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Rule

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Final 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 58432

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

We are revising the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2021 and to implement certain recent legislation. We are also making 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 updating the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2021. In this FY 2021 IPPS/LTCH PPS final rule, we are finalizing changes to the new technology add-on payment pathway for certain antimicrobial products and other changes to new technology add-on payment policies, and the collection of market-based rate information on the Medicare cost report for cost reporting periods ending on or after January 1, 2021 and finalizing the adoption of a market-based MS-DRG relative weight methodology beginning in FY 2024. We are establishing new requirements or revising existing requirements for quality reporting by acute care hospitals and PPS-exempt cancer hospitals. We also established new requirements and revised existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare and Medicaid Promoting Interoperability Programs. We are also establishing performance standards for the Hospital Value-Based Purchasing (VBP) Program, and updating policies for the Hospital Readmissions Reduction Program and the Hospital-Acquired Condition (HAC) Reduction Program.

DATES:

Effective date: This final rule is effective October 1, 2020.

Applicability dates: The amendments at § 413.89(b)(1)(i), (c)(1), (e)(2)(i)(A)(2) are applicable to cost reporting periods before October 1, 2020. The amendments at § 413.89(e)(2)(i)(A)(1), (4) through (6), (i)(B), (iii), and (f) are applicable to cost reporting periods before, on, and after October 1, 2020. The amendments at § 413.89(b)(1)(ii), (c)(2), (e)(2)(i)(A)(3) and (e)(2)(ii) are applicable to cost reporting periods beginning on or after October 1, 2020.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

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

Vinitha Meyyur, (410) 786-8819, Hospital Readmissions Reduction Program—Readmissions—Measures Issues.

Lang Le, (410) 786-5693, 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, Hospital Inpatient Quality Reporting Program—Administration Issues Mihir Patel, (410) 786-2815 and Grace Snyder, (410) 786-0700, Hospital Quality Reporting Program Validation and Reconsideration Issues.

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

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 Katrina Hoadley, (410) 786-8490, 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.

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:

Electronic Access

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

Tables Available Through the Internet on the CMS Website

The IPPS tables for this FY 2021 final rule are available through the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled, “FY 2021 IPPS Final rule Home Page” or “Acute Inpatient—Files for Download.” The LTCH PPS tables for Start Printed Page 58433this FY 2021 final rule are available through the internet on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​LongTermCareHospitalPPS/​index.html under the list item for Regulation Number CMS-1735-F. For further details on the contents of the tables referenced in this final rule, we refer readers to section VI. of the Addendum to this FY 2021 IPPS/LTCH PPS final rule. Readers who experience any problems accessing any of the tables that are posted on the CMS websites, as previously identified, should contact Michael Treitel at (410) 786-4552.

Table of Contents

I. Executive Summary and Background

A. Executive Summary

B. Background Summary

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

D. Issuance of Notice of Proposed Rulemaking

E. Advancing Health Information Exchange

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

A. Background

B. Adoption of the MS-DRGs and MS-DRG Reclassifications

C. FY 2021 MS-DRG Documentation and Coding Adjustment

D. Changes to Specific MS-DRG Classifications

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

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

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

A. Background

B. Worksheet S-3 Wage Data for the FY 2021 Wage Index

C. Verification of Worksheet S-3 Wage Data

D. Method for Computing the FY 2021 Unadjusted Wage Index

E. Occupational Mix Adjustment to the FY 2021 Wage Index

F. Analysis and Implementation of the Occupational Mix Adjustment and the FY 2021 Occupational Mix Adjusted Wage Index

G. Application of the Rural Floor, Application of the State Frontier Floor, and Continuation of the Low Wage Index Hospital Policy

H. FY 2021 Wage Index Tables

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

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

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

L. Process for Requests for Wage Index Data Corrections

M. Labor-Related Share for the FY 2021 Wage Index

IV. Other Decisions and Changes to the IPPS for Operating System

A. Changes to MS-DRGs Subject to Postacute Care Transfer Policy and MS-DRG Special Payments Policies (§ 412.4)

B. Changes in the Inpatient Hospital Updates for FY 2021 (§ 412.64(d))

C. Amendment To Address Short Cost Reporting Periods During Applicable Timeframe for Establishment of Service Area for Sole Community Hospitals Under § 412.92(c)(3)

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

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

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

G. Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) for FY 2021 (§ 412.106)

H. Payment for Allogeneic Hematopoietic Stem Cell Acquisition Costs (§ 412.113)

I. Payment Adjustment for CAR T-cell Clinical Trial Cases (§§ 412.85 and 412.312)

J. Changes for Hospitals With High Percentage of End Stage Renal Disease (ESRD) Discharges (§ 412.104)

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

L. Hospital Value-Based Purchasing (VBP) Program: Updates

M. Hospital-Acquired Conditions (HAC) Reduction Program: Updates and Changes (§ 412.170)

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

O. Rural Commuity Hospital Demonstration Program

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

V. Changes to the IPPS for Capital-Related Costs

A. Overview

B. Additional Provisions

C. Annual Update for FY 2021

VI. Changes for Hospitals Excluded From the IPPS

A. Rate-of-Increase in Payments to Excluded Hospitals for FY 2021

B. Report on Adjustment (Exception) Payment

C. Critical Access Hospitals (CAHs)

VII. Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2021

A. Background of the LTCH PPS

B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2021

C. Changes to the LTCH PPS Payment Rates and Other Changes to the LTCH PPS for FY 2021

D. Rebasing and Revising of the LTCH Market Basket

VIII. Quality Data Reporting Requirements for Specific Providers and Suppliers

A. Hospital Inpatient Quality Reporting (IQR) Program

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

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

D. Changes to the Medicare and Medicaid Promoting Interoperability Programs

IX. Changes for Hospitals and Other Providers

A. Changes in the Submission of Electronic Patient Records to Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs)

B. Revised Regulations To Prepare for Implementation of Mandatory PRRB Electronic Filing (42 CFR Part 405, Subpart R)

C. Revisions of Medicare Bad Debt Policy

X. MedPAC Recommendations

XI. Other Required Information

A. Publicly Available Data

B. Collection of Information Requirements

C. Waiver of the 60-day Delay in Effective Date for the Final Rule

Regulation Text

Addendum—Schedule of Standardized Amounts, Update Factors, and Rate-of-Increase Percentages Effective With Cost Reporting Periods Beginning on or after October 1, 2020 and Payment Rates for LTCHs Effective for Discharges Occurring on or after October 1, 2020

I. Summary and Background

II. Changes to Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2021

A. Calculation of the Adjusted Standardized Amount

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

C. Calculation of the Prospective Payment Rates

III. Changes to Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2021

A. Determination of the Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update for FY 2021

B. Calculation of the Inpatient Capital-Related Prospective Payments for FY 2021

C. Capital Input Price Index

IV. Changes to Payment Rates for Excluded Hospitals: Rate-of-Increase Percentages for FY 2021

V. Changes to the Payment Rates for the LTCH PPS for FY 2021

A. LTCH PPS Standard Federal Payment Rate for FY 2021

B. Adjustment for Area Wage Levels Under the LTCH PPS for FY 2021

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

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

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

F. Computing the Adjusted LTCH PPS Federal Prospective Payments for FY 2021Start Printed Page 58434

VI. Tables Referenced in This Final Rule Generally Available Through the Internet on the CMS Website

Appendix A—Economic Analyses

I. Regulatory Impact Analysis

A. Statement of Need

B. Overall Impact

C. Objectives of the IPPS and the LTCH PPS

D. Limitations of Our Analysis

E. Hospitals Included in and Excluded From the IPPS

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

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

H. Effects of Other Policy Changes

I. Effects of Changes in the Capital IPPS

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

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

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

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

N. Effects of Requirements Regarding the Promoting Interoperability Program

O. Alternatives Considered

P. Reducing Regulation and Controlling Regulatory Costs

Q. Overall Conclusion

R. Regulatory Review Costs

II. Accounting Statements and Tables

A. Acute Care Hospitals

B. LTCHs

III. Regulatory Flexibility Act (RFA) Analysis

IV. Impact on Small Rural Hospitals

V. Unfunded Mandate Reform Act (UMRA) Analysis

VI. Executive Order 13175

VII. Executive Order 12866

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

I. Background

II. Inpatient Hospital Update for FY 2021

A. FY 2021 Inpatient Hospital Update

B. Update for SCHs and MDHs for FY 2021

C. FY 2021 Puerto Rico Hospital Update

D. Update for Hospitals Excluded From the IPPS for FY 2021

E. Update for LTCHs for FY 2021

III. Secretary's Recommendation

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

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority

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

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

We are establishing performance standards for the Hospital Value-Based Purchasing (VBP) Program and updating 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 making 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.Start Printed Page 58435
  • Section 1886(q) of the Act, as amended by section 15002 of the 21st Century Cures Act, which establishes the Hospital Readmissions Reduction Program. Under the program, payments for discharges from an applicable hospital as defined under section 1886(d) of the Act will be reduced to account for certain excess readmissions. Section 15002 of the 21st Century Cures Act 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, for the reasons discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32889 through 32890) and as also discussed in section XI.D. of the preamble of this final rule, we are hereby waiving the 60-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 final rule. In general, these major provisions are part of the annual update to the payment policies and payment rates, consistent with the applicable statutory provisions. A general summary of the proposed changes that were included in the FY 2021 IPPS/LTCH PPS proposed rule is presented in section I.D. of the preamble of this final rule.

a. MS-DRG Documentation and Coding Adjustment

Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub. L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for changes in MS- DRG documentation and coding that do not reflect real changes in case-mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110 90. Section 414 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.) Therefore, for FY 2021, we are making an adjustment of + 0.5 percent to the standardized amount.

b. 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 the proposed rule, 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 proposed 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 final rule, after consideration of public comments, we are finalizing our proposal 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 policy, 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.Start Printed Page 58436

Under current policy, a new technology must receive FDA marketing authorization (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 final rule, after consideration of public comments, we are finalizing our proposal to provide for conditional new technology add-on payment approval for products designated as QIDPs that do not receive FDA approval 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 policy, 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 applying an adjustment to the standardized amounts.

d. DSH Payment Adjustment and Additional Payment for Uncompensated Care

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

In this final rule, we have updated our estimates of the three factors used to determine uncompensated care payments for FY 2021. We continue to use uninsured estimates produced by CMS' Office of the Actuary (OACT) as part of the development of the National Health Expenditure Accounts (NHEA) in the calculation of Factor 2; however, given the unprecedented effects on health insurance enrollment as a result of the public health emergency for the COVID-19 pandemic, OACT has updated the NHEA-based projection of the FY 2021 rate of uninsurance using more recently available unemployment data. In addition, we are using 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 continuing to use the low-income insured days proxy to calculate Factor 3 for these hospitals. Furthermore, we are establishing that to calculate Factor 3 for FY 2022 and all subsequent fiscal years for all eligible hospitals, except IHS and Tribal hospitals and Puerto Rico hospitals, we will use the most recent available single year of audited Worksheet S-10 data. We are also making other methodological changes for purposes of calculating Factor 3.

e. Reduction of Hospital Payments for Excess Readmissions

We are finalizing our proposal 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 final rule, we are finalizing 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 policy.

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 final rule, we are providing 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.

h. 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 final rule, we are finalizing 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 measure validation policies finalized in this rule; and (3) to update the definition of applicable period at 42 CFR 412.170 to Start Printed Page 58437align with the policy to automatically adopt applicable periods.

g. Hospital Inpatient Quality Reporting (IQR) Program

Under section 1886(b)(3)(B)(viii) of the Act, subsection (d) hospitals are required to report data on measures selected by the Secretary for a fiscal year in order to receive the full annual percentage increase that would otherwise apply to the standardized amount applicable to discharges occurring in that fiscal year.

In this FY 2021 IPPS/LTCH PPS final rule, we are finalizing proposals related to the reporting, submission, and public display requirements for eCQMs. These policies are: (1) Progressively increasing the numbers of quarters of eCQM data reported, from one self-selected quarter of data to four quarters of data over a three-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) beginning public display of eCQM data starting with data reported by hospitals for the CY 2021 reporting period/FY 2023 payment determination and for subsequent years. The eCQM-related policies are in alignment with proposals under the Promoting Interoperability Program. We also are finalizing our proposal 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 finalizing proposals to streamline the validation processes under the Hospital IQR Program. We are finalizing proposals to: (1) Update the quarters of data required for validation for both chart-abstracted measures and eCQMs; (2) expand targeting criteria to include hospital selection for eCQMs; (3) change the validation pool from 800 hospitals to 400 hospitals; (4) remove the current exclusions for eCQM validation selection, (5) require electronic file submissions for chart-abstracted measure data; (6) align the eCQM and chart-abstracted measure scoring processes; and (7) update the educational review process to address eCQM 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 final rule, we are finalizing our proposal 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's (CDC) that calculates rates using updated HAI baseline data that are further stratified by patient location.

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 finalizing several changes to the Medicare Promoting Interoperability Program. Specifically, these policies include: (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 three year period. Specifically, we finalized proposals to require: (a) Two self-selected calendar quarters of data for the CY 2021 reporting period; (b) three self-selected calendar quarters of data for the CY 2022 reporting period; and (c) four calendar quarters of data beginning with the CY 2023 reporting period, where the submission period for the Medicare Promoting Interoperability Program will be the 2 months following the close of the respective calendar year; (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 Office of the National Coordinator for Health Information Technology (ONC) certification criteria. We are amending our regulation texts as necessary to incorporate these finalized changes.

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

As discussed in section IV.P. of the preamble of this final rule, in order to reduce the Medicare program's reliance on the hospital chargemaster and to support the development of a market-based approach to payment under the Medicare FFS system, we are finalizing our proposal, with modification, to require that hospitals report certain market-based payment rate information on their Medicare cost report for cost reporting periods ending on or after January 1, 2021.

Specifically, we are finalizing that hospitals would report on the Medicare cost report 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. The market-based rate information we are finalizing for collection 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. The payer-specific 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 finalizing the market-based MS-DRG relative weight methodology as described in the FY Start Printed Page 584382021 IPPS/LTCH PPS proposed rule, which would incorporate this market-based rate information, beginning in FY 2024.

4. Summary of Costs and Benefits

  • Adjustment for MS-DRG Documentation and Coding Changes. Section 414 of the MACRA replaced the single positive adjustment we intended to make in FY 2018 once the recoupment required by section 631 of the ATRA was complete with a 0.5 percentage point positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently adjusted to 0.4588 percentage point by section 15005 of the 21st Century Cures Act.) For FY 2021, we are making an adjustment of +0.5 percentage point to the standardized amount consistent with the MACRA.
  • 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, in this final rule we are making changes to the new technology add-on payment policy for certain antimicrobials for FY 2021. We are expanding 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 policy, 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 providing for conditional new technology add-on payment approval for products designated as QIDPs that do not receive FDA approval 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 policy, 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 finalized policy 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 final policy is a cost, but that cost is not estimable. Therefore, it is not possible to quantify the impact of these policies.

  • Wage Index Disparities Between High and Low Wage Index Hospitals. As discussed in section III.G.3. of the preamble of this final 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 applying a budget neutrality adjustment to the standardized amount so that increase is implemented in a budget neutral manner.
  • Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. For FY 2021, we are updating our estimates of the three factors used to determine uncompensated care payments. To calculate Factor 2, we are using uninsured estimates produced by OACT as part of the development of the NHEA in conjunction with more recently available data that take into consideration the effects of COVID-19. We are using a single year of data on uncompensated care costs from Worksheet S-10 for FY 2017 to determine Factor 3 for FY 2021 for all hospitals with the exception of Puerto Rico hospitals and Indian Health Service and Tribal hospitals. To determine the amount of uncompensated care for purposes of calculating Factor 3 for Puerto Rico hospitals and Indian Health Service and Tribal hospitals, we are continuing to use only data regarding low-income insured days for FY 2013. We project that the amount available to distribute as payments for uncompensated care for FY 2021 will decrease by approximately $60 million, as compared to our estimate of the uncompensated care payments that will be distributed in FY 2020. The uncompensated care payments have redistributive effects, based on a hospital's uncompensated care amount relative to the uncompensated care amount for all hospitals that are projected to be eligible to receive Medicare DSH payments, and the calculated payment amount is not directly tied to a hospital's number of discharges.
  • Update to the LTCH PPS Payment Rates and Other Payment Policies. Based on the best available data for the 363 LTCHs in our database, we estimate that the changes to the payment rates and factors that we present in the preamble of and Addendum to this final rule, which reflect the end of the transition of the statutory application of the site neutral payment rate and the update to the LTCH PPS standard Federal payment rate for FY 2021, would result in an estimated decrease in payments in FY 2021 of approximately $40 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. We estimate that 2,545 hospitals will have their base operating DRG payments reduced by their FY 2021 hospital-specific payment adjustment factors. As a result, we estimate that the Hospital Readmissions Reduction Program will save approximately $553 million in FY 2021.
  • 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 Start Printed Page 584392021 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 changes for the Hospital IQR Program in this final rule would result in a total information collection burden increase of 6,533 hours associated with our policies and updated burden estimates and a total cost increase of approximately $253,480, across a four-year period from the CY 2021 reporting period/FY 2023 payment determination through the CY 2024 reporting period/FY 2026 payment determination, compared to our previously approved information collection burden estimates.
  • Changes to the Medicare and Medicaid Promoting Interoperability Programs. With these finalized proposals, we do not estimate any net change in burden hours or total cost for the Medicare Promoting Interoperability Program for CY 2021, given that there are no substantive change in current measures or data requirements for eligible hospitals and CAHs that would affect previously-approved burden. Unrelated to any of this rule's Promoting Interoperability changes, an 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, result in an estimated increase of $24,073 for the annual information collection burden (total cost) in FY 2021. Therefore, multiplying the total annual burden of 21,4950 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 Data Collection and Change in Methodology for Calculating MS-DRG Relative Weights. In section IV.P.4. of the preamble of this final rule, we are finalizing a methodology for estimating the MS-DRG relative weights beginning in FY 2024 which utilizes the median payer-specific negotiated charge information we are finalizing to collect on the Medicare cost report. We estimate total annual burden hours for this data collection are as follows: 3,189 hospitals times 20 hours per hospital equals 63,780 annual burden hours and $4,315,993. We refer readers to section XI.B.11. of the preamble of this final rule for further analysis of this assessment.

B. Background Summary

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

Section 1886(d) of 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 for fiscal years beginning on or after 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. Any eligible outlier payment is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments.

Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate, which is determined from their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital-specific rate based on their costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the standardized amount. SCHs are the sole source of care in their areas. Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more than 35 road miles from another hospital or that, by reason of factors such as an isolated location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of Start Printed Page 58440hospital 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.

C. Summary of Provisions of Recent Legislation Implemented in This Final 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). We did not make 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 Start Printed Page 58441percent 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. Issuance of Notice of Proposed Rulemaking

In the FY 2021 IPPS/LTCH PPS proposed rule that appeared in the May 29, 2020 Federal Register (84 FR 32460), 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 proposed to make.

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

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

  • Proposed changes to MS-DRG classifications based on our yearly review for FY 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 the proposed rule we proposed to make revisions to the wage index for acute care hospitals and the annual update of the wage data. Specific issues addressed included, but were not limited to, the following:

  • 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 the 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.
  • The statutorily required IME adjustment factor for FY 2021.
  • Proposed changes to the methodology for determining Medicare DSH for uncompensated care payments.
  • 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 proposed changes 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 Start Printed Page 58442report 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 stated 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 the proposed rule, we discussed 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 the proposed rule, we discussed—

  • 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 the proposed rule, we set forth—

  • Proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 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 the proposed rule, we addressed—

  • Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program.
  • Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program).
  • Proposed changes to requirements pertaining to eligible hospitals and CAHs participating in the Medicare and Medicaid Promoting Interoperability Programs.

8. Other Proposed Changes

Section IX. of the preamble to the proposed rule included the following:

  • 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 the Proposed Rule

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

Section XI. of the preamble to the proposed rule included 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 proposed to establish the threshold amounts for outlier cases. In addition, in section IV. of the Addendum to the proposed rule, we addressed the update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 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 proposed 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 the 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 provided 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 services 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 addressed these recommendations in Appendix B of the 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 Start Printed Page 58443interoperability 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. 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).

C. 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 Start Printed Page 58444provided 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. Adjustment for FY 2021

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

Comment: Commenters stated that in order to comply with ATRA requirements, CMS anticipated that a cumulative −3.2 percentage point adjustment to the standardized amount would achieve the mandated $11 billion recoupment. A commenter stated that by retaining the −0.7 percentage point adjustment made in FY 2017, CMS has miscalculated the directives issued by Congress, and has contravened Congress' clear instructions and intent. The commenter contends that when Section 15005 of the 21st Century Cures Act (Pub. L. 114-255) altered the positive adjustment for FY 2018 from 0.5 percentage points to 0.4588 percentage points, Congress recognized that this difference would not be restored. According to the commenter, Congress thus assumed that the 0.7 percentage point adjustment would be returned as part of the restoration process; otherwise, it would have updated the “baseline” to reflect CMS' revised total negative adjustment of 3.9%. A commenter asserted that the additional −0.7 percentage point adjustment made in FY 2017 has been improperly continued in FY 2018, FY 2019, and FY 2020, and failure to restore the additional 0.7 percentage point adjustment will cause hospitals to experience a significant cut in their reimbursement for FY 2021 (in addition to the losses already incurred for FYs 2018, 2019, and 2020). Other commenters urged CMS to use its exceptions and adjustments authority under section 1886(d)(5)(I) by FY 2024, to restore an additional 0.7 percentage point payment adjustment to restore payment equity to hospitals and comply with what they asserted was Congressional intent. Another commenter suggested CMS implement an approximate positive adjustment of 1.0 percentage point by FY 2024 to fully and permanently restore the entire −3.9 percentage point recoupment adjustment to IPPS rates.

Response: As we discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32471), and in response to similar comments in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42057), we believe section 414 of the MACRA and section 15005 of the 21st Century Cures Act set forth the levels of positive adjustments for FYs 2018 through 2023. We are not convinced that the adjustments prescribed by MACRA were predicated on a specific adjustment level estimated or implemented by CMS in previous rulemaking. While we had anticipated making a positive adjustment in FY 2018 to offset the reductions required to recoup the $11 billion under section 631 of the ATRA, section 414 of the MACRA required that we implement a 0.5 percentage point positive adjustment for each of FYs 2018 through 2023, and not the single positive adjustment we intended to make in FY 2018. As discussed in the FY 2017 IPPS/LTCH PPS final rule, by phasing in a total positive adjustment of only 3.0 percentage points, section 414 of the Start Printed Page 58445MACRA would not fully restore even the 3.2 percentage point adjustment originally estimated by CMS in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515). Moreover, as discussed in the FY 2018 IPPS/LTCH PPS final rule, Public Law 114-255, which further reduced the positive adjustment required for FY 2018 from 0.5 percentage point to 0.4588 percentage point, was enacted on December 13, 2016, after CMS had proposed and finalized the final negative − 1.5 percentage point adjustment required under section 631 of the ATRA. We see no evidence that Congress enacted these adjustments with the intent that CMS would make an additional +0.7 percentage point adjustment in FY 2018 to compensate for the higher than expected final ATRA adjustment made in FY 2017, nor are we persuaded that it would be appropriate to use the Secretary's exceptions and adjustments authority under section 1886(d)(5)(I) of the Act to adjust payments in FY 2021 to restore any additional amount of the original 3.9 percentage point reduction, given Congress' prescriptive adjustment levels under section 414 of the MACRA and section 15005 of the 21st Century Cures Act. We intend to address adjustments for FY 2022 and later years in future rulemaking.

After consideration of the public comments we received, we are finalizing our proposal to implement a 0.5 percentage point adjustment to the standardized amount for FY 2021.

D. Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for 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 Reporting. For a detailed discussion of the conversion of the MS-DRGs to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56787 through 56789).

b. Basis for FY 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 final 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.

We stated in the proposed rule that 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 updates. Therefore, we stated that 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 updates. We stated that 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.

Comment: A commenter expressed concern that changing the deadline to submit requested changes to the MS-DRGs from November 1st to October 20th will shorten the amount of time that hospitals have to review the final rule each year and determine how changes may impact MS-DRG recommendations for the following year. The commenter opposed the change in date stating hospitals should be given more time to evaluate impacts of the MS-DRG changes. We also received comments urging CMS to consider the impact of the COVID-19 pandemic on the FY 2020 MedPAR data in evaluating potential MS-DRG changes for FY 2022. Commenters noted that the volume for MS-DRGs unrelated to COVID-19 hospitalizations may not be typical as a result of the postponement or cancellation of elective surgeries.

