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Proposed Rule

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program

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Start Preamble Start Printed Page 25070

AGENCY:

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

ACTION:

Proposed rule.

SUMMARY:

We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2022 and to implement certain recent legislation. In addition, we are proposing to rebase and revise the hospital market baskets for acute care hospitals, update the labor-related share, and provide the market basket update that would apply to the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis, subject to these limits for FY 2022. We are also proposing policies relating to Medicare graduate medical education (GME) for teaching hospitals to implement certain recent legislation. The proposed rule would also update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2022. In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to extend New COVID-19 Treatments Add-on Payment (NCTAP) for certain eligible products through the end of the fiscal year in which the PHE ends and to discontinue the NCTAP for discharges on or after October 1, 2021 for a product that is approved for new technology add-on payments beginning FY 2022. We are also proposing to repeal the collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology, as finalized in the FY 2021 IPPS/LTCH PPS final rule.

We are proposing to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare Promoting Interoperability Program. We are also providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and proposing updated policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, and the PPS-Exempt Cancer Hospital Reporting (PCHQR) Program, and the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). Additionally, due to the impact of the COVID-19 PHE on measure data used in our value-based purchasing programs, we are proposing to suppress several measures in the Hospital VBP, HAC Reduction, and Hospital Readmissions Reduction Programs. In connection with our measure suppression proposals for the FY 2022 Hospital VBP Program, we are also proposing to revise the scoring and payment methodology for the FY 2022 program year such that hospitals will not be scored using quality measure data that are distorted by the effects of the COVID-19 public health emergency (PHE) and will not receive Total Performance Scores or adjustments to their payments as a result. Similarly, we are proposing to suppress affected measures for the FY 2022 HAC Reduction Program such that hospitals will not be scored using distorted quality measure data and will not receive Total HAC Scores based on those data. For the Hospital Readmissions Reduction Program, we are proposing to suppress one affected measure under the proposed measure suppression policy for the FY 2023 applicable period such that hospitals will not be assessed using distorted quality measure data and will not receive payment reductions based on those data.

In addition, we are proposing to change, clarify, and codify Medicare organ acquisition payment policies relative to organ procurement organizations (OPOs), transplant hospitals, and donor community hospitals. Also, we are proposing to add regulation requiring that state Medicaid agencies accept valid enrollments from all Medicare-enrolled providers and suppliers for purposes of processing claims for Medicare cost-sharing liability for services furnished to Medicare-Medicaid dually eligible individuals in order to alleviate a long-standing problem related to claiming Medicare bad debt.

Additionally, we are proposing to amend the Medicare Shared Savings Program regulations to allow eligible accountable care organizations (ACOs) participating in the BASIC track's glide path the opportunity to maintain their current level of participation for performance year (PY) 2022.

DATES:

To be assured consideration, comments must be received at one of the addresses provided in the ADDRESSES section, no later than 5 p.m. EDT on June 28, 2021.

ADDRESSES:

In commenting, please refer to file code CMS-1752-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

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

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

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1752-P, P.O. Box 8013, Baltimore, MD 21244-1850.

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

3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1752-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

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

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Donald Thompson, (410) 786-4487, and Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRG Relative Weights, Wage Index, Hospital Geographic Reclassifications, Graduate Medical Education, Capital Prospective Payment, Excluded Hospitals, Medicare Disproportionate Share Hospital (DSH) Payment Start Printed Page 25071Adjustment, Sole Community Hospitals (SCHs), Medicare-Dependent Small Rural Hospital (MDH) Program, Low-Volume Hospital Payment Adjustment, and Critical Access Hospital (CAH) Issues.

Emily Lipkin, (410) 786-3633 and Jim Mildenberger, (410) 786-4551, 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.

Allison Pompey, (410) 786-2348, New Technology Add On Payments and New COVID-19 Treatments Add-on Payments Issues.

Mady Hue, (410) 786-4510, and Andrea Hazeley, (410) 786-3543, MS-DRG Classifications Issues.

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

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

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

Pamela Brown, pamela.brown@cms.hhs.gov, Hospital Readmissions Reduction Program—Administration Issues.

Jim Poyer, james.poyer@cms.hhs.gov, Hospital Readmissions Reduction Program—Readmissions—Measures Issues.

Jennifer Tate, jennifer.tate@cms.hhs.gov, Hospital-Acquired Condition Reduction Program—Administration Issues.

Yuling Li, (410) 786-8421, Hospital-Acquired Condition Reduction Program—Measures Issues.

Julia Venanzi, julia.venanzi@cms.hhs.gov, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing Programs—Administration Issues.

Katrina Hoadley, katrina.hoadley@cms.hhs.gov, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing Programs—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.

Annie Hollis, annie.hollis@cms.hhs.gov, PPS-Exempt Cancer Hospital Quality Reporting—Administration Issues.

Katrina Hoadley, katrina.hoadley@cms.hhs.gov, PPS-Exempt Cancer Hospital Quality Reporting Program-Measure Issues.

Christy Hughes, (410) 786-5662, Long-Term Care Hospital Quality Reporting Program—Data Reporting Issues.

Jessica Warren, jessica.warren@cms.hhs.gov, Dylan Podson, dylan.podson3@cms.hhs.gov, and Elizabeth Holland, elizabeth.holland@cms.hhs.gov, Promoting Interoperability Programs.

Candace Anderson, (410) 786-1553, Medicaid Enrollment of Medicare Providers and Suppliers for Purposes of Processing Claims for Cost-Sharing for Services Furnished to Dually Eligible Beneficiaries.

