment for other procedures performed on the mediastinum. Therefore, we are proposing to reassign procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively).

(2) Percutaneous Endoscopic Chemical Pleurodesis

One requestor identified ICD-10-PCS procedure code 3E0L4GC (Introduction of other therapeutic substance into pleural cavity, percutaneous endoscopic approach) that the requestor stated is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor noted that talc pleurodesis via video-assisted thoracoscopic surgery (VATS), involves placing a thoracoscope through the chest wall for visualization, then placing a port and injecting talc, doxycycline, or other chemical into the pleural cavity under general anesthesia and should therefore be recognized as an O.R. procedure for purposes of MS-DRG assignment.

We agree with the requestor that ICD-10-PCS procedure code 3E0L4GC typically requires the resources of an operating room. We also note that the AHA published Coding Clinic advice in 2015 that instructed to code both ICD-10-PCS procedure codes 0BJQ4ZZ (Inspection of pleura, percutaneous endoscopic approach) and 3E0L3GC (Introduction of other therapeutic substance into pleural cavity, percutaneous approach) for thoracoscopic chemical pleurodesis. In the publication, code 0BJQ4ZZ, recognized as an O.R. procedure for purposes of MS-DRG assignment, was instructed to be reported for the video-assisted thoracoscopic portion of the procedure since the endoscopic component of the procedure could not be captured by the approach values available at the time. In FY 2018, the approach value “4” Percutaneous Endoscopic was added to the root operation Introduction table 3E0, to capture percutaneous endoscopic administration of a therapeutic substance, meaning that code 0BJQ4ZZ was no longer needed along with code 3E0L3GC to report thoracoscopic chemical pleurodesis. Only code 3E0L4GC is needed to report all components of the procedure. Designating code 3E0L4GC as an O.R. procedure for purposes of MS-DRG assignment classifies the procedure as intended when two codes were needed to fully code the procedure. Therefore, we are proposing to add procedure code 3E0L4GC to the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. procedures with MCC, CC, without CC/MCC, respectively) in MDC 04 (Diseases and Disorders of the Respiratory System); and MS-DRG 264 (Other Circulatory System O.R. Procedures) in MDC 05 (Diseases and Disorders of the Circulatory System).Start Printed Page 32546

(3) Percutaneous Endoscopic Excision of Stomach

One requestor identified ICD-10-PCS procedure code 0DB64ZZ (Excision of stomach, percutaneous endoscopic approach) that the requestor stated is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor noted that percutaneous endoscopic excisions of gastric lesions and percutaneous endoscopic partial gastrectomies are performed in the operating room under general anesthesia, use comparable resources, and are designated as O.R. procedures. Therefore, the requestor stated that this procedure should also be recognized as O.R. procedure for purposes of MS-DRG assignment.

We agree with the requestor that ICD-10-PCS procedure code 0DB64ZZ typically requires the resources of an operating room. During our review, we also noted that ICD-10-PCS code 0DB64ZX (Excision of stomach, percutaneous endoscopic approach, diagnostic) was not currently recognized as an O.R. procedure. We are proposing to add these codes to the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 06 (Diseases and Disorders of the Digestive System); MS-DRGs 619, 620, and 621 (Procedures for Obesity with MCC, with CC, and without CC/MCC, respectively) in MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders); and MS-DRGs 820, 821, and 822 (Lymphoma and Leukemia with Major Procedure with MCC, with CC, and without CC/MCC, respectively), MS-DRGs 826, 827, and 828 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Major Procedure with MCC, with CC, and without CC/MCC, respectively), and MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedure with CC/MCC and without CC/MCC, respectively) in MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms).

During our review, we also noted that ICD-10-PCS procedure code 0DB64Z3 (Excision of stomach, percutaneous endoscopic approach, vertical (sleeve)), which is clinically similar to ICD-10-PCS codes 0DB64ZZ and 0DB64ZX, is designated as an O.R. procedure assigned to the same MS-DRGs as we are proposing for ICD-10-PCS codes 0DB64ZZ and 0DB64ZX, as well as to MS-DRG 264 (Other Circulatory System O.R. Procedures) in MDC 05 (Diseases and Disorders of the Circulatory System); MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries, with MCC, with CC, and 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, with CC, and without CC/MCC, respectively) in MDC 24 (Multiple Significant Trauma). Our clinical advisors believe that principal diagnoses in MDCs 05 and 21 are typically not indications for procedures describing percutaneous endoscopic excision of stomach and that ICD-10-PCS procedure code 0DB64Z3 should be assigned to the same MS-DRGs as ICD-10-PCS codes 0DB64ZZ and 0DB64ZX. We examined claims data from the September 2019 update of the FY 2019 MedPAR file to determine if there were any cases that reported 0DB64Z3 and were assigned to MDC 05, MDC 21, or MDC 24. The following table shows our findings:

We found zero cases in MS-DRGs 957, 958, and 959 reporting 0DB64Z3 and a principal diagnosis in MDC 24 (Multiple Significant Trauma). Our analysis demonstrates that diagnoses assigned to MDC 05, MDC 21, and MDC 24 are not typically corrected surgically by percutaneous endoscopic vertical (sleeve) gastrectomy given the small number of cases reporting this procedure in these MDCs. Our clinical advisors believe procedure codes describing the percutaneous endoscopic excision of stomach should have the same MDC assignments in the ICD-10 MS-DRGs Version 38 for coherence. Therefore, we are proposing to remove the assignments of code 0DB64Z3 from MS-DRG 264 (Other Circulatory System O.R. Procedures) in MDC 05 (Diseases and Disorders of the Circulatory System); MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries, with MCC, with CC, and 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, with CC, and without CC/MCC, respectively) in MDC 24 (Multiple Significant Trauma).

Lastly, while we were reviewing this request, we noted inconsistencies in how procedures involving the excision of stomach are designated. Excision of stomach codes differ by approach and qualifier. ICD-10-PCS procedure codes describing excision of stomach with similar approaches have been assigned Start Printed Page 32547different attributes in terms of designation as an O.R. or Non-O.R. procedure. We identified the following five related codes:

In the ICD-10 MS-DRGs Version 37, these ICD-10-PCS codes are currently recognized as O.R. procedures for purposes of MS-DRG assignment, while similar excision of stomach procedure codes with the same approach but different qualifiers are recognized as Non-O.R. procedures. Our clinical advisors indicated that these procedures are not surgical in nature and do not require an incision. Therefore, we are proposing to remove ICD-10-PCS procedure codes 0DB63Z3, 0DB63ZZ, 0DB67Z3, 0DB67ZZ, and 0DB68Z3 from the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under this proposal, these procedures would no longer impact MS-DRG assignment.

(4) Percutaneous Endoscopic Drainage

One requestor identified six ICD-10-PCS procedure codes that describe procedures involving laparoscopic drainage of peritoneum, peritoneal cavity, and gallbladder that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The six procedure codes are listed in the following table:

The requestor stated these procedures would commonly be performed under general anesthesia and require the resources of an operating room. The requestor also noted that similar procedures such as percutaneous endoscopic inspection of gallbladder, percutaneous endoscopic excision of peritoneum and percutaneous endoscopic extirpation of matter from peritoneal cavity are currently classified as O.R. procedures in Version 37 of the ICD-10 MS-DRGs and that the six listed procedure codes should be designated as O.R. procedures due to comparable costs and resource use.

We agree with the requestor that the six ICD-10-PCS procedure codes listed in the table typically require the resources of an operating room. Therefore, to the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index, we are proposing to add codes 0D9W4ZZ and 0D9W40Z as O.R. procedures assigned to MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 06 (Diseases and Disorders of the Digestive System); and MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs). We are also proposing to add codes 0W9G4ZZ and 0W9G40Z as O.R. procedures assigned to MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 06 (Diseases and Disorders of the Digestive System); MS-DRGs 420, 421, and 422 (Hepatobiliary Diagnostic Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas); MS-DRGs 673, 674, and 675 (Other Kidney and Urinary Tract Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract); MS-DRGs 749 and 750 (Other Female Reproductive System Procedures with and without CC/MCC, respectively) in MDC 13 (Diseases and Disorders of the Female Reproductive System); MS-DRGs 802, 803, and 804 (Other O.R. Procedures of the Blood and Blood Forming Organs, with MCC, with CC, and without CC/MCC, respectively) in MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, Immunologic Disorders); MS-DRGs 820, 821, and 822 (Lymphoma and Leukemia with Major Procedure with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 826, 827, and 828 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Major Procedure with MCC, with CC, and without CC/MCC, respectively) in MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms); and MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Start Printed Page 32548Effects of Drugs). Lastly, we are proposing to add codes 0F944ZZ and 0F9440Z as O.R. procedures assigned to MS-DRGs 408, 409, and 410 (Biliary Tract Procedures Except Only Cholecystectomy with or without C.D.E., with MCC, with CC, and without CC/MCC, respectively) in MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas).

We identified related ICD-10-PCS procedure code 0F944ZX (Drainage of gallbladder, percutaneous endoscopic approach, diagnostic) that is also currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. Our clinical advisors believe that similar to the six procedure codes submitted by the requester, this procedure typically requires the resources of an operating room and should have the same attributes in Version 38 for coherence. Therefore, we are proposing to add code 0F944ZX as an O.R. procedure assigned to MS-DRGs 420, 421 and 422 (Hepatobiliary Diagnostic Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas) to the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index.

During our review, we also identified the related ICD-10-PCS procedure codes 0F940ZZ (Drainage of gallbladder, open approach), 0F940ZX (Drainage of gallbladder, open approach, diagnostic) and 0F9400Z (Drainage of gallbladder with drainage device, open approach). Our analysis found that the ICD-10-PCS codes describing drainage of gallbladder have dissimilar MDC assignments. Procedure codes 0F940ZZ and 0F940ZX are currently assigned to MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 06 (Diseases and Disorders of the Digestive System) and MS-DRGs 408, 409, and 410 (Biliary Tract Procedures Except Only Cholecystectomy with or without C.D.E. with MCC, with CC, and without CC/MCC, respectively) in MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas). However, ICD-10-PCS procedure code 0F9400Z is currently assigned to MS-DRGs 408, 409, and 410 (Biliary Tract Procedures Except Only Cholecystectomy with or without C.D.E. with MCC, with CC, and without CC/MCC, respectively) in MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas) alone. Our clinical advisors believe that principal diagnoses in MDC 06 are typically not indications for procedures describing the drainage of gallbladder. We examined claims data from the September 2019 update of the FY 2019 MedPAR file to determine if there were any cases that reported procedure codes 0F940ZZ or 0F940ZX and were assigned to MDC 06. We found zero cases in MS-DRGs 356, 357, and 358 reporting code 0F944ZZ or 0F940ZX and a principal diagnosis in MDC 06 (Diseases and Disorders of the Digestive System), demonstrating that diagnoses in MDC 06 are not typically corrected surgically by drainage of the gallbladder. Our clinical advisors believe procedure codes describing the drainage of gallbladder should have the same MDC assignments in Version 38 for coherence. Therefore, we are proposing to remove procedure codes 0F940ZZ and 0F940ZX from MS-DRGs 356, 357, and 358 in MDC 06 (Diseases and Disorders of the Digestive System).

Our further analysis of this request identified the nine ICD-10-PCS codes in the following table describing drainage of the peritoneum, peritoneal cavity, or gallbladder:

We note that these procedures are currently classified as extensive O.R. procedures. Our clinical advisors have noted that treatment practices have shifted since the initial O.R procedure designations. Our clinical advisors believe that, given the similarity in factors such as complexity, resource utilization, and requirement for anesthesia administration between procedures describing the drainage of the peritoneum, peritoneal cavity, and gallbladder, it would be more appropriate to designate these nine ICD-10-PCS codes as non-extensive O.R. procedures. Therefore, we are also proposing to change the designation of ICD-10-PCS codes 0D9W00Z, 0D9W0ZX, 0D9W0ZZ, 0D9W4ZX, 0W9G00Z, 0W9G0ZZ, 0F9400Z, 0F940ZZ, and 0F940ZX from extensive O.R. procedures to non-extensive O.R. procedures for FY 2021.

(5) Control of Bleeding

One requestor identified ICD-10-PCS procedure code 0W3G0ZZ (Control bleeding in peritoneal cavity, open approach) that describes a procedure in which the bleeding source within the peritoneal cavity is controlled by cautery, clips, and/or suture through an open abdominal incision with direct visualization of the surgical site, that the requestor stated requires the resources of an operating room and general anesthesia but is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor also noted that ICD-10-PCS procedure codes 0W3F0ZZ (Control bleeding in abdominal wall, open approach), 0W3H0ZZ (Control bleeding in retroperitoneum, open approach), and 0W3J0ZZ (Control bleeding in pelvic cavity, open approach) describe procedures to control bleeding in Start Printed Page 32549various anatomic sites and are currently classified as O.R. procedures.

We agree with the requestor that it would be clinically appropriate to redesignate procedure code 0W3G0ZZ as an O.R. procedure consistent with procedure codes 0W3F0ZZ, 0W3H0ZZ and 0W3J0ZZ, that also describe procedures performed to control bleeding and are designated as O.R. procedures. Therefore, we are proposing to add procedure code 0W3G0ZZ to the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRG 264 (Other Circulatory O.R. Procedures) in MDC 05 (Diseases and Disorders of the Circulatory System); MS-DRGs 356, 357, and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 06 (Diseases and Disorders of the Digestive System); MS-DRGs 423, 424, and 425 (Other Hepatobiliary or Pancreas O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 07 (Diseases and Disorders of the Hepatobiliary System and Pancreas); MS-DRGs 673, 674, and 675 (Other Kidney and Urinary Tract Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract); MS-DRGs 820, 821, and 822 (Lymphoma and Leukemia with Major O.R. Procedure with MCC, with CC, and without CC/MCC, respectively), MS-DRGs 826, 827, and 828 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Major O.R. Procedure with MCC, with CC, and without CC/MCC, respectively), and MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedure with and without CC/MCC, respectively) in MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms); MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with and without CC/MCC, respectively) in MDC 21 ((Injuries, Poisonings and Toxic Effects of Drugs); MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma, with MCC, with CC, and without CC/MCC, respectively) in MDC 24 (Multiple Significant Trauma) and to MS-DRGs 981, 982 and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively).

(6) Inspection of Penis

One requestor stated that ICD-10-PCS procedure code 0VJS0ZZ (Inspection of penis, open approach) is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor noted that there are circumstances that warrant inpatient admission for open exploration of the penis, such as to rule out penile fracture and extravasation due to trauma. The requestor stated their belief that because this procedure involves an open incision for exploration of penile structures and utilizes general anesthesia in the operating room, it would be appropriately classified as an O.R. procedure. We agree with the requestor that ICD-10-PCS code 0VJS0ZZ typically requires the resources of an operating room. Therefore, we are proposing to add ICD-10-PCS procedure code 0VJS0ZZ to the FY 2021 ICD-10 MS-DRG Version 38 Definitions Manual in Appendix E—Operating Room procedures and procedure code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs 709 (Penis Procedures with CC/MCC) and 710 (Penis Procedures without CC/MCC) in MDC 12 (Diseases and Disorders of the Male Reproductive System).

12. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2021

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 a 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 the 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.

We noted in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235) that with the transition to ICD-10-CM and the significant changes that have occurred to diagnosis codes since the FY 2008 review, we believed it was necessary to conduct a comprehensive analysis once again. Based on this analysis, we proposed changes to the severity level designations for 1,492 ICD-10-CM diagnosis codes and invited public comments on those proposals. As summarized in the FY 2020 IPPS/LTCH PPS final rule, many commenters expressed concern with the proposed severity level designation changes overall and recommended that CMS conduct further analysis prior to finalizing any proposals. After careful consideration of the public comments we received, as discussed further in the FY 2020 final rule, we generally did not finalize our proposed changes to the severity designations for the ICD-10-CM diagnosis codes, 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. We stated that postponing adoption of the proposed comprehensive changes in the severity level designations would 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. We refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42150 through 42152) for a complete discussion of our response to public comments regarding the proposed severity level designation changes for FY 2020.Start Printed Page 32550

c. Guiding Principles for Making Changes to Severity Levels

To provide the public with more information on the CC/MCC comprehensive analysis discussed in the FY 2020 IPPS/LTCH PPS proposed and final rules, CMS hosted a listening session on October 8, 2019. The listening session included a review of the methodology to measure the impact on resource use. It also provided an opportunity for CMS to receive public input on this analysis and to address any questions in order to assist the public in formulating written comments on the current severity level designations for consideration in the FY 2021 rulemaking. We refer readers to https://www.cms.gov/​Outreach-and-Education/​Outreach/​OpenDoorForums/​PodcastAndTranscripts.html for the transcript and audio file of the listening session. We also refer readers to https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.html for the supplementary file containing the data describing the impact on resource use of specific ICD-10-CM diagnosis codes when reported as a secondary diagnosis that was made available for the listening session.

Following the listening session, we further considered the public comments received and reconvened an internal workgroup comprised of clinicians, consultants, coding specialists and other policy analysts to identify guiding principles to apply in evaluating whether changes to the severity level designations of diagnoses are needed and to ensure the severity designations proposed appropriately reflect resource use based on review of the claims 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) and improve the overall accuracy of the IPPS payments. Our goal was to develop a set of guiding principles that, when applied, could assist in determining whether the presence of the specified secondary diagnosis would lead to increased hospital resource use in most instances. The workgroup identified the following nine guiding principles as meaningful indicators of expected resource use by a secondary diagnosis:

  • Represents end of life/near death or has reached an advanced stage associated with systemic physiologic decompensation and debility.
  • Denotes organ system instability or failure.
  • Involves a chronic illness with susceptibility to exacerbations or abrupt decline.
  • Serves as a marker for advanced disease states across multiple different comorbid conditions.
  • Reflects systemic impact.
  • Post-operative condition/complication impacting recovery.
  • Typically requires higher level of care (that is, intensive monitoring, greater number of caregivers, additional testing, intensive care unit care, extended length of stay).
  • Impedes patient cooperation and/or management of care.
  • Recent (last 10 years) change in best practice, or in practice guidelines and review of the extent to which these changes have led to concomitant changes in expected resource use.

Using a combination of mathematical analysis of claims data as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235) and the application of these guiding principles, we plan to continue a comprehensive CC/MCC analysis and present the findings and proposals in future rulemaking. We are inviting public comments regarding these guiding principles, as well as other possible ways we can incorporate meaningful indicators of clinical severity. When providing additional feedback or comments, we encourage the public to provide a detailed explanation of how applying a suggested concept or principle would ensure that the severity designation appropriately reflects resource use for any diagnosis code.

d. Proposed Additions and Deletions to the Diagnosis Code Severity Levels for FY 2021

The following tables identify the proposed additions and deletions to the diagnosis code MCC severity levels list and the proposed additions and deletions to the diagnosis code CC severity levels list for FY 2021 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—Proposed Additions to the MCC List—FY 2021;

Table 6I.2— Proposed Deletions to the MCC List—FY 2021;

Table 6J.1— Proposed Additions to the CC List—FY 2021; and

Table 6J.2— Proposed Deletions to the CC List—FY 2021.

e. Proposed CC Exclusions List for FY 2021

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 37 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. For all 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 Start Printed Page 32551CC 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.