Response: We believe that a change in the deadline from November 1st to October 20th will continue to provide hospitals sufficient time to assess potential impacts and inform future MS-DRG recommendations. As noted later in this section, in response to prior public comments, we provided a test version of the ICD-10 MS-DRG GROUPER Software, Version 38 containing the proposed GROUPER logic for FY 2021 in connection with the proposed rule, allowing providers to build case examples reflecting the proposed MS-DRG changes. Therefore, we believe providers have sufficient time to assess potential impacts. However, because of the unique circumstance for this final rule for which we are waiving the delayed effective date (as discussed in section I.A.2 of this preamble), we are maintaining the deadline of November 1, 2020 for FY 2022 MS-DRG classification change requests, and expect to reconsider a change in the deadline beginning with comments and suggestions submitted for FY 2023. In response to the public comments received expressing concerns about evaluating potential MS-DRG changes for FY 2022 using the FY 2020 MedPAR claims data, which may reflect various impacts as a result of the COVID-19 pandemic, we will consider these concerns in developing FY 2022 proposals. Accordingly, interested parties should submit any comments and suggestions for FY 2022 by November 1, 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 provided a test version of the ICD-10 MS-DRG GROUPER Software, Version 38, in connection with the FY 2021 IPPS/LTCH PPS proposed rule so that the public could better analyze and understand the impact of the proposals included in the proposed rule. We noted that this test software reflects the proposed GROUPER logic for FY 2021. Therefore, it includes the new diagnosis Start Printed Page 58446and 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 that were associated with the 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 that was associated with the proposed rule. We also noted that there were not any procedure codes that had been designated as invalid for FY 2021 at the time of the development of the proposed rule. Those tables were not published in the Addendum to the 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 the proposed rule. Because the diagnosis codes no longer valid for FY 2021 are not reflected in the test software, we made 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 had access to the test software allowing them to build case examples that reflect the proposals that were included in the proposed rule. In addition, users were 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 proposed to the MS-DRGs for FY 2021. We invited public comments on each of the MS-DRG classification proposed changes, as well as our proposals to maintain certain existing MS-DRG classifications discussed in the proposed rule. In some cases, we proposed changes to the MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. In other cases, we proposed to maintain the existing MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. For the FY 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 referred to these claims data as the “September 2019 update of the FY 2019 MedPAR file.”

In this FY 2021 IPPS/LTCH PPS final rule, we summarize the public comments we received on our proposals, present our responses, and state our final policies. For this FY 2021 final rule, we generally did not perform any further MS-DRG analysis of claims data. Therefore, our MS-DRG analysis is based on ICD-10 claims data from the September 2019 update of the FY 2019 MedPAR file, which contains hospital bills received through September 30, 2019, for discharges occurring through September 30, 2019, except as otherwise noted.

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

In our examination of the claims data, we apply the following criteria established in FY 2008 (72 FR 47169) to determine if the creation of a new complication or comorbidity (CC) or major complication or comorbidity (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.

In the FY 2021 IPPS/LTCH PPS proposed rule, we proposed to expand the previously listed criteria to also include the NonCC subgroup. We explained that 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 provided 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 the FY 2021 proposed rule. We also stated we had revised the order in which the criteria are presented for illustrative purposes.

Start Printed Page 58447

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 the FY 2021 IPPS/LTCH PPS proposed rule and this final rule, our MS-DRG analysis is 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.

Comment: A commenter acknowledged CMS's proposal to expand the previously listed criteria to create subgroups to also include the NonCC subgroup. This commenter expressed concern that the proposed principles are limited and restrictive and more applicable to MCCs than CCs.

Response: It is not clear to us from the limited discussion in the comment why the commenter believes the principles are limited and restrictive and more applicable to MCCs than CCs, as the commenter did not provide further information or examples of this, nor suggest alternative approaches. We note that the criteria to create subgroups within the MS-DRGs as discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32472 through 32473) are separate from the guiding principles we discussed in the context of the comprehensive CC/MCC analysis of diagnosis codes when reported as a secondary diagnosis (85 FR 32550). However, the commenter did not provide any further information, alternative suggestions or recommendations with respect to either analysis.

Comment: A commenter noted that in CMS's analysis of the MS-DRG classification requests for FY 2021, the proposed expanded criteria were applied to each of the MCC, CC and NonCC subgroups and it questioned the appropriateness of applying the proposed subgroup criteria to include the NonCC subgroup for FY 2021 prior to it being finalized. This commenter also requested that CMS clarify how it will apply the proposed expansion of the subgroup criteria going forward. The commenter stated that if CMS were to apply the NonCC subgroup criteria retroactively in future rulemaking there are concerns with implications on the MS-DRG groupings and relative weights. The commenter conducted its own preliminary analysis using the FY 2018 MedPAR data and noted that some MS-DRGs with three subgroups would have two subgroups under the new framework and it was not clear how this may impact the relative weights of those MS-DRGs.

Response: In the FY 2021 IPPS/LTCH PPS proposed rule, we proposed to expand the existing criteria to create subgroups within a base MS-DRG to include the NonCC subgroup (85 FR 32472 through 32473). We noted that in our analysis of the MS-DRG classification requests for FY 2021, we applied the proposed criteria to each of the MCC, CC and NonCC subgroups. In response to the commenter's concern about the appropriateness of applying Start Printed Page 58448the proposed subgroup criteria for MS-DRG classification requests in FY 2021 prior to it being finalized, we note that we proposed and requested comments on the expansion of these criteria to the NonCC subgroup as part of this rulemaking and before finalization of this approach for FY 2021 MS-DRG changes. We also note that in the absence of applying the proposed criteria to include the NonCC subgroup, the MS-DRG related proposals for FY 2021 involving such requests to create subgroups would have similar results. However, to better illustrate for the reader the criteria that were established in FY 2008 (72 FR 47169) to determine if the creation of a new CC or MCC subgroup within a base MS-DRG is warranted, we have provided this table.

As shown in the table, under column number two (Three-Way Split), the first criterion requires “500+ cases for MCC group; and 500+ cases for CC group” and the second criterion requires “5%+ cases for MCC group; and 5%+ cases for CC group”. We note that there is no volume or percentage of cases requirement for the NonCC group under the first and second criterion for this type of severity level split under the existing criteria. We further note that the proposed expansion of the criteria to include the NonCC subgroup, as discussed in the proposed rule, is only applicable for a three-way split because as previously illustrated in the table, the criteria for the NonCC subgroup already exists in each of the options for a two-way split.

As stated previously, in the absence of applying the proposed criteria to include the NonCC subgroup, the MS-DRG related proposals for FY 2021 involving such requests to create subgroups would have similar results. For example, in response to the request under the Pre-MDC category to split MS-DRG 014 (Allogeneic Bone Marrow Transplant) into two severity levels, based on the presence of a MCC, we discussed our application of the criteria to create subgroups for each of the two-way severity level splits. We noted that the criterion that there be at least 500 cases for each subgroup (with MCC and without MCC) failed due to low volume, for both years analyzed. The analysis did not specifically rely on application of the proposed expansion of the criteria for the NonCC subgroup since the request was not for a three-way severity split and we noted there was already an insufficient volume of cases (less than 500) in the CC subgroup (CC+NonCC group). Another example under the Pre-MDC category is for the proposed new MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy), for which we received public comments regarding CC subgroups and is discussed in further detail in section II.E.2.b. of the preamble of this final rule.

We take this opportunity to clarify that there are no plans to apply the proposed expansion of the criteria to the NonCC subgroup retroactively in future rulemaking. The commenter is correct that application of the proposed NonCC subgroup criteria going forward may result in modifications to certain MS-DRGs that are currently split into three severity levels and result in MS-DRGs that are split into two severity levels under the proposed new framework. Any proposed modifications to the MS-DRGs would be addressed in future rulemaking consistent with our annual process and reflected in the Table 5—Proposed List of Medicare Severity Diagnosis Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay for the applicable fiscal year.

After consideration of the public comments we received, we are finalizing our proposal to expand the previously listed criteria to also include the NonCC subgroup.

We are making the FY 2021 ICD-10 MS-DRG GROUPER and Medicare Code Editor (MCE) Software Version 38, the ICD-10 MS-DRG Definitions Manual files Version 38 and the Definitions of Medicare Code Edits Manual Version 38 available to the public on our CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

2. Pre-MDC

a. Bone Marrow Transplants

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32473 through 32475), we received two separate requests that involve the MS-Start Printed Page 58449DRGs 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 procedure 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.

As noted in the proposed rule, 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 proposed 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. We stated in the proposed rule that 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 proposed 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 discussed in the proposed rule and 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 noted in the proposed rule that 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.

As stated in the proposed rule, 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 Start Printed Page 58450from 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.

We applied the criteria to create subgroups for each of the two-way severity level splits. As discussed in section II.D.1.b., in the FY 2021 IPPS/LTCH PPS proposed rule, we proposed 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 proposed to maintain the current structure of MS-DRG 014 for FY 2021.

Comment: Commenters supported the proposal to redesignate MS-DRGs 014, 016, and 017 as medical MS-DRGs and stated they agreed that bone marrow transplant procedures are medical procedures that do not utilize the resources of an operating room. However, the commenters also noted that bone marrow transplants remain resource intensive procedures and the patients are medically complex, often requiring additional monitoring and increased lengths of stay. Commenters also agreed that the ICD-10-PCS procedure codes describing bone marrow transplants should have the same designation and supported the proposal to redesignate the eight ICD-10-PCS procedure codes listed in the previous table from O.R. to non-O.R. procedures, affecting their current MS-DRG assignment for MS-DRGs 016 and 017. However, a single commenter disagreed with the proposal to redesignate the eight ICD-10-PCS procedure codes listed in the previous table from O.R. to non-O.R. procedures stating that the proposal did not provide any detail as to how the codes would be reassigned and recommended not finalizing the proposal until more information was provided in future rulemaking. Another commenter noted that the bone marrow transplant procedure codes represent an example of why the current process of determining whether a procedure qualifies for designation as an O.R. procedure may be outdated. This commenter acknowledged CMS' discussion from section II.D.11. in the proposed rule that stated while procedures have typically been evaluated on the basis of whether they would be performed in an operating room, there may be other factors to consider with regard to resource consumption (85 FR 32542 through 32549). Another commenter reported that in review of the eight procedure codes CMS proposed to redesignate from O.R. to non-O.R., they queried the FY 2019 MedPAR claims data and discovered a limited number of claims reflecting these procedure codes. This commenter consulted with its clinical advisors to determine if a bone marrow transplant with an “open approach” (as described by the procedure codes and the ICD-10-PCS classification), would generally occur. According to the clinical advisors, it is illogical to maintain these procedure codes describing an open approach for allogeneic and autologous bone marrow transplant procedures. The commenter recommended that CMS remove the procedure codes identified with an open approach from the classification.

Commenters also supported retaining the structure of MS-DRG 014 and not creating a two-way severity level split based on the data and information provided. A commenter stated they understood and did not dispute CMS' logic based on the criteria to create subgroups, however, they suggested that when proposals from the comprehensive CC/MCC analysis are finalized that this MS-DRG be reevaluated given the variation in the “with CC/MCC” and “without CC/MCC” subgroups ($90,924 versus $60,277, respectively) displayed in the CMS data analysis. In addition, this commenter noted that the FY 2020 proposals related to the CC/MCC analysis involved redesignating the neoplasm codes from CC to NonCC and stated their belief that facilities addressing the costly and unavoidable consequences of allogeneic bone marrow transplants should be compensated for providing the care.

Response: We appreciate the commenters' support for our proposals related to MS-DRGs 014, 016 and 017 for bone marrow transplant procedures. We agree with the commenters that bone marrow transplants are resource intensive procedures and the patients are medically complex, often requiring additional monitoring and increased lengths of stay. In response to the commenter who disagreed with the proposal to redesignate the eight ICD-10-PCS procedure codes listed in the previous table from O.R. to non-O.R. procedures because the proposal did not provide any detail as to how the codes would be reassigned and recommended not finalizing the proposal until more information was provided in future rulemaking, we note that the proposed rule specifically stated “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 we also discussed in section II.D.11.a. of the proposed rule, each procedure that is designated as a non-O.R. procedure is Start Printed Page 58451further classified as either affecting the MS-DRG assignment or not affecting the MS-DRG assignment. We noted that the non-O.R. designations that do affect the MS-DRG are referred to as “non-O.R. affecting the MS-DRG.” Accordingly, redesignating these eight procedure codes as non-O.R. procedures affecting their MS-DRG assignment means that they are non-O.R. and will continue to be assigned to MS-DRGs 016 and 017 for FY 2021.

In response to the commenter who recommended that CMS remove the procedure codes describing an allogeneic or autologous bone marrow transplant with an open approach from the classification, we thank the commenter for their suggestion and note that proposed changes to these procedure codes can be considered at an ICD-10 Coordination and Maintenance Committee meeting. As discussed in section II.E.16. of the preamble of this final rule, we encourage commenters to submit proposals for procedure coding changes via Email to: ICDProcedureCodeRequest@cms.hhs.gov.

With regard to the commenter who suggested that MS-DRG 014 be reevaluated when proposals from the comprehensive CC/MCC analysis are finalized due to the variation in the “with CC/MCC” and “without CC/MCC” subgroups as displayed in the CMS data analysis, we note that we will evaluate and analyze data for all the MS-DRGs consistent with our annual process.

After consideration of the public comments that we received, we are finalizing our proposal to redesignate MS-DRGs 014, 016, and 017 from surgical to medical MS-DRGs under the Pre-MDC category and finalizing our proposal to redesignate the eight ICD-10-PCS procedure codes listed in the previous table from O.R. to non-O.R. procedures, affecting their current MS-DRG assignment for MS-DRGs 016 and 017 for FY 2021. We are also finalizing our proposal to maintain the current structure of MS-DRG 014 for FY 2021.

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

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32475 through 32476), we discussed several requests we received 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 stated in the FY 2021 IPPS/LTCH PPS proposed rule that we now have more data upon which to evaluate a new MS-DRG specifically for cases involving CAR T-cell therapies. We stated that 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 development of the proposed rule and this final rule. We stated that we Start Printed Page 58452distinguished 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 noted 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.

*We note that we included 18 cases that were flagged as statistical outliers in our trim methodology due to the mix of CAR T- cell therapy and non-CAR T—cell therapy cases in the current MS-DRG.

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. We stated that 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. We stated in the proposed rule that 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 therefore proposed to assign cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 to a new MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy).

We stated in the proposed rule that if additional procedure codes describing CART- 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 proposed 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”.

Comments: The vast majority of commenters supported CMS' proposal to create new MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy), stating that it will better reflect the resource use involved in providing the CAR T-cell therapy. Commenters acknowledged that CMS had considered many factors previously raised by stakeholders in developing this new MS-DRG. A small number of commenters did not support the creation of a new MS-DRG and recommended that CMS maintain the new technology add-on payment for CAR T-cell therapies, delay creating a new MS-DRG, and consider public-private partnerships for data collection.

Response: We appreciate commenters' support. With respect to commenters that requested that we instead maintain the new technology add-on payments, we refer the reader to the section of this rule where we address these comments. We believe that the data we currently have available is sufficient to establish a relative weight at this time, and therefore do not believe it is appropriate to delay the creation of a new MS-DRG. We also note that the weights are recalibrated yearly to reflect additional data as it becomes available. We note that the commenter did not provide additional detail regarding potential public/private partnerships with respect to data collection.

Comments: Some commenters requested that CMS clarify that all CAR T-cell therapy products, or more Start Printed Page 58453broadly, all T-cell immunotherapy products, would be assigned to MS-DRG 018 regardless of cost. One commenter expressed concern that MS-DRG 018 is specific to one mechanistic approach to cellular therapy and has not provided for the array of cellular therapies in development.

Response: As we stated in the proposed rule, if additional procedure codes describing CART-cell therapies are approved and finalized, we would use our established process to assign these procedure codes to the most appropriate MS-DRG. As described in the FY 2020 final rule (84 FR 42061), assigning new procedure codes involves review of the predecessor procedure code's MS-DRG assignment. However, this process does not automatically result in the new procedure code being assigned (or proposed for assignment) to the same MS-DRG as the predecessor code. There are several factors to consider during this process that our clinical advisors take into account. For example, in the absence of volume, length of stay, and cost data, they may consider the specific service, procedure, or treatment being described by the new procedure code, the indications, treatment difficulty, and the resources utilized. Similarly, should additional cellular therapies become available, we would use our established process to determine whether there is a need to reconsider the MS-DRG assignment that would otherwise result from the principal diagnosis and other factors that go into MS-DRG assignment.

Comments: Some commenters requested that CMS consider subdividing MS-DRG 018 into separate MS-DRGs for MCCs, CCs, and non-CCs in order to account for the higher costs involved in caring for patients who develop Cytokine Release Syndrome (CRS). Some commenters requested that payments consider factors such as patients' burden of illness, comorbid conditions and complications associated with receiving CAR T-cell therapy treatment and consider complications and/or comorbidity or major complications or comorbidity codes when evaluating reimbursement for CAR T-cell therapies as more clinical data become available.

Response: As discussed in the proposed rule (85 FR 32472 through 32473), one of the criteria for the creation of a new complication or comorbidity or major complication or comorbidity subgroup within a base MS-DRG is at least 500 cases are in the CC or MCC subgroup which, as discussed previously in this section, we are finalizing to also expand to the NonCC subgroup beginning with FY 2021. As noted previously, we identified 262 total cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 in MS-DRG 016 based on the data from the September 2019 update of the FY MedPAR file. We may consider the creation of subgroups within MS-DRG 018 in future rulemaking once additional data is available.

Comments: Some commenters requested that CMS create two new cost centers; one for cell therapy products, tied to revenue code 891, and one for gene therapy products, tied to revenue code 892. A commenter suggested that the use of a dedicated cost center would improve the accuracy of cost estimates since it would allow the creation of a separate CCR for CAR T-cell therapy products, and would not rely on hospitals setting their charges for CAR T-cell therapy products at very high levels. Commenters acknowledged that this would also require that CMS modify the cost report to break out these revenue centers. Other commenters requested that CMS issue a Medicare Learning Network (MLN) article instructing hospitals regarding adjustment of charges for CAR T-cell therapy products, while another commenter suggested that CMS could create a standardized charging protocol for CAR T-cell therapy products.

Response: We appreciate the commenters' request regarding the creation of new cost centers for revenue codes 891 and 892 and may consider this request in future rulemaking. With respect to the commenters who expressed concerns about hospital charging practices, we note that there is nothing that precludes hospitals from setting their drug charges consistent with their CCRs.

Comments: A commenter stated that the indefinite use of MS-DRG 018 under the IPPS is not sustainable. Some commenters requested that CMS consider value-based care or other alternative payment models, add-on payments, or paying on a pass-through basis, as more appropriate payment mechanisms for CAR T-cell therapies. A commenter urged CMS to continue to engage all stakeholders to develop long-term sustainable solutions that can be adapted over time and account for innovations that transform how we treat disease. Another commenter stated that the question of how to best pay for CAR T-cell therapies can best be answered by Congress, but that CMS should continue pursuing policies that enable hospitals to recoup all of their costs for providing CAR T-cell therapies. Another commenter requested that CMS create an add-on payment or otherwise modify the IPPS for pharmacy resources associated with CAR T-cell therapies.

Response: We believe that is premature to make structural changes to the IPPS at this time to pay for CAR T-cell therapies. As we gain more experience with these therapies, including the use of a separate MS-DRG for CAR T-cell therapies, we may consider these comments in future rulemaking.

We note that commenters also raised some concerns about outpatient billing instructions with respect to billing for outpatient cell collection and cell processing charges on the inpatient claim, payment issues for TEFRA hospitals, and questions regarding the MedPAR data dictionary. While we consider these comments about outpatient billing instructions and TEFRA hospitals outside of the scope of the proposals in the proposed rule, we will take these comments into consideration when developing policies and program requirements for future years. With respect to comments about the MedPAR data dictionary, we anticipate that the issues will be addressed in future MedPAR releases.

After consideration of public comments received, we are finalizing our proposal to assign cases reporting ICD-10-PCS procedure codes XW033C3 or XW043C3 to a new MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy) and 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 final rule for a discussion of the relative weight calculation for the new MS-DRG 018 for CAR T-cell therapy, and to section IV.I. of the preamble of this final rule for a discussion of the payment adjustment for CAR T-cell clinical trial and expanded access use immunotherapy 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). As discussed in the FY 2021 IPPS/LTCH proposed rule (85 Start Printed Page 58454FR 32476), 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 were still 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 to MS-DRGs 034, 035 and 036 in the FY 2020 IPPS/LTCH PPS final rule. The six codes are identified in the following table.

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.

In response to the request, we first 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 following 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 findings 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 proposed 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 noted that all of the listed MS-DRGs were 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 were 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. As a result, our clinical advisors supported 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 also proposed to add the 36 ICD-10-PCS codes identified in the table that are currently assigned in MDC 05 to MS-Start Printed Page 58459DRGs 252, 253, and 254 to the GROUPER logic for MS-DRGs 034, 035, and 036 in MDC 01.

Comment: Commenters expressed support for CMS' proposal to reassign the identified ICD-10-PCS codes describing dilation of a carotid artery with an intraluminal device from MS-DRGs 037, 038 and 039 to MS-DRGs 034, 035 and 036. Commenters also supported CMS' proposal to add the ICD-10-PCS codes describing dilation of a carotid artery with an intraluminal device currently assigned in MDC 05 to MDC 01. One commenter stated that these were positive reassignments and another stated that these reassignments will help to ensure consistency among the MS-DRG classifications for procedures involving dilation of a carotid artery with an intraluminal device.

Response: We thank the commenters for their support.

Comment: One commenter suggested that given the clinical congruence with the procedures involved with dilation of a carotid artery with an intraluminal device, procedure codes that describe vertebral and intracranial artery dilation and device placement should also be classified in MS-DRGs 034, 035 and 036, and that MS-DRG 034, 035 and 036 be renamed as Carotid, Vertebral and Intracranial Stent Procedures and requested that this recommendation be assessed and analyzed for inclusion in next year's proposed rule.

Response: We appreciate the commenter's suggestion. As stated in section II.E.1.b. of the preamble of this final rule, we encourage individuals with recommendations regarding changes to MS-DRG classification to submit these comments no later than November 1, 2020 so that they can be considered for possible inclusion in the annual proposed rule. We will consider these public comments for possible proposals in future rulemaking as part of our annual review process.

After consideration of the public comments we received, we are finalizing our proposal to reassign the 6 procedure codes discussed above from MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036 because the 6 procedure codes are consistent with the other procedures describing dilation of a carotid artery with an intraluminal device that are currently assigned to

MS-DRGs 034, 035, and 036. Additionally, we are finalizing our proposal 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

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32481), 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 these 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.

We stated that 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 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.

As noted in the proposed rule, the requestor acknowledged the refinements made to MS-DRG 023 effective for FY 2018, but stated that despite the previously-stated 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 first 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:

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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:

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.

We stated in the proposed rule that 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. We stated that 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. We stated 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 Start Printed Page 58461the 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:

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 stated in the proposed rule we could not 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 Start Printed Page 58462attributable to the severity of illness of the patient.

In summary, we stated that 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 stated that we expected in future years, that 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 did not propose 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 also did not propose to reassign Responsive Neurostimulator (RNS©) System cases to another MS-DRG at this time.

Comment: Commenters agreed with CMS' proposal not 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 or to any another MS-DRG at this time. A commenter specifically thanked CMS for its consideration of addressing the costs and reimbursements associated with the insertion of the Responsive Neurostimulator (RNS©) System. Another commenter stated they appreciate CMS' willingness to continue to analyze the data, recognizing the discrepancy in average costs and the potential need for a MS-DRG assignment that provides adequate reimbursement.

Although supporting the decision to not reassign cases reporting the use of an RNS© System neurostimulator for epilepsy, a few commenters expressed concern that the average costs of these cases are higher than the average costs for all cases in the assigned MS-DRG 023 and stated their belief that the costs for the insertion of this device in traditional Medicare patients is not recouped. These same commenters acknowledged the issue is complex and beyond merely separating and reassigning neurostimulators for epilepsy. One commenter stated neurostimulator insertion for the treatment of epilepsy is not clinically similar to treatment of intracranial hemorrhage. Another commenter noted that complex neurostimulator implants may involve chronic disease states other than epilepsy, including Parkinson's disease and essential tremor and stated they agreed with CMS's decision to conduct further analyses, which would provide an opportunity to obtain additional stakeholder input related to improving MS-DRG assignments for neurostimulator procedures. Commenters noted that MS-DRGs 023 and 024 combine a wide range of principal diagnoses, procedures, and procedure approaches that could be contributing to the wide variation of costs of cases assigned to these MS-DRGs. Commenters proposed a number of ways CMS could attempt to create more homogenous groups and improve clinical cohesion such as (1) creating a new set of DRGs focused solely on the cost of the implantation of CNS devices that could be modeled after currently established MS-DRGs for the implantation of stents in carotid artery, stents in the coronary arteries or pacemakers, AICDs or other high-cost technologies in the heart, and/or (2) moving procedures assigned to MS-DRGs 023 and 024 that describe extirpation, drainage and removal to MS-DRGs 025, 026 and 027 (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC, and without CC/MCC, respectively).