Katie Lucas, (410) 786-7723, Amanda Michael, (410) 786-5834, and Kellie Shannon (410) 786-0416, Organ Acquisition Payment Issues.

Naseem Tarmohamed, (410) 786-0814, or SharedSavingsProgram@cms.hhs.gov, for issues related to the Shared Savings Program.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

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

Tables Available Through the Internet on the CMS Website

The IPPS tables for this FY 2022 proposed rule are available through the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled, “FY 2022 IPPS Proposed rule Home Page” or “Acute Inpatient—Files for Download.” The LTCH PPS tables for this FY 2022 proposed rule are available through the internet on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​LongTermCareHospitalPPS/​index.html under the list item for Regulation Number CMS-1752-P. For further details on the contents of the tables referenced in this proposed rule, we refer readers to section VI. of the Addendum to this FY 2022 IPPS/LTCH PPS proposed rule.

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

Table of Contents

I. Executive Summary and Background

A. Executive Summary

B. Background Summary

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

D. Summary of the Provisions of This Proposed Rule

E. Advancing Health Information Exchange

F. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS Ratesetting

II. Proposed 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. Proposed FY 2022 MS-DRG Documentation and Coding Adjustment

D. Proposed Changes to Specific MS-DRG Classifications

E. Recalibration of the FY 2022 MS-DRG Relative Weights

F. Proposed Add-On Payments for New Services and Technologies for FY 2022

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

A. Background

B. Worksheet S-3 Wage Data for the Proposed FY 2022 Wage Index

C. Verification of Worksheet S-3 Wage Data

D. Method for Computing the Proposed FY 2022 Unadjusted Wage Index

E. Proposed Occupational Mix Adjustment to the FY 2022 Wage Index

F. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2022 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, and Proposed Budget Neutrality Adjustment

H. Proposed FY 2022 Wage Index Tables

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

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

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

L. Process for Requests for Wage Index Data Corrections

M. Proposed Labor-Related Share for the FY 2022 Wage Index

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

A. Background

B. Rebasing and Revising the IPPS Market Basket

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

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

V. Other Decisions and Changes to the IPPS for Operating SystemStart Printed Page 25072

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

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

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

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

E. Proposed Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) for FY 2022 (§ 412.106)

F. Counting Days Associated With Section 1115 Demonstration Projects in the Medicaid Fraction

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

H. Hospital Value-Based Purchasing (VBP) Program: Proposed Updates and Changes (§§ 412.160 Through 412.167)

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

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

K. Rural Community Hospital Demonstration Program

L. Market-Based MS-DRG Relative Weight—Proposed Policy Changes (§ 413.20)

M. Payment Adjustment for CAR T-cell Clinical Trial and Expanded Use for Immunotherapy Cases (§§ 412.85 and 412.312)

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

A. Overview

B. Additional Provisions

C. Proposed Annual Update for FY 2022

VII. Proposed Changes for Hospitals Excluded From the IPPS

A. Proposed Rate-of-Increase in Payments to Excluded Hospitals for FY 2022

B. Critical Access Hospitals (CAHs)

VIII. Proposed Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2022

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. Proposed Changes to the LTCH PPS Payment Rates and Other Proposed Changes to the LTCH PPS for FY 2022

IX. Proposed Quality Data Reporting Requirements for Specific Providers and Suppliers

A. Advancing to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Hospital Quality Programs—Request for Information

B. Closing the Health Equity Gap in CMS Hospital Quality Programs—Request For Information

C. Hospital Inpatient Quality Reporting (IQR) Program

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

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

F. Proposed Changes to the Medicare Promoting Interoperability Programs

X. Proposed Changes for Hospitals and Other Providers and Suppliers

A. Medicaid Enrollment of Medicare Providers and Suppliers for Purposes of Processing Claims for Cost-Sharing for Services Furnished to Dually Eligible Beneficiaries—Proposed Policy Changes (§ 455.410)

B. Organ Acquisition Payment—Proposed Policy Changes (Part 413, Subpart L)

C. Medicare Shared Savings Program—Proposed Policy Changes (§ 425.600)

XI. MedPAC Recommendations

XII. Other Required Information

A. Publicly Available Files

B. Collection of Information Requirements

C. Response to Public Comments

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, 2021 and Payment Rates for LTCHs Effective for Discharges Occurring on or After October 1, 2021

I. Summary and Background

II. Proposed Changes to Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2022

A. Calculation of the Proposed Adjusted Standardized Amount

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

C. Calculation of the Proposed Prospective Payment Rates

III. Proposed Changes to Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2022

A. Determination of the Proposed Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update for FY 2022

B. Calculation of the Proposed Inpatient Capital-Related Prospective Payments for FY 2022

C. Capital Input Price Index

IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-of-Increase Percentages for FY 2022