We received a request to consider removing diagnosis codes describing any type of stroke that is designated as a MCC in the code range I60.00 through I63.9 from the CC Exclusion list when a principal diagnosis of diabetes in the code range E08.00 through E13 is reported. According to the requestor, acute strokes and chronic diabetes are two distinct conditions, therefore a stroke that occurs during an admission for an underlying diabetic condition should not be excluded from acting as a MCC. The requestor provided an example of a patient with type 2 diabetes who was admitted for treatment of infected foot ulcers and then experienced a stroke prior to discharge, resulting in assignment to MS-DRG 639 (Diabetes without CC/MCC). The requestor asserted the more appropriate assignment is MS-DRG 637 (Diabetes with MCC), which they stated more appropriately reflects severity of illness and resources involved in the treatment of an acute stroke. In another example provided by the requestor, a patient with type 2 diabetes and osteomyelitis underwent a left below the knee amputation and experienced a stroke before discharge, resulting in assignment to MS-DRG 617 (Amputation of Lower Limb for Endocrine, Nutritional, and Metabolic Diseases with CC). The requestor asserted the more appropriate assignment is MS-DRG 616 (Amputation of Lower Limb for Endocrine, Nutritional, and Metabolic Diseases with MCC), which they stated more appropriately reflects severity of illness and resources involved in the treatment an acute stroke.

Our clinical advisors agree that acute strokes and chronic diabetes are two distinct conditions and a case reporting a secondary diagnosis of a stroke in the code range I60.00 through I63.9 should not be excluded from acting as a MCC when reported with a principal diagnosis of diabetes in the code range E08.00 through E13.9.

We analyzed claims data from the September 2019 update of the FY 2019 MedPAR file for cases reporting a principal diagnosis of diabetes in the code range E08.00 through E13.9 with a secondary diagnosis of a stroke in the code range I60.00 through I63.9. We refer the reader to table 6P.3a for a detailed list of the diagnosis codes describing diabetes that were analyzed and table 6P.3b for a detailed list of the diagnosis codes describing a stroke that were analyzed and that are also designated as a MCC in this code range. We found a total of 1,109 cases across 40 MS-DRGs with an average length of stay of 10.1 days and average costs of $24,672 reporting a principal diagnosis of diabetes with a secondary diagnosis of a stroke that was excluded from acting as a MCC. Of those 1,109 cases, we identified 161 cases that would result in assignment to the higher severity level “with MCC” MS-DRG if the diagnosis of stroke was no longer excluded from acting as a MCC. The remaining 948 cases would maintain their existing MS-DRG assignment since they were either already grouped to the highest MCC severity level based on another diagnosis code that is designated as a MCC or they were assigned to one of the Pre-MDC MS-DRGs. We refer the reader to table 6P.4a for the detailed analysis.

Based on the advice of our clinical advisors, for FY 2021, we are proposing to remove the diagnosis codes describing stroke in the code range I60.00 through I63.9 that are designated as a MCC from the list of CC Exclusions when reported with a principal diagnosis of diabetes in the code range E08.00 through E13.9 from the ICD-10 MS-DRGs Version 38 CC Exclusion List as reflected in Table 6H.1.—Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2021 and Table 6H.2.—Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2021.

We are proposing additional changes to the ICD-10 MS-DRGs Version 38 CC Exclusion List based on the diagnosis and procedure code updates as discussed in section II.D.13. of this FY 2021 IPPS/LTCH PPS proposed rule. Therefore, we have developed Table 6G.1.—Proposed Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2021; Table 6G.2.—Proposed Principal Diagnosis Order Additions to the CC Exclusions List—FY 2021; Table 6H.1.—Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2021; and Table 6H.2.—Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2021. 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 this 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.

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

To identify new, revised and deleted diagnosis and procedure codes, for FY 2021, we have developed Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, and Table 6E.—Revised Diagnosis Code Titles for this proposed rule.

These tables are not published in the Addendum to this proposed rule, but are available via the internet on the CMS 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 proposed rule. As discussed in section II.D.16. of the preamble of this proposed rule, the code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting process. Therefore, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules.

We are proposing 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. In addition, the proposed severity level designations for the new diagnosis codes are set forth in Table 6A. and the proposed 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 proposed rule:

  • Table 6A.—New Diagnosis Codes-FY 2021;Start Printed Page 32552
  • Table 6B.—New Procedure Codes-FY 2021;
  • Table 6C.—Invalid Diagnosis Codes-FY 2021;
  • Table 6E.—Revised Diagnosis Code Titles-FY 2021;
  • Table 6G.1.—Proposed Secondary Diagnosis Order Additions to the CC Exclusions List-FY 2021;
  • Table 6G.2.— Proposed Principal Diagnosis Order Additions to the CC Exclusions List-FY 2021;
  • Table 6H.1.— Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List-FY 2021;
  • Table 6H.2.— Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2021;
  • Table 6I.1.— Proposed Additions to the MCC List-FY 2021;
  • Table 6I.2.- Proposed Deletions to the MCC List-FY 2021;
  • Table 6J.1.— Proposed Additions to the CC List-FY 2021; and
  • Table 6J.2.— Proposed Deletions to the CC List -FY 2021.

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

The Medicare Code Editor (MCE) is a software program that detects and reports errors in the coding of Medicare 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 2020 IPPS/LTCH PPS final rule (84 FR 42156), we made available the FY 2020 ICD-10 MCE Version 37 manual file. The manual contains the definitions of the Medicare code edits, including a description of each coding edit with the corresponding diagnosis and procedure code edit lists. The link to this MCE manual file, along with the link to the mainframe and computer software for the MCE Version 37 (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.

For this FY 2021 IPPS/LTCH PPS proposed rule, we address the MCE requests we received by the November 1, 2019 deadline. We also discuss the proposals we are making based on our internal review and analysis.

a. Age Conflict Edit

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

  • Perinatal/Newborn—Age 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 9-64 years inclusive (for example, diabetes in pregnancy, antepartum pulmonary complication).
  • Adult—Age range is 15-124 years inclusive (for example, senile delirium, mature cataract).

(1) Maternity Diagnoses

Under the ICD-10 MCE, the Maternity diagnoses category for the Age conflict edit considers the age range of 9 to 64 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.

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-CM diagnosis codes listed in this section of this rule to the Maternity diagnoses category code list under the Age conflict edit.

In addition, as discussed in section II.D.13. of the preamble of this proposed rule, Table 6C.—Invalid Diagnosis Codes, lists the diagnosis codes that are no longer effective October 1, 2020. Included in this table is ICD-10-CM diagnosis code O99.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium) which is currently listed on the Maternity diagnoses category code list under the Age Conflict edit. We are proposing to remove this code from the Maternity diagnoses category code list.

(2) Adult Diagnoses

Under the ICD-10 MCE, the Adult diagnoses category for the Age conflict edit considers the age range of 15 to 124 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.

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-CM diagnosis codes to the Adult diagnoses category code list under the Age conflict edit.

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b. Sex Conflict Edit

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

(1) Diagnoses for Females Only Edit

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the new diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-CM diagnosis codes listed in this section of this rule to the edit code list for the Diagnoses for Females Only edit.

In addition, as discussed in section II.D.13. of the preamble of this proposed rule, Table 6C.—Invalid Diagnosis Codes, lists the diagnosis codes that are no longer effective October 1, 2020. Included in this table are ICD-10-CM diagnosis code O99.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium) and ICD-10-CM diagnosis code Q51.20 (Other doubling of uterus, unspecified) which are currently listed on the Diagnoses for Females Only edit code list. We are proposing to delete these codes from the Diagnoses for Females Only edit code list.

(2) Procedures for Females Only Edit

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6B.—New Procedure Codes, lists the new procedure codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-PCS procedure codes listed in this section of this rule to the edit code list for the Procedures for Females Only edit.

(3) Procedures for Males Only

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6B.—New Procedure Codes, lists the new procedure codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-PCS procedure Start Printed Page 32554codes listed in this section of this rule to the edit code list for the Procedures for Males Only edit.

c. Manifestation Code as Principal Diagnosis Edit

In the ICD-10-CM classification system, manifestation codes describe the manifestation of an underlying disease, not the disease itself, and therefore should not be used as a principal diagnosis.

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A—New Diagnosis Codes, lists the new diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-CM diagnosis codes listed in this section of this rule to the edit code list for the Manifestation Codes Not Allowed as Principal Diagnosis edit code list because these codes are describing the manifestation of an underlying disease and not the disease itself.

In addition, as discussed in section II.D.13. of the preamble of this proposed rule, Table 6C.—Invalid Diagnosis Codes, lists the diagnosis codes that are no longer effective October 1, 2020. Included in this table is ICD-10-CM diagnosis code J84.17 (Other interstitial pulmonary diseases with fibrosis in diseases classified elsewhere) which is currently listed on the Manifestation Codes Not Allowed as Principal Diagnosis edit code list. We are proposing to delete this code from the Manifestation Codes Not Allowed as Principal Diagnosis edit code list.

d. Unacceptable Principal Diagnosis Edit

In the MCE, there are select codes that describe a circumstance which 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.

As discussed in Section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the new diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2020. We are proposing to add the following new ICD-10-CM diagnosis codes listed in this section of this rule to the Unacceptable Principal Diagnosis edit code list.

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In addition, as discussed in section II.D.13. of the preamble of this proposed rule, Table 6C.—Invalid Diagnosis Codes, lists the diagnosis codes that are no longer effective October 1, 2020. Included in this table are the following ICD-10-CM diagnosis codes that are currently listed on the Unacceptable Principal Diagnosis edit code list. We are proposing to delete these codes from the Unacceptable Principal Diagnosis edit code list.

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. Subsequently, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20235) we stated that we engaged a contractor to assist in the review of the limited coverage and non-covered procedure edits in the MCE that may also be present in other claims processing Start Printed Page 32556systems 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 is 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. The contractor is continuing to conduct this review.

We have also noted that the purpose of the MCE is to ensure that errors and inconsistencies in the coded data are recognized during Medicare claims processing. 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. 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 October 20, 2020.

15. Proposed Changes to Surgical Hierarchies

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

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 proposed 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 are proposing to make in this FY 2021 IPPS/LTCH PPS proposed rule, as discussed in section II.D.2.b. of the preamble of this proposed rule, we are proposing to revise the surgical hierarchy for the Pre-MDC MS-DRGs as follows: In the Pre-MDC MS-DRGs we are proposing to sequence proposed new Pre-MDC MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy) above Pre-MDC MS-DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively). We also note that, as discussed in section II.D.2.b. of the preamble of this proposed rule, we are proposing to revise the title for Pre-MDC MS-DRG 016 to “Autologous Bone Marrow Transplant with CC/MCC”. In addition, based on the changes that we are proposing to make as discussed in section II.D.8.a. of the preamble of this proposed rule, we are also proposing to sequence proposed new Pre-MDC MS-DRG 019 (Simultaneous Pancreas/Kidney Transplant with Hemodialysis) above Pre-MDC MS-DRG 008 (Simultaneous Pancreas/Kidney Transplant) and below Pre-MDC MS-DRG 007 (Lung Transplant).

As discussed in section II.D.4. of the preamble of this proposed rule, we are proposing to delete MS-DRGs 129 and 130 (Major Head and Neck Procedures with CC/MCC or Major Device and without CC/MCC, respectively), MS-DRGs 131 and 132 (Cranial and Facial Procedures with CC/MCC and without CC/MCC, respectively), and MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R. Procedures with CC/MC and without CC/MCC, respectively). Based on the changes we are proposing to make for those MS-DRGs in MDC 03, we are proposing to revise the surgical hierarchy for MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat) as follows: In MDC 03, we are proposing to sequence proposed new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) above proposed new MS-DRGs 143, 144, and 145 (Other Ear, Start Printed Page 32557Nose, Mouth and Throat O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). We are also proposing to sequence proposed new MS-DRGs 143, 144, and 145 above MS-DRGs 135 and 136 (Sinus and Mastoid Procedures with CC/MCC and without CC/MCC, respectively). We also note that, based on the changes that we are proposing to make, as discussed in section II.D.7b of the preamble of this proposed rule, we are proposing to revise the surgical hierarchy for MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) as follows: In MDC 08, we are proposing to sequence proposed new MS-DRGs 521 and 522 (Hip Replacement with Principal Diagnosis of Hip Fracture with and without MCC, respectively) above MS-DRGs 469 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement) and 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC). We further note that, based on the changes we are proposing to make, as discussed in section II.D. 8 of the preamble of this proposed rule, we are proposing to revise the surgical hierarchy for MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) as follows: In MDC 11, we are proposing to sequence proposed new MS-DRGs 650 and 651 (Kidney Transplant with Hemodialysis with and without MCC, respectively) above MS-DRG 652 (Kidney Transplant).

Our proposal for Appendix D MS-DRG Surgical Hierarchy by MDC and MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 38 is illustrated in the following tables.

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16. 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 Centers for Disease Control and Prevention's (CDC) National Center for Health Statistics (NCHS) 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 recommendations, which then must be approved by the agencies.

The Committee presented proposals for coding changes for implementation in FY 2021 at a public meeting held on September 10-11, 2019, and finalized the coding changes after consideration of comments received at the meetings and in writing by November 8, 2019.

The Committee held its 2020 meeting on March 17-18, 2020. The deadline for submitting comments on these code proposals was April 17, 2020. 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 June 2020 would be included in the October 1, 2020 update to the ICD-10-CM diagnosis and ICD-10-PCS procedure code sets. As discussed in earlier sections of the preamble of this proposed rule, there are new, revised, and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that are captured in Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, and Table 6E.—Revised Diagnosis Code Titles for this proposed 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 10-11, 2019 meeting and a recording of the virtual meeting held on March 17-18, 2020 can be obtained from the CMS website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​C-and-M-Meeting-Materials. The materials for the discussions relating to diagnosis codes at the September 10-11, 2019 meeting and March 17-18, 2020 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 or participating in a Committee meeting, and timeline requirements and meeting dates.

We encourage commenters to address suggestions on coding issues involving diagnosis codes via 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) of Public Law 108-173 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 Start Printed Page 32559in 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 meeting. The request must identify the reason why a new code is needed in April for purposes of the new technology process. The participants at the meeting and those reviewing the Committee meeting 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.

There were not any requests submitted for an expedited April 1, 2020 implementation of a new code at the September 10-11, 2019 Committee meeting. However, as announced by the CDC on December 9, 2019, a new ICD-10 emergency code was established by the World Health Organization (WHO) in response to recent occurrences of vaping related disorders. Consistent with this update, the CDC/NCHS implemented a new ICD-10-CM diagnosis code, U07.0 (Vaping-related disorder) for U.S. reporting of vaping-related disorders effective April 1, 2020. In addition, as announced by the CDC, a new emergency code was established by the WHO on January 31, 2020, in response to the 2019 Novel Coronavirus (2019-nCoV) disease outbreak that was declared a public health emergency of international concern. Consistent with this update, the CDC/NCHS implemented a new ICD-10-CM diagnosis code, U07.1 (COVID-19) for U.S. reporting of the 2019 Novel Coronavirus disease effective April 1, 2020. We refer the reader to the CDC web page at https://www.cdc.gov/​nchs/​icd/​icd10cm.htm for additional details regarding the implementation of these new diagnosis codes.

We have provided the MS-DRG assignments for these codes effective with discharges on and after April 1, 2020, consistent with our established process for assigning new diagnosis codes. Specifically, we review the predecessor diagnosis code and MS-DRG assignment most closely associated with the new diagnosis code, and consider other factors that may be relevant to the MS-DRG assignment, including the severity of illness, treatment difficulty, and the resources utilized for the specific condition/diagnosis. We note that this process does not automatically result in the new diagnosis code being assigned to the same MS-DRG as the predecessor code. Effective with discharges on and after April 1, 2020, diagnosis code U07.0 is assigned to MDC 04 (Diseases and Disorders of the Respiratory System) in MS-DRGs 205 and 206 (Other Respiratory System Diagnoses with and without MCC, respectively), consistent with the assignment of the predecessor diagnosis code. Effective with discharges on and after April 1, 2020, diagnosis code U07.1 is assigned to MDC 04 in MS-DRGs 177, 178 and 179 (Respiratory Infections and Inflammations with MCC, with CC, and without CC/MCC, respectively), MDC 15 (Newborns and Other Neonates with Conditions Originating in Perinatal Period) in MS-DRG 791 (Prematurity with Major Problems) and MS-DRG 793 (Full Term Neonate with Major Problems), and MDC 25 (Human Immunodeficiency Virus Infections) in MS-DRGs 974, 975, and 976 (HIV with Major Related Condition with MCC, with CC, and without CC/MCC, respectively).

These assignments for diagnosis codes U07.0 and U07.1 are reflected in Table 6A—New Diagnosis Codes (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS. As with the other new diagnosis codes and MS-DRG assignments included in Table 6A of this proposed rule, we are soliciting public comments on the most appropriate MDC, MS-DRG, and severity level assignments for these codes for FY 2021, as well as any other options for the GROUPER logic. We also note that Change Request (CR) 11623, Transmittal 4499, titled “Update to the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) for Vaping Related Disorder”, was issued on January 24, 2020 (available via the internet on the CMS website at: https://www.cms.gov/​files/​document/​r4499cp.pdf) regarding the release of an updated version of the ICD-10 MS-DRG Grouper and Medicare Code Editor (MCE) software, Version 37.1, to be effective with discharges on or after April 1, 2020 reflecting new diagnosis code U07.0. The updated software, along with the updated ICD-10 MS-DRG V37.1 Definitions Manual and the Definitions of Medicare Code Edits V37.1 manual was made available at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPSMS-DRG-Classifications-and-Software. In response to the implementation of diagnosis code U07.1 (COVID-19), we subsequently released a new updated version of the ICD-10 MS-DRG Grouper and Medicare Code Editor (MCE) software, Version 37.1 R1, effective with discharges on or after April 1, 2020 reflecting this new code, which replaced the ICD-10 MS-DRG Grouper and Medicare Code Editor (MCE) software, Version 37.1. The updated software, along with the updated ICD-10 MS-DRG V37.1 R1 Definitions Manual and the Definitions of Medicare Code Edits V37.1 R1 manual are available at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​Start Printed Page 32560AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

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.

17. 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. Proposed Changes for FY 2021

As discussed in section II.D.4. of the preamble of this proposed rule, for FY 2021, under MDC 03, we are proposing to delete MS-DRGs 129 and 130 and to Start Printed Page 32561add new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively). A subset of the procedures currently assigned to MS-DRGs 129 and 130 are being proposed for assignment to proposed new MS-DRGs 140, 141, and 142.

Additionally, as discussed in section II.D.7.b. of the preamble of this proposed rule, for FY 2021, under MDC 08, we are proposing to create new MS-DRGs 551 and 552 (Hip Replacement with Principal Diagnosis of Hip Fracture with and without MCC, respectively). A subset of the procedures currently assigned to MS-DRGs 469 through 470 are being proposed for assignment to proposed new MS-DRGs 551 and 552.

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 129, 130, 469 and 470 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. Therefore, if the applicable proposed MS-DRG changes are finalized, we also would add proposed new MS-DRGs 140, 141, 142, 551 and 552 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 as reflected in the table. We are also proposing to continue to include the existing MS-DRGs currently subject to the policy as also displayed in the table.

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The final list of MS-DRGs subject to the IPPS policy for replaced devices offered without cost or with a credit will be included in the FY2021 IPPS/LTCH Start Printed Page 32564PPS final rule and also will be issued to providers in the form of a Change Request (CR).

E. Recalibration of the FY 2021 MS-DRG Relative Weights

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.