Response: We appreciate the commenters' feedback and support.

We also appreciate the commenters' suggestions regarding other potential changes to the current MS-DRG assignments for CMS's consideration. We continue to be attuned to the requestors' and commenters' concerns about reimbursement for cases describing the insertion of the RNS© neurostimulator. As part of our ongoing, comprehensive analysis of the MS-DRGs under ICD-10, we will continue to explore mechanisms to ensure clinical coherence between these cases and the other cases with which they may potentially be grouped. Therefore, after consideration of the public comments we received, and for the reasons stated above, we are finalizing our proposal to maintain the assignment 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) in MS-DRG 023 in MDC 01.

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

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32484 through 32490), we discussed a request we received 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 approach), 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 Start Printed Page 58463asserted would provide for more appropriate payment to providers for the performance of multiple facial procedures.

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

As discussed in the proposed rule, in our analysis of 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.

In the proposed rule we noted that 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 noted 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 stated in the proposed rule that 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.

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.

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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.

We stated in the proposed rule that 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). We stated that 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.

As noted in the proposed rule, 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 the proposed rule and section II.E.15. of this final 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 Start Printed Page 58465is 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.

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 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.

We noted in the proposed rule that 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 Start Printed Page 58466above 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.

As noted in the proposed rule, 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 the proposed rule (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​ 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 a 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.

We stated in the proposed rule that 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 noted 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. We stated that our clinical advisors supported the removal of this special logic from the definition for assignment to any 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 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 modifications to the MS-DRGs in MDC 03, stating that they are appropriately assigned to MS-DRGs Start Printed Page 58467in MDC 01 (Diseases and Disorders of the Nervous System). We further noted 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 referred the reader to Table 6P.2c associated with the proposed rule 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 we stated our clinical advisors agree should be removed from the definition for assignment to any modifications to the MS-DRGs under MDC 03.

As a result of our review, we proposed 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. As discussed in the proposed rule, 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 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 proposed 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 stated that we believe the resulting 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. We stated that 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 severity level splits increase the explanatory power of the base MS-DRG in capturing differences in expected cost between the MS-DRG severity level splits by at least 3 percent and thus improve the overall accuracy of the IPPS payment system. The following table reflects our simulation for the proposed new MS-DRGs with a three-way severity level split. We stated that 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 proposed 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 referred the reader to Table 6P. 2a and Table 6P.2b associated with the proposed rule for the list of procedure codes we proposed for reassignment from MS-DRGs 129, 130, 131, 132, 133, and 134 to each of the new MS-DRGs. As noted, we also proposed the removal of procedure codes 00J00ZZ and 0WJ10ZZ, and the 338 procedure codes listed in Table 6P. 2c associated with the proposed rule from the logic for MDC 03.

Comment: Commenters generally agreed with the proposal to delete MS-DRGs 129, 130, 131, 132, 133, and 134, and to create proposed new MS-DRGs 140, 141, and 142 under proposed new base MS-DRG 140, and to create proposed new MS-DRGs 143, 144, and 145 under proposed new base MS-DRG 143, however, the commenters recommended CMS review the list of proposed procedure codes for assignment to the proposed new MS-DRGs. A commenter noted that procedure codes describing reposition of the left temporal bone were included in Table 6P.2a and proposed for assignment to MS-DRGs 140,141, and 142 while procedure codes describing reposition of the right temporal bone were included in Table 6P.2b and proposed for assignment to MS-DRGs 143, 144, and 145. The commenter also Start Printed Page 58468stated their belief that CMS should classify all repositions of occipital, temporal, frontal and other bones of the skull as major surgery and assign them to proposed new MS-DRGs 140, 141, and 142. The commenter provided the following ICD-10-PCS procedure codes for CMS' consideration.

Another commenter stated there is not a clear understanding of the scope of the proposed changes because the MedPAR data included in the proposed rule referred to temporomandibular joint replacements; however, the procedure listing for the MS-DRGs extended beyond those procedures. The commenter stated that tables 6P.2a and Start Printed Page 584696P.2b associated with the proposed rule include procedures on vessels, lymphatic and other organs in the head and neck. The commenter stated the procedures noted in the tables cross multiple MS-DRGs such as 853, 857, 856, 571, 264, 570, 463, and 902 which were not discussed in the proposed rule. The commenter requested that CMS provide clarity on this topic.

A commenter acknowledged that CMS proposed removing a number of ICD-10-PCS procedure codes from the MDC 03 logic that had been inadvertently included as a result of replication during the transition from ICD-9- to ICD-10-based MS-DRGs. However, according to the commenter there are additional procedure codes not included on CMS' list shown in table 6P.2c that should also be removed from the MDC 03 logic. The commenter noted an example of where some codes for procedures on the esophagus have been proposed for removal from the MDC 03 logic, while other procedures performed on the esophagus are still proposed for inclusion in the GROUPER logic. The commenter also noted that procedures performed on the heart, carotid artery, chest, back abdomen, buttock, liver, and leg are not ear, nose, mouth, or throat procedures, but they are included in the proposed GROUPER logic for 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). The commenter stated that procedures on the chest, back, and abdomen are not head or neck procedures, but they are included in the proposed GROUPER logic for proposed new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively). In addition, the commenter stated that while CMS proposed reassigning procedure code 0WJ10ZZ (Inspection of cranial cavity, open approach) from MDC 03 (Diseases and Disorders of Ear, Nose and Throat) to MDC 01 (Diseases and Disorders of the Nervous System), codes for other procedures performed on the cranial cavity are proposed to be included in the GROUPER logic for proposed new MS-DRGs 140, 141, and 142. The commenter recommended that CMS review the procedure codes listed in tables 6P.2a and 6P.2b to identify all of the procedure codes that should be removed from the GROUPER logic for proposed new MS-DRGs 140, 141, 142, 143, 144, and 145. Lastly, the commenter suggested that CMS consider whether proposed new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) belong in MDC 03 or whether the title of the MDC should be changed since, according to the commenter, the MDC 03 description “Diseases and Disorders of Ear, Nose and Throat” covers a more limited set of anatomic sites than the “major head and neck procedures” included in proposed new MS-DRGs 140, 141, and 142.

Response: We thank the commenters for their support of the proposal to create two new base MS-DRGs, 140 and 143, with a three-way severity level split for new MS-DRGs 140, 141, and 142 and new MS-DRGs 143, 144, and 145. We appreciate the commenter noting that some procedure codes describing reposition of the left temporal bone were included in Table 6P.2a and proposed for assignment to proposed new MS-DRGs 140, 141, and 142, while procedure codes describing reposition of the right temporal bone were included in Table 6P.2b and proposed for assignment to proposed new MS-DRGs 143, 144, and 145. We note that this was an inadvertent error, and the procedure codes describing reposition of the left temporal bone that were included in Table 6P.2a were intended to be included in Table 6P.2b with the codes describing reposition of the right temporal bone, as both sets of codes were intended to be proposed for reassignment to proposed new MS-DRGs 143, 144, and 145 because they describe procedures that are considered to be less complex and less invasive compared to the procedures proposed for reassignment to proposed new MS-DRGs 140, 141, and 142 that describe more complex and more invasive procedures. In response to the commenter's recommendation to classify all repositions of occipital, temporal, frontal and other bones of the skull as major surgery and assign them to proposed new MS-DRGs 140, 141, and 142, our clinical advisors do not agree. In the comprehensive review of all the procedures currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134, which involved an analysis of claims data and clinical judgment, they identified and separated out the procedures they believed to be more clinically complex and resource intensive and those are the procedures that were proposed to be reassigned to proposed new MS-DRGs 140, 141, and 142 so that payment rates are better aligned. Therefore, with respect to the procedure codes describing reposition of temporal, frontal and other bones of the skull identified by the commenter, our clinical advisors do not believe these procedures reflect the complexity or resource utilization consistent with the other procedure codes proposed for reassignment to proposed new MS-DRGs 140, 141, and 142 because they are considered to be less complex and less resource intensive. We note that while the commenter suggested CMS review the procedure codes describing reposition of the occipital bone, it did not include any of those procedure codes for CMS' consideration in its list. We further note that procedure codes describing reposition of the occipital bone were already proposed to be reassigned to proposed new MS-DRGs 140, 141, and 142 as displayed in table 6P.2a associated with the proposed rule, therefore we are unclear as to which procedure codes involving the occipital bone the commenter is specifically referring to.

In response to the commenter who stated there is not a clear understanding of the scope of the proposed changes because the MedPAR data included in the proposed rule referred to other procedure codes in addition to the procedure code for temporomandibular joint replacements, we note that as discussed in the proposed rule (85 FR 32484 through 32490), this was a multi-part request involving the reassignment of ICD-10-PCS procedure codes 0RRC0JZ and 0RRD0JZ that describe replacement of the right and left temporomandibular joint from MS-DRGs 133 and 134 to MS-DRGs 131 and 132, the reassignment of the procedures involving the mandible and maxilla identified with procedure codes from MS-DRGs 129 and 130 to MS-DRGs 131 and 132, and modifying the surgical hierarchy for MS-DRGs 131, 132, 133, and 134. We stated that we examined claims data for all the procedures identified by procedure codes currently assigned to MS-DRGs 129, 130, 131, 132, 133, and 134 and we provided our claims analysis in Table 6P.2d associated with the proposed rule as well as discussion of our analysis and the basis for our proposals. In response to the comments regarding Tables 6P.2a and 6P.2b that included proposals for procedure codes describing procedures on vessels, lymphatic and other organs in the head and neck across multiple MS-DRGs such as 853, 857, 856, 571, 264, 570, 463, and 902 we note that this is because certain procedure codes are currently assigned to multiple MDCs and MS-DRGs as shown in Appendix E-Operating Room Procedures and Procedure Code/MS-DRG Index of the ICD-10 MS-DRGs Definitions Manual. For example, procedure code 07B00ZZ (Excision of head lymphatic, open approach) which is listed in Table Start Printed Page 584706P.2b, is currently assigned to the following MDCs and MS-DRGs.

We encourage the commenter to review Appendix E of the ICD-10 MS-DRG Definitions Manual for further clarification and understanding of how each procedure code may be assigned to multiple MDCs and MS-DRGs under the IPPS.

In response to the commenter who stated their belief that there are additional codes that should also be removed from the MDC 03 logic, such as other procedures performed on the esophagus that were proposed to be included in the GROUPER logic, and procedures performed on the heart, carotid artery, chest, back abdomen, buttock, liver, and leg that are not ear, nose, mouth, or throat procedures, but were included in the proposed GROUPER logic for 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 note that, as stated in the ICD-10 MS-DRG Definitions Manual, “In each MDC there is usually a medical and a surgical class referred to as “other medical diseases” and “other surgical procedures,” respectively. The “other” medical and surgical classes are not as precisely defined from a clinical perspective. The other classes would include diagnoses or procedures which were infrequently encountered or not well defined clinically. For example, the “other” medical class for the Respiratory System MDC would contain the diagnoses “other somatoform disorders” and “congenital malformation of the respiratory system,” while the “other” surgical class for the female reproductive MDC would contain the surgical procedures “excision of liver” (liver biopsy in ICD-9-CM) and “inspection of peritoneal cavity” (exploratory laparotomy in ICD-9-CM). The “other” surgical category contains surgical procedures which, while infrequent, could still reasonably be expected to be performed for a patient in the particular MDC. There are, however, also patients who receive surgical procedures which are completely unrelated to the MDC to which the patient was assigned. An example of such a patient would be a patient with a principal diagnosis of pneumonia whose only surgical procedure is a destruction of prostate (transurethral prostatectomy in ICD-9-CM). Such patients are assigned to a surgical class referred to as “unrelated operating room procedures.” These patients are ultimately never assigned to a well-defined DRG.” With regard to the comment that procedures on the chest, back, and abdomen were included in the proposed GROUPER logic for proposed new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively), we note that the commenter did not provide the specific procedure codes for CMS to review and therefore we were unable to evaluate the commenter's concerns for FY 2021, however, we will take these comments under consideration for future rulemaking. In response to the commenter's statement that codes for other procedures performed on the cranial cavity were proposed to be included in the GROUPER logic for proposed new MS-DRGs 140, 141, and 142, we note that the logic for proposed new MS-DRGs 140, 141, and 142 is comprised of a subset of procedure codes describing procedures performed on the cranial cavity that are currently assigned to MS-DRGs 131 and 132 (Cranial and Facial Procedures with and without CC/MCC, respectively). Our clinical advisors reviewed the list of procedures currently assigned to those MS-DRGs and believed that procedure codes 00J00ZZ and 0WJ10ZZ could be removed from the logic based on the analysis of all the procedure codes and because these codes are currently assigned to MS-DRGs in MDC 01 which they stated is clinically more appropriate. With respect to the commenter's suggestion that CMS consider whether proposed new MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) belong in MDC 03 or whether the title of the MDC should be changed since, according to the commenter, the MDC 03 description “Diseases and Disorders of Ear, Nose and Throat” covers a more limited set of anatomic sites than the “major head and neck procedures” included in proposed new MS-DRGs 140, 141, and 142, we will take this under consideration for future rulemaking.

After consideration of the comments we received, we are finalizing our proposal to create two new base MS-DRGs, 140 and 143, with a three-way severity level split for new MS-DRGs 140, 141, and 142 and new MS-DRGs 143, 144, and 145 and we are also finalizing our proposal to delete MS-Start Printed Page 58471DRGs 129, 130, 131, 132, 133, and 134 for FY 2021. We refer the reader to Tables 6P.2a, 6P.2b, and 6P.2c associated with this final rule and available via the internet at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS for the finalized list of procedure codes that define the logic for the finalized MS-DRGs. We note that discussion of the surgical hierarchy for the modifications is discussed in section II.E.15. of this final 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 that 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.

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32490 through 324950), 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”. As stated in the proposed rule, 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.

We stated in the proposed rule that 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 coherency. 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.

As indicated in the proposed rule, in response to the first request, 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 Start Printed Page 58472274 (1.2 days versus 2 days). We stated in the proposed rule that 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. As indicated in the proposed rule, 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. We stated in the proposed rule that 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, as stated in the proposed rule, our clinical advisors expressed concern regarding making 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 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 did not propose 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.

In the proposed rule we also discussed a second request that we received 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 with 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.

As indicated in the proposed rule, 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.

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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.

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.

As indicated in the proposed rule, 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.

As indicated in the proposed rule, 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 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. We stated in the proposed rule that 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 Start Printed Page 58475open chest procedure, that we should evaluate cases reporting LAAC procedures with the other approaches in their assigned MS-DRGs.

As indicated in the proposed rule, 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.

We stated in the proposed rule that 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. As indicated in the proposed rule our clinical advisors stated that this reassignment would allow all LAAC procedures to be grouped together under the same MS-DRGs and would improve clinical coherence. We noted 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, in the proposed rule, we proposed 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).

Comment: Several commenters supported CMS' proposal to not reassign cases reporting ICD-10-PCS procedure code 02L73DK from MS-DRG 274 to MS-DRG 273 and to not revise the title for MS-DRG 273 to “Percutaneous Intracardiac Procedures with MCC or Major Device Implant for Left Atrial Appendage Closure Procedures”. A commenter concurred that MS-DRG categories should not be based on a specific medical technology or unique procedure code. The commenter noted that the MS-DRGs are intended to group procedures with both similar resource intensity and clinical characteristics. This commenter further noted that the MS-DRG categories are not intended to benefit a single technology or be narrowly constituted such as by singling out a device implant in a field with multiple other techniques and technologies that address a similar disease that do not require an implant. The commenter stated that if CMS were to change its methodology of comparing the procedure requested for reassignment to all cases, as was requested for the WATCHMANTM LAAC device, then in fairness, CMS should do so for all the other procedure code MS-DRG reassignment requests it receives and that this kind of methodological change should be outlined in the proposed rule for comments so stakeholders can discuss the implications. This commenter also stated its belief that it is premature to modify the Percutaneous Intracardiac Procedures MS-DRGs at this time, because there are a number of technologies in this field using different techniques, including non-implanted devices, and are being studied in CMS Investigational Device Exemption (IDE) approved clinical trials. According to the commenter, it is anticipated that some of these technologies will receive marketing authorization in the near future and therefore, they should also be considered in any MS-DRGs reclassification. In addition, the commenter stated that volume, costs, and length of stay data for the procedures utilizing these technologies Start Printed Page 58476may not be fully incorporated in current hospital cost data, and current clinical trial pricing for these devices, which is lower than commercialized pricing, will not fully reflect true hospital costs. The commenter noted it is critical to ensure that as these alternative technologies are adopted by hospitals that they are not disadvantaged in their MS-DRG assignments, particularly relative to existing implant technologies. The commenter agreed that MS-DRGs 273 and MS-DRG 274 should continue to be broadly constituted to include the full range of procedures performed within the heart chambers using intracardiac techniques. The commenter also agreed with CMS that the title of MS-DRG 273 should remain “Percutaneous Intracardiac Procedures” and not reference device implants or be limited to a particular device approach when numerous other options exist and or are in clinical trials. The commenter stated that to the extent CMS implements MS-DRG changes impacting the assignment for WATCHMANTM LAAC procedures, they request that such policies apply to all LAA procedures, regardless of specific technique, including whether they involve an implant.

Response: We appreciate the commenters' support of our proposal to maintain cases reporting procedure code 02L73DK in MS-DRG 274 and to retain the current titles for MS-DRGs 273 and 274 by not revising to include terminology referencing an implant. As discussed in the proposed rule, we agree that the MS-DRGs are intended to group procedures with both similar resource intensity and clinical characteristics, rather than to identify a specific, single technology, identified by only one unique procedure code. We further note that we would expect to discuss any changes to CMS' current methodology for evaluating MS-DRG requests involving reassignment of a procedure code in future rulemaking. We appreciate the information provided by the commenter regarding additional technologies and techniques for this clinical area that are under study in CMS Investigational Device Exemption (IDE) approved clinical trials and agree they should also be considered in any potential future MS-DRG reclassification.

Comment: We received a comment (from the requestor) expressing concern that in the proposed rule, CMS' summary of the requestor's analysis for the average costs of LAAC procedures reporting ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach), which identifies the WATCHMANTM device, may have been misunderstood. The commenter clarified that the $3,405 it referenced in its analysis represented the difference between the average costs of the cases identified by procedure code 02L73DK in MS-DRGs 273 and 274 versus all other procedure codes that do not identify the WATCHMANTM device in MS-DRGs 273 and 274. The commenter stated its belief that a comparison of the cases reporting procedure code 02L73DK “WATCHMANTM cases” versus “non-WATCHMANTM” cases is more appropriate to evaluate cost alignment, opposed to the comparison of procedure code 02L73DK to all cases in MS-DRG 273 and 274. The commenter noted that comparing the cases reporting procedure code 02L73DK (“WATCHMANTM cases”) against all cases includes cases reporting procedure code 02L73DK (“WATCHMANTM cases”) and effectively compares “WATCHMAN cases” to a pool of procedures in which “WATCHMAN cases” are a significant subgroup, and therefore influences the MS-DRGs cost. The commenter stated their belief that an accurate cost comparison requires an evaluation of two distinct groups (that is, WATCHMANTM procedures vs. non-WATCHMANTM procedures), as opposed to comparing one group against another of which it is a part (that is, WatchmanTM procedures vs. all procedures in the MS-DRG category). The commenter also stated that if CMS intends to use a methodology in which clinical/economic coherence is based upon a comparison against the group in which that procedure is already represented, this should be clarified for consistency in future rulemaking. The commenter provided an updated data analysis using FY 2019 MedPAR and concluded that there is greater cost coherence between WATCHMANTM cases currently assigned to DRG 274 and Non-WATCHMANTM cases currently assigned to DRG 273 (a difference of $2,019), as opposed to Non-WATCHMANTM cases currently assigned to DRG 274 (a difference of $4,059). The commenter reiterated its request for CMS to reassign all cases with procedure code 02L73DK from MS-DRG 274 to MS-DRG 273 and rename MS-DRG 273 “Percutaneous Intracardiac Procedures with MCC or Major Device Implant for LAAC”.

Response: We thank the commenter for the additional information and analysis provided. In response to the commenter's concern that CMS' summary of the requestor's analysis was misunderstood, we note that we inadvertently omitted the reference to MS-DRG 273 in our statement that read, “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.” For clarification, the statement should have read, “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 273 and 274.” With regard to the commenter's remarks that an accurate cost comparison requires an evaluation of two distinct groups, as opposed to comparing one group against another of which it is a part, we note that we consider this information and the data in this way to understand the impact of the selected cases, however, we have generally not included this specific information in our discussions or summaries of our analysis. The claims data that is evaluated as part of the overall analysis includes the “with” and “without” cases related to the specific request where applicable, therefore, CMS can consider including this additional data analysis information in future rulemaking. With respect to the commenter's statement that CMS should clarify in future rulemaking if it intends to use a methodology in which clinical/economic coherence is based upon a comparison against the group in which that procedure is already represented, we note that due to the structure of the MS-DRGs and the CC/MCC subgroups that exist, it is not entirely feasible to expect that a comparison would not include other MS-DRGs in which that procedure is already assigned. For the reasons previously discussed in the FY 2021 IPPS/LTCH PPS proposed rule, our clinical advisors continue to support the current structure of MS-DRGs 273 and 274 where all LAAC procedures, with or without an implant, are grouped together. Therefore, after consideration of the public comments that we received, we are finalizing our proposal to not reassign cases reporting ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach) from MS-DRG 274 (Percutaneous Intracardiac Procedures without MCC) to MS-DRG 273 (Percutaneous Intracardiac Procedures with MCC).

Comment: Several commenters supported CMS' proposal to reassign ICD-10-PCS procedure codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274. Start Printed Page 58477A commenter stated that reassignment of these procedure codes is more representative of the average costs and average length of stay associated with procedures in the logic for MS-DRGs 273 and 274 compared to the procedures that are included in the logic for MS-DRGs 250 and 251. A commenter also suggested that CMS revise the titles for MS-DRGs 273 and 274 to “Percutaneous and Other Intracardiac Procedures with and without MCC, respectively”, since the current MS-DRG titles suggest that only percutaneous procedures apply to these MS-DRGs. However, a commenter did not support CMS' proposal to reassign ICD-10-PCS procedure codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274 because according to the commenter, it would result in an inappropriate grouping of open procedures under the title of “percutaneous” procedures. The commenter asserted that although open atrial appendage closures are rarely performed as standalone procedures and are normally performed in conjunction with open coronary bypass and open valve procedures, if an open atrial appendage closure is actually performed standalone, MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively), would more appropriately compensate for the resources and longer length of stays expected with open heart procedures.

Another commenter stated they understood CMS' rationale for not proposing to create a separate MS-DRG for the insertion of WATCHMANTM devices since the cost reductions involved in their shorter length of stay balances out the costs of the device.

Response: We appreciate the commenters' support of the proposal to reassign ICD-10-PCS procedure codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274. We also agree with the commenter who suggested that the titles for MS-DRGs 273 and 274 should be revised to “Percutaneous and Other Intracardiac Procedures with and without MCC, respectively”, to reflect this reassignment, as the current MS-DRG titles refer only to percutaneous procedures. In response to the commenter who did not agree with the proposal to reassign procedure codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274 based on the current titles of the MS-DRGs, as we have done in prior rulemaking and as another commenter suggested, we may revise the title of a MS-DRG to better reflect the procedures assigned to it. With regard to the commenter's statement that open LAAC procedures are normally performed in conjunction with open coronary bypass and open valve procedures, therefore, if an open atrial appendage closure is actually performed standalone, it would more appropriately compensate for the resources and longer length of stays expected with open heart procedures if assigned to MS-DRGs 228 and 229, we consider this comment to be outside the scope of the proposal discussed. We can consider additional claims data analysis for these procedures in future rulemaking. With respect to the commenter who stated they understood CMS' rationale for not proposing to create a separate MS-DRG for the insertion of WATCHMANTM devices since the cost reductions involved in their shorter length of stay balances out the costs of the device, we are unclear as to what this comment is in reference to as there was no discussion in the FY 2021 IPPS/LTCH PPS proposed rule about proposing to create a separate MS-DRG for procedures involving the insertion of a WATCHMANTM device, rather the discussion concerned reassigning cases reporting the procedure code describing the insertion of a WATCHMANTM device.