V. Proposed Changes to the Payment Rates for the LTCH PPS for FY 2022

A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2022

B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS for FY 2022

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

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

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

F. Computing the Proposed Adjusted LTCH PPS Federal Prospective Payments for FY 2022

VI. Tables Referenced in This Proposed 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 Proposed Policy Changes

I. Effects of Proposed Changes in the Capital IPPS

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

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

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

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

N. Effects of Proposed Requirements Regarding the Promoting Interoperability Program

O. Alternatives Considered

P. Overall Conclusion

Q. 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 2022

A. Proposed FY 2022 Inpatient Hospital Update

B. Proposed Update for SCHs and MDHs for FY 2022

C. Proposed FY 2022 Puerto Rico Hospital Update

D. Proposed Update for Hospitals Excluded From the IPPS for FY 2022

E. Proposed Update for LTCHs for FY 2022

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 2022 IPPS/LTCH PPS proposed rule would make payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. In addition, it would make payment and policy changes for inpatient hospital services Start Printed Page 25073provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). This proposed rule also would make policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2022 proposed rule, we are continuing policies to address wage index disparities impacting low wage index hospitals; including a proposal to implement the imputed floor wage index provision of the American Rescue Plan Act of 2021; including proposals related to new technology add-on payments; and proposing to repeal the collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology, as finalized in the FY 2021 IPPS/LTCH PPS final rule. This proposed rule also includes proposals to implement provisions of the Consolidated Appropriations Act of 2021 relating to payments to hospitals for direct graduate medical education (GME) and indirect medical education (IME) costs.

We are proposing to establish new requirements and revise existing requirements for eligible hospitals and CAHs participating in the Medicare Promoting Interoperability Program.

We are providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and proposing updated policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, Long Term Care Hospital Quality Reporting Program (LTCH QRP), and the PPS-Exempt Cancer Hospital Reporting (PCHQR) Program. Additionally, due to the impact of the COVID-19 PHE on measure data used in our value-based purchasing programs, we are proposing to suppress several measures in the Hospital VBP, HAC Reduction, and Hospital Readmissions Reduction Programs. As a result of these measure suppressions for the Hospital VBP Program we are also proposing a special scoring methodology for FY 2022 that results in a value-based incentive payment amount that matches the 2 percent reduction to the base operating DRG payment amount.

Under various statutory authorities, we either discuss continued program implementation or are proposing to make changes to the Medicare IPPS, to the LTCH PPS, other related payment methodologies and programs for FY 2022 and subsequent fiscal years, and other policies and provisions included in this rule. 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 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 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(o) of the Act, which requires the Secretary to establish a Hospital Value-Based Purchasing (VBP) Program, under which value-based incentive payments are made in a fiscal year to hospitals meeting performance standards established for a performance period for such fiscal year.
  • Section 1886(p) of the Act, which establishes a Hospital-Acquired Condition (HAC) Reduction Program, under which payments to applicable hospitals are adjusted to provide an incentive to reduce hospital-acquired conditions.
  • Section 1886(q) of the Act, as amended by section 15002 of the 21st Century Cures Act, which establishes the Hospital Readmissions Reduction Program. Under the program, payments for discharges from an applicable hospital as defined under section 1886(d) of the Act will be reduced to account for certain excess readmissions. Section 15002 of the 21st Century Cures Act 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 Start Printed Page 25074care amount of all DSH hospitals expressed as a percentage.
  • Section 1886(m)(5) of the Act, which requires the Secretary to reduce by two percentage points the annual update to the standard Federal rate for discharges for a long-term care hospital (LTCH) during the rate year for LTCHs that do not submit data in the form, manner, and at a time, specified by the Secretary.
  • 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.
  • Section 1899 of the Act which established the Medicare Shared Savings Program (Shared Savings Program) to facilitate coordination and cooperation among providers and suppliers to improve the quality of care for Medicare fee-for-service (FFS) beneficiaries and reduce the rate of growth in expenditures under Medicare Parts A and B.
  • Section 1902(a)(23) of the Act, which specifies Medicaid provider enrollment requirements. States may set reasonable standards relating to the qualifications of providers but may not restrict the right of beneficiaries to obtain services from any person or entity that is both qualified and willing to furnish such services.

2. Summary of the Major Provisions

The following is a summary of the major provisions in this proposed rule. In general, these major provisions are being proposed as part of the annual update to the payment policies and payment rates, consistent with the applicable statutory provisions. A general summary of the proposed changes in this proposed rule is presented in section I.D. of the preamble of this proposed rule.

a. Proposed MS-DRG Documentation and Coding Adjustment

Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub. L. 112- 240) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for changes in MS-DRG documentation and coding that do not reflect real changes in case-mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110 90. Section 414 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.) Therefore, for FY 2022, we are proposing to make an adjustment of +0.5 percent to the standardized amount.

b. Proposed Changes to the New COVID-19 Treatments Add-On Payment (NCTAP)

In response to the COVID-19 PHE, we established the New COVID-19 Treatments Add-on Payment (NCTAP) under the IPPS for COVID-19 cases that meet certain criteria (85 FR 71157 and 71158). We believe that as drugs and biological products become available and are authorized for emergency use or approved by Food and Drug Administration (FDA) for the treatment of COVID-19 in the inpatient setting, it is appropriate to increase the current IPPS payment amounts to mitigate any potential financial disincentives for hospitals to provide new COVID-19 treatments during the PHE. Therefore, effective for discharges occurring on or after November 2, 2020 and until the end of the PHE for COVID-19, CMS established the NCTAP.

We anticipate that there might be inpatient cases of COVID-19, beyond the end of the PHE, for which payment based on the assigned MS-DRG may not adequately reflect the additional cost of new COVID-19 treatments. In order to continue to mitigate potential financial disincentives for hospitals to provide these new treatments, and to minimize any potential payment disruption immediately following the end of the PHE, we believe that the NCTAP should remain available for cases involving eligible treatments for the remainder of the fiscal year in which the PHE ends (for example, until September 30, 2022). At the same time, we also believe that any new technology add-on payments that may be approved for a COVID-19 treatment would also serve to mitigate any potential financial disincentives for hospitals to provide that new COVID-19 treatment, such that the NCTAP would no longer be needed for that same product.