1. Data Sources for Developing the Relative Weights

Consistent with our established policy, in developing the MS-DRG relative weights for FY 2021, we are proposing to use two data sources: claims data and cost report data. The claims data source is the MedPAR file, which includes fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2019 MedPAR data used in this proposed rule include discharges occurring on October 1, 2018, through September 30, 2019, based on bills received by CMS through December 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 2019 MedPAR file used in calculating the proposed relative weights includes data for approximately 9,184,114 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, 2019 update of the FY 2019 MedPAR file complies with version 5010 of the X12 HIPAA Transaction and Code Set Standards, and includes a variable called “claim type.” Claim type “60” indicates that the claim was an inpatient claim paid as fee-for-service. Claim types “61,” “62,” “63,” and “64” relate to encounter claims, Medicare Advantage IME claims, and HMO no-pay claims. Therefore, the calculation of the proposed relative weights for FY 2021 also excludes claims with claim type values not equal to “60.” The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. We note that the proposed FY 2021 relative weights are based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes from the FY 2019 MedPAR claims data, grouped through the ICD-10 version of the proposed FY 2021 GROUPER (Version 38).

The second data source used in the cost-based relative weighting methodology is the Medicare cost report data files from the HCRIS. Normally, we use the HCRIS dataset that is 3 years prior to the IPPS fiscal year. Specifically, we used cost report data from the December 31, 2019 update of the FY 2018 HCRIS for calculating the proposed FY 2021 cost-based relative weights. Consistent with our historical practice, for this FY 2021 proposed rule, we are providing the version of the HCRIS from which we calculated these proposed 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 2021 IPPS Proposed Rule Home Page” or “Acute Inpatient Files for Download.”

2. Methodology for Calculation of the Relative Weights

a. General

We calculated the proposed FY 2021 relative weights based on 19 CCRs, as we did for FY 2020. The methodology we are proposing to use to calculate the FY 2021 MS-DRG cost-based relative weights based on claims data in the FY 2019 MedPAR file and data from the FY 2018 Medicare cost reports is as follows:

  • To the extent possible, all the claims were regrouped using the proposed FY 2021 MS-DRG classifications discussed in sections II.B. and II.F. of the preamble of this proposed rule.
  • The transplant cases that were used to establish the proposed relative weights for heart and heart-lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare-approved transplant centers that have cases in the FY 2019 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 92.8 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 Start Printed Page 32565condition 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).

The participation of hospitals in the BPCI initiative concluded on September 30, 2018. The participation of hospitals in the BPCI Advanced model started on October 1, 2018. The BPCI Advanced model, tested under the authority of 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/​. Consistent with our policy for FY 2020, and consistent with how we have treated hospitals that participated in the BPCI Initiative, for FY 2021, 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 previously, these hospitals are still receiving IPPS payments under section 1886(d) of the Act. Consistent with FY 2020 IPPS/LTCH PPS final rule, we also are proposing to include all applicable data from subsection (d) hospitals participating in the Comprehensive Care for Joint Replacement (CJR) Model in our IPPS payment modeling and ratesetting calculations.

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 proposed national average CCRs developed from the FY 2018 cost report data.

The 19 cost centers that we used in the proposed relative weight calculation are shown in a supplemental data file posted via the internet on the CMS website for this proposed rule and available at http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. The supplemental data file shows the lines on the cost report and the corresponding revenue codes that we used to create the proposed 19 national cost center CCRs. If we receive comments about the groupings, we may consider those comments as we finalize our policy.

We are inviting public comments on our proposals related to recalibration of the proposed FY 2021 relative weights and the changes in relative weights from FY 2020.

We note that in the FY 2020 IPPS/LTCH PPS final rule, we adopted 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. For an MS-DRG meeting this criterion, the FY 2020 relative weight was set equal to the FY 2019 relative weight, which in turn had been set equal to the FY 2018 relative weight (84 FR 42167). For FY 2020, the only MS-DRG meeting this criterion was MS-Start Printed Page 32566DRG 215. We are inviting public comments on the proposed FY 2021 weight for MS-DRG 215 (Other Heart Assist System Implant) as set forth in Table 5 associated with this proposed rule, including comments on whether we should consider a policy under sections 1886(d)(4)(B) and (C) of the Act similar to the measure adopted in the FY 2020 IPPS/LTCH PPS final rule to maintain the FY 2021 relative weight equal to the FY 2020 relative weight for MS-DRG 215, or an alternative approach such as averaging the FY 2020 relative weight and the otherwise applicable FY 2021 weight.

b. Proposed Relative Weight Calculation for Proposed New MS-DRG 018 for CAR T-Cell Therapy

As discussed in section II.D.2.b. of this proposed rule, we are proposing to create new MS-DRG 018 for cases that include procedures describing CAR T-cell therapies, which are currently reported using ICD-10-PCS procedure codes XW033C3 or XW043C3. As discussed in section IV.I. of this proposed rule, given the high cost of the CAR T-cell product, we are proposing a differential payment for cases where the CAR T-cell product is provided without cost as part of a clinical trial to ensure that the payment amount for CAR T-cell therapy clinical trial cases appropriately reflects the relative resources required for providing CAR T-cell therapy as part of a clinical trial.

We also believe it would be appropriate to modify our existing relative weight methodology to ensure that the relative weight for proposed new MS-DRG 018 appropriately reflects the relative resources required for providing CAR T-cell therapy outside of a clinical trial, while still accounting for the clinical trial cases in the overall average cost for all MS-DRGs. Specifically, we are proposing that clinical trial claims that group to proposed new MS-DRG 018 would not be included when calculating the average cost for proposed new MS-DRG 018 that is used to calculate the relative weight for this MS-DRG, so that the relative weight reflects the costs of the CAR T-cell therapy drug. Consistent with our analysis of the FY 2019 MedPAR claims data as discussed in section IV.I. of this proposed rule, we identified clinical trial claims as claims that contain ICD-10-CM diagnosis code Z00.6 or contain standardized drug charges of less than $373,000, which is the average sales price of KYMRIAH and YESCARTA, which are the two CAR T-cell medicines approved to treat relapsed/refractory diffuse large B-cell lymphoma as of the time of the development of this proposed rule. We are also proposing to calculate the following adjustment to account for the CAR T-cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case that is used to calculate the relative weights for all MS-DRGs and for purposes of budget neutrality and outlier simulations:

  • Calculate the average cost for cases to be assigned to proposed new MS-DRG 018 that contain ICD-10-CM diagnosis code Z00.6 or contain standardized drug charges of less than $373,000.
  • Calculate the average cost for cases to be assigned to proposed new MS-DRG 018 that do not contain ICD-10-CM diagnosis code Z00.6 or standardized drug charges of at least $373,000.
  • Calculate an adjustor by dividing the average cost calculated in step 1 by the average cost calculated in step 2.
  • Apply the adjustor calculated in step 3 to the cases identified in step 1 as clinical trial cases, then add this adjusted case count to the non-clinical trial case count prior to calculating the average cost across all MS-DRGs.

Each year, when we calculate the relative weights, we use a transfer-adjusted case count for each MS-DRG, which accounts for payment adjustments resulting from our postacute care transfer policy. This process is described in the FY 2006 IPPS/LTCH PPS final rule (70 FR 47697). We propose to apply this adjustor to the case count for MS-DRG 018 in a similar manner. We propose to first calculate the transfer-adjusted case count for MS-DRG 018, and then further adjust the transfer-adjusted case count by the adjustor described previously. Then, we propose to use this adjusted case count for MS-DRG 018 in calculating the national average cost per case, which is used in the calculation of the relative weights. Based on the December 2019 update of the FY 2019 MedPAR file, we estimate that the average costs of CAR T-cell therapy cases identified as clinical trial cases ($42,164) are 15 percent of the average costs of CAR T-cell therapy cases identified as non-clinical trial cases ($277,592), and therefore, in calculating the national average cost per case, each case identified as a clinical trial case was adjusted to 0.15. We expect to recalculate this adjustor for the CAR T cell therapy clinical trial cases for the final rule based on the updated data available. We also note that we are applying this proposed adjustor for CAR T-cell therapy clinical trial cases for purposes of budget neutrality and outlier simulations, as discussed further in section II.A. of the Addendum to this proposed rule.

We are inviting public comments on our proposal.

3. Development of Proposed National Average CCRs

We developed the proposed national average CCRs as follows:

Using the FY 2018 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. Then we created CCRs for each provider for each cost center (see the supplemental data file 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. Then we took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-3 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare-specific charges for each line item from Worksheet D-3. Once each hospital's Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs.

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

The proposed FY 2021 cost-based relative weights were then normalized by a proposed adjustment factor of 1.818392 so that the average case weight Start Printed Page 32567after 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 proposed 19 national average CCRs for FY 2021 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 are proposing to use that same case threshold in recalibrating the proposed MS-DRG relative weights for FY 2021. Using data from the FY 2019 MedPAR file, there were 7 MS-DRGs that contain fewer than 10 cases. For FY 2021, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for these low-volume MS-DRGs, we are proposing to compute relative weights for the low-volume MS-DRGs by adjusting their final FY 2020 relative weights by the percentage change in the average weight of the cases in other MS-DRGs from FY 2020 to FY 2021. The crosswalk table is as follows.

Start Printed Page 32568

G. Proposed Add-On Payments for New Services and Technologies for FY 2021

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 § 412.87(b) specifies 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 addition, certain transformative new devices and Qualified Infectious Disease Products may qualify under an alternative inpatient new technology add-on payment pathway, as set forth in the regulations at § 412.87(c) and (d). In this 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) and the FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42300).

a. New Technology Add On Payment Criteria

(1) Newness Criterion

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 new FDA approval or clearance, it may not necessarily be considered “new” for purposes of new technology add-on payments if it is “substantially similar” to 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).

(2) Cost Criterion

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 generally used in evaluating new technology add-on payment applications for FY 2021 are presented in a data file that is available, along with the other data files associated with the FY 2020 IPPS/LTCH PPS final rule and correction notice, on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index. However, as we discuss in section II.F.5.i. of the Start Printed Page 32569preamble of this proposed rule, we are proposing to apply the proposed threshold value for proposed new MS-DRG 018 in evaluating the cost criterion for the CAR T-cell therapy technologies for purposes of FY 2021 new technology add-on payments.

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 proposed thresholds for applications for new technology add-on payments for FY 2022 are presented in a data file that is available on the CMS website, along with the other data files associated with this FY 2021 proposed rule, by clicking on the FY 2021 IPPS Proposed Rule Home Page at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index. We note that, under our proposal discussed in section II.F.5.i of the preamble of this proposed rule, beginning with FY 2022, we would use the proposed threshold values associated with the proposed rule for that fiscal year to evaluate the cost criterion for all other applications for new technology add-on payments and previously approved technologies that may continue to receive new technology add-on payments, if those technologies would be assigned to a proposed new MS-DRG for that same fiscal year. In the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed that applicants should submit a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Specifically, applicants should submit a sample of sufficient size to enable us to undertake an initial validation and analysis of the data. We also discussed in the September 7, 2001 final rule (66 FR 46917) 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.

b. Substantial Clinical Improvement Criterion

Under the third criterion at § 412.87(b)(1), a medical service or technology must represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42292) we prospectively codified in our regulations at § 412.87(b) the following aspects of how we evaluate substantial clinical improvement for purposes of new technology add-on payments under the IPPS:

  • The totality of the circumstances is considered when making a determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries.
  • A determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries means—

++ The new medical service or technology offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments;

++ The new medical service or technology offers the ability to diagnose a medical condition in a patient population where that medical condition is currently undetectable, or offers the ability to diagnose a medical condition earlier in a patient population than allowed by currently available methods, and there must also be evidence that use of the new medical service or technology to make a diagnosis affects the management of the patient;

++ The use of the new medical service or technology significantly improves clinical outcomes relative to services or technologies previously available as demonstrated by one or more of the following: A reduction in at least one clinically significant adverse event, including a reduction in mortality or a clinically significant complication; a decreased rate of at least one subsequent diagnostic or therapeutic intervention; a decreased number of future hospitalizations or physician visits; a more rapid beneficial resolution of the disease process treatment including, but not limited to, a reduced length of stay or recovery time; an improvement in one or more activities of daily living; an improved quality of life; or, a demonstrated greater medication adherence or compliance; or

++ The totality of the circumstances otherwise demonstrates that the new medical service or technology substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

  • Evidence from the following published or unpublished information sources from within the United States or elsewhere may be sufficient to establish that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries: Clinical trials, peer reviewed journal articles; study results; meta-analyses; consensus statements; white papers; patient surveys; case studies; reports; systematic literature reviews; letters from major healthcare associations; editorials and letters to the editor; and public comments. Other appropriate information sources may be considered.
  • The medical condition diagnosed or treated by the new medical service or technology may have a low prevalence among Medicare beneficiaries.
  • The new medical service or technology may represent an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of a subpopulation of patients with the medical condition diagnosed or treated by the new medical service or technology.

We refer the reader to the FY 2020 IPPS/LTCH PPS final rule for additional discussion of the evaluation of substantial clinical improvement for purposes of new technology add-on payments under the IPPS.

We note, consistent with the discussion in the FY 2003 IPPS Final Rule (67 FR 50015), although we are affiliated with the FDA and we do not question the FDA's regulatory responsibility for decisions related to marketing authorization (for example, approval, clearance, etc.), we do not use FDA criteria to determine what drugs, devices, or technologies qualify for new technology add-on payments under Medicare. Our criteria do not depend on the standard of safety and efficacy on which the FDA relies but on a demonstration of substantial clinical improvement in the Medicare population (particularly patients over age 65).

c. Alternative Inpatient New Technology Add-On Payment Pathway

Under § 412.87(c) and (d) of the regulations, beginning with applications for new technology add-on payments for FY 2021, certain transformative new devices and Qualified Infectious Disease Products (QIDPs) may qualify for the new technology add-on payment under Start Printed Page 32570an alternative pathway, as described in this section. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule for complete discussion on this policy (84 FR 42292 through 42297). We note, in section II.F.9.b. of this preamble, we are proposing to expand our current alternative new technology add-on payment pathway for QIDPs to include products approved under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD) pathway. In addition, we are proposing to refer more broadly to “certain antimicrobial products” rather than specifying the particular FDA programs for antimicrobial products (that is, QIDPs and LPADs) that are the subject of the alternative new technology add-on payment pathway. (We refer the reader to section II.F.9.b. of this preamble below for a complete discussion regarding this proposal.) We note that a technology is not required to have the specified FDA designation at the time the new technology add-on payment application is submitted. CMS will review the application based on the information provided by the applicant under the alternative pathway specified by the applicant. However, to receive approval for the new technology add-on payment under that alternative pathway, the technology must have the applicable designation and meet all other requirements in the regulations in § 412.87(c) and (d), as applicable.

(1) Alternative Pathway for Certain Transformative New Devices

For applications received for new technology add-on payments for FY 2021 and subsequent fiscal years, if a medical device is part of FDA's Breakthrough Devices Program nd received FDA marketing authorization, it will be considered new and not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS, and 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. This policy is codified at § 412.87(c). Under this alternative pathway, a medical device that has received FDA marketing authorization (that is, has been approved or cleared by, or had a De Novo classification request granted by, FDA) and that is part of FDA's Breakthrough Devices Program will need to meet the cost criterion under § 412.87(b)(3), as reflected in § 412.87(c)(3), and will be considered new as reflected in § 412.87(c)(2). We note, in section II.F.8. of this preamble, we are clarifying our policy that a new medical device under this alternative pathway must receive marketing authorization for the indication covered by the Breakthrough Devices Program designation. (We refer the reader to section II.F.8. of this preamble below for a complete discussion regarding this clarification.)

(2) Alternative Pathway for Qualified Infectious Disease Products (QIDPs)

For applications received for new technology add-on payments for FY 2021 and subsequent fiscal years, if a technology is designated by FDA as a QIDP and received FDA marketing authorization, it will be considered new and not substantially similar to an existing technology for purposes of new technology add-on payments and will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. We codified this policy at § 412.87(d). Under this alternative pathway for QIDPs, a medical product that has received FDA marketing authorization and is designated by FDA as a QIDP will need to meet the cost criterion under § 412.87(b)(3), as reflected in § 412.87(d)(3), and will be considered new as reflected in § 412.87(d)(2).

We refer the reader to the FY 2020 IPPS/LTCH PPS final rule for complete discussion on this policy (84 FR 42292 through 42297). We note, in section II.F.9.b. of this preamble, we are clarifying a new medical product seeking approval for the new technology add-on payment under the alternative pathway for QIDPs must receive marketing authorization for the indication covered by the QIDP designation. (We refer the reader to section II.F.9.b. of this preamble. below for a complete discussion regarding this clarification.)

d. Additional Payment for New Medical Service or Technology

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. For discharges occurring before October 1, 2019, under § 412.88, if the costs of the 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 made 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.

Beginning with discharges on or after October 1, 2019, for the reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300), we finalized an increase in the new technology add-on payment percentage, as reflected at § 412.88(a)(2)(ii). Specifically, for a new technology other than a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (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 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. For a new technology that is a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (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 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. As set forth in § 412.88(b)(2), unless the discharge qualifies for an outlier payment, the additional Medicare payment will be limited to the full MS-DRG payment plus 65 percent (or 75 percent for a medical product designated by FDA as a QIDP) of the estimated costs of the new technology or medical service.

We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300) for complete discussion on the increase in the new technology add on payment beginning with discharges on or after October 1, 2019. We note, in section II.F.9.c. of this preamble, we are proposing an increase in the new technology add-on payment percentage to 75 percent for products approved under FDA's LPAD pathway. (We refer the reader to section II.F.9.c. of this preamble below for a complete discussion regarding this proposal.)Start Printed Page 32571

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 subsequent years have not been subjected to budget neutrality.

e. Evaluation of Eligibility Criteria for New Medical Service or Technology Applications

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. We note, in section II.F.9.c. of this preamble, we are proposing a process by which a technology for which an application for new technology add-on payments is submitted under the alternative pathway for certain antimicrobial products would receive conditional approval for such payment, provided the product receives FDA marketing authorization by July 1 of the year for which the new technology add-on payment application was submitted. (We refer the reader to section II.F.9.c. of this preamble below for a complete discussion regarding this proposal.)

f. Council on Technology and Innovation (CTI)

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

g. Application Information for New Medical Services or Technologies

Applicants for add-on payments for new medical services or technologies for FY 2022 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement (unless the application is under one of the alternative pathways as previously described), along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Complete application information, along with final deadlines for submitting a full application, will be posted as it becomes available on the CMS 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 2022, 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 and approved under OMB control number 0938-1347.

As discussed previously, in the FY 2020 IPPS/LTCH PPS final rule, we adopted an alternative inpatient new technology add-on payment pathway for certain transformative new devices and for Qualified Infectious Disease Products, as set forth in the regulations at § 412.87(c) and (d). The change in burden associated with these changes to the new technology add-on payment application process were discussed in a revision of the information collection requirement (ICR) request currently approved under OMB control number 0938-1347. In accordance with the implementing regulations of the PRA, we detailed the revisions of the ICR and published the required 60-day notice on August 15, 2019 (84 FR 41723) and 30-day notice on December 17, 2019 (84 FR 68936) to solicit public comments. The ICR is currently pending OMB approval.

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 Start Printed Page 32572Public 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 2021 prior to publication of this FY 2021 IPPS/LTCH PPS proposed rule, we published a notice in the Federal Register on October 8, 2019 (84 FR 53732), and held a town hall meeting at the CMS Headquarters Office in Baltimore, MD, on December 16, 2019. 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 the FY 2021 new medical service and technology add-on payment applications before the publication of the FY 2021 IPPS/LTCH PPS proposed rule.