After consideration of the public comments that we received, we are finalizing our proposal to reassign ICD-10-PCS procedure codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274, and are finalizing a revision to the titles for MS-DRG 273 and 274 to Percutaneous and Other Intracardiac Procedures with and without MCC, respectively to reflect this reassignment for FY 2021.

b. Endovascular Cardiac Valve Replacement and Supplement Procedures

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32495 through 32496), we discussed a request we received 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 noted in the proposed rule that 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.

As indicated in the proposed rule, 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. We stated in the proposed rule that 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 noted 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 proposed 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.

Comment: Commenters supported CMS' proposal to retain the structure of MS-DRGs 266 and 267 with the current two-way severity level split based on the information and data analysis provided. A commenter also acknowledged the requestor's sentiments regarding situations where 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. This commenter stated that inconsistencies in the MS-DRG CC Exclusion List for heart failure also confound the issues involving heart failure. The commenter suggested that CMS consider the following:

  • Allow all acute heart failure codes to be sequenced as a principal diagnosis to serve as its own MCC in the same manner that acute cor pulmonale serves as an MCC when sequenced as a principal diagnosis with acute pulmonary embolism.
  • Amend the CC Exclusion List as to eliminate list 682 for all the ICD-10-CM codes listed in this section of this rule and place all of them in list 2025. The commenter stated that if CMS chooses not to do this, it recommends that CMS transition the I50.23, I50.33, I50.41 and I50.43 diagnosis codes into the 2025 category so that all acute AND acute on chronic heart failure (I50.21, I50.23, I50.31, I50.33, I50.41, I50.43) codes are treated equally.

I50.21 MCC 2025:29 codes, Acute systolic (congestive) heart failure

I50.22 CC 0682:30 codes, Chronic systolic (congestive) heart failure

I50.23 MCC 0682:30 codes, Acute on chronic systolic (congestive) heart failure

I50.30 CC 0682:30 codes, Unspecified diastolic (congestive) heart failure

I50.31 MCC 2025:29 codes, Acute diastolic (congestive) heart failure

I50.32 CC 0682:30 codes, Chronic diastolic (congestive) heart failure

I50.33 MCC 0682:30 codes, Acute on chronic diastolic (congestive) heart failure

I50.40 CC 0682:30 codes, Unspecified combined systolic (congestive) and diastolic (congestive) heart failure

I50.41 MCC 0682:30 codes, Acute combined systolic (congestive) and diastolic (congestive) heart failure

I50.42 CC 0682:30 codes, Chronic combined systolic (congestive) and diastolic (congestive) heart failure

I50.43 MCC 0682:30 codes, Acute on chronic combined systolic (congestive) and diastolic (congestive) heart failure

The commenter also suggested that CMS, as a member of the ICD-10 Coordination and Maintenance Committee, advocate to expand ICD-10-CM diagnosis code I50.9 Heart failure, unspecified, and assign CC and MCC status to these suggested expanded codes, consistent with how the I50.2-, I50.3- and I50.4- series are assigned.

I50.90—Heart failure, unspecified

I50.91—Acute heart failure—should serve as an MCC

I50.92—Chronic heart failure—should serve as a CC

I50.93—Acute on chronic heart failure—should serve as an MCC

According to the commenter, this action would sufficiently eliminate the administrative burden to providers regarding querying the physician for the specific type of heart failure.

Response: We appreciate the commenters' support. In response to the commenter who suggested modifying the logic of all the acute heart failure codes to allow them to act as their own MCC or to amend the CC Exclusion list, we appreciate the commenter's suggestions. However, because we consider these public comments to be Start Printed Page 58479outside the scope of the proposed rule, we are not addressing them in this final rule. With regard to the commenter's suggestion to expand diagnosis code I50.9 Heart failure, unspecified, as discussed in section II.E.16. of the preamble of this final rule, the CDC/NCHS has lead responsibility for the diagnosis code classification and proposals for code updates should be directed to nchsicd10CM@cdc.gov for consideration at a future ICD-10 Coordination and Maintenance Committee meeting. In addition, as discussed in section II.E.1.b. of the preamble of this final rule, we are maintaining the November 1 deadline for the submission of MS-DRG classification requests for FY 2022, therefore, with regard to the additional suggestions to modify the logic of all the acute heart failure codes to allow them to act as their own MCC or amend the CC Exclusion list, we encourage individuals with comments about MS-DRG classifications to submit these comments no later than November 1, 2020 so that they can be considered for possible inclusion in the annual proposed rule. We will consider these public comments for possible proposals in future rulemaking as part of our annual review process.

After consideration of the public comments that we received, we are finalizing our proposal to maintain the structure of MS-DRGs 266 and 277 for FY 2021.

c. Insertion of Cardiac Contractility Modulation Device

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32496), 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.

As noted in the proposed rule, the ICD-10-PCS procedure code pairs currently assigned to MS-DRGs 222, 223, 224, 225, 226 and 227 that identify the insertion of contractility modulation devices are shown in the following table:

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We stated in the proposed rule that based on our analysis of cases reporting ICD-10-PCS procedure codes for CCM device systems, we agreed 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. We also noted that our analysis indicated 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 then 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.

We stated that our clinical advisors agreed that the 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 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 stated 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 code combination that identifies the insertion of contractility modulation device and the insertion of a cardiac lead into the left ventricle.

We noted that while our analysis did not identify any cases reporting a procedure code combination for the insertion of contractility modulation device and the insertion 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 proposed to add the following 24 ICD-10-PCS code combinations to MS-DRGs 222, 223, 224, 225, 226 and 227.

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We also proposed 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.

Start Printed Page 58482

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Comments: Commenters supported the proposal to modify the GROUPER logic of MS-DRGs 222, 223, 224, 225, 226 and 227 by (1) adding the 24 ICD-10-PCS code combinations describing the insertion of contractility modulation device and the insertion of a cardiac lead into right ventricle or right atrium to MS-DRGs 222, 223, 224, 225, 226 and 227; and (2) deleting the 12 clinically invalid procedure code combinations that describe the insertion of contractility modulation device and the insertion of a cardiac lead into the left ventricle. A commenter specifically thanked CMS for consulting with their clinical advisors, conducting a thorough analysis regarding these codes, and for determining the most appropriate MS-DRG assignments for cardiac contractility modulation devices. While indicating its support, one commenter questioned why cardiac contractility modulation devices qualify for MS-DRGs 222, 223, 224, 225, 226 and 227 and cardiac resynchronization therapy pacemakers (CRT-P) without defibrillators do not and requested that this be investigated in future rulemaking. This commenter also Start Printed Page 58484suggested that CMS change the name of MS- DRGs 222, 223, 224, 225, 226 and 227 since a cardiac modulation device is not used in all circumstances. Another commenter noted its intention to monitor the deletion of the 12 clinically invalid code combinations from the GROUPER logic in hopes that no unintended consequences come from this change.

Response: We appreciate the commenters' feedback and support.

In response to the commenter that questioned why cardiac contractility modulation devices qualify for MS-DRGs 222, 223, 224, 225, 226 and 227 and cardiac resynchronization therapy pacemakers do not, procedures involving CRT-P are assigned to a number of MS-DRGs. Specifically, in MDC 05 (Diseases and Disorders of the Circulatory System), procedures involving these pacemakers are assigned to MS-DRGs 242, 243, and 244 (Permanent Cardiac Pacemaker Implant with MCC, with CC, and without CC/MCC, respectively), MS-DRGs 258 and 259 (Cardiac Pacemaker Device Replacement with MCC and without MCC, respectively), and MS-DRGs 260, 261 and 262 (Cardiac Pacemaker Revision Except Device Replacement with MCC, with CC, and without CC/MCC, respectively).

Procedures codes describing the insertion of total contractility modulation device systems have been assigned to MS-DRGs 222, 223, 224, 225, 226 and 227 since the initial implementation of these procedure codes in FY 2010 under ICD-9-CM, recognizing that insertion of the CCM device might occur alone, in the presence of a pre-existing automatic implantable cardioverter-defibrillator (AICD), or in a combined implantation with an AICD. As stated in the proposed rule, 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. Recognizing that clinical practice might have changed since the creation of codes for CCM devices, our clinical advisors believe additional analyses are needed in MDC 05, specifically for cases reporting both contractility modulation device systems and pacemakers, as part of our efforts toward a broader approach to refining MS-DRGs and to address the commenters' request. As such, we also do not believe conforming changes to the titles of MS-DRGs 222, 223, 224, 225, 226 and 227 are warranted at this time until further review is complete.

CMS also will monitor claims data for unintended consequences as a result of the deletion of the 12 clinically invalid code combinations from the GROUPER logic as we continue our comprehensive analysis in future rulemaking. Therefore, after consideration of the public comments we received, we are finalizing our proposal to add the 24 ICD-10-PCS code combinations as previously listed to MS-DRGs 222, 223, 224, 225, 226 and 227. We are also finalizing our proposal 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 under the ICD-10 MS-DRGs Version 38, effective October 1, 2020.

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

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32500 through 32503), we discussed a request that we received 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 K35.2 (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.

As indicated in the FY 2021 IPPS/LTCH PPS proposed rule, 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 Start Printed Page 58485an 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.

As indicated in the proposed rule, 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.

We stated in the proposed rule that 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, we stated 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 stated in the proposed rule, that 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). Therefore, we did not propose 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, in the proposed rule, 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 peritonitis) and reviewed their respective MS-DRG assignments for clinical coherence. The diagnosis codes in these subcategories are shown in the following table.

As indicated in the proposed rule, 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.

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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. We stated in the proposed rule, that 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, in the proposed rule, we noted that our clinical advisors determined that diagnosis code K35.32 should also be assigned to MS-DRGs 341, 342, and 343 for clinical consistency.

Accordingly, in the proposed rule, we proposed to reassign diagnosis code K35.32 to MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively).

As also noted in the proposed rule, 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 proposed to remove diagnosis code K35.32 from the complicated principal diagnosis list to be clinically consistent.

Therefore, for the reasons discussed, in the proposed rule, we proposed 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.

Comment: Commenters' supported CMS' proposal to reassign diagnosis code K35.32 from MS-DRGs 338, 339 and 340 to MS-DRGs 341, 342, and 343 and to remove K35.32 from the complicated principal diagnosis list in MS-DRGs 338, 339, and 340. One commenter stated that the “peritonitis” described by the diagnoses code may be just reactive peritonitis from the appendicitis and therefore would not be associated with an abscess or an increased length of stay. Another commenter supported CMS' proposal not to reassign ICD-10-CM diagnosis code K35.20 (Acute appendicitis with generalized peritonitis, without abscess) from MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 338, 339, and 340 (Appendectomy with Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). The commenter stated their agreement with CMS clinical advisors that the presence of an abscess should clinically determine whether a diagnosis of acute appendicitis would be considered a complicated principal diagnosis, therefore all diagnosis codes for acute appendicitis “without” abscess should be assigned to MS-DRGs 341, 342, and 343 for clinical consistency.

Response: We appreciate the commenters' support.

Comment: One commenter stated that they disagreed with CMS on clinical grounds that ICD-10-CM code K35.20 is not a complicating diagnosis, and that all ICD-10-CM codes in subcategory K35.2 (Acute appendicitis with Start Printed Page 58487generalized peritonitis) should serve as an MCC in the same manner that unspecified peritonitis serves as an MCC. This commenter also stated that given that acute appendicitis is more commonly encountered in non-Medicare patients and that MS-DRGs are a common payment methodology for private insurance and Medicaid claims, CMS should additionally analyze Medicaid claims.

Response: We thank the commenter for their feedback. We note diagnosis codes for acute appendicitis described as “without abscess” or “without perforation” were assigned the CC severity level designation in FY 2019 when diagnosis code K35.2 was subdivided into diagnosis codes K35.20 (Acute appendicitis with generalized peritonitis, without abscess) and K35.21 (Acute appendicitis with generalized peritonitis, with abscess) because our clinical advisors stated cases “without abscess” or “without perforation” are not as severe clinical conditions compared to cases “with abscess” or “with perforation” as discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41230). However, as noted in section II.E.12.b. of the preamble of this final rule, we plan to continue a comprehensive CC/MCC analysis, using a combination of mathematical analysis of claims data and the application of nine guiding principles. We continue to solicit comments regarding these guiding principles, as well as other possible ways we can incorporate meaningful indicators of clinical severity. We encourage the commenter to provide a detailed explanation of how applying a suggested concept or principle would ensure that the severity designation appropriately reflects resource use for diagnosis code K35.20. Commenters should submit their recommendations to the following email address: MSDRGClassificationChange@cms.hhs.gov by November 1, 2020.

Comment: Some commenters opposed CMS' proposal to maintain the current MS-DRG assignment for ICD-10-CM diagnosis code K35.20 (Acute appendicitis with generalized peritonitis, without abscess). A commenter stated that the costs for treating acute appendicitis with generalized peritonitis are on the higher end of the scale as CMS's data demonstrated in the proposed rule and requested that CMS reconsider the request to move principal diagnosis code K35.20 from MS-DRGs 341, 342, and 343 to MS-DRGs 338, 339 and 340 based on the severity of illness and the cost of treatment. The commenter stated that when ruptured appendicitis results in generalized peritonitis, resources are greater because the infection is not walled off, not localized, and has spread to two or more compartments within the abdominal cavity. According to the commenter, clinical literature supports the statement that generalized peritonitis is a more morbid (severe) presentation than just perforation or localized abscess. The commenter also stated that close postoperative monitoring is required to identify any signs of sepsis or organ dysfunction indicating persistent abdominal infection requiring intra-abdominal lavage via postoperative drains or relaparotomy. In addition, according to the commenter, antibiotics are given to the patient for 5-7 days until temperature and white blood cell count are within normal limits. Another commenter stated that the condition described by diagnosis code K35.20 (Acute appendicitis with generalized peritonitis, without abscess) can be associated with a risk of post-operative abscess formation and extended length of hospital stay, thereby warranting the classification as a complicated diagnosis. The commenter urged CMS to reassign diagnosis code K35.20 from MS-DRGs 341, 342, and 343 to MS-DRGs 338, 339 and 340. Another commenter stated that diagnosis code K35.20, is a complicated diagnosis on clinical grounds and strongly believes that when sequenced as a principal diagnosis along with an appendectomy should continue to group to MS-DRGs 338, 339 and 340.

Other commenters did not support the proposal to reassign diagnosis code K35.32 from MS-DRGs 338, 339 and 340 to MS-DRGs 341, 342, and 343 and urged CMS to reconsider reassigning diagnosis code K35.32. A commenter stated that the condition described by ICD-10-CM diagnosis code K35.32 (Acute appendicitis with perforation and localized peritonitis, without abscess) represents a complicated diagnosis, and asked CMS to maintain the current complicated diagnosis classification for code K35.32. Another commenter analyzed data from their facility and found claims reporting a principal diagnosis of K35.32 in MS-DRGs 338, 339 and 340 had an average LOS of 4.18 days and average charges of $60,000. This commenter stated when compared to claims at their facility grouped to MS-DRGs 341, 342 and 343, which had an average length of stay of 1.91 days and average charges of $42,000, claims reporting principal diagnosis ICD-10-CM diagnosis code K35.32 were more congruent with MS-DRG's 338-340. This commenter also stated it was the professional opinion of the critical care surgical staff of the facility that the presence of appendiceal perforations resulting in peritonitis (with or without abscess) requires longer hospitalizations and increased resources, such as peritoneal washings, intravenous antibiotics, and intravenous hydration to care for the increased severity of illness.

Response: We appreciate the commenters' feedback.

While our clinical advisors continue to believe that when peritonitis develops in a patient with acute appendicitis, the degree and severity of the peritonitis can vary greatly, we concur that the expansion of diagnosis codes K35.2 and K35.3 to introduce additional clinical concepts effective October 1, 2018 significantly changed the scope and complexity of the diagnosis codes for this subset of patients. As noted in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41236), when we consulted with the staff at the Centers for Disease Control's (CDC's) National Center for Health Statistics (NCHS), because NCHS has the lead responsibility for maintaining the ICD-10-CM diagnosis codes, the NCHS' staff acknowledged the clinical concerns based on the manner in which diagnosis codes K35.2 and K35.3 were expanded and confirmed that they would consider further review of these newly expanded codes with respect to the clinical concepts. As such, we believe it would be appropriate to maintain the current assignments at this time in order to further examine the relevant clinical factors and similarities in resource consumption in order to best represent this subset of patients within the MS-DRG classification. Therefore, after consideration of the public comments we received, and for the reasons discussed, diagnosis code K35.20 (Acute appendicitis with generalized peritonitis, without abscess) will be maintained in MS-DRGs 341, 342, and 343 (Appendectomy without Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2021. We are not finalizing our proposal to reassign diagnosis code K35.32 (Acute appendicitis with perforation and localized peritonitis, without abscess) to MS-DRGs 341, 342, and 343; and we are not finalizing our proposal to remove diagnosis code K35.32 from the complicated principal diagnosis list in MS-DRGs 338, 339, and 340. Accordingly, the assignment of ICD-10-CM code K35.32 will be maintained in MS-DRGs 338, 339, and 340 (Appendectomy with Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) and Start Printed Page 58488ICD-10-CM diagnosis code K35.32 will continue to be listed as a Complicated Principal Diagnosis in MS-DRGs 338, 339, and 340, in the ICD-10 MS-DRG Version 38 Definitions Manual. As additional claims data become available, we will continue to analyze the clinical nature of each of the diagnoses and their MS-DRG assignments to further improve the overall accuracy of the IPPS payments in future rulemaking.

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

a. Cervical Radiculopathy

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32503 through 32505), 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.

We noted that 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. We further noted that 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 referred 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.

As indicated in the FY 2021 IPPS/LTCH PPS proposed rule, 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 the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​ 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 Start Printed Page 58490average costs of $24,026. Of those 3,574 cases, there were 176 cases reporting a principal diagnosis of cervical radiculopathy 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 noted 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).

We stated that 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. We noted that 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. We stated that our clinical advisors recommended 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 recommended 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 did not propose to reassign diagnosis codes M54.11, M54.12, and M54.13 from MDC 01 to MDC 08 at this time.

Comment: Commenters agreed with the proposal to maintain 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 1 or MDC 8. Commenters also agreed with CMS' plan to solicit clinical input from medical specialty societies on the appropriate MDC classification for the diagnosis codes describing radiculopathy. A commenter thanked CMS for the consideration of the request and the solicitation for outside support from the industry while continuing to evaluate. Another commenter recommended reclassifying all cervical spinal fusion procedures to the same MS-DRGs, regardless of the diagnosis for which the procedure is performed. The commenter stated that the main driver for resource utilization is the surgical procedure and the ICD-10-CM diagnosis codes describing radiculopathy of the cervical/cervicothoracic spine would need to be classified to MDC 08 in order to group clinically similar cases under MS-DRGs 471, 472, and 473.

Response: We appreciate the commenters' support. In response to the commenter who recommended reclassifying all cervical spinal fusion procedures to the same MS-DRGs, regardless of the diagnosis for which the procedure is performed, as noted above and stated in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32505), our clinical advisors recommended 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 as well as further input from the public, including professional societies, and national associations for neurology and orthopedics. We agree with the commenter that the main driver for resource utilization is the surgical procedure and the ICD-10-CM diagnosis codes describing radiculopathy of the cervical/cervicothoracic spine would need to be classified to MDC 08 in order to group clinically similar cases under MS-DRGs 471, 472, and 473, however, it is the diagnosis codes and the MDC to which they should be clinically classified that requires further evaluation. From a clinical perspective, cervical radiculopathy involves inflammation or damage to the nerve root in the cervical spine which can affect a patient's neurological function. The underlying causes and risk factors vary, and depending on the patient's age, may more likely be attributed to a Start Printed Page 58491musculoskeletal condition, an infection, congenital anomaly, injury or a tumor.

After consideration of the public comments that we received, we are maintaining the current assignment of diagnosis codes M54.11, M54.12, and M54.13 describing cervical radiculopathy in MDC 01 for FY 2021, and as discussed intend to further review and analyze all the diagnosis codes describing radiculopathy of a specified or unspecified site to determine if they should be assigned to the same MDC, and if so, whether those codes should be assigned to MDC 1 or MDC 8.

b. Hip and Knee Joint Replacements

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32505 through 32510), we discussed a request we received 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 more 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 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) model, 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 Start Printed Page 58492subset 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:

We indicated in the FY 2021 IPPS/LTCH PPS proposed rule that 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 Start Printed Page 58493cases 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 referred the reader to Table 6P.1c associated with the proposed rule for a list of the procedure codes that describe a hip replacement without an oxidized zirconium bearing surface implant and to Table 6P.1e associated with the proposed rule 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.

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.

We noted that the data analysis performed to evaluate the first option provided by the requestor indicated 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. We stated that our clinical advisors also believed that the characteristics of the patients Start Printed Page 58494and 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 proposed to not 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 indicated 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 $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 indicated 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. We stated that our clinical advisors believed 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 did not propose 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 indicated 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.

As indicated in the proposed rule, 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. We stated that the procedure codes for the hip replacement procedures included in this additional analysis are displayed in Table 6P.1d associated with the proposed rule and the diagnosis codes for hip fracture included in this additional analysis are displayed in Table 6P.1e associated with the proposed rule. Our findings are shown in the following table.

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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 cases in MS-DRG 469 ($21,951 versus $22,126) and slightly more for MS-DRG 470 ($16,092 versus $14,326). Our clinical advisors supported 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 the FY 2021 IPPS/LTCH PPS proposed rule and section II.E.1.b. of this final rule. We noted that, 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. We stated that 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 severity level splits increase the explanatory power of the base MS-DRG in capturing differences in expected cost between the 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.

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For FY 2021, we proposed 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 referred the reader to Table 6P.1d associated with this proposed rule for the list of procedure codes describing hip replacement procedures and to Table 6P.1e associated with the proposed rule for the list of diagnosis codes describing hip fracture diagnoses that we proposed to define in the logic for these new MS-DRGs.

Comment: Several commenters supported the proposal to create proposed new MS-DRGs 521 and 522 for patients undergoing a hip replacement due to a hip fracture. The commenters stated their belief that the proposed new MS-DRGs and payment rates will better match the resource utilization for these clinically distinct patients. Specifically, a commenter noted that it is appropriate to differentiate hip replacement cases based on whether the patient has a hip fracture since, as noted in clinical literature, total hip arthroplasty (THA) for hip fracture cases are subject to longer lengths of stay, and more postoperative complications, readmissions, reoperations, and mortality than THA cases performed for osteoarthritis of the hip. Another commenter stated that combining hip fractures in the current MS-DRGs 469 and 470 with planned hip replacement procedures fails to take into consideration and adequately compensate for the complex nature of and additional care fracture patients require. The commenter noted that hip fracture patients require an increased acute length of stay, often have more post traumatic stressors due to their fall and are on average frailer than those patients who choose to have an elective hip replacement, therefore, creating two new MS-DRGs would help to capture the differences in the care required and the cost between hip fracture patients and elective hip replacement patients. Another commenter expressed appreciation for CMS' effort to review the analysis and provide results of each option and alternative options in detail with the associated diagnosis and procedure codes in the proposed rule to define in the logic for the proposed new MS-DRGs. Based on the results, the commenter stated they agreed that 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 would better align cases by average length of stay and average costs of cases, and lead to a more reasonable MS-DRG classification of these cases. Lastly, a commenter specifically expressed support for the establishment of the proposed new MS-DRGs, regardless of the type of bearing surface implant used in the joint replacement procedure.

However, a couple commenters who supported the concept of the proposal to create proposed new MS-DRGs 521 and 522 recommended that CMS not finalize the proposal until further analysis could be conducted. The commenters expressed concern that the relative weight and the average length of stay for proposed new MS-DRG 521 did not appear to align with clinical experience and underlying data since it is lower than the relative weight and average length of stay for MS-DRG 469. The commenters suggested that CMS re-evaluate and provide clarification on the data analysis.