Therefore, we are proposing to extend NCTAP for eligible products that are not approved for new technology add-on payments through the end of the fiscal year in which the PHE ends (for example, September 30, 2022). We also are proposing to discontinue the NCTAP for discharges on or after October 1, 2021 for a product that is approved for new technology add-on payments beginning FY 2022.

c. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS Ratesetting

For the IPPS and LTCH PPS ratesetting, our longstanding goal is always to use the best available data overall. In section I.F. of the preamble of this proposed rule we discuss our analysis of the best available data for use in the development of this FY 2022 IPPS/LTCH PPS proposed rule given the potential impact of the public health emergency (PHE) for the Coronavirus Disease (COVID-19). As discussed in section I.F of the preamble of this proposed rule, we are proposing to use the FY 2019 data, such as the FY 2019 MedPAR file, for the FY 2022 ratesetting for circumstances where the FY 2020 data is significantly impacted by the COVID-19 PHE, primarily in that the utilization of inpatient services reflect generally markedly different utilization for certain types of services in FY 2020 than would have been expected in the absence of the PHE. In section I.O. of Appendix A of this proposed rule, we are also considering, as an alternative to this proposal, the use of the same FY 2020 data that we would ordinarily use for purposes of FY 2022 ratesetting, and which we may consider finalizing based on consideration of comments received.

d. Proposed 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 Start Printed Page 25075PPS rule (84 FR 42326 through 42332), we adopted a policy to increase 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 2022, we are continuing the low wage index hospital policy, and are also proposing to apply this policy in a budget neutral manner by applying an adjustment to the standardized amounts.

e. Proposed Implementation of Section 9831 of the American Rescue Plan Act of 2021 (Pub. L. 117-2) Imputed Floor Wage Index Policy for All-Urban States

Section 9831 of the American Rescue Plan Act of 2021 (Pub. L. 117-2) amended section 1886(d)(3)(E) of the Act (42 U.S.C. 1395ww(d)(3)(E)) to establish a minimum area wage index for hospitals in all-urban States. Specifically, section 1886(d)(3)(E)(iv) of the Act (as added by section 9831(a)(2) of Pub. L. 117-2) reinstates the imputed floor wage index policy for all-urban states effective for discharges on or after October 1, 2021 (FY 2022) with no expiration date using the methodology described in 42 CFR 412.64(h)(4)(vi) as in effect for FY 2018. Furthermore, section 1886(d)(3)(E)(iv)(III) of the Act provides that the imputed floor wage index shall not be applied in a budget neutral manner. We refer readers to section III.G.2. of this proposed rule for a summary of the provisions of section 9831 of Public Law 117-2 that we are proposing to implement in this proposed rule.

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

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

In this proposed rule, we are proposing to update our estimates of the three factors used to determine uncompensated care payments for FY 2022. We are also proposing to continue to use uninsured estimates produced by CMS' Office of the Actuary (OACT) as part of the development of the National Health Expenditure Accounts (NHEA) in the calculation of Factor 2. Consistent with the policy adopted in the FY 2021 IPPS/LTCH PPS final rule for FY 2022 and subsequent fiscal years, we are using a single year of data on uncompensated care costs from Worksheet S-10 of the FY 2018 cost reports to calculate Factor 3 in the FY 2022 methodology for all eligible hospitals with the exception of Indian Health Service (IHS) and Tribal hospitals and Puerto Rico hospitals. For IHS and Tribal hospitals and Puerto Rico hospitals we are proposing to continue to use the low-income insured days proxy to calculate Factor 3 for these hospitals for FY 2022. We are proposing certain methodological changes for calculating Factor 3 for FY 2022.

Additionally, we are proposing to revise our regulation governing the calculation of the Medicaid fraction of the DSH calculation. Under this proposal, patient days of individuals receiving benefits under a section 1115 waiver program would be counted in the numerator of the Medicaid fraction only if the patient directly receives inpatient hospital insurance coverage on that day under a waiver authorized under section 1115(a)(2) of the Act.

g. Reduction of Hospital Payments for Excess Readmissions

We are proposing to make changes to policies for the Hospital Readmissions Reduction Program, which was established under section 1886(q) of the Act, as amended by section 15002 of the 21st Century Cures Act. The Hospital Readmissions Reduction Program requires a reduction to a hospital's base operating DRG payment to account for excess readmissions of selected applicable conditions. For FY 2017 and subsequent years, the reduction is based on a hospital's risk-adjusted readmission rate during a 3-year period for acute myocardial infarction (AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary disease (COPD), elective primary total hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG) surgery. In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing the following policies: (1) To adopt a cross-program measure suppression policy; (2) to suppress the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure (NQF #0506) for the FY 2023 program year; (3) to modify the remaining five condition-specific readmission measures to exclude COVID-19 diagnosed patients from the measure denominators, beginning with the FY 2023 program year; (4) to use the MedPAR data that aligns with the applicable period for FY 2022; (5) to automatically adopt the use of MedPAR data corresponding to the applicable period beginning with the FY 2023 program year and all subsequent program years, unless otherwise specified by the Secretary; and (6) to update the regulatory text to reflect that our Hospital Compare website has been renamed and is now referred to as Care Compare. We are clarifying our Extraordinary Circumstances Exceptions (ECE) policy, and we are also requesting public comment on opportunities to advance health equity through possible future stratification of results by race and ethnicity for condition/procedure-specific readmission measures and by expansion of standardized data collection to additional social factors, such as language preference and disability status. We are also seeking comment on mechanisms of incorporating other demographic characteristics into analyses that address and advance health equity, such as the potential to include administrative and self-reported data to measure co-occurring disability status.