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 January 3, 2020, in our evaluation of the new technology add-on payment applications for FY 2021 in the development of this FY 2021 IPPS/LTCH PPS proposed rule.

In response to the published notice and the December 16, 2019 New Technology Town Hall meeting, we received written comments regarding the applications for FY 2021 new technology add-on payments. We note 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 (84 FR 53732 through 53734), 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 2021. Therefore, we are not summarizing those written comments in this proposed rule that are unrelated to the substantial clinical improvement criterion. In section II.F.5. of the preamble of this proposed rule, we are summarizing comments regarding individual applications, or, if applicable, indicating 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. Proposed FY 2021 Status of Technologies Approved for FY 2020 New Technology Add-On Payments

In this section of the proposed rule, we discuss the proposed FY 2021 status of 18 technologies approved for FY 2020 new technology add-on payments. 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 upcoming fiscal year. We refer readers to a table at the end of this section summarizing for FY 2021 the name of each technology, newness start date, whether we are proposing to continue or discontinue the add-on payment for FY 2021, relevant final rule citations, proposed maximum add-on payment amount and coding assignments.

a. KYMRIAH® (Tisagenlecleucel) and YESCARTA® (Axicabtagene Ciloleucel)

Two manufacturers, Novartis Pharmaceuticals Corporation and Kite Pharma, Inc., submitted separate applications for new technology add-on payments for FY 2019 for KYMRIAH® (tisagenlecleucel) and YESCARTA® (axicabtagene ciloleucel), respectively. Both of these technologies are CD-19-directed T-cell immunotherapies used for the purposes of treating patients with aggressive variants of non-Hodgkin lymphoma (NHL). On May 1, 2018, Novartis Pharmaceuticals Corporation received FDA approval for KYMRIAH®'s second indication, the treatment of adult patients with relapsed or refractory (r/r) large B-cell lymphoma after two or more lines of systemic therapy including diffuse large B-cell lymphoma (DLBCL) not otherwise specified, high grade B-cell lymphoma and DLBCL arising from follicular lymphoma. On October 18, 2017, Kite Pharma, Inc. received FDA approval for the use of YESCARTA® indicated for the treatment of adult patients with r/r large B-cell lymphoma after two or more lines of systemic therapy, including DLBCL not otherwise specified, primary mediastinal large B-cell lymphoma, high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma. With respect to the newness criterion, because potential cases representing patients who may be eligible for treatment using KYMRIAH® and YESCARTA® would group to the same Start Printed Page 32573MS-DRGs (because the same ICD-10-CM diagnosis codes and ICD-10-PCS procedures codes are used to report treatment using either KYMRIAH® or YESCARTA®), and because we believed that these technologies are intended to treat the same or similar disease in the same or similar patient population, and are purposed to achieve the same therapeutic outcome using the same or similar mechanism of action, we considered these two technologies to be substantially similar to each other. We refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41285 through 41286) and FY 2020 IPPS/LTCH/PPS final rule (84 FR 42185 through 42187) for a complete discussion. We stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41285 through 41286) and FY 2020 IPPS/LTCH PPS final rule (84 FR 42185 through 42186) that in accordance with our policy, since we consider the technologies to be substantially similar to each other, it is appropriate to use the earliest market availability date submitted as the beginning of the newness period for both technologies. According to the applicant for YESCARTA®, the first commercial shipment of YESCARTA® was received by a certified treatment center on November 22, 2017. Therefore, based on our policy, with regard to both technologies, we stated that the beginning of the newness period would be November 22, 2017. KYMRIAH® and YESCARTA® were approved for new technology add-on payments for FY 2019 (83 FR 41299). We refer readers to section II.H.5.a. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41283 through 41299) and section II.H.4.d. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42185 through 42187) for a complete discussion of the new technology add-on payment application, coding and payment amount for KYMRIAH® and YESCARTA® for FY 2019 and FY 2020.

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 KYMRIAH® and YESCARTA®, as discussed in the FY 2019 IPPS/LTCH PPS final rule, according to the applicant for YESCARTA®, the first commercial shipment of YESCARTA® was received by a certified treatment center on November 22, 2017. As previously stated, we use the earliest market availability date submitted as the beginning of the newness period for both KYMRIAH® and YESCARTA®. Therefore, we consider the beginning of the newness period for both KYMRIAH® and YESCARTA® to commence November 22, 2017. Because the 3-year anniversary date of the entry of the technology onto the U.S. market (November 22, 2020) will occur in the first half of FY 2021, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for KYMRIAH® and YESCARTA® for FY 2021.

As discussed in section II.D.2.b. of the preamble of this proposed rule, 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. As discussed in section II.D.2.b. of the preamble of this proposed rule, we are proposing to create a new MS-DRG 018 for cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 for FY 2021. We also refer readers to section II.F.5.i of the preamble of this proposed rule for a complete discussion of our proposal that, effective for FY 2022, for applications for new technology add-on payments and for previously approved technologies that may continue to receive new technology add-on payments, the proposed threshold for the upcoming fiscal year for a proposed new MS-DRG would be used to evaluate the cost criterion for any new technologies that would be assigned to a proposed new MS-DRG. As we also discuss in section II.F.5.i. of the preamble of this proposed rule, in light of the significant variance in the threshold amount for proposed new MS-DRG 018 for cases involving CAR T-cell therapies, we are proposing to apply this policy in evaluating the CAR T-cell therapy technologies for FY 2021 new technology add-on payments. This would include both the new FY 2021 CAR T-cell therapy applications, KTE-X19 and Liso-cel, and those CAR T-cell therapy technologies previously approved for new technology add-on payments, KYMRIAH® and YESCARTA®. Therefore, even if KYMRIAH® and/or YESCARTA® were still considered new and within the 3-year anniversary date of the entry of the technology onto the U.S. market, in determining whether these technologies would continue to be eligible for the new technology add-on payment, we are proposing to evaluate whether they meet the cost criterion using the proposed threshold for the proposed new MS-DRG 018 for FY 2021 payment. We refer readers to section II.F.5.i. of the preamble of this proposed rule for a complete discussion on our proposal to use the proposed threshold for proposed new MS-DRG 018 to evaluate the cost criterion for CAR T-cell therapy technologies for purposes of FY 2021 new technology add-on payments.

Per the applicants' cost analyses in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41291), the final inflated average case-weighted standardized charge per case for KYMRIAH® and YESCARTA® is $39,723 (not including the charges related to the technology) and $118,575 (not including the charges related to the technology), respectively. However, we now have cases involving the use of CAR T-cell therapy within the FY 2019 MedPAR data that we believe represent cases that would be eligible for KYMRIAH® and YESCARTA® and which can be used to estimate the average standardized charge per case for purposes of this proposed rule. This charge information from the FY 2019 MedPAR data can be found in the FY 2021 Proposed Before Outliers Removed (BOR) File (available on the CMS website) for Version 38 of the MS-DRGs. Based on information from the FY 2021 Proposed BOR File for Version 38 of the MS-DRGs, the standardized charge per case for MS-DRG 018 is $913,224. The average case-weighted threshold amount based on the proposed new MS-DRG 018 is $1,237,393. Because this estimated average case-weighted standardized charge per case for KYMRIAH® and YESCARTA® ($913,224) does not exceed the average case-weighted threshold amount for proposed new MS-DRG 018 ($1,237,393), we do not Start Printed Page 32574believe that the technology would meet the cost criterion and, as previously stated, are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comment on our proposals.

b. VYXEOSTM (Daunorubicin and Cytarabine) Liposome for Injection

Jazz Pharmaceuticals, Inc. submitted an application for new technology add-on payments for the VYXEOSTM technology for FY 2019. VYXEOSTM was approved by FDA on August 3, 2017, for the treatment of adults with newly diagnosed therapy-related acute myeloid leukemia (t-AML) or AML with myelodysplasia-related changes (AML- MRC). CMS approved VYXEOSTM for new technology add on payments for FY 2019 (83 FR 41299). We refer readers to section II.H.5.b. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41299 through 41305) and section II.H.4.e. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42187 through 42188) for a complete discussion of the new technology add on payment application, coding, and payment amount for VYXEOSTM for FY 2019 and FY 2020.

With regard to the newness criterion for VYXEOSTM, we consider the beginning of the newness period to commence when VYXEOSTM was approved by the FDA (August 3, 2017). Because the 3-year anniversary date of the entry of the VYXEOSTM onto the U.S. market (August 3, 2020) will occur in FY 2020, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for VYXEOSTM for FY 2021.

c. VABOMERETM> (Meropenem and Vaborbactam)

Melinta Therapeutics, Inc., submitted an application for new technology add-on payments for VABOMERETM for FY 2019. VABOMERETM is indicated for use in the treatment of adult patients who have been diagnosed with complicated urinary tract infections (cUTIs), including pyelonephritis caused by designated susceptible bacteria. VABOMERETM received FDA approval on August 29, 2017 and was approved for new technology add on payments for FY 2019 (83 FR 41311). We refer readers to section II.H.5.c. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41305 through 41311) and section II.H.4.f. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42188 through 42189) for a complete discussion of the new technology add on payment application, coding, and payment amount for VABOMERETM for FY 2019 and FY 2020.

With regard to the newness criterion for VABOMERETM, we consider the beginning of the newness period to commence when VABOMERETM received FDA approval (August 29, 2017). Because the 3-year anniversary date of the entry of VABOMERETM onto the U.S. market (August 29, 2020) will occur in FY 2020, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for VABOMERETM for FY 2021.

d. Remedē® System

Respicardia, Inc. submitted an application for new technology add-on payments for the remedē® System for FY 2019. The remedē® System is indicated for use as a transvenous phrenic nerve stimulator in the treatment of adult patients who have been diagnosed with moderate to severe central sleep apnea (CSA). On October 6, 2017, the remedē® System was approved by FDA. The remedē® System was approved for new technology add on payments for FY 2019. We refer readers to section II.H.5.d. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41311 through 41320) and section II.H.4.g. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42189 through 42190) for a complete discussion of the new technology add on payment application, coding and payment amount for the remedē® System for FY 2019 and FY 2020.

With regard to the newness criterion for the remedē® System, as we have discussed in prior rulemaking, we consider the beginning of the newness period to commence when the remedē® System was approved by FDA on October 6, 2017. However, as we summarized in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42189 through 42190), a commenter on the FY 2020 IPPS/LTCH PPS proposed rule, who was also the applicant, believed that the newness period for the remedē® System should start on February 1, 2018, instead of the FDA approval date of October 6, 2017. The commenter stated that due to the required build out of operational and commercial capabilities, the remedē® System was not commercially available upon FDA approval and the first case involving its use did not occur until February 1, 2018. The commenter asserted that the date of the first implant should mark the start of the newness period since before that, the technology was not commercially available. In response to that comment, we indicated that we would consider the additional information the applicant provided when proposing whether to continue new technology add-on payments for the remedē® System for FY 2021.

As we have discussed in prior rulemaking (77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. With regard to the commenter's assertion that the date of the first implant should mark the start of the newness period, we note that while we may consider a documented delay in a technology's availability on the U.S. market in determining when the newness period begins, under our historical policy, we do not consider how frequently the medical service or technology has been used in our determination of newness (70 FR 47349). Without additional information from the applicant, we cannot determine a newness date based on such a documented delay in commercial availability (and not the first case involving use of the remedē® System on February 1, 2018). However, even if we were to consider the newness period to commence on February 1, 2018, as recommended by the commenter, such that the 3-year anniversary date of the entry of the remedē® System onto the U.S. market would be February 1, 2021 rather than October 6, 2020, that 3-year anniversary date would still occur within the first half of FY 2021. Because the 3-year anniversary date of the entry of the remedē® System onto the U.S. market will occur in the first half of FY 2021, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for the remedē® System for FY 2021.

e. ZEMDRITM (Plazomicin)

Achaogen, Inc. submitted an application for new technology add-on payments for ZEMDRITM (plazomicin) for FY 2019. According to the applicant, ZEMDRITM is a next generation aminoglycoside antibiotic, which has been found in vitro to have enhanced activity against many multidrug resistant (MDR) gram-negative bacteria. The applicant received approval from FDA on June 25, 2018, for use in the treatment of adults who have been diagnosed with cUTIs, including pyelonephritis. ZEMDRITM was Start Printed Page 32575approved for new technology add on payments for FY 2019 (83 FR 41334). We refer readers to section II.H.5.f. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41326 through 41334) and section II.H.4.h. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42190 through 42191) for a complete discussion of the new technology add on payment application, coding and payment amount for ZEMDRITM for FY 2019 and FY 2020.

With regard to the newness criterion for ZEMDRITM, we consider the beginning of the newness period to commence when ZEMDRITM was approved by FDA on June 25, 2018. As discussed previously in this section, 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 upcoming fiscal year. Because the 3-year anniversary date of the entry of ZEMDRITM onto the U.S. market (June 25, 2021) will occur in the second half of FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment amount for a case involving the use of ZEMDRITM would remain at $4,083.75 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for ZEMDRITM). Cases involving ZEMDRITM that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure codes XW033G4 (Introduction of Plazomicin anti-infective into peripheral vein, percutaneous approach, new technology group 4) or XW043G4 (Introduction of Plazomicin antiinfective into central vein, percutaneous approach, new technology group 4). We are inviting public comments on our proposal to continue new technology add-on payments for ZEMDRITM for FY 2021.

f. GIAPREZATM (Angiotensin II)

The La Jolla Pharmaceutical Company submitted an application for new technology add-on payments for GIAPREZATM for FY 2019. GIAPREZATM, a synthetic human angiotensin II, is administered through intravenous infusion to raise blood pressure in adult patients who have been diagnosed with septic or other distributive shock. GIAPREZATM was granted a Priority Review designation under FDA's expedited program and received FDA approval on December 21, 2017, for the use in the treatment of adults who have been diagnosed with septic or other distributive shock as an intravenous infusion to increase blood pressure. GIAPREZATM was approved for new technology add on payments for FY 2019 (83 FR 41342). We refer readers to section II.H.5.g. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41334 through 41342) and section II.H.4.i. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42191) for a complete discussion of the new technology add on payment application, coding and payment amount for GIAPREZATM for FY 2019 and FY 2020.

With regard to the newness criterion for GIAPREZATM, we consider the beginning of the newness period to commence when GIAPREZATM was approved by FDA (December 21, 2017). As discussed previously in this section, 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 upcoming fiscal year. Because the 3-year anniversary date of the entry of GIAPREZATM onto the U.S. market (December 21, 2020) will occur in the first half of FY 2021, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for GIAPREZATM for FY 2021.

g. Cerebral Protection System (Sentinel® Cerebral Protection System)

Claret Medical, Inc. submitted an application for new technology add-on payments for the Cerebral Protection System (Sentinel® Cerebral Protection System) for FY 2019. According to the applicant, the Sentinel Cerebral Protection System is indicated for the use as an embolic protection (EP) device to capture and remove thrombus and debris while performing transcatheter aortic valve replacement (TAVR) procedures. The device is percutaneously delivered via the right radial artery and is removed upon completion of the TAVR procedure. The De Novo request for the Sentinel® Cerebral Protection System was granted by FDA on June 1, 2017. The Sentinel Cerebral Protection System was approved for new technology add on payments for FY 2019 (83 FR 41348). We refer readers to section II.H.5.h. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41342 through 41348) and section II.H.4.j. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42191 through 42192) for a complete discussion the new technology add on payment application, coding, and payment amount for the Sentinel® Cerebral Protection System for FY 2019 and FY 2020.

With regard to the newness criterion for the Sentinel® Cerebral Protection System, we consider the beginning of the newness period to commence when FDA granted the De Novo request for the Sentinel® Cerebral Protection System (June 1, 2017). Because the 3-year anniversary date of the entry of the Sentinel® Cerebral Protection System onto the U.S. market (June 1, 2020) will occur in FY 2020, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for the Sentinel® Cerebral Protection System for FY 2021.

h. The AQUABEAM System (Aquablation)

PROCEPT BioRobotics Corporation submitted an application for new technology add-on payments for the AQUABEAM System (Aquablation) for FY 2019. According to the applicant, the AQUABEAM System is indicated for the use in the treatment of patients experiencing lower urinary tract symptoms caused by a diagnosis of benign prostatic hyperplasia (BPH). FDA granted the AQUABEAM System's De Novo request on December 21, 2017, for use in the resection and removal of prostate tissue in males suffering from lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia. The AQUABEAM System was approved for new technology add on payments for FY 2019 (83 FR 41355). We refer readers to section II.H.5.i. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41348 through 41355) and section II.H.4.k. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42192 through 42193) for a complete discussion of the new technology add on payment application, coding, and payment for the AQUABEAM System for FY 2019 and FY 2020.

With regard to the newness criterion for the AQUABEAM System, we consider the beginning of the newness period to commence on the date FDA granted the De Novo request (December 21, 2017). As discussed previously in this section, 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 upcoming fiscal year. Because the 3-year anniversary date of the entry of the AQUABEAM System Start Printed Page 32576onto the U.S. market (December 21, 2020) will occur in the first half of FY 2021, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for the AQUABEAM System for FY 2021.

i. AndexXaTM (Coagulation Factor Xa (Recombinant), Inactivated-zhzo)

Portola Pharmaceuticals, Inc. (Portola) submitted an application for new technology add-on payments for FY 2019 for the use of AndexXaTM (coagulation factor Xa (recombinant), inactivated-zhzo). AndexXaTM received FDA approval on May 3, 2018, and is indicated for use in the treatment of patients who are receiving treatment with rivaroxaban and apixaban, when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding. AndexXaTM was approved for new technology add on payments for FY 2019 (83 FR 41362). We refer readers to section II.H.5.j. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41355 through 41362) and section II.H.4.k. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42193 through 42194) for a complete discussion of the new technology add on payment application, coding, and payment amount for AndexXaTM for FY 2019 and FY 2020.

With regard to the newness criterion for AndexXaTM, we consider the beginning of the newness period to commence when AndexXaTM received FDA approval (May 3, 2018). As discussed previously in this section, 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 upcoming fiscal year. Because the 3-year anniversary date of the entry of AndexXaTM onto the U.S. market (May 3, 2021) will occur in the second half of FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving AndexXaTM would remain at $18,281.25 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for AndexXaTM). Cases involving the use of AndexXaTM that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure codes XW03372 (Introduction of inactivated coagulation factor Xa into peripheral vein, percutaneous approach, new technology group 2) or XW04372 (Introduction of inactivated coagulation factor Xa into central vein, percutaneous approach, new technology group 2). We are inviting public comments on our proposal to continue new technology add-on payments for AndexXaTM for FY 2021.

j. AZEDRA® (Iobenguane Iodine-131) Solution

Progenics Pharmaceuticals, Inc. submitted an application for new technology add-on payments for AZEDRA® (iobenguane Iodine-131) for FY 2020. AZEDRA® is a drug solution formulated for intravenous (IV) use in the treatment of patients who have been diagnosed with obenguane avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma (PPGL). AZEDRA was approved by FDA on July 30, 2018, as a radioactive therapeutic agent indicated for the treatment of adult and pediatric patients 12 years and older with iobenguane scan positive, unresectable, locally advanced or metastatic pheochromocytoma or paraganglioma who require systemic anticancer therapy. AZEDRA® was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.a. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42194 through 42201) for a complete discussion of the new technology add on payment application, coding and payment amount for AZEDRA® for FY 2020.