A commenter expressed appreciation for the consideration CMS provided in response to the request to create MS-DRGs specifically for oxidized zirconium implants utilized in hip and knee replacement procedures. The commenter stated that although CMS' proposal did not explicitly focus on oxidized zirconium implants, an alternative option for the joint replacement procedures was examined and presented, resulting in the proposed new MS-DRGs 521 and 522. The commenter stated that these proposed MS-DRGs would improve distinguishing this subset of patients with a hip fracture who undergo a hip replacement procedure, however, the ability to differentiate meaningful parameters of care quality is not realized since the proposal treats all implants the same, despite what the commenter stated were the important clinical improvements demonstrated in the Medicare claims data for oxidized zirconium implants used for hip fracture patients. As a result, the commenter stated its belief that CMS should revise its proposal and adopt a specific MS-DRG for patients with a principal diagnosis of hip fracture receiving an oxidized zirconium bearing surface implant in a hip replacement procedure. According to the commenter, this would reflect an improvement over the proposed MS-DRGs 521 and 522, and best advance CMS policy and patient care objectives by creating incentives that appropriately encourage the use of a technology that has been shown to have substantial cost-saving and quality of care benefits. In addition, the commenter asserted that CMS stated a separate MS-DRG for oxidized zirconium is not warranted because certain criteria for establishing MS-DRG CC subgroups are not met. The commenter indicated CMS has broad statutory authority in the design of the Medicare inpatient payment system and is not required to limit its MS-DRG subgroups exclusively to be based on severity of co-morbidities or complications. The commenter remarked CMS should also not be limited to its five-step criteria for CC subgroups and by allowing for the creation of MS-DRG subgroups where there is clear evidence of a substantial clinical improvement will give CMS significantly greater flexibility to accomplish its goals of transformative quality improvement and cost-savings. The commenter stated that CMS has the ability and authority to make payment policy decisions that it believes will advance care and the Social Security Act grants CMS broad authority to establish a classification of inpatient hospital discharges by diagnosis-related groups and a methodology for classifying specific hospital discharges within these groups. The commenter maintained that nothing in the statute prohibits CMS from creating MS-DRG groups or sub-groups based partly upon other important policy criteria, such as actual improved patient outcomes. According to the commenter, CMS should use its exceptions and adjustments authority to accomplish this objective. The commenter provided the example that although CMS did not propose to create a new MS-DRG for Start Printed Page 58497oxidized zirconium implants, it could still adjust payment rates for inpatient stays involving such implants and accomplish similar results. The commenter expressed appreciation that the IPPS centrally organizes MS-DRGs on the basis of resource usage and clinical coherence, however, urged CMS to incorporate outcomes-based consideration. The commenter also contended that CMS has the opportunity to more fully realize the value of proven technologies by making incremental MS-DRG changes that lend access to the technologies shown to provide the most significant clinical benefits and signal to hospitals, surgeons, private payers, and others that CMS sees the value of these implants and wants to make sure Medicare beneficiaries can access these technologies. The commenter suggested that CMS consider MS-DRG subgroup requests that fall outside of the current five-step criteria for CC sub-groups, provided that requestors can demonstrate a substantial clinical improvement since this would allow the agency additional flexibility to make changes in MS-DRGs for technologies that demonstrate substantial clinical improvement based on lengthy track records of proven performance. The commenter noted how CMS utilizes the substantial clinical improvement criterion as part of assessing whether a new technology is eligible for a New Technology Add-On Payment or Transitional Pass-Through status and urged CMS to expand its use of this standard as an alternative pathway when evaluating certain MS-DRG subgroup requests. The commenter stated that in reviewing certain technologies associated with total joint replacement procedures, CMS should evaluate implants based on their ability to demonstrate significant reductions in long-term revision rates which are critical in studying improved patient outcomes and cost savings within the Medicare program. Additional data for revision rates from international joint replacement registries, reduced mortality rates from both international registries and Medicare claims data, and readmission rates from Medicare claims data was also provided by the commenter who asserted the information compels CMS to determine whether to finalize MS-DRGs that capture the broad category of hip fracture cases, or to create a narrower hip fracture MS-DRG based on strong outcomes differences observed in Medicare claims. The commenter asserted that because the data show strong results for hip fracture patients treated with an oxidized zirconium implant, CMS should also consider an exception and expand on proposed MS-DRGs 521 and 522 by creating a specific MS-DRG for hip fracture patients treated with an oxidized zirconium implant.

Lastly, the commenter expressed its appreciation for the analytical work and extensive consideration CMS provided to the request and acknowledged oxidized zirconium implants are only used in a very small portion of total hip replacement with hip fracture cases. The commenter stated its belief that the proposed MS-DRGs 521 and 522 would improve the ability to clinically distinguish hip fracture cases treated with a hip replacement from elective hip replacement procedures if CMS continues to believe a specific MS-DRG for hip fracture patients treated with an oxidized zirconium implant is not warranted.

Another commenter stated the proposal to create proposed new MS-DRGs 521 and 522 to account for differences in the cost of the THA procedure for a hip fracture appeared to be a neutral act in terms of cost. The commenter recommended that the proposal not be adopted as final policy since the current THA MS-DRGs 469 and 470 already provide similar reimbursement for the procedures through associated diagnostic codes, and the added expense of treating hip fractures is accounted for in the Comprehensive Care for Joint Replacement (CJR) Model. This commenter stated their belief that it would be inappropriate to make such a substantive change to the MS-DRG system without a strong body of evidence to support proposals which directly benefit one device over another. The commenter also stated they are not aware of any high-quality randomized controlled trials which report beneficial effects of the oxidized zirconium bearing surface. According to the commenter, any reported beneficial effect is most likely due to selection bias (that is, choosing younger, healthier patients for the oxidized zirconium bearings), rather than any real difference in performance. The commenter stated that this is true for registry data as well as clinical cohort studies. In addition, the commenter noted that among their society's hip replacement experts, the superiority of oxidized zirconium-alloy bearings is not a generally accepted fact. The commenter stated that they support higher reimbursement for hip replacements with a fracture in the existing MS-DRGs 469 and 470, however, they currently do not support creating the new MS-DRGs as proposed.

Response: We appreciate the commenters' support of the proposal to create proposed new MS-DRGs 521 and 522. We agree with the commenters that the proposed new MS-DRGs and payment rates will better match the resource utilization for these clinically distinct patients.

In response to the commenters who supported the concept of the proposal however recommended that CMS conduct further analysis for proposed new MS-DRG 521 because the proposed relative weight and average length of stay did not appear to align with clinical experience and underlying data in comparison to MS-DRG 469, we note that effective October 1, 2017 (FY 2018) the logic for MS-DRG 469 includes total ankle replacement procedures, therefore, the average length of stay, the average costs, and the relative weight of MS-DRG 469 continue to reflect the resource utilization associated with total ankle replacement procedures. In addition, total knee replacement procedures with a MCC are also included in the logic for MS-DRG 469.

The procedure codes identifying a total ankle replacement or total knee replacement are as follows:

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We analyzed data from the September 2019 update of the FY 2019 MedPAR file for cases reporting a total ankle replacement procedure or a total knee replacement procedure in MS-DRG 469 for comparison to proposed MS-DRG 521. Our findings are shown in the following tables.

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We found a total of 25,701 cases in MS-DRG 469 with an average length of stay of 5.9 days and average costs of $22,126. Of those 25,701 cases, we found a total of 2,819 cases reporting a total ankle replacement procedure with an average length of stay of 1.7 days and average costs of $22,327 and a total of 4,617 cases reporting a total knee replacement procedure with an average length of stay of 4.9days and average costs of $21,626.

As discussed in the proposed rule and shown in the table above, for proposed MS-DRG 521, the average length of stay is 7.2 days which is longer than the average length of stay of 5.9 days for MS-DRG 469, and the average costs for proposed MS-DRG 521 are slightly lower ($175) compared to the average costs of MS-DRG 469 ($21,951 versus $22,126, respectively).

The data demonstrates that the average costs of the total ankle replacement procedures in MS-DRG 469 are slightly higher than the average costs of all the cases in MS-DRG 469 ($22,327 versus $22,126). The proposal to reassign cases reporting a total hip replacement procedure with a principal diagnosis of a hip fracture from MS-DRG 469 to proposed new MS-DRG 521 includes the reassignment of 14,163 cases out of the 25,701 cases resulting in a total of 11,538 cases proposed to remain in MS-DRG 469. Of those 11,538 cases remaining in MS-DRG 469, a total of 2,819 cases reflect a higher utilization of resources, thereby continuing to impact the relative weight of MS-DRG 469 such that it is slightly higher than the proposed relative weight for proposed MS-DRG 521 (3.0844 versus 3.0634). Therefore, the data appears to reflect that the difference in the relative weights can be attributed to the fact that the total ankle replacement procedures continue to have an impact for MS-DRG 469.

In response to the commenter who stated that CMS should revise its proposal and adopt a specific MS-DRG for patients with a principal diagnosis of hip fracture receiving an oxidized zirconium bearing surface implant in a hip replacement procedure, we note that, our clinical advisors do not support the creation of a separate, specific MS-DRG for oxidized zirconium bearing surface implants for reasons previously discussed in the FY 2021 IPPS/LTCH PPS proposed rule. As the commenter stated in its own comments, CMS organizes MS-DRGs on the basis of resource usage and clinical coherence. Consistent with our annual process of evaluating MS-DRG classification requests, we performed a thorough review of the claims data for oxidized zirconium bearing surface implants utilized in a hip replacement procedure and provided a summary of that analysis, including input from our clinical advisors, as discussed in the proposed rule. Our clinical advisors believe that hip replacement procedures performed for a hip fracture demonstrate similar and predictable resource demands, regardless of the type of bearing surface implant used in the performance of the procedure. Therefore, we proposed to create new MS-DRGs 521 and 522, consistent with our efforts to continually refine the ICD-10 MS-DRGs while maintaining clinically coherent groups that also more accurately stratify Medicare patients with varying levels of severity. Therefore, with respect to the commenter's statement that CMS has broad authority to make policy changes, including the special exceptions and adjustment authority, we do not believe such changes would be appropriate or necessary for this group of hip replacement patients that receive an oxidized zirconium bearing surface implant. We can consider the commenter's suggestions to incorporate additional considerations into our analysis of MS-DRG classification requests in future rulemaking. We also wish to clarify for the commenter that the criteria to create subgroups within a base MS-DRG was not applied in evaluating the request to create a new MS-DRG. In other words, the criteria to create subgroups is only applied after the decision to propose to create a base MS-DRG is made.

Finally, in response to the commenter's statement that CMS should expand its use of the substantial clinical improvement standard as an alternative pathway when evaluating certain MS-DRG subgroup requests similar to the new technology add-on payment policy process, we will take this into future consideration.

In response to the commenter who stated their belief that it would be inappropriate to make a substantive change to the MS-DRG system without a strong body of evidence to support proposals which directly benefit one device over another and that they are not aware of any high-quality randomized controlled trials which report beneficial effects of the oxidized zirconium bearing surface, we wish to clarify that the CMS proposal did not involve proposing to directly benefit the oxidized zirconium bearing surface implant over other bearing surface implants. The CMS proposal presented was an alternative option to what the requestor submitted for CMS' consideration. Specifically, the CMS proposal was to group together all hip replacement procedures performed to treat a hip fracture, regardless of the type of bearing surface implant used, and the resulting MS-DRG assignment would be further differentiated based on the presence of a MCC, hence the proposal to create proposed new MS-DRGs 521 and 522 (Hip Replacement with Principal Diagnosis of Hip Fracture with and without MCC, respectively).

After consideration of the comments we received, for the reasons previously discussed, we are finalizing our Start Printed Page 58502proposal to create MS-DRGs 521 and 522 (Hip Replacement with Principal Diagnosis of Hip Fracture with and without MCC, respectively) for FY 2021. We refer readers to table 6P.1d for the list of procedure codes describing hip replacements and table 6P.1e for the list of diagnosis codes describing hip fractures (available via the internet on the CMS web page at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) that we are finalizing in the GROUPER logic for MS-DRGs 521 and 522.

In the FY 2021 IPPS/LTCH PPS proposed rule, we also noted 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 new MS-DRG 521 and MS-DRG 522, we sought public 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. We stated that 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, we stated that the CJR proposed rule would allow time to test the 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 closed on June 23, 2020 (85 FR 22978). We intend to address the comments on the proposed rule and this solicitation in the Comprehensive Care for Joint Replacement Model Three-Year Extension and Changes to Episode Definition and Pricing Final Rule. . In an interim final rule that we published in the April 6, 2020 Federal Register, we extended the duration of the CJR model through March 31, 2021, in light of the COVID-19 pandemic, to ensure continuity of CJR model operations in participant hospitals during the public health emergency so that we did not create any additional disruptions to the standard of care procedures hospitals have in place during this challenging time. Because the model will continue until at least March 31, 2021, we intend to adopt a policy in the CJR final rule that incorporates MS-DRG 521 and MS-DRG 522 into the CJR model as of the effective date of these new MS-DRGs. We believe such an approach would avoid disruption to the model for the remainder of PY5 (as extended) and thereafter, if our proposal to extend the CJR model to December 31, 2023 is finalized.

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

a. Kidney Transplants

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32510), 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 MDC 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 considered.

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 the proposed rule, we stated 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.

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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. We stated that 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 proposed 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 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 MS-DRG logic for MS-DRG 652 (Kidney Transplant) would function.

We stated we recognized 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 proposal 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. We stated that 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.

Comment: Commenters agreed with CMS' proposal to modify the GROUPER logic for MS-DRG 652 (Kidney Transplant) to allow the presence of a procedure code describing Start Printed Page 58506transplantation of the kidney to determine the MS-DRG assignment independent of the MDC. A commenter also stated they agreed that CMS should consider having the resource-intensive procedures currently assigned to the Pre-MDC MS-DRGs determine assignment to MS-DRGs with the ultimate goal of perhaps being able to eliminate the Pre-MDC category entirely.

Response: We appreciate the commenters' support of the proposal and CMS' plan to include the Pre-MDC category as part of our comprehensive, systematic review of the ICD-10-PCS procedure codes. After consideration of the public comments we received, we are finalizing the proposal to modify the GROUPER logic for MS-DRG 652 to allow 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 except in the two instances noted above.

We stated in the proposed rule, 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.E.1.b. of the preamble of this final 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:

We applied the criteria to create subgroups for the three-way severity level split. As discussed in section II.D.1.b. of the proposed rule and section II.E.1.b. of this final rule, we proposed, and are finalizing, the expansion of the previously listed criteria to also include the NonCC 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 did not propose to subdivide MS-DRG 652 into severity levels.

Comment: A commenter supported our proposal and expressed appreciation for CMS's examination of the GROUPER logic for DRG 652.

Response: We appreciate the commenters' support.

After consideration of public comments, we are finalizing the proposal to not subdivide MS-DRG 652 into severity levels. We refer the reader to section II.E.1.b. of this final rule for the comments regarding our proposal to expand the previously listed subgroup criteria to also include the NonCC group, as well as our finalization of that proposal.

As discussed in the proposed rule and 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.

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We stated that we acknowledged 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.

We stated in further analyzing this issue, noting that patients can require a simultaneous pancreas/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. We stated 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.

In the proposed rule, we stated 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 Start Printed Page 58508transplant 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 stated 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 proposed 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.

As stated in the proposed rule, 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 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.

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 did not propose 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, in the FY 2021 proposed rule, 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 proposed 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 also proposed 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 new Pre-MDC MS-DRG 019 (Simultaneous Pancreas/Kidney Transplant with Hemodialysis), new MS-DRG 650 (Kidney Transplant with Hemodialysis with MCC) and new MS-DRG 651 (Kidney Transplant with Hemodialysis without MCC). We proposed 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 also proposed 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. In the proposed rule, we noted 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 also proposed to designate these codes as non-O.R. procedures affecting the MS-DRG.

Comment: Many commenters supported CMS' proposal. Commenters stated that the establishment of new MS-DRGs for kidney and simultaneous pancreas/kidney transplants with hemodialysis will increase the number of viable kidneys for transplantation and decrease the kidney discard rate by reducing the financial disincentive for using kidneys from medically complex donors. A few commenters stated they appreciate CMS' recognition of the higher cost involved in these cases and the effort to make kidney transplant services more accessible by aligning payment rates with the relative cost of services for kidney transplants. A commenter stated the proposed creation of two new MS-DRGs for kidney transplant cases with hemodialysis—one for cases with major complications and comorbidities (MCC) and one for cases without MCC, strengthens transplant programs and increases Start Printed Page 58509patient access to this vital medical service. Another commenter stated the inclusion of a MCC subgroup for kidney transplant with hemodialysis is vital given the documented increase in the complexity of transplant patients. One commenter specifically stated they strongly support efforts to ensure that kidney transplant MS-DRGs better reflect the cost of all associated care.

Response: We appreciate the commenters' support.

Comment: A few commenters opposed this proposal. One commenter stated they are concerned that the proposal would decrease Medicare payment for all kidney transplants not requiring post-transplant dialysis and were against including components in the proposal that would result in a reduction in inpatient payment for kidney transplant in any category. Another commenter stated they were concerned that CMS will extract money from existing MS-DRG 652 and Pre-MDC MS-DRG 008 to pay for the proposed new MS-DRGs. A different commenter stated their facility has a low volume of admissions with both hemodialysis and kidney transplant performed, with only approximately 21 out of a total of 110 kidney transplants having such a combination, and therefore would be adversely affected should this proposal be finalized.

Response: We appreciate the commenters' concerns, however as we have stated in prior rulemaking, the MS-DRGs are a classification system intended to group together those diagnoses and procedures with similar clinical characteristics and utilization of resources. We continue to believe that consistent with this classification system, the proposed new MS-DRGs would improve clinical coherence while appropriately addressing the differential in resource consumption for cases where hemodialysis is performed during an admission where the patient receives a kidney or simultaneous pancreas/kidney transplant. Each year, we calculate the relative weights by dividing the average cost for cases within each MS-DRG by the average cost for cases across all MS-DRGs. It is to be expected that when MS-DRGs are restructured, resulting in a different case-mix within the new MS-DRGs, the relative weights of the MS-DRGs will change as a result. We refer readers to section II.E.2. of the preamble of this final rule for a discussion of the relative weight calculations.

Therefore, after consideration of the public comments received, and for the reasons stated above, we are finalizing our proposal to create new Pre-MDC MS-DRG 019 (Simultaneous Pancreas/Kidney Transplant with Hemodialysis) for cases describing the performance of hemodialysis during an admission where the patient received a simultaneous pancreas/kidney transplant. We are also finalizing our proposal to create new MS-DRG 650 (Kidney Transplant with Hemodialysis with MCC) and new MS-DRG 651 (Kidney Transplant with Hemodialysis without MCC) for cases describing the performance of hemodialysis in an admission where the patient received a kidney transplant in MDC 11. Accordingly, we are also finalizing our proposal to designate procedure codes 5A1D70Z, 5A1D80Z, and 5A1D90Z that describe hemodialysis as non-O.R. procedures affecting the MS-DRG.

The diagram illustrates how the MS-DRG logic for Kidney Transplants will function. The diagram (Diagram 1.), which is the same Diagram 1 included in the proposed rule, 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 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 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).

We also received public comments regarding a number of kidney and hemodialysis related MS-DRG issues that were outside the scope of the proposals included in the FY 2021 IPPS/LTCH PPS proposed rule. These comments were as follows:

  • One commenter requested that CMS establish a new MS-DRG for Continuous Renal Replacement Therapy (CRRT).
  • One commenter requested that CMS review other transplant cases that end up in MS-DRGs 981 through 983 for reassignment to a more appropriate MS-DRG.
  • Two commenters requested that CMS evaluate and make modifications to any MS-DRG related to the delivery of dialysis.

Because we consider these public comments to be outside the scope of the proposed rule, we are not addressing them in this final rule. As stated in section II.E.1.b. of the preamble of this final rule, we encourage individuals with comments about MS-DRG classification to submit these comments no later than November 1, 2020 so that they can be considered for possible inclusion in the annual proposed rule. We will consider these public comments for possible proposals in future rulemaking as part of our annual review process.

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

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32519), 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.

As discussed in the proposed rule, 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 Start Printed Page 58512procedure 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 49993 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. In the proposed rule, we stated 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. We stated in the proposed rule that 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.

We further stated that our clinical advisors also did 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 did not propose 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.

Comment: Commenters supported our proposal to not add the 18 ICD-10-CM diagnosis codes listed to the special logic in MS-DRGs 673, 674, and 675. One commenter specifically agreed stating these devices may be inserted for a variety of diagnoses, and adding diagnosis codes that are not specific to renal failure would not maintain clinical coherence with other cases in these MS-DRGs.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to not 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. We stated in the proposed rule that 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.

As discussed in the proposed rule, 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:

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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 two 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, we stated in the proposed rule that 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 proposed 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).

Comment: One commenter questioned the rationale as to the extent totally implantable vascular access devices (TIVADs) are considered “kidney and urinary tract procedures” when placed to address a condition assigned to MDC 05.

Response: We appreciate the commenters' concern.

As discussed in the proposed rule, the procedure code for the insertion of totally implantable vascular access devices was originally 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 these devices are inserted as an inpatient procedure for the purposes of hemodialysis. Our clinical advisors believe the four ICD-10-CM diagnosis codes describing a mechanical complication of a vascular dialysis catheter are clearly clinically related to diagnosis codes that describe renal failure because the complicated vascular dialysis catheter described by these diagnosis codes would not be in place if hemodialysis was not indicated. Therefore, 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 Start Printed Page 58514the 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.

Comment: Other commenters supported the reassignment of diagnosis codes describing a mechanical complication of a vascular dialysis catheter 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 MDC 11.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal 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) under the ICD-10 MS-DRGs Version 38, effective October 1, 2020.

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 listed 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 recommended 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. We stated 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.

To summarize, we proposed 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 also proposed 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.

Comment: Commenters supported our proposal 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. The commenters stated they agreed that 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 for hemodialysis purposes. Commenters also supported the addition of ICD-10-CM codes for complications of kidney transplant 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.

Response: We appreciate the commenters' support.

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

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As stated in the proposed rule, 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 noted 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 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:

Start Printed Page 58516

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 that 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. We stated in the proposed rule that 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 proposed 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.

Comment: One commenter expressed concerns about the proposal and did not fully agree with this change. This commenter described a scenario in which a patient with stage 3 chronic kidney disease develops acute kidney failure and has totally implantable vascular access device inserted for the purpose of hemodialysis during an inpatient hospitalization. The commenter questioned if this scenario would qualify for 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.

Response: We appreciate the commenter's concern.

As discussed in the proposed rule, ICD-10-CM diagnosis codes N17.0, Start Printed Page 58517N17.1 N17.2, N17.8 and N17.9 which describe acute kidney failure are currently included in the special logic of MS-DRGs 673, 674, and 675. These codes were not listed in the seven codes proposed to be removed. In the hypothetical scenario described by the commenter, the case would qualify for 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 long as the diagnosis of acute kidney failure met the definition of principal diagnosis. We encourage the commenter to review the Official ICD-10-CM Coding Guidelines, which can be found on the CDC website at: http://www.cdc.gov/​nchs/​icd/​icd10.htm.

Comment: Other commenters supported our proposal and stated they agreed that the seven ICD-10-CM codes that do not describe renal failure or indications that would generally require the insertion of totally implantable vascular access devices for the purpose of hemodialysis should be removed from the special logic in MS-DRGs 673, 674, and 675.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal 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 under the ICD-10 MS-DRGs Version 38, effective October 1, 2020.

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

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32524), 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.

As stated in the proposed rule, 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.

We stated 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 Start Printed Page 58518chemotherapy agent as reflected in the logic table:

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 noted 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 Start Printed Page 58519procedure 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 days 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. We stated 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. We stated that 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. We stated 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 proposed 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.

Comment: A few commenters supported CMS' proposal and agreed ICD-10-PCS procedure codes 06H00DZ, 06H03DZ, and 06H04DZ describing the insertion of an intraluminal device into the inferior vena cava should be designated as non-O.R. procedures since these procedures are not surgical in nature, and related ICD-10-PCS codes are currently designated as non-O.R. procedures.

Response: We appreciate the commenters' support.

Comment: A commenter stated that they recommend that CMS remove code Z08 from the GROUPER logic for MS-DRGs 837, 838, and 839. The commenter stated that ICD-10-CM code Z08 identifies a follow-up visit after completed treatment for a malignant neoplasm which implies that the condition has been fully treated and no longer exists. Therefore, ICD-10-CM code Z08 does not describe an admission for chemotherapy. This commenter also noted that code Z08 is on the Unacceptable Principal diagnosis edit code list.

Response: We appreciate the commenters' concern.