h. Hospital Value-Based Purchasing (VBP) Program

Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year. In this proposed rule, we are proposing to: (1) Establish a measure suppression policy for the duration of the public health emergency for COVID-19; (2) suppress the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), Medicare Spending Per Beneficiary (MSPB), and five Healthcare-Associated Infection (HAI) measures, for the FY 2022 Program year; and (3) suppress the Hospital 30-Day, Start Printed Page 25076All-Cause, Risk-Standardized Mortality Rate Following Pneumonia (PN) Hospitalization (MORT-30-PN) measure for the FY 2023 program year. We are also proposing to revise the scoring and payment methodology for the FY 2022 program year such that hospitals' Total Performance Scores will not include calculations based on these measures. We believe that awarding a TPS to any hospital based off the remaining measures that are not suppressed would not result in a fair national comparison and, as a result, are proposing not to award a TPS to any hospital for the FY 2022 program year. Instead, we are proposing to award each hospital a payment incentive multiplier that results in a value-based incentive payment that is equal to the amount withheld for the fiscal year (2 percent). We are proposing to remove the CMS Patient Safety and Adverse Events Composite (PSI 90) measure beginning with FY 2023 because the costs associated with the measure outweigh the benefit of its use in the program. We are also proposing to update the baseline periods for certain measures affected by the ECE granted in response to the COVID-19 PHE and to make a technical update to our terminology used in the Hospital VBP Program regulations.

i. 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 2022 IPPS/LTCH PPS proposed rule, we are proposing to: (1) Clarify our ECE policy; (2) adopt a cross-program measure suppression policy; (3) apply that measure suppression policy to suppress certain program data; and (4) update the regulatory text to reflect that our Hospital Compare website has been renamed and is now referred to as Care Compare.

j. 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 2022 IPPS/LTCH PPS proposed rule, we are proposing to make several changes. We are proposing to adopt five new measures: (1) A new structural measure—Maternal Morbidity Structural Measure—beginning with a shortened reporting period from October 1, 2021 through December 31, 2021 affecting the CY 2021 reporting period/FY 2023 payment determination; (2) the Hybrid Hospital-Wide All-Cause Risk Standardized Mortality (Hybrid HWM) measure in a stepwise fashion, beginning with a voluntary reporting period from July 1, 2022 through June 30, 2023, and followed by mandatory reporting from July 1, 2023 through June 30, 2024, affecting the FY 2026 payment determination and for subsequent years; (3) the COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure beginning with a shortened reporting period from October 1, 2021 through December 31, 2021, affecting the CY 2021 reporting period/FY 2023 payment determination and with quarterly reporting beginning with the FY 2024 payment determination and for subsequent years; and two medication-related adverse event eCQMs beginning with the CY 2023 reporting period/FY 2025 payment determination; (4) Hospital Harm-Severe Hypoglycemia eCQM (NQF #3503e); and (5) Hospital Harm-Severe Hyperglycemia eCQM (NQF #3533e).

We are also proposing to remove five measures: (1) Death Among Surgical Inpatients with Serious Treatable Complications (CMS PSI-04) beginning with the FY 2023 payment determination; (2) Exclusive Breast Milk Feeding (PC-05) (NQF #0480) beginning with the FY 2026 payment determination; (3) Admit Decision Time to ED Departure Time for Admitted Patients (ED-2) (NQF #0497) beginning with the FY 2026 payment determination; and two stroke-related eCQMs beginning with the FY 2026 payment determination; (4) Anticoagulation Therapy for Atrial Fibrillation/Flutter eCQM (STK-03) (NQF #0436); and (5) Discharged on Statin Medication eCQM (STK-06) (NQF #0439).

We are requesting comment from stakeholders on the potential future development and inclusion of two measures: (1) A mortality measure for patients admitted with COVID-19; and (2) a patient-reported outcomes measure following elective total hip and/or total knee arthroplasty (THA/TKA). We are also requesting comment from stakeholders on ways we can leverage measures to address gaps in existing health equity generally as well as comment on: (1) Potential future confidential stratified reporting for the Hospital-Wide All-Cause Unplanned Readmission (HWR) measure using both dual eligibility and race/ethnicity; and (2) potential future reporting of a structural measure to assess the degree of hospital leadership engagement in health equity performance data. In this proposed rule, we are also requesting feedback across programs on potential actions and priority areas that would enable the continued transformation of our quality measurement toward greater digital capture of data and use of the FHIR standard.