With regard to the newness criterion for AZEDRA®, we consider the beginning of the newness period to commence when AZEDRA® was approved by FDA (July 30, 2018). As discussed previously in this section, 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 upcoming fiscal year. Because the 3-year anniversary date of the entry of AZEDRA® onto the U.S. market (July 30, 2021) will occur in the second half of FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving AZEDRA® would remain at $98,150 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for AZEDRA®). Cases involving the use of AZEDRA® that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure codes XW033S5 (Introduction of Iobenguane I-131 antineoplastic into peripheral vein, percutaneous approach, new technology group 5), and XW043S5 (Introduction of Iobenguane I-131 antineoplastic into central vein, percutaneous approach, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for AZEDRA® for FY 2021.

k. CABLIVI® (Caplacizumab-yhdp)

The Sanofi Company submitted an application for new technology add-on payments for CABLIVI® (caplacizumab-yhdp) for FY 2020. The applicant described CABLIVI® as a humanized bivalent nanobody consisting of two identical building blocks joined by a tri alanine linker, which is administered through intravenous and subcutaneous injection to inhibit microclot formation in adult patients who have been diagnosed with acquired thrombotic thrombocytopenic purpura (aTTP). CABLIVI® received FDA approval on February 6, 2019, for the treatment of adult patients with acquired aTTP, in combination with plasma exchange and immunosuppressive therapy. CABLIVI® was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.b. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42201 through 42208) for a complete discussion of the new technology add on payment application, coding, and payment amount for CABLIVI® for FY2020.

With regard to the newness criterion for CABLIVI®, we consider the beginning of the newness period to commence when CABLIVI® was approved by FDA (February 6, 2019). Because the 3-year anniversary date of the entry of CABLIVI® onto the U.S. market (February 6, 2022) will occur after FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving CABLIVI® would remain at $33,215 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for CABLIVI®). Cases involving the use of CABLIVI® that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure codes XW013W5 (Introduction of Caplacizumab into subcutaneous tissue, percutaneous approach, new technology group 5), XW033W5 (Introduction of Start Printed Page 32577Caplacizumab into peripheral vein, percutaneous approach, new technology group 5) and XW043W5 (Introduction of Caplacizumab into central vein, percutaneous approach, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for CABLIVI® for FY 2021.

l. ELZONRISTM (Tagraxofusp-erzs)

Stemline Therapeutics submitted an application for new technology add-on payments for ELZONRISTM for FY 2020. ELZONRISTM (tagraxofusp-erzs) is a targeted therapy for the treatment of blastic plasmacytoid dendritic cell neoplasm (BPDCN) administered via infusion. On December 21, 2018, the FDA approved ELZONRISTM for the treatment of blastic plasmacytoid dendritic cell neoplasm in adults and in pediatric patients 2 years old and older. ELZONRISTM was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.e. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42231 through 42237) for a complete discussion of the new technology add on payment application, coding and payment amount for ELZONRISTM for FY 2020.

With regard to the newness criterion for ELZONRISTM, we consider the beginning of the newness period to commence when ELZONRISTM was approved by FDA (December 21, 2018). Because the 3-year anniversary date of the entry of ELZONRISTM onto the U.S. market (December 21, 2021) will occur after FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving ELZONRISTM would remain at $125,448.05 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for ELZONRISTM). Cases involving the use of ELZONRISTM that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure codes XW033Q5 (Introduction of Tagraxofusp-erzs antineoplastic into peripheral vein, percutaneous approach, new technology, group 5) and XW043Q5 (Introduction of Tagraxofusp-erzs antineoplastic into central vein, percutaneous approach, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for ELZONRISTM for FY 2021.

m. BalversaTM (Erdafitinib)

Johnson & Johnson Health Care Systems, Inc. (on behalf of Janssen Oncology, Inc.) submitted an application for new technology add-on payments for BalversaTM for FY 2020. BalversaTM is indicated for the second line treatment of adult patients who have been diagnosed with locally advanced or metastatic urothelial carcinoma whose tumors exhibit certain fibroblast growth factor receptor (FGFR) genetic alterations as detected by an FDA-approved test, and who have disease progression during or following at least one line of prior chemotherapy including within 12 months of neoadjuvant or adjuvant chemotherapy. BalversaTM received FDA approval on April 12, 2019. BalversaTM was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.f. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42237 through 42242) for a complete discussion of the new technology add on payment application, coding and payment amount for BalversaTM for FY 2020.

With regard to the newness criterion for BalversaTM, we consider the beginning of the newness period to commence when BalversaTM was approved by FDA (April 12, 2019). Because the 3-year anniversary date of the entry of BalversaTM onto the U.S. market (April 12, 2022) will occur after FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving BalversaTM would remain at $3,563.23 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for BalversaTM). Cases involving the use of BalversaTM that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure code XW0DXL5 (Introduction of Erdafitinib antineoplastic into mouth and pharynx, external approach, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for BalversaTM for FY 2021.

n. ERLEADATM (Apalutamide)

Johnson & Johnson Health Care Systems Inc., on behalf of Janssen Products, LP, Inc., submitted an application for new technology add-on payments for ERLEADATM (apalutamide) for FY 2020. This oral drug is an androgen receptor inhibitor indicated for the treatment of patients who have been diagnosed with non-metastatic castration-resistant prostate cancer (nmCRPC). ERLEADATM received FDA approval on February 14, 2018. ERLEADATM was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.g. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42242 through 42247) for a complete discussion of the new technology add on payment application, coding and payment amount for ERLEADATM for FY 2020.

With regard to the newness criterion for ERLEADATM, we consider the beginning of the newness period to commence when ERLEADATM was approved by FDA (February 14, 2018). As discussed previously in this section, 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 upcoming fiscal year. Because the 3-year anniversary date of the entry of ERLEADATM onto the U.S. market (February 14, 2021) will occur in the first half of FY 2021, we are proposing to discontinue new technology add-on payments for this technology for FY 2021. We are inviting public comments on our proposal to discontinue new technology add-on payments for ERLEADATM for FY 2021.

o. SPRAVATOTM (Esketamine)

Johnson & Johnson Health Care Systems, Inc., on behalf of Janssen Pharmaceuticals, Inc., submitted an application for new technology add-on payments for SPRAVATOTM (Esketamine) nasal spray for FY 2020. The FDA-approved indication for SPRAVATOTM is treatment resistant depression (TRD). SPRAVATOTM Nasal Spray was approved by FDA March 5, 2019. SPRAVATOTM was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.h. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42247 through 42256) for a complete discussion of the new technology add on payment application, coding and payment amount for SPRAVATOTM for FY 2020.

With regard to the newness criterion for SPRAVATOTM, we consider the beginning of the newness period to commence when SPRAVATOTM was approved by FDA (March 5, 2019). Because the 3-year anniversary date of the entry of SPRAVATOTM onto the U.S. market (March 5, 2022) will occur after FY 2021, we are proposing to continue new technology add-on payments for Start Printed Page 32578this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving SPRAVATOTM would remain at $1,014.79 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for SPRAVATOTM).

In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19329), we noted that the applicant had submitted a request to the ICD-10 Coordination and Maintenance Committee for approval for a unique ICD-10-PCS procedure code to specifically identify cases involving the use of SPRAVATOTM, beginning in FY 2020. As of the time of the development of the FY 2020 IPPS/LTCH PPS final rule, a unique ICD-10-PCS procedure code to specifically identify cases involving the use of SPRAVATOTM had not yet been finalized in response to the applicant's request. Therefore, we stated that cases reporting SPRAVATOTM would be identified by ICD-10-PCS procedure code 3E097GC (Introduction of other therapeutic substance into nose, via natural or artificial opening) for FY 2020. Subsequent to the FY 2020 IPPS/LTCH PPS final rule, a unique ICD-10-PCS procedure code to specifically identify cases involving the use of SPRAVATOTM was finalized, effective October 1, 2020. As a result, cases involving the use of SPRAVATOTM that are eligible for new technology add-on payments would be identified by ICD-10-PCS procedure code XW097M5 (Introduction of Esketamine Hydrochloride into nose, via natural or artificial opening, new technology group 5) for FY 2021. Because new ICD-10-PCS procedure code XW097M5 is not effective until October 1, 2020, ICD-10-PCS procedure code 3E097GC is the only code available to report the use of the SPRAVATOTM for FY 2020. For FY 2021, beginning with discharges on or after October 1, 2020, cases involving SPRAVATOTM that are eligible for new technology add-on payments will be identified using the new ICD-10-PCS procedure code XW097M5 (that is effective for FY 2021). We are inviting public comments on our proposal to continue new technology add-on payments for SPRAVATOTM for FY 2021.

p. XOSPATA® (Gilteritinib)

Astellas Pharma U.S., Inc. submitted an application for new technology add-on payments for XOSPATA® (gilteritinib) for FY 2020. XOSPATA® received FDA approval November 28, 2018 and is indicated for the treatment of adult patients who have been diagnosed with relapsed or refractory acute myeloid leukemia (AML) with a FMS-like tyrosine kinase 3 (FLT3) mutation as detected by an FDA approved test. XOSPATA® was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.i. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42256 through 42260) for a complete discussion of the new technology add on payment application, coding and payment amount for XOSPATA®.

With regard to the newness criterion for XOSPATA®, we consider the beginning of the newness period to commence when XOSPATA® was approved by FDA (November 28, 2018). Because the 3-year anniversary date of the entry of XOSPATA® onto the U.S. market (November 28, 2021) will occur after FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving XOSPATA® would remain at $7,312.50 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for XOSPATA®). Cases involving the use of XOSPATA® that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure code XW0DXV5 (Introduction of Gilteritinib antineoplastic into mouth and pharynx, external approach, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for XOSPATA® for FY 2021.

q. JAKAFITM (Ruxolitinib)

Incyte Corporation submitted an application for new technology add-on payments for JAKAFITM (ruxolitinib) for FY 2020. According to the applicant, JAK inhibition represents a therapeutic approach for the treatment of acute graft-versus-host disease (aGVHD) in patients who have had an inadequate response to corticosteroids. JAKAFITM received FDA approval on May 24, 2019 for the treatment of steroid-refractory aGVHD in adult and pediatric patients 12 years and older. JAKAFITM was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.k. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42265 through 42273) for a complete discussion of the new technology add on payment application, coding and payment amount for JAKAFITM for FY 2020.

With regard to the newness criterion for JAKAFITM, we consider the beginning of the newness period to commence when JAKAFITM was approved by FDA (May 24, 2019). Because the 3-year anniversary date of the entry of JAKAFITM onto the U.S. market (May 24, 2022) will occur after FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving JAKAFITM would remain at $3,977.06 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for JAKAFITM). Cases involving the use of JAKAFITM that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure code XW0DXT5 (Introduction of Ruxolitinib into mouth and pharynx, external approach, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for JAKAFITM for FY 2021.

r. T2Bacteria® Panel (T2Bacteria Test Panel)

T2Biosystems, Inc. submitted an application for new technology add-on payments for the T2Bacteria Test Panel (T2Bacteria® Panel) for FY 2020. The T2Bacteria® Panel received 510(k) clearance from FDA on May 24, 2018 for use as an aid in the diagnosis of bacteremia, bacterial presence in the blood, which is a precursor for sepsis. Per the FDA cleared indication, results from the T2Bacteria® Panel are not intended to be used as the sole basis for diagnosis, treatment, or other patient management decisions in patients with suspected bacteremia. Concomitant blood cultures are necessary to recover organisms for susceptibility testing or further identification, and for organisms not detected by the T2Bacteria® Panel. The T2Bacteria® Panel was approved for new technology add on payments for FY 2020. We refer readers to section II.H.5.m. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42278 through 42288) for a complete discussion of the new technology add on payment application, coding and payment amount for the T2Bacteria® Panel for FY 2020.

With regard to the newness criterion for the T2Bacteria® Panel, we consider the beginning of the newness period to commence when the T2Bacteria® Panel was cleared by FDA (May 24, 2018). As discussed previously in this section, 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 Start Printed Page 32579occurs in the latter half of the upcoming fiscal year. Because the 3-year anniversary date of the entry of the T2Bacteria® Panel onto the U.S. market (May 24, 2021) will occur in the second half of FY 2021, we are proposing to continue new technology add-on payments for this technology for FY 2021. We are proposing that the maximum new technology add-on payment for a case involving the T2Bacteria® Panel would remain at $97.50 for FY 2021 (we refer readers to the FY 2020 IPPS/LTCH PPS final rule for complete discussion of the calculation of the new technology add on payment amount for the T2Bacteria® Panel). Cases involving the use of the T2Bacteria® Panel that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure code XXE5XM5 (Measurement of infection, whole blood nucleic acid-base microbial detection, new technology group 5). We are inviting public comments on our proposal to continue new technology add-on payments for the T2Bacteria® Panel for FY 2021.

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5. Proposed FY 2021 Applications for New Technology Add-On Payments (Traditional Pathway)

a. Accelerate Pheno Test BC kit for Use With Accelerate Pheno System

Accelerate Diagnostics, Inc. submitted an application for new technology add-on payments for the Accelerate PhenoTestTM BC kit for FY 2021. According to the applicant, the Accelerate PhenoTestTM BC kit is for use with the Accelerate PhenoTM system and is the only commercially available technology in the U.S. that provides microorganism (bacteria and yeast) identification (ID) and phenotypic (MIC-based) antimicrobial susceptibility test (AST) results for patients with bacteremia/fungemia and a positive blood culture. The applicant stated that the Accelerate PhenoTM system is a novel technology for fast diagnosis of bloodstream infection that provides these results in approximately 7 hours, as opposed to standard of care methods that typically take 2-3 days.

The applicant stated that other methods that provide phenotypic AST results such as current automated ID/AST systems, antibiotic gradient strips and disk diffusion require overnight culturing of the bacteria to produce an isolated colony of the pathogen, and therefore take 1-2 days longer than the Accelerate PhenoTestTM BC kit. The applicant explained that other isolate-based methods include matrix-assisted laser desorption/ionization time-of-flight mass spectrometry (MALDI-TOF MS) and biochemical methods which only provide identification results, but not antibiotic susceptibilities which would indicate possible drug resistance in common pathogens and the efficacy of the drugs of choice for particular infections. The applicant stated that similarly, T2 Dx Biosystems with T2 Bacterial Panel provides a rapid organism ID but does not provide antibiotic susceptibility results.

The applicant explained that the Accelerate PhenoTestTM BC kit identifies the following Gram-positive and Gram-negative bacteria and yeast utilizing fluorescent in-situ hybridization (FISH) probes targeting organism-specific ribosomal RNA sequences and tests the antimicrobial agents and resistance phenotypes in the organism(s) identified in the following table.

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The applicant stated that the laboratory workflow for the Accelerate PhenoTestTM BC kit is simple and requires ~2 minutes of hands on laboratory technologist time, in three steps: (1) Aliquot 0.5 mL positive blood culture into sample vial; (2) load the sample into the Accelerate PhenoTestTM BC kit; and (3) load the Accelerate PhenoTestTM BC kit into the Accelerate PhenoTM system.

The applicant explained and stated the following regarding use of the Accelerate PhenoTestTM BC kit:

  • Microorganism identification (ID) is performed using fluorescence in situ hybridization (FISH). Colocalization of target (green fluorescence) and universal (red fluorescence) probe signal confirms presence and identity of the target organism while differentiating from non-specific staining. ID results are produced in approximately 2 hours. AST is performed using morphokinetic cellular analysis (MCA), which measures morphological and kinetic changes over time of organisms exposed to antibiotics.
  • MCA is a computer vision-based analytical method that uses digital microscopy inputs and machine learning technology to observe individual live cells and recognize patterns of change over time. This technology tracks and analyzes multiple morphological and kinetic changes of individual cells and microcolonies under a variety of conditions. These changes include morphokinetic features such as cell morphology, mass as measured by light intensity of a growing cells, division rate, anomalous growth patterns, and heterogeneity. During this period, morphokinetic features are measured and used for analysis; the precise quantitative measurement of individual cell growth rate over time is a powerful indicator of antimicrobial efficacy. Onboard software algorithms derive minimum inhibitory concentration (MIC) values from the measured features, and apply appropriate expert rules for proper interpretation and reporting of categorical interpretations: S, I, or R (susceptible, intermediate, or resistant). According to the applicant, AST results are reported in approximately 7 hours from the start of the run.

The applicant stated that rapid ID/genotypic resistance marker tests using polymerase chain reaction (PCR) provide partial results and no MIC values. The applicant further stated that the clinically actionable results using resistant marker tests are less definitive in that the absence or presence of a resistance gene does not necessarily indicate susceptibility or resistance to an antibiotic.

According to the applicant, theoretical studies and research not conducted with the Accelerate PhenoTestTM BC kit have illustrated the strong connection between time to appropriate antimicrobial therapy and clinical outcomes for bacteremic patients. The applicant stated that time to phenotypic susceptibility results is critical for patients with serious infections as studies show a measurable increase in mortality for each hour appropriate treatment is delayed in patients with septic shock.[1] The applicant further stated that based on these and other results, guidelines from the Surviving Sepsis Campaign recommend prescribing empiric broad- spectrum antimicrobials within 1 hour of recognition for both sepsis and septic shock.[2] However, the applicant explained that initial empiric therapy can be inappropriate in as high as 30-50 percent of cases.[3 4] The applicant stated that patients treated with appropriate versus inappropriate initial antimicrobial therapy have been shown to have improved patient outcomes including mortality, hospital length of stay (LOS), intensive care unit (ICU) LOS, and days on mechanical ventilation.[5]

With respect to the newness criterion, the Accelerate PhenoTestTM BC kit received FDA de novo clearance on February 23, 2017. According to applicant, the technology was on the Start Printed Page 32583market immediately after FDA approval in February 2017. According to the applicant, on September 22, 2019, Accelerate Diagnostics, Inc. (AXDX) submitted a 510(k) submission to FDA, which details several changes to the Accelerate PhenoTestTM BC kit. According to the applicant, the purpose of the 510(k) submission is to present product enhancements and include an additional organism-antimicrobial combination to the panel. There are currently no ICD-10-PCS procedure codes that uniquely identify the use of the Accelerate PhenoTM BC kit. We note the applicant submitted a request for approval for a unique ICD-10-PCS procedure code to identify use of the technology beginning in FY 2021. The applicant provided the following ICD-10 codes that they stated would identify cases for which their technology is used, in the interim.

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As discussed previously, if a technology meets all three of the substantial similarity 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.

With regard to the first criterion, whether a product used the same or similar mechanism of action to achieve a therapeutic outcome, according to the applicant, the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system is the only fast, automated, phenotypic, direct-from-positive blood culture ID/AST technology available. The applicant Start Printed Page 32585explained that it provides MIC values as well as SIR categorical designations (that is, susceptible, intermediate, resistant). The applicant further explained that MIC results are used to not only choose which antimicrobial(s) is/are active for a patient's infection, but also may be used to modify dosing, based on the relative degree of resistance to an antimicrobial the MIC indicates. The applicant also stated that both results are significantly faster than other methods (approximately 40 hours faster).

The applicant stated that in support of the uniqueness of the test compared to other technologies, in 2017 the Accelerate PhenoTestTM BC kit used with the Accelerate PhenoTM system was granted marketing authorization by the FDA under the de novo pathway, which is reserved for devices of a new type with low-to-moderate risk for which there are no legally marketed predicates.

The applicant explained that other FDA-cleared identification (ID) technologies include Bruker Daltonics MALDI TOF-MS, bioMerieux Vitek® MS. Additionally, the applicant noted several FDA-cleared AST methods, which are based on broth microdilution (BMD), including bioMerieux VITEK®2, ThermoFisher SensititreTM AST system, BD PhoenixTM AST system, and Beckman Coulter MicroScan Walkaway. Additionally, the applicant noted that AST can be determined using antibiotic gradient strips and disk diffusion. The applicant notes all of these technologies require overnight culturing to produce an isolated colony of the pathogen, and therefore take 1 to 2 days longer than the Accelerate PhenoTestTM BC kit.