The GROUPER logic assignment for each diagnosis code as a principal diagnosis is for grouping purposes only. As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41227), because the diagnoses are codes listed under the heading of “Principal Diagnosis” in the ICD-10 MS-DRG Definitions Manual, it may appear to indicate that these codes are to be reported as a principal diagnosis for assignment to these MS-DRGs. However, the Definitions Manual display of the GROUPER logic assignment for each diagnosis code does not correspond to coding guidelines for reporting the principal diagnosis. The MS-DRG logic must specifically require a condition to group based on whether it is reported as a principal diagnosis or a secondary diagnosis, and consider any procedures that are reported, in addition to consideration of the patient's age, sex and discharge status in order to affect the MS-DRG assignment. In other words, cases will group according to the GROUPER logic, regardless of any coding guidelines or coverage policies. It is the Medicare Code Editor (MCE) Start Printed Page 58520and other payer-specific edits that identify inconsistencies in the coding guidelines or coverage policies. The MCE is designed to identify cases that require further review before classification into an MS-DRG. These data integrity edits address issues such as data validity, coding rules, and coverage policies. Since the inception of the IPPS, the data editing function has been a separate and independent step in the process of determining a DRG assignment. The separation of the MS-DRG grouping and data editing functions allows the MS-DRG GROUPER to remain stable even though coding rules and coverage policies may change during the fiscal year.

Comment: Other commenters opposed CMS' proposal. A commenter stated the insertion of vena cava filters requires the use of specialized interventional radiology suites and in other hospitals without such specialized suites, the procedure may be performed in a multipurpose operating room. A few commenters stated that that the insertion of an inferior vena cava filter is not comparable to the insertion of an infusion device and that while it may be true that in some hospitals the procedure may be done at bedside similar to the insertion of infusion devices, this is not universally true and facilities incur significant costs beyond those for infusion devices to compensate for the costly implanted devices, specialized procedure rooms, equipment, and skill. A commenter stated that they believe that this proposed change will result in insufficient reimbursement for the resources utilized in delivering care to these patients. One commenter specifically noted that the costs of vena cava filters are higher than infusion catheters because filters can easily add over $4,000 to the cost of the procedure. Another commenter stated all open and laparoscopic vascular procedures should always be designated as O.R. procedures strictly because of the approach.

Response: We appreciate the commenters' feedback and concern.

With regard to the comments about the implications for reimbursement, we note that the goals of changing the designation of procedures from non-O.R. to O.R., or vice versa, are to better clinically represent the resources involved in caring for these patients and to enhance the overall accuracy of the system. Therefore, decisions to change an O.R. designation are based on whether such a change would accomplish those goals and not whether the change in designation would impact the payment in a particular direction.

Our clinical advisors reviewed the commenters' concerns and continue to support changing the O.R. designation of procedures describing insertion of an intraluminal device into the inferior vena cava performed via a percutaneous approach for consistency with the other procedure codes describing the insertion of a device into the inferior vena cava that are currently designated as non-O.R procedures because, as commenters noted in their own comments, inferior vena cava filters are most often placed in Interventional Radiology suites. The resources involved in furnishing these procedures are consistent with non-O.R. procedures and our clinical advisors noted it is not uncommon for anesthesia to be used in the radiology suite. Our clinical advisors also disagree with the assertion that these procedures are dissimilar to procedures describing the insertion of infusion devices into the inferior vena cava and believe that these procedures involve similar technical complexity.

Our clinical advisors do, however, concur with the commenters that while the procedure to insert an IVC filter is not surgical in nature, procedures describing the insertion of an intraluminal device into the inferior vena cava performed via an open or a percutaneous endoscopic approach could require greater resources than a procedure describing insertion of an intraluminal device into the inferior vena cava performed via a percutaneous approach. As such, we believe that at this time it would be appropriate to take additional time to further examine the relevant clinical factors and similarities in resource consumption between procedures describing the insertion of an intraluminal device into the inferior vena cava performed via an open or a percutaneous endoscopic approach. As discussed in section II.E.11. of the preamble of this final rule, we are exploring alternatives on how 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 continue to develop our process and methodology, and will provide more detail in future rulemaking.

Therefore, after consideration of the public comments we received, and for the reasons stated above, under the ICD-10 MS-DRGs Version 38, effective October 1, 2020, we are (1) finalizing our proposal to change the designation of ICD-10-PCS procedure code 06H03DZ from O.R. procedure to non-O.R. procedure and (2) maintaining the O.R. designation of procedure codes 06H00DZ and 06H04DZ. Accordingly, procedure codes 06H00DZ and 06H04DZ will continue to 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 proposed 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 58521

a. Horseshoe Abscess With Drainage

As discussed in the proposed rule, 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).

We stated in the proposed rule that our analysis of this grouping issue confirmed 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 first 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 requester 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:

We stated 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 proposed 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.

Comment: Commenters supported our proposal to add ICD-10-PCS procedure code 0J9B0ZZ to MDC 06 in MS-DRGs 356, 357, and 358.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure code 0J9B0ZZ to MDC 06 in 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.Start Printed Page 58522

As discussed in the proposed rule, 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) and 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 noted 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.

We stated in the proposed rule that 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 was only one case reporting procedure codes 0WU807Z or 0WU80KZ with principal diagnosis M95.4 in MS-DRGs 981, 982, and 983, we stated 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 proposed 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.

Comments: Commenters supported the proposal to add ICD-10-PCS procedure codes 0WU807Z and 0WU80KZ to MDC 08 in MS-DRGs 515, 516, and 517. The commenters stated that the proposal was reasonable, given the ICD-10-CM code and the information provided. One commenter specifically stated this reassignment would allow procedures describing chest wall supplementation to be assigned to the appropriate MS-DRG when reported with the principal diagnosis of acquired deformity of chest and rib instead of one of the unrelated operating room procedure MS-DRGs. Another commenter stated this would improve clinical consistency since one of the codes describing these procedures is already assigned to MDC 08.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedure codes 0WU807Z and 0WU80KZ to MDC 08 in MS-DRGs 515, 516, and 517.

c. Hepatic Malignancy With Hepatic Artery Embolization

As discussed in the proposed rule, 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.

We stated in the proposed rule that 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 Start Printed Page 58523identified the following fourteen ICD-10-CM diagnosis codes, all currently assigned to MDC 07 (Diseases and Disorders of the Hepatobiliary System & Pancreas):

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:

Start Printed Page 58524

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. We stated 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 proposed 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.

Comments: Commenters supported our proposal to add ICD-10-PCS procedure codes 04V33DZ and 04L33DZ to MDC 07 in MS-DRGs 423, 424 and 425.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure codes 04V33DZ and 04L33DZ to MDC 07 in 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. As discussed in the proposed rule, 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. We stated 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:

Start Printed Page 58525

As indicated earlier, the requestor suggested that we move ICD-10-PCS procedure code 03LY3DZ to MS-DRGs 163, 164, and 165. We stated, 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. We stated that therefore, it is clinically appropriate for the procedures to group to the same MDC as the principal diagnoses.

Therefore, we proposed 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.

Comment: A few commenters supported our proposal.

Response: We appreciate the commenters' support.

Comment: A commenter stated that ICD-10-PCS does not have procedure codes with a root operation of control in association with these upper arteries and there are times when an embolization procedure to control acute bleeding manifested as hemoptysis is necessary. This commenter also stated that the correct ICD-10-PCS root operation involving an intervention to address current acute or postprocedural bleeding or to prevent future bleeding is control involving the organ that is bleeding.

Response: We appreciate the commenter raising its concerns.

While we agree that the ICD-10-PCS Official Guidelines for Coding and Reporting define the root operation “control” as “stopping or attempting to stop, postprocedural or other acute bleeding”, the guidelines also state that if a more definitive root operation is required to stop the bleeding then the more definitive root operation is coded instead of “control”. That is, when embolization is performed to stop acute postprocedural or other acute bleeding of a tubular body part, the more definitive root operations that should be coded in those instances are restriction (if the intent is to partially close) or occlusion (if the intent is to completely occlude) the tubular body part, and not the root operation “control”. We encourage this commenter to review the posted ICD-10-PCS Guidelines on the CMS website at: https://www.cms.gov/​medicare/​icd-10/​2021-icd-10-pcs.html.

Comment: Another commenter disagreed with our proposal and stated hemoptysis could be due to other non-respiratory reasons and believed these procedures should be assigned to a “circulatory” over a “respiratory” DRG if the source of bleeding is not known and a non-respiratory artery or circulatory vessel is occluded to stop the bleeding.

Response: We disagree with the commenter that hemoptysis can be due to other non-respiratory reasons and note that the term “hemoptysis” specifically refers to the expectoration of blood originating from the respiratory tract. The expectoration of blood from a source other than the respiratory tract is not defined as hemoptysis and would not be coded with ICD-10-CM diagnosis code R04.2 (Hemoptysis).

As stated in the proposed rule, ICD-10-CM diagnosis code R04. 2 (Hemoptysis) is currently assigned to MDC 04 (Diseases & Disorders of the Respiratory System), not MDC 05 (Diseases & Disorders of the Circulatory System). We proposed to add these procedures to MDC 04, to address the matter of these procedures producing assignment to MS-DRGs 981 through 983 when coded with this diagnosis.

We note that under this proposal ICD-10-PCS procedure codes 03LY0DZ, 03LY3DZ and 03LY4DZ will continue to also be assigned to several MS-DRGs in three other MDCs (including MDC 05 (Diseases & Disorders of the Circulatory System)) as discussed in the proposed rule. With the exception of the pre-Start Printed Page 58526MDC, assignment to MDCs is driven by the principal diagnosis and not by the procedure. We also note that according to the ICD-10-CM Official Guidelines for Coding and Reporting, diagnoses described by codes from Chapter 18 (Symptoms, Signs and Abnormal Clinical and Laboratory Findings) of ICD-10-CM, such as R04.2, are acceptable for reporting when a related definitive diagnosis has not been established (confirmed) by the provider. If the expectoration of blood from the respiratory tract or another source is determined to be due another condition, that condition should be coded as principal diagnosis instead and assignment to a MDC will be driven by that principal diagnosis.

Our clinical advisors continue to believe that these procedures are also clearly related to ICD-10-CM diagnosis code R04.2 (Hemoptysis) assigned to MDC 04 and believe that it is appropriate to add these procedures to MDC 04. Therefore, after consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure codes 03LY0DZ, 03LY3DZ and 03LY4DZ to MDC 04 in MS-DRGs 166, 167, and 168.

e. Acquired Coagulation Factor Deficiency With Percutaneous Artery Embolization

As discussed in the proposed rule, 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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We stated 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 D68.4.

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.

As discussed in the proposed rule, 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.

We are clarifying in this final rule that cases reporting a principal diagnosis of acquired coagulation factor deficiency group to MS-DRGs 813, which is the medical MS-DRG that contains coagulation disorders, in the absence of a surgical procedure. We note that every diagnosis code is assigned to a medical MS-DRG to define the logic of the MS-DRG either as a principal or secondary diagnosis. As discussed in section II.E.12.a., certain procedure codes may affect the MS-DRG and result in a surgical MS-DRG assignment. Cases reporting a principal diagnosis of acquired coagulation factor deficiency group to MS-DRGs 799, 800 and 801 (Splenectomy with MCC, with CC, and without CC/MCC, respectively) or 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 the presence of a surgical procedure such as the procedures listed by the requestor. We refer the reader to the ICD-10 MS-DRG Version 37 Definitions Manual for complete documentation of the logic for case assignment to surgical MS-DRGs 799, 800, 801, 802, 803, and 804 and to medical MS-DRG 813 (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).

However, as stated in the proposed rule, 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. We stated that 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 did not propose to reassign ICD-10-CM diagnosis code D68.4 from MDC 16 to MDC 05.

Comments: Commenters agreed with CMS' proposal not to reassign ICD-10-CM diagnosis code D68.4 from MDC 16 to MDC 05. One commenter stated a diagnosis of an acquired bleeding disorder is not comparable to conditions described by the ICD-10-CM code R58, Hemorrhage, not elsewhere classified, and ICD-10-CM code D68.4 is most clinically aligned with the diagnosis codes in MDC 16.Start Printed Page 58530

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the assignment of ICD-10-CM diagnosis code D68.4 in MDC 16.

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 describing 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).

As stated in the proposed rule, 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 first 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 R04.0 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.

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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, and 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 noted that, as discussed in section II.D.4 of the preamble of the proposed rule and section II.E.4. of this final rule, we proposed to delete MS-DRGs 133 and 134 and create 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 proposed to add ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, and 03LR3DZ to MDC 03 in 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 new MS-DRGs 143, 144, and 145.

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

Comment: A commenter supported our proposal to add procedure codes describing a percutaneous arterial embolization to MDC 03. This commenter also stated CMS should expand ICD-10-PCS to include procedure codes describing the control of bleeding of the nasal passages performed using a percutaneous and percutaneous endoscopic approach so the resources involved in addressing acute or postprocedural bleeding in this manner can be assessed.

Response: We appreciate the commenter's support. As discussed in section II.E.16. of the preamble of this final rule, the ICD-10 Coordination and Maintenance Committee addresses updates to the ICD-10-CM and ICD-10-PCS coding systems. We encourage commenters to submit proposals for procedure coding changes via Email to: ICDProcedureCodeRequest@cms.hhs.gov.

Comment: Another commenter questioned CMS's proposal and stated these procedures should be classified to the circulatory MS-DRGs if the bleed is due to an artery or vessel and a procedure is performed on that artery/vessel.

Response: We appreciate the comment and concerns raised on our proposal.

As explained in the proposed rule, when conducting the review of procedures producing assignment to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, the objective is to identify those procedures occurring in conjunction with certain principal diagnoses with sufficient frequency to justify adding them to one of the surgical MS-DRGs for the MDC in which the diagnosis falls, or to move the principal diagnosis codes to the MDC in which the procedure falls.

As stated in the proposed rule, 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 (Diseases & Disorders of the Ear, Nose, Mouth & Throat), not MDC 05 (Diseases & Disorders of the Circulatory System). We proposed to add these procedures to MDC 03, to address the matter of these procedures producing assignment to MS-DRGs 981 through 983 when performed for a diagnosis of epistaxis.

We note that under this proposal ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, and 03LR3DZ will continue to also be assigned to several MS-DRGs in five other MDCs (including MDC 05 (Diseases & Disorders of the Circulatory System)) as discussed in the proposed rule. With the exception of the pre-MDC, assignment to MDCs is driven by the principal diagnosis and not by the procedure. We also note that according Start Printed Page 58532to the ICD-10-CM Official Guidelines for Coding and Reporting, diagnoses described by codes from Chapter 18 (Symptoms, Signs and Abnormal Clinical and Laboratory Findings) of ICD-10-CM, such as R04.0, are acceptable for reporting when a related definitive diagnosis has not been established (confirmed) by the provider. If the nasal bleeding is determined to be due another condition, that condition should be coded as principal diagnosis instead and assignment to a MDC will be driven by that principal diagnosis. Our clinical advisors continue to believe that these procedures are also clearly related to the principal diagnoses ICD-10-CM diagnosis code R04.0 (Epistaxis), assigned to MDC 03 and believe that it is appropriate to add these procedures to MDC 03.

Therefore, after consideration of the public comments we received, we are finalizing our proposal to add ICD-10-PCS procedure codes 03LM3DZ, 03LN3DZ, and 03LR3DZ to MDC 03 in new MS-DRGs 143, 144, and 145. We refer the reader to section II.E.4. of this final rule for the comments regarding our proposal to create new MS-DRGs 143, 144, and 145, as well as our finalization of that proposal.

g. Revision or Removal of Synthetic Substitute in Peritoneal Cavity

As discussed in the proposed rule, during our 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).

As stated in the proposed rule, 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.

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 proposed 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.

Comments: Commenters supported our proposal 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. One commenter stated that ICD-10-PCS procedure codes describing revision or removal of synthetic substitute in the peritoneal cavity are related to the principal diagnosis codes describing complications of intracranial shunts, and so it is appropriate for the procedures to group to the same MS-Start Printed Page 58533DRGs as the principal diagnoses describing complications of intracranial shunts. Another commenter noted that another indication for shunt revision is most commonly complications of ventriculoperitoneal shunts, and ICD-10-CM diagnosis codes describing complication of the ventriculoperitoneal shunts are assigned to MDC 01.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure codes 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

As discussed in the proposed rule, during our review of the cases currently grouping 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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We stated 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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In the proposed rule, we noted 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 proposed 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.

Comments: Commenters supported the addition of ICD-10-PCS procedure codes describing insertion of totally implantable vascular access devices to the MS-DRGs describing “Other” procedures within MDCs 04, 06, 07, 08, 13, and 16.

Response: We appreciate the commenters' support.

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

i. Multiple Trauma With Internal Fixation of Joints

As discussed in the proposed rule, 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 Start Printed Page 58536Trauma) 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, we stated in the proposed rule, our clinical advisors reviewed the list of procedure codes in the “0RH” and “0SH” code ranges, as suggested 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.

In the proposed rule, we noted 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. We stated 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 proposed to add the 161 ICD-10-PCS codes shown in Table 6P.1f associated with the proposed rule 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.

In the proposed rule, we noted that while we made 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.

Comment: Commenters supported our proposal to add the 161 ICD-10-PCS codes shown in Table 6P.1f to MDC 24 in MS-DRGs 957, 958, and 959. A commenter specifically stated they endorse the proposal as a means of more accurately representing the costs associated with the care and treatment of multi trauma patients. Commenters also stated they agreed that a more comprehensive analysis of the diagnoses and procedures assigned to MDC 24 should be undertaken.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to add the 161 ICD-10-PCS codes shown in Table 6P.1f associated with this final rule to MDC 24 in MS-DRGs 957, 958, and 959. Accordingly, 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 under the ICD-10 MS-DRGs Version 38, effective October 1, 2020. As noted in the proposed rule, 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 proposed 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 also proposed 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.E.11.c.5. of this final 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, percutaneous 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. We stated that 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 proposed to reassign ICD-10-PCS codes 0W3G3ZZ and 0W3G4ZZ from MS-DRGs 981 through 983 to 987 through 989.

Comment: A commenter supported our proposal.

Response: We appreciate the commenter's support.

After consideration of the public comments we received, we are finalizing our proposal to reassign ICD-10-PCS codes 0W3G3ZZ and 0W3G4ZZ from MS-DRGs 981 through 983 to 987 through 989, effective October 1, 2020.

In conducting our review of the request to designate ICD-10-PCS procedure codes 0WBC4ZX (Excision of mediastinum, percutaneous endoscopic approach, diagnostic) and 0WBC3ZX (Excision of mediastinum, percutaneous approach, diagnostic) as O.R. procedures (as described in section II.E.11.c.1. of this final 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. We stated that 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.E.11.c.1. of this final rule. Therefore, we proposed to reassign ICD-10-PCS code 0WBC0ZX from MS-DRGs 981 through 983 to 987 through 989.

Comment: A commenter supported our proposal.

Response: We appreciate the commenter's support.

After consideration of the public comments we received, we are finalizing our proposal to reassign ICD-10-PCS code 0WBC0ZX from MS-DRGs Start Printed Page 58538981 through 983 to 987 through 989, effective October 1, 2020.

As discussed in the proposed rule, 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:

In the proposed rule, we noted 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) group to MS-DRGs in MDC 06.

We stated in the proposed rule that 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. We noted 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:

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:

Start Printed Page 58539

We stated the results of our data analysis indicated 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. Further we stated, our clinical advisors believed 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 proposed 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.

Comment: A commenter supported our proposal to change the designation of the three procedure codes so that when 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 instead of MS-DRGs 987, 988, and 989.

Response: We appreciate the commenter's support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of ICD-10-PCS codes 0DB90ZZ, 0DBA0ZZ and 0DBB0ZZ from non-extensive O.R. procedures to extensive O.R. procedures, effective October 1, 2020.

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 of hospital resources. For example, generally the presence of a surgical procedure which required the use of the operating room would be expected to have a significant effect on the type of hospital resources (for example, operating room, recovery room, and anesthesia) used by a patient, and therefore, these patients were considered surgical. Because the claims data generally available do not precisely indicate whether a patient was taken to the operating room, surgical patients were identified based on the procedures that were performed. Generally, if the procedure was not expected to require the use of the operating room, the patient would be considered medical (non-O.R.).

Currently, each ICD-10-PCS procedure code has designations that determine whether and in what way the presence of that procedure on a claim impacts the MS-DRG assignment. First, each ICD-10-PCS procedure code is either designated as an O.R. procedure for purposes of MS-DRG assignment (“O.R. procedures”) or is not designated 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. Start Printed Page 58540procedures 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 to be newly designated as O.R. procedures. As discussed in section II.E.13. of the preamble of this final 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.

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. Therefore, in the FY 2021 proposed rule, we again solicited 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. We stated commenters should submit their recommendations to the following email address: MSDRGClassificationChange@cms.hhs.gov by October 20, 2020.

In this FY 2021 IPPS/LTCH PPS final rule, we present a summation of the comments we received in response to this discussion in the proposed rule.

Comment: Several commenters supported CMS' plan to continue to conduct the comprehensive, systematic review of the ICD-10-PCS codes that includes a process for determining when a procedure is designated as O.R. or Non-O.R. and acknowledged the magnitude of the potential impact to significantly restructure MS-DRGs.

Response: We thank the commenters for their support and appreciate their acknowledgement of the magnitude of this effort.

Comment: Two commenters stated that the public feedback they submitted by November 1, 2019 in response to CMS' request for feedback in the FY 2020 IPPS/LTCH PPS proposed rule was not stated in the FY 2021 IPPS/LTCH proposed rule.

Response: CMS appreciates the comments submitted in response to our request for feedback in both the FY 2020 IPPS/LTCH PPS proposed rule and in the FY 2021 IPPS/LTCH PPS proposed rule. While the comments submitted by the November 1, 2019 deadline were not specifically addressed in the FY 2021 IPPS/LTCH PPS proposed rule, feedback on what factors and/or criteria to consider in determining whether a procedure is designated as an O.R. procedure in the ICD-10-PCS classification system will be included when we provide more detail on this analysis and the methodology for conducting this comprehensive review in future rulemaking.

Comment: Several commenters requested that CMS consider the drivers of complexity and resource consumption surrounding the entire procedure and not only O.R. charges. The commenters stated that while large hospitals may have hybrid operating rooms or specialized procedure rooms (for example, interventional radiology suites), many smaller community hospitals may have multi-purpose O.R.s where the same room may be used for invasive general surgeries as well as procedures that may be performed in specialized procedure rooms in large hospitals. One of these commenters provided an example of the complexity and resource consumption of a procedure performed in a catheterization lab and stated that O.R verses Non O.R. may not be the most critical differentiator of resource consumption. Another commenter urged CMS to consider the definition of a “significant procedure” as defined in the Uniform Hospital Discharge Data Set (UHDDS) which states, “A significant procedure is one that is: Surgical in nature; carries a procedural risk; carries an aesthetic risk; or requires specialized training.” This commenter stated that this definition does not include whether an “O.R.” is required, but in many cases, the procedure itself determines if it is “surgical in nature” and other procedures that do not require an Start Printed Page 58541“O.R.” do require specialized training or carry risk.

Response: CMS appreciates the commenters' feedback and recommendations as to factors to consider in evaluating O.R. designations. As stated previously, we have typically evaluated procedures on the basis of whether or not they would be performed in an operating room. We agree with commenters and believe that there may be other factors to consider with regard to resource utilization, particularly with the implementation of ICD-10. As discussed in the proposed rule, we are exploring alternatives on how 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 continue to develop our process and methodology, and will provide more detail in future rulemaking.

Comment: Several commenters suggested that CMS assemble an advisory panel comprised of clinical, coding and financial stakeholders, physician specialty societies and experts to review methodologies for O.R. determination and that CMS should address procedures performed in all settings as there may be variations based on geographical differences, hospital size, resources and physician specialty availability. Two commenters suggested that CMS allow sufficient time for provider review and stated that thorough data analysis with provider input is critical to allow for appropriate insight in provider comments. These commenters stated that outside of the CMS noted intentions for consideration, additional data for each ICD-10-PCS procedure code should be provided so that a more thorough analysis can be completed. One of these commenters further suggested revising the October 20 deadline for submission of public comments if CMS could not provide the additional data timely.

Response: CMS appreciates this feedback. While CMS has already convened an internal workgroup comprised of clinicians, consultants, coding specialists and other policy analysts, we look forward to further collaboration with the industry. As discussed in section II.D.1.b. of the preamble of the proposed rule, given 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, changing the deadline to October 20th of each year would allow CMS the additional time for the review and consideration of any proposed updates. However, as stated in section II.E.1.b. of this final rule, we are maintaining the deadline of November 1, 2020 for the submission of such requests for FY 2022. Recognizing sufficient time is needed to provide feedback on what factors or criteria to consider in determining whether a procedure should be designated as an O.R. procedure in the ICD-10-PCS classification system, we have provided opportunity for the public to provide feedback beginning with the FY 2018 final rule and we continue to solicit input. We encourage the public to submit comments on other factors to consider in our refinement efforts to recognize and differentiate consumption of resources for the ICD-10 MS-DRGs timely for consideration. Once we are in a position to provide more detail on this analysis and the methodology for conducting this comprehensive review in future rulemaking, the public will again have the opportunity to provide feedback.