In addition, beginning with the CY 2023 reporting period/FY 2025 payment determination, we are proposing to require hospitals to use certified technology that has been updated consistent with the 2015 Edition Cures Update and clarifying that certified technology must support the reporting requirements for all available eCQMs. We also are proposing that hybrid measures comply with the same certification requirements as eCQMs, specifically that EHR technology must be certified to the 2015 Edition Cures Update. We are proposing an update to revise 42 CFR 412.140(a)(2) and 42 CFR 412.140(e)(2)(iii) replacing the terms “Security Administrator” and “System Administrator” with the term “security official” in alignment with other CMS quality programs. Due to an updated URL for the QualityNet website from QualityNet.org to QualityNet.cms.gov, we are also proposing to revise Hospital IQR Program regulations at 42 CFR 412.140(a)(1) and 42 CFR 412.140(c)(2)(i) to reflect updates to the QualityNet website. Lastly, we are proposing to extend the effects of the educational review process for chart-abstracted measures beginning with validations affecting the FY 2024 payment determination.

k. 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 proposed rule, we are proposing to remove the Oncology: Plan of Care for Pain—Medical Oncology and Start Printed Page 25077Radiation Oncology (NQF #0383) (PCH-15) measure beginning with the FY 2024 program year, adopt the COVID-19 Vaccination Coverage Among Healthcare Personnel measure beginning with the FY 2023 program year, make a technical update to the terminology we use in the program, and codify existing PCHQR Program policies in our regulations.

l. Medicare Promoting Interoperability Program

For purposes of reducing the burden on eligible hospitals and CAHs, we are proposing several changes to the Medicare Promoting Interoperability Program. Specifically, we are proposing: (1) To continue the EHR reporting period of a minimum of any continuous 90-day period for new and returning eligible hospitals and CAHs for CY 2023 and to increase the EHR reporting period to a minimum of any continuous 180-day period for new and returning eligible hospitals and CAHs for CY 2024; (2) to maintain the Electronic Prescribing Objective's Query of PDMP measure as optional while increasing its available bonus from five points to 10 points for the EHR reporting period in CY 2022; (3) to modify the Provide Patient's Electronic Access to Their Health Information measure to establish a data availability requirement beginning with encounters with a date of service on or after January 1, 2016, beginning with the EHR reporting period in CY 2022; (4) to add a new Health Information Exchange (HIE) Bi-Directional Exchange measure as a yes/no attestation, to the HIE objective as an optional alternative to the two existing measures beginning with the EHR reporting period in CY 2022; (5) to require reporting a “yes” on four of the existing Public Health and Clinical Data Exchange Objective measures (Syndromic Surveillance Reporting, Immunization Registry Reporting, Electronic Case Reporting, and Electronic Reportable Laboratory Result Reporting) or requesting the applicable exclusion(s); (6) adding a new measure to the Protect Patient Health Information objective that requires eligible hospitals and CAHs to attest to having completed an annual assessment of SAFER Guides beginning with the EHR reporting period in CY 2022; (7) to remove attestation statements 2 and 3 from the Promoting Interoperability Program's prevention of information blocking requirement; (8) to increase the minimum required score for the objectives and measures from 50 points to 60 points (out of 100 points) in order to be considered a meaningful EHR user; and (9) to adopt two new eCQMs to the Medicare Promoting Interoperability Program's eCQM measure set beginning with the reporting period in CY 2023, in addition to removing four eCQMs from the measure set beginning with the reporting period in CY 2024 which is in alignment with the proposals for the Hospital IQR Program. We are amending our regulation texts as necessary to incorporate several of these proposed changes.

m. Proposed Repeal of Market-Based Data Collection and Market-Based MS-DRG Relative Weight Methodology

As discussed in section V.L. of the preamble of this proposed rule, we are proposing to repeal the requirement that a hospital report on the Medicare cost report the median payer-specific negotiated charge that the hospital has negotiated with all of its MA organization payers, by MS-DRG, for cost reporting periods ending on or after January 1, 2021. We are also proposing to repeal the market-based MS-DRG relative weight methodology adopted for calculating the MS-DRG relative weights effective in FY 2024, and to continue using the existing cost-based methodology for calculating the MS-DRG relative weights for FY 2024 and subsequent fiscal years. Lastly, we are soliciting comment on alternative approaches or data sources that could be used in Medicare fee-for-service (FFS) ratesetting. The proposed repeal of these policies would result in a reduction of 63,780 annual burden hours for all hospitals.

n. Proposed Implementation of Sections 126, 127 and 131 of the Consolidated Appropriations Act (CAA) of 2021

In this proposed rule, we are including proposals to implement sections 126, 127 and 131 of the Consolidated Appropriations Act (CAA) of 2021. Section 126(a) of the CAA amended section 1886(h) of the Act by adding a new section 1886(h)(9) of the Act requiring the distribution of additional residency positions to qualifying hospitals. Section 127 of the CAA amended section 1886(h)(4)(H)(iv) of the Act to specify that in the case of a hospital not located in a rural area that established or establishes a medical residency training program (or rural track) in a rural area, the hospital, and each such hospital located in a rural area that participates in such a training, is allowed to receive an adjustment to its full-time equivalent (FTE) resident limit. Section 131 of the CAA amended section 1886(h)(2)(F) of the Act to provide an opportunity to hospitals with such extremely low or $0 per resident amounts (PRAs) that meet certain criteria to reset and establish new PRAs if the hospital trains resident(s) in a cost reporting period beginning on or after enactment [December 27, 2020] and before the date that is 5 years after enactment [December 26, 2025]. Section 131 also amended section 1886(h)(4)(H)(i) of the Act to provide an opportunity for hospitals that meet certain criteria and that have very small FTE resident caps to replace those caps if the Secretary determines the hospital begins training residents in a new program beginning on or after enactment (December 27, 2020) and before 5 years after enactment (December 26, 2025). We refer readers to section V.J.2. of this proposed rule for rule for a summary of the provisions of sections 126, 127, and 131 of the CAA that we are proposing to implement in this proposed rule.