According to the applicant, FDA-cleared genotypic technologies provide organism identification results and presence/absence of some antibiotic resistance genes. The applicant explained that knowledge that a gene is present can be used to rule out therapy, but the absence of a resistance gene generally does not allow a clinician to rule-in antibiotic therapy, unlike phenotypic AST, which can do both. According to the applicant, genotypic tests that are FDA cleared and available in the US include the BioFire® FilmArray, Luminex® Verigene® Nanosphere, GenMark ePlex® BCID Panel, Curetis Unyvero A50 system, iCubate® iC-systemTM, T2 Dx Biosystems with T2 Bacterial Panel, and Cepheid GeneXpert® (Table 2). The applicant explained that rapid ID/genotypic resistance marker tests can provide fast results in hours directly from positive blood culture; however these methods only provide partial results, resulting in less diagnostic certainty. The applicant further explained that unlike phenotypic AST results, the absence or presence of a resistance gene does not definitively indicate susceptibility or resistance to an antibiotic, respectively. The applicant noted that resistance can be caused by multiple mutations across >1 gene (that is, porin or efflux pump), and resistance depends not only on the presence of a gene, but also on its level of expression. The applicant further explained that while clinicians can use these partial results to prescribe effective therapy in select cases, patients are often left on overly broad spectrum therapy, which may or may not be effective for that individual because the resistance marker results only allow clinicians to rule-out certain therapies.[6]

According to the applicant, in contrast, phenotypic MIC-based results are key drivers for clinical decisions when determining antibiotics, dose regimen, and de-escalation. The applicant also stated that in a recent conference publication, one institution that implemented a genotypic resistance marker test found that even after 5 years of use, clinicians did not de-escalate from empiric antimicrobials for 62 percent of patients with E. coli and Klebsiella pneumoniae bloodstream infections until phenotypic antimicrobial susceptibility results were available.[7] To address whether the version of the Accelerate PhenoTest BC kit currently pending 510(k) clearance uses the same or similar mechanism of action to achieve a therapeutic outcome as the version that has been on the market since February 2017, the applicant provided the following table describing the differences between the two products:

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According to the applicant, while this product originally received FDA de novo status in February 2017, it should still be considered new for the following two reasons. First, the applicant stated that there is still no other comparable integrated rapid ID and rapid AST diagnostic for positive blood cultures commercially available in the US. The applicant stated that this technology was completely novel when it was launched and remains alone in its class today. The applicant added that this particular technology has yet to experience widespread adoption in U.S. hospitals. Second, the applicant stated that it submitted an FDA 510(k) submission on Sept. 22, 2019 for a product addendum, which contains clinically relevant modifications to the originally cleared product, impacting both the organism identification and the antibiotic susceptibility testing reportability. The applicant stated that it believes the software updates and assay changes contained in this submission, and as set forth in the previous table, are substantive and meet the criteria for newness.

With respect to the second criterion, the applicant did not indicate whether the Accelerate PhenoTestTM BC kit would be assigned to the same MS-DRGs as cases representing patients who receive diagnostic information from competing technologies, or from the version of the Accelerate PhenoTestTM BC kit that was approved in February 2017. However, we believe that cases involving the use of the technology would be assigned to the same MS-DRGs as cases involving the use of the previous version of the Accelerate PhenoTestTM BC Kit that was approved in 2017, as well as cases representing patients who receive diagnostic information from competing technologies.

With respect to the third criterion, the applicant did not specify whether the Accelerate PhenoTestTM BC kit involves the treatment of the same or similar type of disease and the same or similar patient population as existing technologies, including the version of the Accelerate PhenoTestTM BC kit that was approved in February 2017. However, we believe that both the current version of the Accelerate PhenoTestTM BC kit and the predicate version of the Accelerate PhenoTestTM BC kit, as well as competing technologies that may also aid in diagnosing patients with bloodstream infections, would treat the same or similar type of disease and patient population.

The applicant is seeking new technology add-on payments for the version of the Accelerate PhenoTestTM BC kit that is the subject of the September 2019 510(k) submission to FDA. We are concerned that this updated technology may be substantially similar to the first version of the Accelerate PhenoTestTM BC kit that was first available on the U.S. market in February 2017 and, therefore, the technology would not meet the newness criterion. It is not clear that the changes made to the product currently pending 510(k) clearance would distinguish the mechanism of action of this updated product from the mechanism of action of the first version of the technology, which received FDA de novo clearance on February 23, 2017. Although we understand that the updated version includes software updates and assay changes, we believe both tests may nonetheless use the same mechanism of action, consisting of phenotypic, direct-from-positive blood culture identification and AST technology that provides MIC values as well as SIR categorical designations. Start Printed Page 32589Furthermore, like other available diagnostic tests, the Accelerate PhenotypeTM BC Kit uses positive blood cultures to identify microorganisms.

We also are concerned with regard to the lack of information from the applicant regarding the second and third substantial similarity criteria. Because the first version of the Accelerate PhenoTestTM BC kit was first available on the U.S. market in February 2017 and because we believe the version that is currently pending 510(k) clearance may be substantially similar, we are concerned that the product may not be considered new for the purposes of new technology add-on payments. We believe the costs associated with the Accelerate PhenoTestTM BC kit should be reflected in the relative payment weights for the MS-DRGs to which cases involving treatment with the Accelerate PhenoTestTM BC kit would be assigned, because the product has been on the market and available since 2017. Also, similar to our discussion in the FY 2006 IPPS final rule (70 FR 47349), whether a technology has yet to experience widespread adoption in U.S. hospitals is not relevant to the determination of whether the technology is “new.” Consistent with the statute, a technology no longer qualifies as “new” once it is more than 2 to 3 years old, irrespective of how frequently it has been used in the Medicare population. Therefore, if a product is more than 2 to 3 years old, we consider its costs to be included in the MS-DRG relative weights whether its use in the Medicare population has been frequent or infrequent. We are inviting public comments on whether the Accelerate PhenoTestTM BC kit is substantially similar to other technologies, including the version of this technology that received FDA de novo clearance on February 23, 2017, and whether the Accelerate PhenoTestTM BC kit meets the newness criterion.

With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. The applicant identified 43 ICD-10-CM diagnosis codes that apply to conditions for which its technology may be used, and then applied these 43 codes to the MEDPAR Limited Data Set (LDS)—Hospital (National) FY 2018 (Proposed Rule) data, in order to identify cases for which the use of Accelerate PhenoTestTM BC kit could be appropriate. These diagnosis codes are the 41 diagnosis codes listed in the previous table, along with ICD-10-CM codes R78.81 (Bacteremia) and B49 (Unspecified mycosis).

According to the applicant, this process resulted in 27,971 cases spanning 411 MS-DRGs, with approximately 80 percent of those cases mapping to the following top 8 MS-DRGs:

The applicant performed two analyses to demonstrate that the technology meets the cost criterion. The first analysis was based on 100 percent of the claims that included the specified ICD-10 codes, while the second analysis was based on the 80 percent of claims that mapped to the top 8 MS-DRGs listed previously.

Under both analyses, the applicant removed charges for prior technology or technology being replaced. Using Accelerate Diagnostics customer cost and utilization information and the National Average Laboratory Cost-to-Charge Ratio (CCR) of 0.109 (84 FR 42179), the applicant estimated the charge for prior technology as approximately $339. Specifically, the applicant multiplied an 80 percent utilization by a cost of $15 for the MALDI-TOF MS-based test and multiplied a 25 percent utilization by a cost of $100 for the Molecular BCID. The applicant then added these calculations, reaching a sum of $37 of estimated cost. The applicant divided this cost by the National Average Laboratory CCR (0.109), reaching an estimated charge of $339.45. The applicant also removed other charges related to the prior technology, assuming cost savings related to reduced LOS, vancomycin avoidance, C. difficile infection avoidance, and acute kidney injury avoidance based on data from provided studies.[8 9 10 11 12 13 14]

The applicant then standardized the charges and applied the 2-year outlier inflation factor of 11.1 percent used to update the outlier threshold in the FY 2020 IPPS final rule (84 FR 42629). The applicant indicated an estimated per patient cost for the Accelerate PhenoTestTM BC kit of $375.17 (based on current average sales price of the Accelerate PhenoTestTM BC kit, plus market data on several other associated elements of per-patient cost enumerated by the applicant). The applicant then added charges for the Accelerate PhenoTestTM BC kit by dividing the average hospital cost per patient of $375.17 by the National Average Laboratory CCR of 0.109.

The applicant reported that these analyses met the cost criterion in each instance. For the analysis based on 100 percent of cases, the applicant Start Printed Page 32590computed a final inflated average case weighted standardized charge per case of $107,432, as compared to an average case-weighted threshold amount of $75,101. For the analysis based on the 80 percent of cases in the top eight MS-DRGs, the applicant computed a final inflated average case weighted standardized charge per case of $86,956, as compared to the average case-weighted threshold amount of $71,401. Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under both analyses described previously, the applicant asserted that the technology meets the cost criterion.

We are inviting public comments on whether the Accelerate PhenoTestTM BC Kit meets the cost criterion.

With respect to the substantial clinical improvement criterion, the applicant asserted that the Accelerate PhenoTest BC kit represents a substantial clinical improvement over existing technology because data from studies show that it offers the ability to diagnose a medical condition earlier than allowed by currently available methods. Additionally, the applicant stated that these studies suggest the Accelerate PhenoTest BC kit improves clinical outcomes relative to services or technologies previously available. Specifically, according to the applicant, the studies demonstrate a reduction in clinically significant adverse events such as lower mortality, a decrease in inappropriate therapy, a more rapid resolution, and the termination of antibiotic therapy.

The applicant submitted fifteen published peer-reviewed articles that the applicant stated demonstrate the ability to diagnose a medical condition earlier than allowed by currently available methods. Per the applicant, the results demonstrated the following: reduction in time to AST results, de-escalation or escalation, and hands-on time; decreased time to step-down therapy, initiation of definitive therapy (TTDT), optimal therapy (TTOT), effective therapy (TTET) and active therapy; and decreased use of aminopenicillin + B-lactamase, cefepime, aminoglycosides, piperacillin-tazobactam, and vancomycin. The applicant also asserted that the results demonstrated reduced length of stay, total antibiotic days on therapy (DOT), antibiotic intensity score, average number of antibiotic days, median days of broad-spectrum antibiotics, time to first antibiotic modification and first Gram negative antibiotic modification, and inpatient mortality. We summarize the studies the applicant provided as follows:

  • Brazelton de Cardenas, et al.[15] is an equivalency performance (methods comparison) paper and showed identification sensitivity of 91.2 percent and AST categorical agreement (CA) of 91.2-91.8 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system were 40.1 hours faster than standard of care (VITEK®2 and BMD).
  • Bowler, et al.[16] is an equivalency performance paper that examined Acinetobacter clinical isolates showing ID sensitivity of 97.6 percent and specificity of 86.6 percent and AST essential agreement of 98.0 percent. The applicant stated that standard of care was MALDI-TOF MS for ID and broth microdilution (BMD) for AST.
  • Burnham, et al.[17] is an equivalency performance paper showing ID sensitivity of 91.5 percent and specificity of 99.6 percent and AST CA of 91.0 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 40.8 hours faster than standard of care (VITEK®2 or DD for AST).
  • Charnot-Katsikas, et al.[18] is an equivalency performance paper showing ID sensitivity of 95.6 percent and specificity of 99.5 percent and AST EA of 95.1 percent and CA of 95.5 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 41.86 hours faster than standard of care (VITEK MS for ID and VITEK2 for AST) and reduction in hands-on time was 25.5 minutes per culture.
  • De Angelis, et al.[19] is an equivalency performance paper showing antimicrobial susceptibility testing (AST) categorical agreement (CA) of 92.7 percent for gram-positive and 99.0 percent for gram-negative organisms. The applicant explained that the standard of care was BMD for AST.
  • Descours, et al.[20] is an equivalency performance paper showing ID sensitivity of 96.2 percent and AST EA of 92.3 percent and CA of 93.7 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 24.4 hours faster than MALDI-TOF MS for ID and VITEK®2/traditional BMD for AST. According to the applicant, the study concluded that overall categorical agreement was decreased for beta-lactams (cefepime 84.4 percent, piperacillin-tazobactam 86.5 percent, ceftazidime 87.6 percent) or Pseudomonas aeruginosa (71.9 percent; with cefepime 33.3 percent, piperacillin-tazobactam 77.8 percent, ceftazidime 0 percent).
  • Giordano, et al.[21] is an equivalency performance paper showing ID sensitivity of 97 percent and AST CA of 91.3 percent (breakdown of 94.7 percent gram-positive (GP) and 90.2 percent gram-negative (GN) organisms) and EA of 81.8 percent. Standard of care was MALDI-TOF MS for ID and Sensitire/traditional BMD for AST. According to the applicant, the paper concluded that both methodologies provided comparable results, showing no statistically significant differences. The study concluded that the time to obtain ID and AST as well as costs are lower for Alfred 60AST combined with MALDI-TOF MS; however, the PhenoTest BC kit provides both identification and MIC determination in one cartridge. The study noted that both systems were determined to allow for proper diagnostic stewardship in order to hinder sepsis and minimize the spread of bacterial resistance.
  • Lutgring et al.[22] is an equivalency performance paper showing ID sensitivity of 94.7 percent and Start Printed Page 32591specificity of 98.9 percent and AST CA of 94.1 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 48.4 hours faster than standard of care (MicroScan WalkAway (ID and AST), MALDI or biochemical or API strips (ID)).
  • The applicant explained that Marschal, et al.[23] is an equivalency performance paper showing ID sensitivity of 97.1 percent and AST CA of 96.4 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 40.39 hours faster than standard of care (MALDI-TOF MS for ID and VITEK®2/Etest for AST).
  • Pancholi, et al.[24] is an equivalency performance paper showing ID sensitivity of 97.5 percent and specificity of 99.5 percent and AST CA of 97.6 percent (GP) and 95.4 percent (GN) and AST EA of 97.9 percent (GP) and 94.3 percent GN. The applicant noted that standard of care was VITEK®2 for ID and BMD or DD for AST.
  • Pantel, et al.[25] is an equivalency performance paper showing ID sensitivity of 100 percent and AST CA of 94.9 percent. The applicant explained that the standard of care was VITEK MS and VITEK®2 for ID and DD Etest for AST.
  • Sofjan, et al.,[26] is an equivalency performance paper showing ID sensitivity of 98.0 percent and specificity of 99.5 percent and AST EA of 97.4 percent and CA of 97.9 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 63.3 hours faster than standard of care (VITEK2 (ID and AST), Etest (AST)).
  • Schneider, et al.[27] is an equivalency performance paper showing an AST CA of 94.7 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 22.6 hours faster than standard of care (VITEK2 (AST)).
  • Ward, et al.[28] is an equivalency performance paper showing ID sensitivity of 88.0 percent and AST EA of 91.6 percent and CA of 93.4 percent. According to the applicant, the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 41.95 hours faster than standard of care (MALDI-TOF MS for ID and VITEK2 + Verigene (BC-GP) for AST).
  • Starr, et al.[29] is an equivalency performance paper showing AST EA of 96.5 percent and CA of 94.6 percent. The applicant explained that the average time to ID was reduced by 24.9 ± 6.9 hours and AST by 36.7 ±18.9 hours compared with standard of care (MALDI-TOF MS for ID and MicroScan and BMD for AST).

Additionally, the applicant provided four outcomes peer reviewed articles that it stated suggest the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system improves clinical outcomes relative to services or technologies previously available as demonstrated by reducing clinically significant adverse events.

  • Ehren, et al.[30] is a prospective outcome study that found statistically significant reduction for (1) time to step-down Abx therapy (p=0.019), (2) time to optimal antibiotic therapy (p=0.024), and (3) time to definitive therapy (p=0.005). The applicant noted that statistical significance was achieved despite low sample size of 204.
  • Henig, et al., 2018 [31] is a retrospective outcome study reporting time to effective therapy (TTET) and time to definitive therapy (TTDT) of 25.9 h (Interquartile Range (IQR) 18.5, 42.1) and 47.6 h (IQR, 24.9, 79.6), respectively. The applicant explained that almost half of the patients had potential improvement in TTET and/or TTDT with Accelerate PhenoTM system. The applicant explained that in patients who would have had a benefit the median potential decreases in TTET and TTDT were 16.6 h (IQR, 5.5 to 30.6) and 29.8 h (IQR, 13.6 to 43), respectively.
  • Henig, et al., 2019 [32] is a retrospective outcome study reporting a median time to effective therapy (TTET) of 2.4 h (IQR 0.5, 15.1), and Accelerate PhenoTM system results could have improved TTET in 4 patients (2.4%) by a median decrease of 18.9 h (IQR 11.3, 20.4). The applicant explained that the median time to definitive therapy (TTDT) was 41.4 h (IQR 21.7, 73.3) and Accelerate PhenoTM system results could have improved TTDT among 51 patients (30.5%), by a median decrease of 25.4 h (IQR 18.7, 37.5). The applicant explained that the Accelerate PhenoTM system implementation could have led to decreased usage of cefepime (16% less), aminoglycosides (23%), piperacillin-tazobactam (8%), and vancomycin (4%). The study noted that the impact of the Accelerate PhenoTM system on TTET was small, likely related to the availability of other rapid diagnostic tests at the study location.
  • Schneider, et al.[33] paper had both an outcome and a performance component. The applicant explained that if Accelerate PhenoTest results had been available to inform patient care, 25 percent of patients could have been put on active therapy sooner, while 78 percent of patients who had therapy optimized during hospitalization could have had therapy optimized sooner. The applicant explained that additionally, Accelerate PhenoTM system results Start Printed Page 32592could have reduced time to de-escalation (16 versus 31 h) and escalation (19 versus 31 h) compared with SOC. The applicant further explained that the paper reported an ID sensitivity of 95.9 percent, specificity of 99.9 percent, AST EA of 94.5 percent, and CA of 93.5 percent. The applicant explained that the time to results for the Accelerate PhenoTestTM BC kit for use with the Accelerate PhenoTM system was 26 hours faster than SOC (Verigene BCID-GN and MALDI-TOF MS for ID, and VITEK2 and BMD for AST).

Additionally, the applicant provided six posters that were presented at conferences to support its claims of substantial clinical improvement.

  • Dare, et al.[34] poster provided an interim analysis of a dataset (N=154) from single center, retrospective chart review study that showed 3-day reduction in length of stay (LOS) (p=0.03), 2-day reduction in days on therapy (DOT) (p=0.05), and 36-hour reduction in time to optimal therapy (TTOT) (p<0.001).
  • Sheth, et al.[35] poster provided an interim analysis of a dataset (N=173) from a quasi-experimental outcome study (with a prospective and retrospective arm). The applicant explained that it showed a 2-day reduction in length of stay (LOS) (p=0.002), reduction in antibiotic intensity score (p=0.0002), and reduction of median days broad-spectrum antibiotics (p<0.0001).
  • Chirca, et al.[36] poster provided a prospective analysis of positive blood cultures. The applicant explained that it showed that after the implementation of the Accelerate PhenoTM system, there was a decrease in sepsis due to bloodstream infections (BSI) as a percentage of inpatient mortality and average number of antibiotic days.
  • Banerjee, et al.[37] was a prospective randomized study of 448 patients. The applicant explained that it showed a significant reduction in the time to results (AST: 13 vs. 54.6 h, p<0.001), time to first antibiotic modification (8.6 vs. 14.9 h, p=0.02) and time to gram negative antibiotic modification (17.4 vs. 42.1 h, p<0.0001).
  • Pearson, et al.,[38] provided a quasi-experimental before/after study of 496 patients. The applicant explained that it showed significant reduction in length of stay (LOS) (9.54 vs 11.89 days, p<0.01). reduction in time to optimal therapy days (TTOT) (1.58 v 2.69, p<0.01), and reduction in time to optimal treatment (95.4% vs 84.6%, p<0.01).
  • Kinn, et al.[39] showed that recommendations (bug-drug mismatch, de-escalation, dose optimization, and infectious disease consult) were accepted at a rate of 97.4 percent, according to the applicant.