In the FY 2021 IPPS/LTCH PPS proposed rule and this final 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 we proposed to change the designation of procedure codes from non-O.R. procedures to O.R. procedures, we also proposed one or more MS-DRGs with which these procedures are clinically aligned and to which the procedure code would be assigned.

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

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

Start Printed Page 58542

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.

In the proposed rule, we stated that we agreed with the requestors that these procedures do not typically require the resources of an operating room, and are not surgical in nature. Therefore, we proposed to remove 0DW08UZ, 0DW68UZ, and 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. We stated in the proposed rule that, under this proposal, these procedures would no longer impact MS-DRG assignment.

Comments: Commenters supported our proposal to designate ICD-10-PCS procedure codes 0DW08UZ, 0DW68UZ, 0DWD8UZ as non-O.R. procedures. One commenter specifically stated they believed that the endoscopic revision of feeding devices does not typically require the resources of an O.R. and can be safely performed in non-O.R. settings such as interventional radiology or endoscopy suites.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure codes 0DW08UZ, 0DW68UZ, and 0DWD8UZ from O.R. procedures to non-O.R. procedures, effective October 1, 2020.

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:

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 stated in the proposed rule that we agree with the requestor that procedure code 0WBC4ZX would typically require the resources of an operating room. We further stated that our clinical advisors also agree that procedure code 0WBC3ZX would typically require the resources of an operating room. Therefore, we proposed 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 Start Printed Page 58543System); 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). We stated in the proposed rule that 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 proposed 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).

Comment: Commenters supported the proposal to reclassify ICD-10-PCS procedure codes 0WBC4ZX (Excision of mediastinum, percutaneous endoscopic approach, diagnostic) and 0WBC3ZX (Excision of mediastinum, percutaneous approach, diagnostic) as O.R. procedures for the purposes of MS-DRG assignment for FY 2021. A commenter stated their belief that surgeries performed within the mediastinum by an open or percutaneous endoscopic approach, regardless of whether it is a diagnostic or therapeutic procedure, typically require the resources of the O.R. to control for possible damage to the structures contained within the mediastinum, including loose connective tissue, the heart and great vessels, esophagus, trachea, nerves, and lymph nodes. The commenter noted that the invasive nature of these procedures also necessitates the sterile environment of an O.R. to limit the risk of secondary infection.

Commenters also supported the proposal to reassign procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ from MS-DRGs 163, 164, and 165 to MS-DRGs 166, 167, and 168. However, a couple commenters did not agree with the proposal and stated that the open, percutaneous, and endoscopic therapeutic mediastinal excisions should remain distinct from the diagnostic mediastinal procedures. The commenters noted that while the approaches of the procedures are the same, the time, risk and resource utilization is different for the therapeutic and diagnostic procedures. The commenters stated that diagnostic procedures require only a small mediastinal resection, more specifically an incisional biopsy, for diagnostic purposes while the therapeutic mediastinal resection involves the complete resection of large tumors, cysts or masses that may be malignant or benign juxtaposed to critical mediastinal structures. In addition, the commenters reported that therapeutic mediastinal resections will often require more time in the O.R., slightly longer lengths of stay, and more post-operative care due to the invasive nature of the procedures.

Response: We appreciate the commenters' feedback on the proposal to reclassify ICD-10-PCS procedure codes 0WBC4ZX and 0WBC3ZX as O.R. procedures for the purposes of MS-DRG assignment and on the proposal to reassign procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ from MS-DRGs 163, 164, and 165 to MS-DRGs 166, 167, and 168. In response to the commenters who did not agree with the proposal to reassign procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ from MS-DRGs 163, 164, and 165 to MS-DRGs 166, 167, and 168, as noted by the commenters, the approaches of the therapeutic and diagnostic procedures are the same, however our clinical advisors did not agree that the time, risk and resource utilization are necessarily different for the therapeutic and diagnostic procedures.

While the commenters' asserted that therapeutic mediastinal procedures will often require more time in the O.R., slightly longer lengths of stay, and more post-operative care due to the invasive nature of the procedures, our analysis of claims data found that the average length of stay and the average costs for the diagnostic procedures were greater than those of the therapeutic procedures. We examined data from the September 2019 update of the FY 2019 MedPAR data for both diagnostic and therapeutic mediastinal excision procedures across all MS-DRGs. Our findings are shown in the table below.

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As shown in the table, there were a total of 1,141 cases reporting a diagnostic excision of mediastinum procedure with an average length of stay of 8.2 days and average costs of $21,279 and a total of 291 cases reporting a therapeutic excision of mediastinum procedure with an average length of stay of 4.3 days and average costs of $17,267. Our clinical advisors maintain that therapeutic and diagnostic procedures involving excision of the mediastinum are clinically aligned and should be grouped together. However, as noted in prior rule making (84 FR 42148), our clinical advisors recognize that MS-DRGs 163, 164, 165, 166, 167, and 168 may warrant further review and therefore, we plan to begin this more detailed review beginning with our FY 2022 MS-DRG classification analysis of claims data and determine what modifications may need to be considered for future rulemaking.

After consideration of the public comments we received, we are finalizing our proposal to add procedure codes 0WBC4ZX and 0WBC3ZX as O.R. procedures 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). We are also finalizing our proposal to reassign procedure codes 0WBC0ZZ, 0WBC3ZZ, and 0WBC4ZZ from MS-DRGs 163, 164, and 165 to MS-DRGs 166, 167, and 168, effective FY 2021.

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 stated in the proposed rule that we agreed 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 proposed 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).

Comments: Commenters supported our proposal to designate ICD-10-PCS procedure code 3E0L4GC as an O.R. procedure. A commenter noted that Start Printed Page 58545since code 0BJQ4ZZ, Inspection of pleura, percutaneous endoscopic approach, is no longer necessary as an additional code to capture the endoscopic component of the procedure it makes sense for code 3E0L4GC to be designated as an O.R. procedure.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure code 3E0L4GC from non-O.R. procedure to O.R. procedure, effective October 1, 2020.

(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 stated in the proposed rule that we agreed 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 proposed 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 O.R. procedures 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).

Comments: Many commenters supported our proposal. One commenter specifically stated they concurred with the requestor's statement that similar procedures such as percutaneous endoscopic excisions of gastric lesions and percutaneous endoscopic partial gastrectomies are currently classified as O.R. procedures, and that the two listed stomach excision codes should be designated as O.R. procedures due to comparable costs and resource use. This commenter also stated they believed that the invasive nature of such procedures also necessitates the sterile environment of an O.R. to limit the risk of secondary infection.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure codes 0DB64ZZ and 0DB64ZX from non-O.R. procedures to O.R. procedures, effective October 1, 2020.

As discussed in the proposed rule, 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 proposed 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). We stated 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:

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We found zero cases in MS-DRGs 957, 958, and 959 reporting 0DB64Z3 and a principal diagnosis in MDC 24 (Multiple Significant Trauma). We stated our analysis demonstrated 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. We also stated 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 proposed 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).

Comments: Commenters supported our proposal and stated they agreed that diagnoses 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) are not typically corrected surgically by percutaneous endoscopic vertical (sleeve) gastrectomy, and that procedure codes describing the percutaneous endoscopic excision of stomach should all be assigned to the same MDCs.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal 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), effective October 1, 2020.

Lastly, we stated 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 different attributes in terms of designation as an O.R. or Non-O.R. procedure. We identified the following five related codes:

As discussed in the proposed rule, 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. We stated our clinical advisors indicated that these procedures are not surgical in nature and do not require an incision. Therefore, we proposed 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.

Comments: Commenters opposed our proposal. A few commenters noted that the five procedure codes describing excision of stomach listed are similar in nature to procedure codes 0DB64ZZ and 0DB64ZX that describe percutaneous endoscopic excisions of the stomach, which CMS proposed to change from non-O.R. procedures to O.R. procedures. One commenter also stated that procedure codes describing excision of stomach via percutaneous approach or excision of stomach via percutaneous endoscopic approach should have the same O.R. procedure designation.

Response: We appreciate the comments and concerns raised on our proposal.

Our clinical advisors continue to indicate that these procedures are not surgical in nature and do not require an incision however, after acknowledging the concerns raised by commenters, believe it would be appropriate to take additional time to review the inconsistencies in how procedures involving the excision of stomach are designated. Therefore, after consideration of public comments, we are not finalizing our proposal 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. Accordingly, these procedures will continue to impact MS-DRG assignment under the ICD-10 MS-DRGs Version 38, effective October 1, 2020.

(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:

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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 stated in the proposed rule that we agreed 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 proposed 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 also proposed 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 Effects of Drugs). Lastly, we proposed 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).

Comments: Commenters supported our proposal. One commenter stated they concurred with the requestor's statement 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, and that the six listed procedure codes should be designated as O.R. procedures due to comparable costs and resource use. The commenter also stated they believed that the invasive nature of such procedures also necessitates the sterile environment of an O.R. to limit the risk of secondary infection. Other commenters stated they agreed all ICD-10-PCS procedure codes describing procedures involving laparoscopic drainage of peritoneum, peritoneal cavity, or gallbladder should be designated as O.R. procedures.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of ICD-10-PCS procedure codes 0D9W4ZZ, 0D9W40Z, 0W9G4ZZ 0W9G40Z, 0F944ZZ and 0F9440Z from non-O.R. procedures to O.R. procedures, effective October 1, 2020.

As discussed in the proposed rule, during our review of this request, 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. We stated that 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 proposed 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.

Comments: Commenters supported our proposal and as previously mentioned stated they agreed all ICD-10-PCS procedure codes describing procedures involving laparoscopic drainage of the peritoneum, peritoneal cavity, or gallbladder should be designated as O.R. procedures.

Response: We appreciate the commenters' support.Start Printed Page 58548

After consideration of the public comments we received, we are finalizing our proposal to change the designation of 0F944ZX from non-O.R. procedure to O.R. procedure, effective October 1, 2020.

In the proposed rule, we stated 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. We stated 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 proposed to remove procedure codes 0F940ZZ and 0F940ZX from MS-DRGs 356, 357, and 358 in MDC 06 (Diseases and Disorders of the Digestive System).

Comments: Commenters supported our proposal and stated they agreed that procedure codes describing the drainage of the gallbladder should be assigned to the same MDC.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to remove procedure codes 0F940ZZ and 0F940ZX from MS-DRGs 356, 357, and 358 in MDC 06 (Diseases and Disorders of the Digestive System), effective October 1, 2020.

As stated in the proposed rule, 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 noted 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. We stated 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 also proposed 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.

Comment: A commenter supported our proposal to designate the nine ICD-10-PCS codes describing drainage of the peritoneum, peritoneal cavity, or gallbladder that are currently classified as extensive O.R. procedures as non-extensive O.R. procedures.

Response: We appreciate the commenter's support.

Comment: One commenter opposed CMS' proposal and stated location should be factored in. The commenter stated the designation of these procedures should differ depending if the procedure was performed in an operating room versus a radiology suite versus a procedure room. The commenter also stated procedures performed via an open approach should be designated as extensive O.R. procedures and procedures performed via a percutaneous endoscopic approach should be designated as non-extensive O.R. procedures. This same commenter specifically opposed changing the designation of procedure codes that describe the open drainage of the peritoneal cavity from extensive O.R. to non-extensive O.R. procedure and believed the designation should depend on how deep the open drainage incision site is.

Response: We do not agree that unilaterally all open procedures should be designated as extensive O.R. procedures and procedures performed laparoscopically should be designated Start Printed Page 58549as non-extensive O.R. procedures. While the site in which the procedure is performed and the procedural approach are important considerations in the designation of a procedure, there are other clinical factors such as procedure complexity, resource utilization, and need for anesthesia administration that should also be considered. In this regard, our clinical advisors believe the nine ICD-10-PCS codes that describe the drainage of the peritoneum, peritoneal cavity, and gallbladder, regardless of approach, are generally less complex than other procedures designated as extensive O.R. procedures.

Also, we are not clear what the commenter means when they state that “the designation of procedure codes describing the open drainage of the peritoneum should depend on how deep the open drainage incision site is”. The peritoneum is defined as the smooth transparent serous membrane that lines the cavity of the abdomen. Procedure codes for the open drainage of the peritoneum are used to describe any procedure where the skin or mucous membrane and any other body layers necessary to expose the peritoneum are cut through to take or let out fluid and/or gases. Any anatomical differences from patient to patient that might factor into the technical complexity of the procedure, such as habitus, would be captured in the ICD-10-CM diagnosis coding.

In the absence of a compelling clinical rationale for maintaining the designation of these procedures as extensive O.R. procedures, our clinical advisors continue to 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, after consideration of the public comments we received, we are finalizing our proposal 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, effective October 1, 2020.

(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 various anatomic sites and are currently classified as O.R. procedures.

We stated in the proposed rule that 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 proposed 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).

Comment: Commenters agreed with the proposed redesignation of ICD-10-PCS procedure code 0W3G0ZZ as an O.R. procedure, and stated this would be consistent with similar procedure codes describing control of bleeding in other anatomic sites.

Response: We thank the commenters for their support.

After consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure code 0W3G0ZZ to the 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 the MDCs and MS-DRGs noted earlier in this section, effective October 1, 2020.

(6) Inspection of Penis

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32549), 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. In the proposed rule, we stated that we agreed with the requestor that ICD-10-PCS procedure code 0VJS0ZZ typically requires the resources of an operating room. Therefore, we proposed 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/Start Printed Page 58550MCC) in MDC 12 (Diseases and Disorders of the Male Reproductive System).

Comments: Several commenters supported CMS' proposal to reclassify ICD-10-PCS procedure code 0VJS0ZZ from a non-O.R. procedure to an O.R procedure for purposes of MS-DRG assignment for MS-DRGs 709 and 710.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to add ICD-10-PCS procedure code 0VJS0ZZ (Inspection of penis, open approach) to the FY2021 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 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) for FY2021 effective October 1, 2020.

12. 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 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 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 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 severity level designation changes for FY 2020.

c. Guiding Principles for Making Changes to Severity Levels

As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32550), 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 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. In the proposed rule, we stated 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.Start Printed Page 58551
  • 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.

We stated in the FY 2021 IPPS/LTCH PPS proposed rule that we plan to continue a comprehensive CC/MCC analysis, 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, and present the findings and proposals in future rulemaking. We invited public comments regarding these guiding principles, as well as other possible ways we could incorporate meaningful indicators of clinical severity. When providing additional feedback or comments, we encouraged 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.

Comment: Many commenters supported the guiding principles. Commenters stated the application of the nine guiding principles, as laid out in the proposed rule, rather than solely relying on a mathematical analysis of claims data is a reasoned approach in addressing the concerns raised last year. A commenter specifically stated they acknowledge and appreciate CMS' recognition that the transition to ICD-10-CM, and the significant changes that have occurred to diagnosis codes since the FY 2008 review, warrants a comprehensive CC/MCC analysis.

Response: We thank the commenters for their support.

Comment: Some commenters noted general concerns with the guiding principles. Commenters stated that the nine guiding principles appeared to be open to interpretation or differences in clinical opinion and do not provide clear logic for decision-making. Other commenters stated that it was not clear how CMS will apply these guiding principles in conjunction with the mathematical analyses of claims data to make decisions about severity levels. These commenters stated that more information is needed to better understand CMS's process for decision making on the designation of diagnosis severity levels.

Response: We thank the commenters for sharing their concerns.

The nine guiding principles are not criteria, intended to turn the analysis into a quantitative exercise, but instead to provide a framework for assessing relevant clinical factors. As patients present with a variety of diagnoses, in examining the secondary diagnoses, we would consider what additional resources are required, above and beyond those that are already being utilized to address the principal diagnosis and/or other secondary diagnoses that might also be present on the claim. The goal of our comprehensive analysis is to create stratification for reimbursing inpatient hospitalization in the fewest amount of categories with the most explanatory power in a clinically cohesive way.

Our intended approach is first, CMS will use these guiding principles in making an initial clinical assessment of the appropriate severity level designation for each ICD-10-CM code as a secondary diagnosis. CMS will then use a mathematical analysis of claims data as discussed in the FY 2020 IPPS/LTCH PPS proposed rule to determine if the presence of the ICD-10-CM code as a secondary diagnosis appears to, or does not appear to, increase hospital resource consumption. There may be instances in which we would decide that the clinical analysis weighs in favor of proposing to maintain or proposing to change the severity designation of an ICD-10-CM code after application of the nine guiding principles.

Comment: Some commenters stated that the guiding principles appeared to be more applicable to MCC conditions, were too strict and could potentially eliminate CC conditions. A commenter stated that the application of the guiding principles would represent a substantial revision to the definition of a CC, noting MS-DRG Definition Manual Version 37.1 provides the following definition: “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 length of stay by at least one day in at least 75 percent of the patients.” A few commenters highlighted individual ICD-10-CM diagnoses and stated these conditions warrant assignment into CC or MCC MS-DRGs based on certain clinical criteria.

Response: We appreciate the commenters' feedback.

We do not believe the nine guiding principles would be mostly applicable, or only applicable, to MCC conditions. In applying the nine guiding principles in our review of the appropriate severity level designation, the intention is not to require that a diagnosis code satisfy each principle, or a specific number of principles in assessing whether to designate a secondary diagnosis code as a non-CC versus a CC versus a MCC. Rather, the severity level determinations would be based on the consideration of the clinical factors captured by these principles as well as the empirical analysis of the additional resources associated with the secondary diagnosis.

We wish to clarify that the definition of a “substantial complication or comorbidity” from the MS-DRG Definition Manual that the commenter referenced, is the definition of a CC that was used in Version 8 of the DRGs. In FY 2008, for Version 25 of the MS-DRGs, the diagnoses comprising the CC list were completely redefined and instead each CC was categorized as a major CC or a CC (that is, non-major CC) based on relative resource use. As stated previously, we refer readers to the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion of our approach. We also wish to clarify that there is a difference between the non-CC, CC, or MCC designation of an individual diagnosis code and the requirements for GROUPER assignment into a severity split MS-DRG. MS-DRG assignment is a different issue and is based on GROUPER logic and the other codes reported on a claim.

Comment: A commenter encouraged the use of the APR-DRG GROUPER to analyze severity levels for individual diagnoses and in conjunction with certain principal diagnoses to reinforce change decisions or identify conflicts requiring re-evaluation. Some commenters questioned how conditions such as obstetrical diagnoses or congenital conditions would, or would not, be considered in the application of the guiding principles.

Response: We thank the commenters for sharing their input and suggestions.

The Medicare GROUPER is for the Medicare population and is not designed to account for all populations like the APR-DRG GROUPER, so we generally do not believe it would be appropriate to use the APR-DRG GROUPER severity of illness and risk of mortality scores to analyze severity levels as they relate to Medicare inpatient prospective payment. In regards to obstetric conditions, given the limited number of cases reporting ICD-10-CM obstetrical codes in the Medicare claims data, we are considering use of datasets other than MedPAR cost data, as we indicated in the FY 2020 IPPS/LTCH PPS final rule Start Printed Page 58552(84 FR 42152), to be used in addition to the application of these guiding principles for future evaluation of severity level designation for the ICD-10-CM diagnosis codes from the Obstetrics chapter of the ICD-10-CM classification. In contrast, the diagnosis codes from the Congenital Malformations, Deformities and Chromosomal Abnormalities Chapter of the ICD-10-CM classification may be used throughout the life of the patient. Our internal workgroup believe the nine guiding principles are applicable to these conditions and these codes lend themselves to review 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.

In this FY 2021 IPPS/LTCH PPS final rule, we present a summation of the comments we received for each of the nine guiding principles and our responses to those comments. We thank commenters for sharing their views and their willingness to support CMS in our efforts to continue a comprehensive CC/MCC analysis.

  • Represents end of life/near death or has reached an advanced stage associated with systemic physiologic decompensation and debility.

Comment: A commenter opposed this principle and stated that decisions in these patients are complex, especially when being guided by family members as part of `person and community engagement' which hospitals are scored on under the Value Based Purchasing program. This commenter expressed concern that a family may insist on continued use of resources that CMS then determines it will not pay for, placing the financial burden onto the hospital.

Response: We note the target of our analysis is on individual ICD-10-CM codes, as secondary diagnosis codes, as they relate to inpatient prospective payment. While we appreciate the commenters' concern, we note that in certain instances, conditions that denote end of life or near death may conversely also decrease resource use as the decision to withdraw care is made. We also note that the impact of the secondary diagnosis is dependent on the principal diagnosis reported, with which it is associated. If the secondary diagnosis is reported with a principal diagnosis that reflects serious illness with treatment complexity, then the marginal contribution of the secondary diagnosis to the overall resource use may actually be relatively small. In applying these principles as part of the clinical analysis of the appropriate severity level designation for each ICD-10-CM code as a secondary diagnosis, CMS will take this into consideration.

  • Denotes organ system instability or failure.

Comments: Commenters supported this guiding principle.

Response: We appreciate the commenters' support.

  • Involves a chronic illness with susceptibility to exacerbations or abrupt decline.

Comments: Some commenters opposed this principle and stated this principle may not be able to be applied across the board as many ICD-10-CM diagnosis codes do not distinguish exacerbation. The commenters stated there are conditions that have separate acute and chronic diagnosis codes, combined acute/chronic concepts into single diagnosis codes, and some conditions for which the diagnosis code does not indicate the specificity of acute or chronic.

Response: All ICD-10-CM diagnosis codes, including codes that do not explicitly describe acute exacerbations, would be reviewed using this guiding principle to assess the degree to which the individual ICD-10-CM diagnosis code as a secondary diagnosis affects hospital resource consumption, to determine if the severity designation is more appropriately non-CC, CC, or MCC. The intention is again, not to require that every diagnosis code satisfy each principle, but instead to identify relevant clinical factors to help denote if, and to what degree, additional resources are required above and beyond those that are already being utilized to address the principal diagnosis and/or other secondary diagnoses that might also be present on the claim.

  • Serves as a marker for advanced disease states across multiple different comorbid conditions.

Comment: A few commenters noted that this guiding principle is open to interpretation.

Response: A marker is a clinical measurement that is associated with or believed to be related pathophysiologically to a clinical outcome and can serve as an indicator for health or disease. While we appreciate that assessing relevant clinical factors will depend on the particular diagnosis codes at issue, our clinical advisors believe this principle, along with the other 8 principles, would provide appropriate parameters for our clinical review.

  • Reflects systemic impact.

Comment: A commenter noted that many current CC or MCC diagnoses are limited to a single body system and therefore, stated it is unclear what the guideline means by “systemic impact.”

Response: Systemic impact refers to conditions that affect more than one body system or the entire body.

  • Post-operative condition/complication impacting recovery.

Comment: Several commenters recommended that CMS revise the language used so that this guiding principle includes the term “post-procedure” to more broadly recognize that some procedures also have associated complications that are severe that can typically warrant additional resources (that is, drugs, supplies, ancillary tests, etc.). These commenters stated they believed stakeholders are likely to take the wording of this guiding principle literally as originally stated. Commenters also stated that the term “recovery” is conceptually appropriate, so long as its use does not result in the exclusion of consideration of costs that may impact the patient stay. Another commenter also stated that CMS should describe the cost implications of each of these principles.

Response: CMS agrees that adding the term “post-procedure” would be appropriate to encompass procedures that have associated complications that may warrant additional resources. We are revising this guiding principle to “post-operative/post-procedure condition/complication impacting recovery”. To clarify for the commenters, when reviewing costs, we do not analyze impact using a detailed cost accounting approach. The approach that is utilized in the mathematical analysis of claims data for impact analysis is the same expected cost approach that used in the relative weight computations. All charges in each revenue bucket, that already include supply and ancillary costs, are adjusted specific to the revenue cost to charge ratio, on a national scale and incorporated into impact values from a total estimated cost perspective. As part of this statistical review to determine if a secondary diagnosis appears to, or does not appear to, increase resource consumption, our clinical workgroup will also examine the additional days the secondary diagnosis contributed to the length of stay against what would be expected.

  • Typically requires higher level of care (that is, intensive monitoring, greater number of caregivers, additional testing, intensive care unit care, extended length of stay).

Comment: Commenters stated that while they agree with this principle, they request that CMS clarify if “intermediate care” will be considered within this guiding principle. Other Start Printed Page 58553commenters requested clarification on how conditions meeting this principle would be determined. Other commenters noted that this principle is similar to Section III of the ICD-10-CM Guidelines for Coding and Reporting regarding reportable secondary diagnosis.