o. Proposed Changes to Organ Acquisition Payment Policy

In section X.B.2.h. of the preamble of this proposed rule, we are proposing to revise and codify the Medicare usable organ counting policy to count only organs transplanted into Medicare beneficiaries so that Medicare more accurately records and pays its share of organ acquisition costs.

p. Medicare Shared Savings Program

We are proposing to make changes to policies for the Shared Savings Program, which was established under section 1899 of the Act, to allow eligible ACOs participating in the BASIC track's glide path the option to elect to forgo automatic advancement along the glide path's increasing levels of risk and potential reward for performance year (PY) 2022. Under this proposal, prior to the automatic advancement for PY 2022, an eligible ACO may elect to remain in the same level of the BASIC track's glide path in which it participated during PY 2021. For PY 2023, an ACO that elects this advancement deferral option would be automatically advanced to the level of the BASIC track's glide path in which it would have participated during PY 2023 if it had advanced automatically to the required level for PY 2022 (unless the ACO elects to advance more quickly before the start of PY 2023).

3. Summary of Costs and Benefits

The following table provides a summary of the costs, savings, benefits associated with the major provisions described in section I.A.3. of the preamble of this proposed rule.

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

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

Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. In general, to qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add-on payment, it would be inadequately paid under the regular DRG payment. In addition, certain transformative new devices and certain antimicrobial products may qualify under an alternative inpatient new technology add-on payment pathway by demonstrating that, absent an add-on payment, they would be inadequately paid under the regular DRG payment.

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

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

Under current law, the Medicare-dependent, small rural hospital (MDH) program is effective through FY 2022. 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 Start Printed Page 25083updates 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 That Would Be Implemented in This Proposed Rule

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

Section 414 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. These adjustments follow the recoupment adjustment to the standardized amounts under section 1886(d) of the Act based upon the Secretary's estimates for discharges occurring from FYs 2014 through 2017 to fully offset $11 billion, in accordance with section 631 of the ATRA. The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.

2. Consolidated Appropriations Act, 2021 (Pub. L. 116-260)

Sections 126, 127 and 131 of the Consolidated Appropriations Act, 2021 made a number of changes to various sections of the Act relating to payment for direct GME and IME costs to hospitals.

a. Section 126 of the Consolidated Appropriations Act, 2021

Section 126 amended section 1886(h) of the Act by adding a new section 1886(h)(9) requiring the distribution of additional residency positions to qualifying hospitals. Section 1886(h)(9)(A) requires that for FY 2023, and for each succeeding fiscal year until the aggregate number of full-time equivalent residency positions distributed is equal to 1,000, the Secretary shall initiate separate rounds of applications from hospitals for these additional residency positions. The Secretary is required, subject to certain provisions in the law, to increase the otherwise applicable resident limit for each qualifying hospital that submits a timely application by the number of positions that may be approved by the Secretary for that hospital. The Secretary is required to notify hospitals of the number of positions distributed to them by January 31 of the fiscal year of the increase, and the increase is effective beginning July 1 of that fiscal year. Section 1886(h)(9)(A) also limits the aggregate number of such positions made available in a single fiscal year across all hospitals to no more than 200.

In determining the qualifying hospitals for which an increase is provided, section 1886(h)(9)(B) requires the Secretary to take into account the demonstrated likelihood of the hospital filling the positions made available within the first 5 training years beginning after the date the increase would be effective, as determined by the Secretary.

Section 1886(h)(9)(B) of the Act also requires a minimum distribution for certain categories of hospitals. Specifically, the Secretary is required to distribute at least 10 percent of the aggregate number of total residency positions available to each of four categories of hospitals. Stated briefly, and discussed in greater detail in later in this proposed rule, the categories are as follows: (1) Hospitals located in rural areas or that are treated as being located in a rural area; (2) hospitals in which the reference resident level of the hospital is greater than the otherwise applicable resident limit; (3) hospitals in states with new medical schools or additional locations and branches of existing medical schools; and (4) hospitals that serve areas designated as Health Professional Shortage Areas (HPSAs). Additionally, section 1886(h)(9)(F)(ii) of the Act defines a qualifying hospital as a hospital in one of these four categories.

Section 1886(h)(9)(C) of the Act places certain limitations on the distribution of the residency positions. First, a hospital may not receive more than 25 additional full-time equivalent residency positions. Second, no increase in the otherwise applicable resident limit of a hospital may be made unless the hospital agrees to increase the total number of full-time equivalent residency positions under the approved medical residency training program of the hospital by the number of positions made available to that hospital.

b. Section 127 of the Consolidated Appropriations Act, 2021

Section 127 of the CAA amended section 1886(h)(4)(H)(iv) of the Act to Start Printed Page 25084specify that in the case of a hospital not located in a rural area that established or establishes a medical residency training program (or rural tracks) in a rural area, the hospital, and each such hospital located in a rural areas that participates in such a training, is allowed to receive an adjustment to its full-time equivalent (FTE) resident limit.

c. Sections 131 of the Consolidated Appropriations Act, 2021

Section 131 of the CAA amended section 1886(h)(2)(F) of the Act to provide an opportunity to hospitals with such extremely low or $0 per resident amounts (PRAs) that meet certain criteria to reset and establish new PRAs if the hospital trains resident(s) in a cost reporting period beginning on or after enactment [December 27, 2020] and before the date that is 5 years after enactment [December 26, 2025]. Section 131 of the CAA also amended section 1886(h)(4)(H)(i) of the Act to provide an opportunity for hospitals that meet certain criteria and that have very small FTE resident caps to replace those caps if the Secretary determines the hospital begins training residents in a program year beginning on or after enactment (December 27, 2020) and before 5 years after enactment (December 26, 2025).