The applicant also explained that an oral presentation by Walsh, et al.[40] detailed the clinical improvements an institution realized since implementing the Accelerate PhenoTestTM BC kit, including a 4.6 day reduction in days of antimicrobial therapy, a 2.2 day reduction in ICU length of stay, and a decrease in sepsis-related readmission rates from 21.8 percent to 14.3 percent.

The applicant asserted that these studies supported that the technology represents a substantial clinical improvement, for the following reasons:

  • The claim of reduction in time to AST results is supported by evidence, per the applicant, from 10 out of 19 studies that show the time to AST results over standard of care (SOC) are 40.1, 40.8, 41.86, 24.4, 48.4, 40.39, 63.3, 22.6, 41.96, and 36.7 hours, which averages to 40.05 hours. The applicant asserted that this reduction shows the ability to diagnose a medical condition (antibiotic resistance or susceptibility) earlier than allowed by currently available methods. The applicant cited the following studies to support this claim: Brazelton,[41] Burnham,[42] Charnot-Katsikas,[43] Descours,[44] Lutgring,[45] Marschal,[46] Sofjan,[47] Schneider,[48] Ward,[49] and Starr.[50]
  • The claim of reduction in hands-on time is supported, according to the applicant, by evidence from the Charnot-Katsikas [51] study, which the applicant stated shows a reduction in hands on time observed of 25.5 min per culture over standard of care methods.
  • The applicant stated that the Ehren [52] study supports four of its Start Printed Page 32593claims regarding substantial clinical improvement.

++ Per the applicant, the claim of decreased time to step-down therapy is supported by the findings in that study that the time to step-down antimicrobial therapy was significantly decreased in the Accelerate PhenoTM BC kit with antimicrobial stewardship intervention (12 h; p= 0.019).

++ Per the applicant, the claim of decreased time to initiation of definitive therapy (TTDT) is supported by the findings that the time to recommendation of definitive therapy (26.5 vs. 7.7 h, p=0.000) and time to definitive therapy (TTDT) (25.7 vs. 7.5 h, p=0.005) was significantly shorter using the Accelerate PhenoTM BC kit with antimicrobial stewardship intervention.

++ Per the applicant, the claim of decreased time to optimal therapy (TTOT) is supported by the findings that the use of Accelerate PhenoTM BC kit significantly decreased time from Gram stain to ID (23 vs. 2.2 h, p<0.001) and AST (23 vs. 7.4 hours, p<0.001) and decreased time from Gram stain to optimal therapy (11 vs. 7 hours, p=0.024) and to step-down antimicrobial therapy (27.8 vs. 12 hours, p=0.019).

++ Per the applicant, the claim of decreased use of aminopenicillin + ß-lactamase is supported by the findings that within 5 days after blood culture draw, utilization of aminopenicillins + ß-lactamase inhibitors was significantly reduced (26.4 vs. 9.7 h, p<0.001) in the group with Accelerate PhenoTM BC kit with antimicrobial stewardship.

  • The applicant stated that the first Henig [53] study supports two of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of time to effective therapy (TTET) is supported by the findings that the TTET was 25.9 h, and almost half of the patients had potential improvement in TTET and/or TTDT with Accelerate PhenoTM BC kit. The applicant explained that in patients who would have had a benefit, the median potential decrease in TTET was 16.6 h.

++ Per the applicant, the claim of time to definitive therapy (TTDT) is supported by the findings that the TTDT was 47.6 h, and almost half of the patients had potential improvement in TTET and/or TTDT with Accelerate PhenoTM BC kit. The applicant explained that in patients who would have had a benefit, the median potential decrease in TTDT was 29.8 h.

  • The applicant stated that the second Henig [54] study supports three of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of time to effective therapy (TTET) is supported by the conclusion that had the Accelerate PhenoTM BC kit results been available, TTET could have been improved in 2.4 percent of patients by a median decrease of 18.9 h, with 75 percent of these patients having blood stream infections with ESBL-producing Enterobaceriaceae.

++ Per the applicant, the claim of decreased use of cefepime, aminoglycosides, piperacillin-tazobactam, and vancomycin is supported by the findings that with the Accelerate PhenoTM BC kit, results show there was a decreased usage of cefepime (16% less), aminoglycosides (23%), piperacillin-tazobactam (8%) and vancomycin (4%).

++ Per the applicant, the claim of time to definitive therapy (TTDT) is supported by the findings that nearly one-third of patients, 30.5 percent, could have received definitive therapy more rapidly had Accelerate PhenoTM BC kit results been available in real time. Additionally, the applicant explained that a potential benefit in TTDT was demonstrated in 53 percent of patients with CRE, 61.5 percent of patients with ESBL,[55] and 20 percent of patients with non-fermenting bacteria. The applicant explained that the potential median decrease in TTDT among those who could have had a benefit if Accelerate PhenoTM BC kit results had been available was 25.4 h (IQR, 18.7, 37.5).

  • The applicant stated that the Schneider [56] study supports two of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of decreased time to active therapy and time to optimal therapy (TTOT) is supported by the findings that if Accelerate PhenoTest results had been available to inform patient care 25 percent of patients could have been put on active therapy sooner, and 78 percent of patients who had therapy optimized could have had therapy optimized sooner.

++ Per the applicant, the claim of “reduce time to de-escalation or escalation” is supported by the findings that the Accelerate PhenoTest could have reduced the time to de-escalation (16 versus 31 h) and escalation (19 versus 31 h) compared with standard of care (SOC).

  • The applicant stated that the Dare [57] study supports three of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of decreased time to active therapy and time to optimal therapy (TTOT) is supported by the findings of a decrease in length of stay from a mean of 12.1 days under the standard of care to 9.1 days under the Accelerate PhenoTest system.

++ Per the applicant, the claim of time to optimal therapy (TTOT) is supported by the findings of a reduction from 73.5 hours under the standard of care to 37.5 hours under the Accelerate PhenoTest system.

++ Per the applicant, the claim of total antibiotic days on therapy (DOT) is supported by the findings of a reduction from 9 days under the standard of care to 7 days under the Accelerate PhenoTest system.

  • The applicant stated that the Sheth [58] study supports three of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of reduced length of stay (LOS) is supported by the findings of a reduction in length of stay from 8 days with VERIGENE to 6 days with the Accelerate PhenoTest system.

++ Per the applicant, the claim of reduction in antibiotic intensity score is supported by the findings of a reduction from 16 with VERIGENE to 12 with the Accelerate PhenoTest system.

++ Per the applicant, the claim of reduction of median days broad-Start Printed Page 32594spectrum antibiotics is supported by the findings of a reduction of median days on broad-spectrum antibiotics from 2 days with VERIGENE to 1 day with the Accelerate PhenoTest system.

  • The applicant stated that the Chirca [59] study supports two of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of reduction of inpatient mortality is supported by the findings of a decrease in sepsis due to BSIs [60] (as a percentage of inpatient mortality) from 10.9 percent to 7 percent for the duration of the study, with a consistent downward slope. The applicant noted a statistically significant decrease in inpatient mortality in cases of proven BSI; the rate of decrease is estimated at 0.27 percent per month with a 95 percent confidence interval of (0.12%-0.41%) per month, p = 0.001.

++ Per the applicant, the claim of reduction in average number of antibiotic days is supported by the finding that the average number of antibiotic days per patient encounter was reduced by 1 full day, from 6.8 to 5.8 days.

  • The applicant stated that the Banerjee [61] study supports three of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of time to results is supported by the findings that the Accelerate PhenoTM system provided identification (ID) results (2.7 vs. 15.6 h, p<0.001) and antimicrobial susceptibility test (AST) results (13 vs. 54.6 h, p<0.001) faster than standard of care (SOC).

++ Per the applicant, the claim of time to first antibiotic modification is supported by the finding that the average time to first antibiotic modification was reduced from 14.9 hours to 8.6 hours.

++ Per the applicant, the claim of time to first gram negative antibiotic modification is supported by the finding that the time to first gram negative antibiotic modification was reduced from 42.1 hours to 17.4 hours. The applicant also explained that time to antimicrobial therapy change was reduced by 24.8 hours for patients with Gram-negative bacteremia.

  • The applicant stated that the Pearson [62] study supports three of its claims regarding substantial clinical improvement.

++ Per the applicant, the claim of reduction in length of stay (LOS) is supported by the findings that the Accelerate PhenoTM system showed a significant reduction in length of stay (9.54 vs 11.89 days, p<0.01).

++ Per the applicant, the claim of time to optimal therapy (TTOT) is supported by the finding that the Accelerate PhenoTM system showed a significant reduction in time to optimal therapy days (TTOT) (1.58 v 2.69, p<0.01).

++ Per the applicant, the claim of time to optimal treatment achieved is supported by the finding that the Accelerate PhenoTM system showed a significant reduction in time to optimal treatment (95.4% vs 84.6%, p<0.01). The applicant also noted that time to optimal antimicrobial therapy was reduced by 19.2 hours, overall days of antimicrobial therapy were reduced by 1.6 days, and length of stay was reduced by 2.4 days.

The applicant stated that its claim of acceptance of therapeutic recommendations is supported by the Kinn [63] study, which the applicant stated found that recommendations of bug-drug mismatch, de-escalation, dose optimization, and infectious disease consultation were accepted at a rate of 97.4 percent. The applicant also noted that time to optimal antimicrobial therapy was reduced by 15.3 hours for bacterimic patients.

After reviewing the information submitted by the applicant as part of its FY 2021 new technology add-on payment application, we are concerned that the studies the applicant provided are either unclear about which version of the Accelerate PhenoTestTM BC kit was used or indicate that the first version of the device was used in the study. The applicant appears to rely mainly on studies conducted on the first version of the device, which has been on the market since February 2017, as compared to other products to establish substantial clinical improvement, although it was not always clear in each study which version was being used. The applicant submitted its application for new technology add-on payments for the updated version of the Accelerate PhenoTestTM BC kit submitted to FDA for 510(k) clearance in 2019. However, the applicant did not present any clinical data to distinguish the clinical outcomes achieved by the updated version as compared to the original version. We would be interested in additional information on which studies involved the first version of the device, which has been commercially available since February 2017, and which studies involved the updated version of the device for which the applicant submitted its new technology add-on payment application. We note that several of the studies submitted by the applicant in support of substantial clinical improvement showed empirical results that were less favorable to the Accelerate PhenoTestTM BC kit as compared to the current standard of care. For instance, an analysis of discrepant results in Decours et al. found impaired performance of the Accelerate PhenoTM system for beta-lactams (except cefepime) in Enterobacteriales (six very major errors) and poor performance in P. aeruginosa.[64] In addition, Giordano et al. did not show superiority for the Accelerate PhenoTestTM BC kit against SOC comparisons (MALDI-TOF for ID and Sensitive/traditional BMD for AST), on any of several measures including sensitivity and time to get results back from the testing.[65]

We invite public comments on whether the updated version of the Accelerate PhenoTestTM BC kit meets the substantial clinical improvement criterion.

In this section, we summarize and respond to written comments we received in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for the Accelerate PhenoTestTM BC kit.

Comment: In response to a question presented at the New Technology Town Hall meeting, the applicant provided a table with study details on the clinical outcomes studies they presented, which are also referenced and summarized in part previously, as well as for study data comparing clinical outcomes resulting Start Printed Page 32595from use of the Accelerate PhenoTest® BC kit to use of standard of care methodologies for determining antibiotic susceptibility testing. Regarding Banerjee R., et al., the applicant explained that the study was conducted at Mayo Clinic and University of California, Los Angeles; the study type was a multicenter, prospective randomized controlled trial with a sample of 448 (226 SOC, 222 AXDX); SOC testing included rapid MALDI-TOF mass spectrometry ID and agar dilution or broth microdilution AST; and the conclusions were median (interquartile range) hours to first Gram-negative antibiotic modification (including escalation and de-escalation) 24.7 hours faster in the AXDX than SOC group 17.4 (4.9, 72) vs. 42.1 (10.1, 72), p<0.001.[66] Regarding Pearson C., et al., the applicant explained that the study was conducted by University of Arkansas for Medical Science; the study type was a single center, quasi-experimental study of bacteremic adult inpatients before and after implementation of AXDX; the N was 496 (188 historical, 155 Intervention 1, 153 Intervention 2); SOC was historical ID/AST performed using VITEK® MS and VITEK®2; and conclusions were reduced inpatient length of stay (LOS) by 2.4 days, reduced days on therapy (DOT) by 1.6 days, reduced broad-spectrum Gram-positive antibiotic therapy by 0.7 days, and reduced broad-spectrum Gram-negative antibiotic therapy by 1.7 days.[67] Regarding Kinn P., et al., the applicant explained that the study was conducted at the University of Iowa; the study type was observational, which included an interrupted time series sub-study; the N was 690 (417 in A; 273 in B); SCO as MALDI for organism identification and VITEK®2 and/or SensititreTM for AST; and conclusions were implementation of AXDX with AST review resulted in fast identification and antibiotic susceptibility results with early optimization of antimicrobial therapy.[68] Regarding Walsh T., the applicant explained that the study was conducted at Allegheny General Hospital (AGH); it was a quasi-experimental study of bacteremic patients before and after implementation of AXDX with positive blood cultures tested at AGH from both AGH and West Penn Hospital; the N was 208 (of non-ICU patients, 78 in the pre-AXDX arm and 63 in the post-AXDX arm, and of ICU patients: 36 in the pre-AXDX arm and 31 in the post-Accelerate arm); VITEK®2 was used for both ID and AST results in the control arm; and conclusions were DOT reduced by 4.6 days, 2.2 day reduction in ICU LOS, and readmission rate reduced from 21.8 percent to 14.3 percent.[69] Regarding Sheth S., et al., the applicant explained that the study was conducted at Peninsula Regional Medical Center; the study consisted of a retrospective (pre-implementation group with VERIGENE® system testing for 100 patients) arm and a prospective (postimplementation of fast ID/AST with AXDX for 100 patients) group; the N was 173 (84 in the pre-implementation arm and 89 in the AXDX arm); SOC was the VERIGENE® system; and conclusions were reduced inpatient LOS by 2.0 days, reduced broad-spectrum days on therapy by 2.0 days.[70]

Response: We appreciate the applicant's further explanation of these study details and data. We will take this information into consideration when deciding whether to approve new technology add-on payments for the Accelerate PhenoTest® BC kit.

Comment: In response to a question presented at the New Technology Town Hall meeting, the applicant explained that T2 Biosystems' instrument is designed for whole blood samples. The applicant stated that T2 Biosystems has two FDA-cleared assays, a Candida panel with five target organisms and a Bacteria panel with five target organisms. The applicant stated that the assay turnaround times for T2 Biosystems vary from 3 hours to 5 hours. The applicant further stated that neither of the T2 Biosystems FDA-cleared products provide antibiotic susceptibility testing results; in other words, they perform identification only, but do not yield antimicrobial susceptibility/resistance results. The applicant explained that, in contrast, the Accelerate PhenoTest® BC kit contains 116 assays, providing organism identification results (16 assays: 8 Gram-negative bacterial targets, 6 Gram-positive bacterial targets and 2 Candida spp.) as well as antibiotic susceptibility testing (100 assays) information for approximately 91 percent of positive blood cultures and that it has a turnaround time of approximately 7 hours after blood culture positivity. The applicant also stated that antimicrobial susceptibility testing with the Accelerate PhenoTest® BC kit is included for Gram-positive organisms: Ampicillin, Ceftaroline, Erythromycin, Daptomycin, Linezolid, Vancomycin, Methicillin resistance (cefoxitin), MLSb (Erythromycin-clindamycin); and for Gram-negative organisms: Ampicillin-sulbactam, Piperacillin-tazobactam, Cefepime, Ceftazidime, Ceftriaxone, Ertapenem, Meropenem, Amikacin, Gentamicin, Tobramycin, Ciprofloxacin, Aztreonam.

Response: We appreciate the applicant's explanation of the Accelerate PhenoTest® BC kit and how the technology differs from T2 Biosystems' instrument. We will take this information into consideration when deciding whether to approve new technology add-on payments for the Accelerate PhenoTest® BC kit.

b. BioFire® FilmArray® Pneumonia Panel

BioFire Diagnostics, LLC submitted an application for new technology add-on payments for the BioFire® FilmArray® Pneumonia Panel for FY 2021. According to the applicant, the BioFire® FilmArray® Pneumonia Panel identifies 33 clinically relevant targets, including bacterial and viral targets, from sputum (including endotracheal aspirate) and bronchoalveolar lavage (including mini-BAL) samples in about an hour. The applicant also stated that for 15 bacteria, the BioFire® FilmArray® Pneumonia Panel provides semi-quantitative results, which may help determine whether an organism is a colonizer or a pathogen.

According to the applicant, lower respiratory tract infections are a leading cause of morbidity and mortality. The applicant stated that world-wide, they are the leading cause of infectious disease death and the 5th leading overall cause of death.[71] The applicant Start Printed Page 32596also asserted that in the United States, community acquired pneumonia (CAP) is the second most common cause of hospitalization and the most common infectious disease cause of death.[72 73] The applicant also stated that in addition to CAP, Hospital-acquired Pneumonia (HAP) and Ventilator-associated Pneumonia (VAP) are the most common hospital acquired infections (HAI) accounting for 22 percent of all HAIs.[74] According to the applicant, HAP and VAP are of particular concern for patients admitted to intensive care units (ICUs) where mortality rates can be up to 50 percent.[75 76]

According to the applicant, timely administration of effective antibiotics is essential for ensuring a good prognosis. The applicant stated that mortality increases for each hour of delay in initiating antibiotic therapy for hospitalized pneumonia patients,[77 78] and ideally, antimicrobial therapy would be pathogen specific and guided by the results of microbiology tests. However, the applicant stated that current microbiologic methods are slow and fail to identify a causative pathogen in over 50 percent of patients, even when comprehensive methods are used.[79] As a result, the applicant noted that current guidelines recommend empiric treatment with broad spectrum antibiotics,[80] and that broad-spectrum antibiotics lead to overuse of antibiotics, which increases the risk of an antibiotic related adverse event (for example, diarrhea, allergic reactions, C. difficile infection) for the patient and contributes to the well-known problem of antimicrobial resistance. In addition, the applicant noted that 6-15 percent of hospitalized patients with CAP fail to respond to the initial antibiotic treatment, in part due to ineffective antibiotic therapy.[81 82 83 84]

According to the applicant, there are three current methods for determining the causative organism of pneumonia: bacterial culture, lab developed and commercial singleplex PCR (Polymerase Chain Reaction) tests, and off-label use of upper respiratory multiplex syndromic panels.