Response: Mathematical data regarding ICU usage will inform the clinical decision making of our internal workgroup, but we note that definitions for terms such as “intermediate care” and “ICU” vary from institution to institution. We note as stated above, our intention is not to be prescriptive in matching hospital costs, instead our intention is to ensure the severity designations appropriately reflect resource use and improve the overall accuracy of the IPPS payment system. To clarify for the commenters, the definition for “other diagnoses” as stated in the ICD-10-CM Official Guidelines for Coding and Reporting is intended to ensure inpatient data elements are reported in a standardized manner. This guiding principle is to intended to assist in assessing what additional resources are required for each ICD-10-CM code as a secondary diagnosis, above and beyond those that are already being utilized to address the principal diagnosis and/or other secondary diagnoses that might also be present on the claim.

  • Impedes patient cooperation and/or management of care.

Comment: A number of commenters requested that codes for various social determinants of health (SDOH) be considered in this principle and in subsequent data analysis. One commenter suggested that CMS use registry information, rather than relying solely on administrative data, to take into consideration these underlying risk factors, including socioeconomic status. Another commenter questioned whether the post discharge environment should be added as a guiding principle.

Response: The ICD-10-CM classification in its entirety will be reviewed in our comprehensive CC/MCC analysis, not excluding the ICD-10-CM codes for the social determinants of health, which are the socioeconomic, cultural and environmental circumstances in which individuals live. We note the focus of our comprehensive analysis is on the appropriate severity level designation of individual ICD-10-CM codes as secondary diagnosis codes as they relate to the resource utilization required while the patient is in the hospital and on inpatient prospective payment. In reference to the comment that CMS use registry information, we appreciate the suggestion but we do not believe there is enough consistency in voluntary registry data for this purpose, and it would also be challenging for CMS to operationalize.

  • 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.

Comment: Many commenters stated CMS needs a method to assign CC and MCC designations to new ICD-10-CM diagnosis codes in advance of receiving claims data, since the availability of claims data lags for two years after new codes are released, to account for diagnoses which require costly treatment or might otherwise require ICU care or lengthier stays. Another commenter stated this guiding principle is poorly worded at best and vague on how it would be converted to a decision by CMS. Another commenter questioned the validity of this principle and noted that most medical conditions have potentially had some changes in best practices in the last 10 years

Response: We would like to clarify and note that CMS does have an established process to assign severity level designation to new diagnosis codes. Our process in assigning a severity level designation to a new diagnosis code generally begins with identifying the designation of the predecessor ICD-10-CM code. To inform our assignments, we also review materials from the discussions relating to proposed new diagnosis codes from the ICD-10 Coordination and Maintenance Committee meetings to determine if there are new or revised clinical concepts included in the new diagnosis codes that should also be considered when assigning a severity level designation. We refer readers to section II.E.16. of the preamble of this final rule for a discussion of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting process.

We agree with the commenter that most medical conditions have potentially had some changes in best practices in the last 10 years. Significant strides have been made in the past 10 years to ensure that Medicare beneficiaries have access to critical and life-saving new cures and technologies that improve beneficiary health outcomes. Consequently, we believe this comprehensive analysis should take into account the way changes in medical practice have, or have not, affected the impact on relative resource use for each ICD-10-CM code as a secondary diagnosis since our last comprehensive analysis in FY 2008.

Therefore, after consideration of the public comments we received, we are updating the nine guiding principles as follows:

  • 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/post-procedure 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.

Comment: A few commenters recommended that CMS convene a technical advisory panel comprised of industry stakeholders and subject matter experts (including clinicians and health information professionals) to review the guiding principles. Other commenters requested that the mathematical data to be utilized in our comprehensive analysis be again presented and explained in a public listening session, similar to what the agency held in October 2019 on this topic.

Response: We again thank commenters for sharing their views and their willingness to support CMS in our efforts to continue a comprehensive CC/MCC analysis. While CMS has already convened an internal workgroup comprised of clinicians, consultants, coding specialists and other policy analysts, as well as provided opportunity to provide feedback on the guiding principles, we look forward to further collaboration with the industry. We plan to make an updated impact on resource use file available after publication of this final rule.

We continue to solicit feedback 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 Start Printed Page 58554ensure that the severity designation appropriately reflects resource use for any diagnosis code.

Commenters should submit their recommendations to the following email address: MSDRGClassificationChange@cms.hhs.gov by November 1, 2020.

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

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32550) we noted 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.

Comment: Commenters agreed with the proposed additions and deletions to the MCC and CC lists as shown in tables 6I.1, 6I.2, 6J.1, and 6J.2 associated with the proposed rule.

Response: We appreciate the commenters' support.

As discussed in section II.E.13. of the preamble of this final rule, after consideration of the public comments received, we are finalizing changes to the severity levels for new diagnosis codes D89.833, D89.834, and D89.835 describing cytokine release syndrome (CRS) from NonCC to CC for FY 2021. Therefore, these diagnosis codes are now reflected in Table 6J.1—Additions to the CC List—FY 2021.

The following tables associated with this final rule reflect the finalized severity levels under Version 38 of the ICD-10 MS-DRGs 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.—Complete MCC List—FY 2021;

Table 6I.1—Additions to the MCC List—FY 2021;

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

Table 6J.—Complete CC List—FY 2021;

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

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

e. 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 CC or MCC diagnosis to be considered as a non-CC. Part 2 is the list of diagnosis codes designated as a MCC only for patients discharged alive; otherwise, they are assigned as a non-CC.

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32550 through 32551), we discussed a request we received 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 of an acute stroke.

We stated in the proposed rule that our clinical advisors agreed 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.Start Printed Page 58555

As noted in the proposed rule, 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 associated with the proposed rule 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 associated with the proposed rule for the detailed analysis.

Based on the advice of our clinical advisors, for FY 2021, we proposed 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 associated with the proposed rule and available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS.

Comment: Commenters supported the proposal to remove 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.

Response: We thank the commenters for their support.

We proposed 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 the FY 2021 IPPS/LTCH PPS proposed rule and set forth in Tables 6G.1, 6G.2, 6H.1, and 6H.2 associated with the proposed rule and available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS.

Comment: Commenters supported the proposed additions and deletions to the CC Exclusion List as shown in tables 6G.1, 6G.2, 6H.1 and 6H.2.

Response: We appreciate the commenters' support.

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

The proposed CC Exclusions for a subset of the diagnosis codes as set forth in Tables 6G.1, 6G.2, 6H.1, and 6H.2 associated with the FY 2021 IPPS/LTCH PPS proposed rule reflect the proposed severity level designations as discussed in section II.D.13. of the preamble of the proposed rule. As discussed in section II.E.13. of the preamble of this final rule, we are finalizing changes to the severity level designations for three diagnosis codes after consideration of the public comments received. Therefore, the finalized CC Exclusions List as displayed in Tables 6G.1, 6G.2, 6H.1 6H.2, and 6K, associated with this final rule reflect the severity levels under Version 38 of the ICD-10 MS-DRGs.

We have developed Table 6G.1.—Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2021; Table 6G.2.—Principal Diagnosis Order Additions to the CC Exclusions List—FY 2021; Table 6H.1.—Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2021; Table 6H.2.—Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2021; and Table 6K.—Complete List of CC Exclusions—FY 2021. For Table 6G.1, each secondary diagnosis code for addition to the CC Exclusion List is shown with an asterisk and the principal diagnoses 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 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 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. Table 6K is a list of all of the codes that are defined as either CC or a MCC when used as a secondary diagnosis. Within the table each code is specifically indicated as CC or MCC. A table number is given to a collection of diagnosis codes which, when used as the principal diagnosis, will cause the CC or MCC to be considered as only a non-CC. Tables 6G.1., 6G.2., 6H.1., 6H.2., and 6K. associated with this final rule are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.

The ICD-10 MS-DRGs Version 38 CC Exclusion List is included as Appendix C of the Definitions Manual (available in two formats; text and HTML). The manuals are 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 and each format 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 (HTML version) is provided to a collection of diagnosis codes which, when used as the principal diagnosis, would cause the CC or MCC diagnosis to be considered as a non-CC. Part 2 is the list of diagnosis codes designated as a MCC only for patients discharged alive; otherwise, they are assigned as a non-CC.

13. 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 final rule.

These tables are not published in the Addendum to the proposed rule or final rule, but are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-Start Printed Page 58556for-Service-Payment/​AcuteInpatientPPS/​index.html as described in section VI. of the Addendum to this final rule. As discussed in section II.E.16. of the preamble of this final rule, the code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee 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.

In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32551 through 32552), we proposed the MDC and MS-DRG assignments for the new diagnosis codes and procedure codes as set forth in Table 6A.—New Diagnosis Codes and Table 6B.—New Procedure Codes. We also stated that the proposed severity level designations for the new diagnosis codes are set forth in Table 6A. and the proposed O.R. status for the new procedure codes are set forth in Table 6B.

Comment: A commenter stated they appreciated the finalization of new ICD-10-CM diagnosis code J84.170 (Interstitial lung disease with progressive fibrotic phenotype in diseases classified elsewhere) that was included in Table 6A—New Diagnosis Codes associated with the proposed rule. The commenter stated this new diagnosis code will provide clarification for current coding of Interstitial Lung Disease (ILD) within the ICD-10-CM classification by enabling identification of patients with chronic fibrotic ILD who exhibit a progressive phenotype. The commenter noted this update is critical for facilitating research for patients with a progressive fibrotic ILD phenotype which is an area of high unmet needs. Another commenter also supported the creation of diagnosis code J84.170 and stated they generally support new ICD-10 codes that enable identification of beneficiaries with specific diseases or clinically important diagnoses, such as that represented by diagnosis code J84.170. However, the commenter expressed concern that the process for obtaining new ICD-10 codes can be cumbersome and cause delays in approving new codes that are important to identify and support appropriate treatment for patients with specific diseases or conditions. The commenter provided an example that current ICD-10 codes do not accurately characterize the disease progression of Alzheimer's Disease and have not kept up with the current clinical documentation and management of patient treatments, and do not accurately reflect the various stages of disease progression. The commenter noted that proper identification is necessary, not only in clinical practice, but also to track the real word outcomes as patients progress through the disease states. The commenter stated CMS, along with the CDC, should consider steps to expedite the timetable for implementing important new diagnosis codes in emerging therapeutic areas in order to ensure timely patient access to vital treatment options.

Response: We appreciate the commenters' support. In response to the commenter who expressed concern regarding the process and timing for obtaining new ICD-10 codes, we note that, as discussed in section II.E.16. of the preamble of this final rule, the CDC/NCHS has lead responsibility for the ICD-10-CM diagnosis classification while CMS has lead responsibility for the ICD-10-PCS procedure classification. Each organization has their own established process in responding to requests for code updates, including when specific topics may appear on the agenda of an ICD-10 Coordination and Maintenance Committee meeting and the fiscal year in which code proposals are considered for implementation. With regard to the commenter's concerns involving outdated and insufficient diagnosis code descriptions for Alzheimer's Disease, we encourage the commenter to contact the CDC/NCHS directly as they have lead responsibility for the ICD-10-CM diagnosis classification. Requests for new and revised diagnosis code updates must be submitted to nchsicd10cm@cdc.gov for consideration. In response to the commenter's suggestion that CMS and CDC should consider steps to expedite the timetable for implementing important new diagnosis codes in emerging therapeutic areas in order to ensure timely patient access to vital treatment options, we note that, as also discussed in section II.E.16. of the preamble of this final rule, there are existing processes in place to implement diagnosis codes in an expedited manner.

Comment: A commenter expressed appreciation for CMS' request for comment on the MDC, MS-DRG and severity level for diagnosis code U07.1 (COVID-19). The commenter stated there are variable and changing practices related to COVID-19, particularly as related to medication use. In addition, the commenter noted as medications may be used off-label or become newly approved for COVID-19, the cost of those medications remains to be seen. According to the commenter, these costs may have a significant impact on a hospital's ability to treat patients with COVID-19. Therefore, the commenter suggested that as CMS considers the most appropriate MDC, MS-DRG and severity level assignments for diagnosis code U07.1, it recommended the agency account for the ongoing changes in best practices and medication use related to COVID-19, and whether additional reimbursement options or flexibilities could be provided to limit financial risks to hospitals. Another commenter applauded the speed with which CMS and CDC/NCHS addressed and implemented the new ICD-10-CM diagnosis codes U07.0 (Vaping-related disorder) and U07.1 (COVID-19) effective April 1, 2020 with MS-DRG assignments. This commenter encouraged the agencies to respond swiftly to address any similar public health emergencies in the future.

Response: We thank the commenters for their support. In Table 6A—New Diagnosis Codes, associated with the proposed rule, we proposed to continue to designate diagnosis code U07.1 (COVID-19) as a MCC in MDC 04 (Diseases and Disorders of the Respiratory System) for MS-DRGs 177, 178, and 179 (Respiratory Infections and Inflammations with MCC, with CC, and without CC/MCC, respectively); in MDC 15 (Newborns and Other Neonates with Conditions Originating in Perinatal Period) for MS-DRGs 791 (Prematurity with Major Problems) and 793 (Full Term Neonate with Major Problems); and in MDC 25 (Human Immunodeficiency Virus Infections) for MS-DRGs 974, 975, and 976 (HIV with Major Related Condition with MCC, with CC, and without CC/MCC, respectively). We note that these are the same MDC and MS-DRG assignments that were applied at the time diagnosis code U07.1 was implemented, effective April 1, 2020, as discussed in section II.D.16. of the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32559). In response to the commenter's recommendation that CMS account for changes in best practices and medications used for the treatment of COVID-19 with respect to providing additional payment options and flexibilities to limit financial risk to hospitals, we note that we have developed several resources in the form of a Coronavirus (COVID-19) Partner Toolkit available at the following CMS webpage: https://www.cms.gov/​outreach-education/​partner-resources/​coronavirus-covid-19-partner-toolkit for various providers with respect to the COVID-19 public health emergency. Specifically, on that CMS webpage under the section titled “If you are in a Care Setting” there is a “Hospitals and Start Printed Page 58557Healthcare Systems” list of 20 resource documents that have been made publicly available.

Comment: Several commenters expressed concern regarding the proposed NonCC severity level designation for a subset of the new ICD-10-CM diagnosis codes describing cytokine release syndrome (CRS) as displayed in Table 6A—New Diagnosis Codes (associated with the proposed rule and available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS). Specifically, the commenters stated diagnosis codes D89.833 (Cytokine release syndrome, grade 3), D89.834 (Cytokine release syndrome, grade 4), and D89.835 (Cytokine release syndrome, grade 5) warrant further consideration. The commenters noted that CRS has emerged as an established diagnosis in association with CAR T-cell therapy for various cancers, and providers are now seeing this syndrome in patients who present with COVID-19. The commenters requested CMS reconsider how the diagnosis codes describing CRS are designated within the ICD-10 MS-DRGs.

Some commenters suggested that the American Society for Transplantation and Cellular Therapy (ASTCT) CRS Grading system be examined in review of potential CC and MCC designations for the CRS diagnosis codes. Other commenters stated that based on the ASTCT CRS Grading system, the CRS diagnosis codes describing grades 3, 4, and 5 appear to satisfy many of the CMS guiding principles discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32550). A commenter recommended that severity level assignments for the various grades of CRS could be used as a test case for these new guiding principles. According to the commenter, the guiding principles as described in the proposed rule do not indicate that a required threshold for the number of cases for Medicare patients be attained before an analysis of the severity level assignment occurs. The commenter stated that based on the ASTCT CRS Grading system, grades 3, 4 and 5 meet the criteria for 7 of the 9 proposed guiding principles. The commenter provided the following information for CMS' consideration.

This same commenter also suggested that CMS consider expanding the logic for the CRS diagnosis codes to include patients diagnosed with COVID-19. The commenter reported that based on current academic literature, CRS is a common occurrence and a focus of treatment in patients presenting with advanced COVID-19. According to the commenter, the presence of CRS in the COVID-19 population also indicates that the new CRS diagnosis codes meet the 4th guiding principle of “marker for advanced disease states across multiple different comorbid conditions.”

Another commenter urged CMS to assign the CRS diagnosis codes identified as Grades 3, 4, and 5 (D89.833, D89.834, and D89.835, respectively) as a MCC and to assign the CRS diagnosis code identified as Grade 2, D89.832 (Cytokine release syndrome, grade 2) as a CC based on clinical significance. The commenter agreed with the proposed NonCC designation for the CRS diagnosis code identified as Grade 1, D89.831 (Cytokine release syndrome, grade 1) until additional data is available for analysis and consideration.

A commenter noted that for Table 6A—New Diagnosis Codes, associated with the proposed rule, that the proposed MDC for the new CRS diagnosis codes is MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, Immunologic Disorders) and the proposed MS-DRGs are 814, 815, and 816 (Reticuloendothelial and Immunity Disorders with MCC, with CC, and without CC/MCC, respectively). The commenter stated that since the CRS diagnosis codes were proposed as NonCC it understood this to equate to the CRS diagnosis codes being assigned to MS-DRG 816. The commenter disagreed with the proposed severity levels for the CRS diagnosis codes and recommended CMS consider revising. According to the commenter, CRS is the most common complication of Immune Effector Cell (IEC) therapy as described in the ASTCT's Consensus Grading Start Printed Page 58558paper.[1] Symptoms can be progressive, include fever at the onset, and may include hypotension, hypoxia, and end organ dysfunction. The commenter noted that patients with CRS grade 3 require treatment for hypotension and hypoxia and patients with CRS grade 4 experience hypoxia requiring treatment, are hemodynamically unstable, and have capillary leak which can lead to pulmonary edema and ventilation impairment and may require mechanical ventilation. Lastly, the commenter noted CRS grade 5 is defined as “death due to CRS,” and suggested this condition be considered a MCC. In addition, the commenter compared the APR-DRG Grouper severity levels, as described in the FY 2008 IPPS/LTCH PPS final rule (72 FR 47158) to inform how CMS should assign CC/MCC designations for the new CRS codes. For example, the commenter suggested diagnosis code D89.831 (Cytokine release syndrome, grade (1) should be designated as NonCC; diagnosis code D86.832 (Cytokine release syndrome, grade (2) should be designated as CC; diagnosis code D89.833 (Cytokine release syndrome, grade (3) should be designated as MCC; diagnosis code D89.834 (Cytokine release syndrome, grade (4) should be designated as MCC; diagnosis code D89.835 (Cytokine release syndrome, grade (5) should be designated as MCC; and diagnosis code D89.839 (Cytokine release syndrome, grade unspecified) should be designated as NonCC.

Similar to comments discussed earlier in this section, this commenter also stated that when applying CMS' guiding principles as described in the proposed rule for severity level assignments, many of them are applicable to the new CRS diagnosis codes. The commenter provided the following table for CMS' consideration and review which also included recommended MS-DRG assignments.

Start Printed Page 58559

The commenter also noted that coding guidelines instruct the CRS diagnosis codes to be sequenced as a secondary diagnosis with a complication code (T code) sequenced first when CRS is a complication due to a procedure. The commenter expressed concern regarding how CRS cases will group into MS-DRGs 814, 815, and 816 as proposed by CMS since sequencing a T code as the principal diagnosis results in a different MS-DRG assignment. The commenter suggested CMS consider revising the Grouper logic, proposing different MS-DRGs for CRS and allow for public comment, or urging NCHS to change the coding instruction at subcategory D89.83 to allow only for diagnosis code T80.90XA (Unspecified complication following infusion and therapeutic injection) to be reported first since it would group to MS-DRGs 814, 815, and 816. The commenter also urged CMS to request that the NCHS and the AHA publish clear coding guidance to eliminate any confusion about the appropriate T code to report for CRS due to CAR T-cell therapy.

Another commenter also recommended that CMS assign the new CRS diagnosis codes to CC and MCC MS-DRGs within the MS-DRG 814, 815, and 816 series. The commenter stated their belief that several of the CMS guiding principles described in the proposed rule provide sufficient rationale for such assignments. The commenter also stated that once information regarding the CRS codes becomes available in the claims data, CMS can re-evaluate MS-DRG assignments.

Response: Consistent with our annual process of assigning new diagnosis codes to MDCs, MS-DRGs, and designating a severity level (MCC, CC or NonCC), we reviewed the predecessor diagnosis code assignment for CRS. The predecessor code for CRS is diagnosis code D89.89 (Other specified disorders involving the immune mechanism, not elsewhere classified) which is designated as a NonCC, therefore our proposed severity level designation for each of the CRS codes was also a NonCC. After consideration of the commenters' concerns regarding the proposed severity level designations for the new ICD-10-CM diagnosis codes describing cytokine release syndrome (hereafter referred to as “CRS codes”) as displayed in Table 6A—New Diagnosis Codes, associated with proposed rule, we agree that the CRS codes warrant further consideration.

Upon further review and consideration, our clinical advisors believe a CC severity level for CRS codes identified as grade 3, 4, or 5 would be warranted since these patients may require additional resources and treatment including intensive monitoring, blood pressure support, oxygen or mechanical ventilation, that are above and beyond the resources required for patients with CRS identified as a grade 1, 2, or an unspecified grade. Our clinical advisors continue to believe that CRS codes with a grade 1, 2, or an unspecified grade do not warrant the CC severity level.

Our clinical advisors also acknowledged the commenters' recommendations to review the American Society for Transplantation and Cellular Therapy (ASTCT) CRS Grading system to reassess potential CC and MCC designations for the CRS codes and consider how the CMS guiding principles discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32550) could be applied as a test case for the various grades of the CRS codes. As noted previously, we applied our established process in proposing severity level assignments for these codes and the other new diagnosis codes for FY 2021. We also note that the guiding principles continue to be under development as we consider the public comments received, as discussed in section II.E.12.c. of the preamble of this final rule. We further note that with respect to proposing severity level assignments for new diagnosis codes in the future, we anticipate continuing our current process of first reviewing the predecessor code assignment, followed by review and consideration of the guiding principles that may be applied, in future rulemaking.

We note that while our clinical advisors do not dispute the commenters' assessments that the CRS codes would appear to meet most of the guiding principles, they also noted, as discussed previously, that a distinction between Start Printed Page 58560assigning the codes as a CC versus a MCC cannot be made based on the fact that they appear to meet several of the guiding principles nor can assignment of a secondary diagnosis be based on whether the code meets 1 or 2 principles or meets 7 or 8 of the principles. Our clinical advisors maintain that generally, the proposed severity level ultimately depends on clinical judgement and, where the data is available, the empirical analysis of the additional resources associated with the secondary diagnosis. The impact of the secondary diagnosis is dependent on the principal diagnosis reported, with which it is associated. If the secondary diagnosis is reported primarily with a principal diagnosis that reflects serious illness with treatment complexity, then the marginal contribution of the secondary diagnosis to the overall resource use may actually be relatively small. The CRS codes initially appeared to fall into this category, since it occurs in patients who are quite ill to begin with, the “grading” definitions have varied among organizations, and it has evolved over time. However, for the reasons noted, and after further consideration, we believe that a CC severity level for CRS codes identified as grade 3, 4, or 5 is warranted. We will continue to monitor the CRS codes and their impact on resource use once the claims data becomes available to determine if further modifications to the severity level are warranted.

In response to the commenter who expressed concern regarding how CRS cases will group into MS-DRGs 814, 815, and 816 as proposed by CMS (since sequencing certain T codes as the principal diagnosis results in a different MS-DRG assignment), we note that after notification and consideration of the concerns involving the proposed Tabular List instructions for the CRS codes were brought to its attention, the CDC/NCHS updated and finalized the Tabular instruction for the CRS codes. As noted in section II.E.16. of the preamble of this final rule, the CDC/NCHS has lead responsibility for the diagnosis codes and CMS has lead responsibility for the ICD-10-PCS procedure codes. The finalized changes effective FY 2021 include updates to the diagnosis codes instructed to be sequenced first, followed by the applicable CRS code as follows:

D89.83 Cytokine release syndrome

Code first underlying cause, such as:

Complications following infusion, transfusion and therapeutic injection (T80.89-)

complications of transplanted organs and tissue (T86.-)

Use additional code to identify associated manifestations

D89.831 Cytokine release syndrome, grade 1

D89.832 Cytokine release syndrome, grade 2

D89.833 Cytokine release syndrome, grade 3

D89.834 Cytokine release syndrome, grade 4

D89.835 Cytokine release syndrome, grade 5

D89.839 Cytokine release syndrome, grade unspecified

As a result, CMS considered modifications to the GROUPER logic to allow cases reporting diagnosis code T80.89XA (Other complications following infusion, transfusion and therapeutic injection) as the principal diagnosis with any one of the CRS codes as a secondary diagnosis to group to MS-DRGs 814, 815, and 816. We note that diagnosis code T80.90XA (Unspecified complication following infusion and therapeutic inj