According to the applicant, semi-quantitative bacterial culture is routinely performed on lower respiratory specimens. The applicant explained that a calibrated loop is used to spread sample on appropriate media. A quadrant streak method is generally employed and, depending on how many of the quadrants the organism grows in, determines its semi-quantification. According to the applicant, normal flora will often grow in all 4 quadrants and technicians must differentiate between potential pathogens and normal flora, and potential pathogens are picked from the plate and isolated on another media plate. According to the applicant, after growing isolate, final identification and susceptibility is performed.

According to the applicant, there are also FDA and lab developed tests for single targets that cause pneumonia. The applicant stated that that these are for the more serious pathogens (for example. Methicillin resistant Staphylococcus aureus, MRSA) or fastidious organisms (for example Mycobacterium tuberculosis). According to the applicant, these tests range from sample-to-answer (Cepheid® Xpert® MTB/RIF) to lab developed tests that are often multi-step and multiple pieces of equipment that require isolating nucleic acid from a sample and then adding appropriate reagents to perform a PCR assay on the isolated nucleic acid.

According to the applicant, a number of academic hospital labs have also performed off label validation of commercially available respiratory panels designed for upper respiratory syndromes. The applicant stated that these tests are used primarily on BAL specimens for the rapid detection of viral causes of Pneumonia.

With respect to the newness criterion, the BioFire® FilmArray® Pneumonia Panel received FDA clearance via 510(k) on November 9, 2018, based on a determination of substantial equivalence to a legally marketed predicate device (Curetis UnyveroTM). According to the applicant, the Pneumonia Panel was launched globally on December 11, 2018. According to the applicant, there was a delay between FDA clearance date and U.S. market availability (global launch date) in order to satisfy documentation requirements in preparation of the global launch. The applicant stated that it has been granted a Proprietary Laboratory Analyses (PLA) code by the American Medical Association; PLA Code 0151U was published on October 1st, 2019 and became effective on January 1st, 2020. According to the applicant, the PLA code assigned to the BioFire® FilmArray® Pneumonia Panel uniquely identifies this test and no other technologies use this code. Currently, there are no ICD-10-PCS procedure codes to uniquely identify procedures involving the BioFire® FilmArray® Pneumonia Panel. We note that the applicant has submitted a request for approval for a unique ICD-10-PCS code for the administration of the BioFire® FilmArray® Pneumonia Panel beginning in FY 2021.

As discussed previously, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be Start Printed Page 32597considered “new” for purposes of new technology add-on payments.

With regard to the first criterion, whether a product uses the same or similar mechanism of action to achieve a therapeutic outcome, according to the applicant, the BioFire® FilmArray® Pneumonia Panel is the only sample-to-answer, rapid (~1 hour), and comprehensive molecular panel available for the diagnosis of the major causes of infectious pneumonia. The applicant further explained that the BioFire® FilmArray® Pneumonia Panel is also the only semi-quantitative molecular solution available for rapidly diagnosing infectious causes of pneumonia. The applicant noted that this important feature allows labs and clinicians to better differentiate whether an organism is normal flora or the cause of the patient's illness. The applicant asserted that the current best practice is standard culture technique, discussed previously. The applicant further stated that other comprehensive molecular technologies include Curetis UnyveroTM which is a multi-step process, only has bacterial targets, and only provides qualitative results for all of its targets.

With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, the applicant stated that potential cases representing patients who may be eligible for treatment involving the BioFire® FilmArray® Pneumonia Panel would be assigned to the same MS-DRGs as cases representing patients who receive diagnostic information from competing technologies.

With respect to the third criterion, 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, according to the applicant, the BioFire® FilmArray® Pneumonia Panel is the only FDA cleared comprehensive molecular panel approved for use on both sputum (including endotracheal aspirate) and bronchoalveolar lavage (including mini-BAL) samples allowing for diagnosis of pneumonia in hospital, community, and ventilator associated populations. The applicant stated that the BioFire® FilmArray® Pneumonia Panel is also the only molecular panel that detects both bacterial and viral causes of lower respiratory infections and pneumonia.

In addition, the applicant added that the ability of the BioFire® FilmArray® Pneumonia Panel to detect pathogens and related susceptibility traits is a unique feature of the panel that differentiates it from existing respiratory panels that have been designed and approved for use on upper respiratory specimens and not lower respiratory specimens. The applicant stated that Furukawa, D., et al., evaluated the ability of the BioFire® FilmArray® Pneumonia Panel to detect pathogens and related susceptibility traits, specifically looking at the impact of MRSA detection, and showed that the BioFire® FilmArray® Pneumonia panel has the potential to significantly expedite time to MRSA results allowing for rapid escalation or de-escalation of therapy.[85]

Based on the applicant's statements as presented previously, we are concerned there is insufficient information to determine whether the BioFire® FilmArray® Pneumonia Panel mechanism of action is different from existing products. In the FDA decision summary, the test is described as a multiplex nucleic acid test, or PCR accompanied by the applicant's software. However, it is unclear from the new technology add-on payment application how the mechanism of action is new or different from other products that utilize PCR. While the applicant described this test as the only sample-to-answer, rapid (~1 hour), and comprehensive molecular panel available for the diagnosis of the major causes of infectious pneumonia and as also semi-quantitative, and further described another comprehensive molecular product (Curetis UnyveroTM) as having only bacterial targets and providing only qualitative results for all of its targets, we are uncertain how the underlying mechanism of action of the BioFire® FilmArray® Pneumonia Panel is different from existing PCR-based tests. Additionally, based on the information provided by the applicant, it appears as though the product does not treat a different disease or population compared to other products. Finally, with respect to the Furukawa study, which the applicant cited to support that the BioFire has the potential to specifically expedite time to MRSA results allowing for rapid escalation or de-escalation of therapy, we note that the study authors also concluded that the BioFire® FilmArray® Pneumonia Panel “has good agreement with SOC for detection of bacteria and viruses” and that the BioFire® FilmArray® Pneumonia Panel “detects additional S. aureus bacteria not reported by SOC,” but that “[a]dditional S. aureus detection are more likely to be at low concentration and are of unclear clinical significance.” We are inviting public comments on whether the BioFire® FilmArray® Pneumonia Panel is substantially similar to other technologies and whether the BioFire® FilmArray® Pneumonia Panel meets the newness criterion.

With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion.

The applicant stated that it used 2018 data from Definitive Health Care at defhc.com, and that it searched these data for cases in MS-DRGs 193, 194, and 195 (Simple Pneumonia and Pleurisy with MCC, with CC, and without CC/MCC, respectively), which resulted in 297,956 cases. The applicant indicated that the data was from proprietary data drawn from one hospital in Indianapolis in 2018. However, the scope of the data as described by the applicant is unclear to us, as it seems unlikely that a single hospital in Indiana would have observed 297, 956 cases of simple pneumonia in 1 year. It is also not clear how these cases correspond to any of the later steps in the cost analysis. For example, the applicant did not indicate whether the charge values from the data are based on the same 297,956 cases identified in the three MS-DRGs.

In its analysis, the applicant stated that no charges were removed for any prior technologies as the BioFire® FilmArray® Pneumonia Panel does not eliminate culture testing of specimens. The applicant standardized the charges and then inflated the charges. The applicant reported using an inflation factor of 5.50 percent based on the charge inflation factor published by CMS in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42629). The applicant appears to have made a minor error in this inflation factor, since the actual, 1-year inflation factor in the FY 2020 IPPS/LTCH PPS final rule was 5.4 percent. To estimate the cost of the technology, the applicant used the per-test list price cost of the BioFire® FilmArray® Pneumonia Panel. The applicant indicated that it did not incorporate an estimate of technician time spent administering the test, asserting that “2-5 minutes of technician time is nearly obsolete due to ease of use of the test.” The applicant also indicated that it did not incorporate an estimate of instrumentation cost into its costing of the BioFire® FilmArray® Pneumonia Panel, noting that “a number of” labs already have sufficient instrumentation to run the BioFire® FilmArray® Pneumonia Panel test. The applicant added charges for the BioFire® FilmArray® Pneumonia Panel based on an estimated range of projected Start Printed Page 32598patient charges for the BioFire® FilmArray® Pneumonia Panel technology. The applicant stated that the charge to the patient varies by location and the methodology of the hospital or lab charge master. The applicant noted that the estimate was based on patient charges for other BioFire products that had been reported by hospitals and reference labs. Based on this analysis, the applicant computed a final inflated average case-weighted standardized charge per case of $78,156, as compared to an average case-weighted threshold amount of $42,812. Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, the applicant asserted that the technology meets the cost criterion.

We are concerned that many of the calculated values in the applicant's analysis, such as the average-cost-per case, unweighted and unstandardized, were reportedly based on proprietary claims data that came from one hospital in Indianapolis. We are concerned that an analysis based on one hospital would not adequately represent the cost of cases using the BioFire® FilmArray® Pneumonia Panel as the data could be skewed or biased based on one hospital. We are also concerned with the lack of description of how the BioFire® FilmArray® Pneumonia Panel maps to the three MS-DRGs for simple pneumonia (that is, MS-DRGs 193, 194 and 195); for example, whether the analysis included all the cases in these MS-DRGs or was limited to specific cases. We note there are several additional pneumonia-related MS-DRGs to which we believe potential cases that may be eligible for the use of the product could be mapped, but which were not included in the cost analysis; for example, MS-DRGs 177, 178 and 179 (Respiratory Infections and Inflammations with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 974, 975, and 976 (HIV with Major Related Condition with MCC, with CC, and without CC/MCC, respectively).

We are inviting public comments on whether the BioFire® FilmArray® Pneumonia Panel meets the cost criterion.

With respect to the substantial clinical improvement criterion, the applicant asserted that data from studies conducted with the BioFire® FilmArray® Pneumonia Panel show that it can detect major causes of pneumonia with a high degree of sensitivity and specificity in a clinically relevant timeframe. The applicant explained that results from the BioFire® FilmArray® Pneumonia Panel also have the potential to impact antibiotic usage and lead to improved stewardship and possible cost savings.

The applicant submitted four studies presented as posters at national conferences to support its assertion that the product represents a substantial clinical improvement, noting that data for this test is still new and has not yet been published in academic journals.

According to the applicant, Buchan, et al. compared the results of conventional testing (bacterial culture and clinician directed molecular testing for viruses and atypical bacteria) with the results from the BioFire® FilmArray® Pneumonia Panel for 259 BAL and 48 sputum samples.[86] We note that in their poster, Buchan, et al. specified that conventional testing specifically included bacterial culture and PCR based on clinician order. Also, while Buchan, et al. did report on the BAL specimens, the poster did not appear to report information regarding sputum samples. According to Buchan, et al., specimens were obtained from inpatients aged 18 years and older with symptoms of respiratory tract infection at 8 hospitals in the US. Chart review was conducted to determine type and duration of antibiotic therapy for each subject. According to the applicant, at least one bacterial pathogen was identified by standard methods and by the BioFire® FilmArray® Pneumonia Panel for 23 percent of BALs samples (n=60) and 35 percent (n=17) of sputum samples; however, the BioFire® FilmArray® Pneumonia Panel detected a bacterial pathogen in an additional 15 percent (n=40) of BAL samples and 21 percent (n=10) of the sputum samples. For the 259 BAL samples, 75 bacteria were identified by both standard methods and by the BioFire® FilmArray® Pneumonia Panel. The applicant noted that the BioFire® FilmArray® Pneumonia Panel identified an additional 84 bacteria, with the most common detections for Staphylococcus aureus (N=21), Haemophilus influenzea (n=19), Moxaella catarrhalis (n=8), Pseudomonas aeruginosa (n=6) and Klebsiella oxytoca (n=6). The applicant also explained that an evaluation of the medical and laboratory records for the affected patients found that 50 percent had been on antibiotics within 72 hours of samples collection, 42 percent of the organisms may have been present in the culture but were not reported (due either to low quantification (<104 cfu/mL) or the presence of mixed colonies) and only 8 percent of the detections were unexplained.

According to the applicant, an important feature of the BioFire® FilmArray® Pneumonia Panel is the inclusion of assays for viral agents. The applicant noted that in Buchan, et al., the BioFire® FilmArray® Pneumonia Panel identified at least 1 virus in 19 percent of 259 BAL samples from hospitalized adults [87] and viruses were the only pathogen detection in 12 percent (n=31) of BAL specimens, while 7 percent (n=18) had both bacterial and viral pathogen detections. The applicant summarized that the most common viral pathogens were human rhinovirus (n=17), coronavirus (n=9) and influenza (n=5). Twenty-three percent of the samples with a viral detection had a corresponding test ordered as part of standard of care. The applicant stated that this finding highlights that the role of viruses in pneumonia is still under appreciated. The applicant further stated that identification of a viral agent in the absence of a bacterial detection may allow reduction in the use of antibiotics.

According to the applicant, the ability of the BioFire® FilmArray® Pneumonia Panel to impact patient management has been evaluated by two different groups (Buchan, et al. and Enne, et al). The applicant stated that Buchan, et al., performed a theoretical outcomes analysis by using the result of the BioFire® FilmArray® Pneumonia Panel to modify antimicrobial therapy and then judge if the modification was correct using the final microbiology results. The applicant explained that in this analysis of 243 BAL samples, 68 percent (n=165) could have had an antibiotic adjustment; 48 percent (n=122) would have had antibiotics appropriately de-escalated or discontinued, 31 percent (n=78) would have had no change, and 2 percent (n=5) would have had appropriate escalation or initiation of antibiotics.[88] Alternately, 17 percent (n=42) would have received inappropriate escalation and 2 percent (n=6) would have received inappropriate de-escalation when compared to culture results. The applicant summarized that the most common de-escalations occurred due to discontinuation of vancomycin due to non-detection of MRSA (35 percent) and discontinuation of piperacillin/tazobactam due to non-detection of Enterobacteriaceae (23 percent). Start Printed Page 32599According to the applicant, the de-escalation due to non-detection of these pathogens is possible because the increased sensitivity of the BioFire® FilmArray® Pneumonia Panel for detection of bacterial pathogen provides a high negative predictive value for these non-detections. The applicant explained that the authors estimated the results could have potentially saved >18,000 antibiotic hours equating to an average of 6.5 days/patient (we note that in the poster by Buchan, et al., they reported an average of 6.2 d/patient rather than 6.5 mentioned in the application).[89]

According to the applicant, in an analysis of 120 ICU patients (79 males and 41 females; 33 children, with a median age of 1; and adults with a median age of 68) in the UK by Enne, et al., patients were divided into a group with positive outcomes (pneumonia resolved within 21 days) and negative outcomes (pneumonia not resolved in 21 days or contributed to the patient's death). Enne, et al., evaluated the appropriateness of antimicrobials used for HAP/VAP versus both routine culture and two rapid PCR tests, BioFire® FilmArray® Pneumonia Panel (1h) and Curetis UnyveroTM Pneumonia Panel (5.5h). Consented or assented ICU patients were recruited at 4 diverse UK hospitals: 1 district general, 1 tertiary referral, 1 children's and 1 private. Patients were those starting or changing antibiotics for suspected pneumonia, already hospitalized for >48h and with a timely respiratory sample. According to the applicant, the results of the BioFire® FilmArray® Pneumonia Panel and routine culture were evaluated to determine if the test results would have identified the antibiotic therapy as active or inactive. The applicant explained that in the group with positive outcomes, the results of the BioFire® FilmArray® Pneumonia Panel were able to correctly classify the patient's therapy as active for 35 percent of patients compared to only 20 percent for routine culture (p=0.005). The applicant also explained that in the group of 27 percent of patients that had negative outcomes, the results of the BioFire® FilmArray® Pneumonia Panel would have classified the initial antibiotic therapy as inactive for 41 percent of patients compared to only 15.6 percent for routine culture.[90] The study authors also reported that routine microbiology and Curetis UnyveroTM detected a potential pathogen in 41.7 percent and 59.2 percent of specimens respectively, whereas BioFire® FilmArray® Pneumonia Panel detected a potential pathogen in 66.7 percent of respiratory samples from patients enrolled in the study. The applicant stated that these study results indicate that the test results of the BioFire® FilmArray® Pneumonia Panel provide information that can lead to more targeted and effective therapy in a shorter period of time, and may help to improve patient outcomes.

The applicant also submitted Rand et al., which conducted a retrospective analysis of BAL (n=197) and endotracheal aspirates (n=93) samples from 270 unique hospitalized patients that were collected and stored at −70 °C until thawed and tested on the BioFire® FilmArray® Pneumonia Panel compared to routine microbiology results.[91] Patient data were extracted from the electronic medical record. Cultures were performed by standard methods and identified by Vitek II and mass spectrometry. The applicant explained that the authors found a high correlation between standard methods and BioFire® FilmArray® results and that the authors concluded the BioFire® FilmArray® Pneumonia Panel would have had a significant impact on time to result which could potentially lead to more rapid and appropriate use of antibiotics. The applicant also noted that the authors found significant association with clinical/outcome variables and that the BioFire® FilmArray® Pneumonia Panel's semi-quantification was “at least as strong” as standard culture methods, which according to the applicant, have been developed and improved over decades.

The applicant also submitted White et al., which conducted a comparison of the BioFire® FilmArray® Pneumonia Panel on sputum samples to a multi-test diagnostic bundle for patients admitted from the emergency department (ED) with community acquired pneumonia (CAP).[92] We note that White et al., specifically described the diagnostic bundle as including the following: (1) Blood Cultures; (2) Sputum culture and sensitivity; (3) Urine antigens: Legionella and S. pneumoniae; (4) Nasal swab (NS) PCR for MRSA and S. pneumoniae; (5) FilmArray (Biofire) PCR Panel (NS): Detects 17 viruses, 4 bacteria. Of 585 enrolled patients, 278 were evaluable. The applicant explained that the authors found that the BioFire® FilmArray® Pneumonia Panel detected a higher rate of potential pathogens than the multi-test bundle (90.6 percent versus 81 percent). The applicant also noted that the authors determined that the urine antigen testing, S. aureus and S. pnuemoniae, and PCR upper respiratory panel use could be eliminated for this sample/patient type in the future.[93]

The applicant also submitted a poster by Furukawa et al., which reported a retrospective case review of 43 samples (17 used for clinical use and 26 obtained randomly by microbiology lab) in which BioFire® FilmArray® Multiplex PCR was utilized.[94] According to the applicant, initial use of BioFire FilmArray Pneumonia panel had 100 percent intervention rate leading to de-escalation or prevention of inappropriate antibiotics and the authors found that there was a low risk of unnecessary antibiotics being administered due to the increased sensitivity of the BioFire® FilmArray® Pneumonia panel. The applicant added that the authors believe that with additional data they may be able to discontinue empiric broad spectrum coverage due to the rapid and sensitive nature of the BioFire FilmArray Pneumonia Panel. The applicant also noted that they have a number of ongoing prospective studies being conducted to further support their claims.

The applicant asserted that Buchan, et al. and Rand et al. support their claim of decreased time to actionable results based on— (1) the conclusion in Buchan, et al., that greater than 60 percent of patients potentially could have had an antibiotic adjustment 3-4 days earlier than standard methods based on BioFire® FilmArray® Pneumonia Panel results, and (2) the conclusion in Rand et al., that the BioFire® FilmArray® Pneumonia Panel would have a major impact on the time to report potential pathogens that may cause Pneumonia in intubated/ICU patients.

The applicant asserted that Buchan, et al., and Enne V.I. et al. support their Start Printed Page 32600claim of improved antibiotic stewardship. The applicant pointed to the conclusions in Buchan, et al., that >60 percent of patients potentially could have had an antibiotic adjustment with BioFire® FilmArray® Pneumonia Panel results and 50 percent of potential antibiotic adjustments from BioFire® FilmArray® Pne