D. Summary of the Provisions of This Proposed Rule

In this proposed rule, we set forth proposed payment and policy changes to the Medicare IPPS for FY 2022 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 2022.

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

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

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

  • Proposed changes to MS-DRG classifications based on our yearly review for FY 2022.
  • Proposed adjustment to the standardized amounts under section 1886(d) of the Act for FY 2022 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 2022 status of new technologies approved for add-on payments for FY 2022, a presentation of our evaluation and analysis of the FY 2022 applicants for add-on payments for high-cost new medical services and technologies (including public input, as directed by Public Law 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 2022 new technology applicants under the alternative pathways for certain medical devices and certain antimicrobial products.
  • A proposal to extend the New COVID-19 Treatments Add-on Payment (NCTAP) through the end of the fiscal year in which the PHE ends for certain products and discontinue NCTAP for products approved for new technology add-on payments in FY 2022.

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

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

  • The proposed FY 2022 wage index update using wage data from cost reporting periods beginning in FY 2018.
  • Calculation, analysis, and implementation of the proposed occupational mix adjustment to the wage index for acute care hospitals for FY 2022 based on the 2019 Occupational Mix Survey.
  • Proposed application of the rural floor and the frontier State floor, and continuation of the low wage index hospital policy.
  • Proposed implementation of the imputed floor wage index policy for all-urban states under section 9831 of the American Rescue Plan Act of 2021 (Pub. L. 117-2).
  • 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 revisions to the regulations at § 412.278 regarding the Administrator's Review of MGCRB decisions.
  • Proposed changes to rural reclassification cancellation requirements at § 412.103(g).
  • Proposed adjustment to the wage index for acute care hospitals for FY 2022 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 2022 wage index.

3. Proposed Rebasing and Revising of the Hospital Market Baskets

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

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

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

  • Proposed inpatient hospital update for FY 2022.
  • Proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.
  • The statutorily required IME adjustment factor for FY 2022.
  • Proposed changes to the methodologies for determining Medicare DSH payments and the additional payments for uncompensated care.
  • Proposed requirements for payment adjustments under the Hospital Readmissions Reduction Program for FY 2022.
  • The provision of estimated and newly established performance standards for the calculation of value-based incentive payments, as well as a proposal to suppress multiple measures and provide net-neutral payment adjustments under the Hospital Value-Based Purchasing Program.
  • Proposed requirements for payment adjustments to hospitals under the HAC Reduction Program for FY 2022.
  • Discussion of and proposed changes relating to the implementation of the Rural Community Hospital Demonstration Program in FY 2022.
  • Proposed revisions to the regulations regarding the counting of days associated with section 1115 demonstration projects in the Medicaid fraction.
  • Proposals to implement provisions of the Consolidated Appropriations Act relating to payments to hospitals for direct graduate medical education (GME) and indirect medical education (IME) costs.
  • Proposed repeal of the market-based data collection requirement and market-based MS-DRG relative weight methodology.Start Printed Page 25085

5. Proposed FY 2022 Policy Governing the IPPS for Capital-Related Costs

In section VI. of the preamble to this proposed rule, we discuss the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2022.

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

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

  • Proposed changes to payments to certain excluded hospitals for FY 2022.
  • Proposed continued implementation of the Frontier Community Health Integration Project (FCHIP) Demonstration.

7. Proposed Changes to the LTCH PPS

In section VIII. of the preamble of this proposed rule, we set forth proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2022.

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

In section IX. of the preamble of this proposed rule, we address the following:

  • Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program.
  • Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program).
  • Proposed changes to the requirements under the LTCH Quality Reporting Program (QRP). We are also seeking information on CMS's future plans to define digital quality measures (dQMs) for the LTCH QRP and on CMS' continued efforts to close the health equity gap.
  • Proposed changes to requirements pertaining to eligible hospitals and CAHs participating in the Medicare Promoting Interoperability Program.

9. Other Proposals Included in This Proposed Rule

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

  • Proposed changes pertaining to Medicaid enrollment of Medicare-enrolled providers and suppliers to 42 CFR part 455.410 and request for comment on provider experiences where state Medicaid agencies apply the Medicaid payment and coverage rules to a claim for a Medicare service rather than adjudicating the claim for Medicare cost-sharing liability.
  • Proposed changes pertaining to Medicare's share of organ acquisition costs transplanted into Medicare beneficiaries and the charges for services provided to cadaveric organ donors by donor community hospitals and transplants hospitals.
  • Proposed changes pertaining to the Shared Savings Program that would allow eligible ACOs participating in the BASIC track's glide path to maintain their current level of participation for PY 2022.

10. Other Provisions of This Proposed Rule

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

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

  • A descriptive listing of the public use files associated with the proposed rule.
  • The collection of information requirements for entities based on our proposals.
  • Information regarding our responses to public comments.

11. 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 this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2022 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 this proposed rule, we address the proposed update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2022 for certain hospitals excluded from the IPPS.

12. 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 2022 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 2022. We are proposing to establish the adjustments for the wage index, labor-related share, the cost-of-living adjustment, and high-cost outliers, including the applicable fixed-loss amounts and the LTCH cost-to-charge ratios (CCRs) for both payment rates.

13. Impact Analysis

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

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

In Appendix B of the proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the appropriate percentage changes for FY 2022 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.

15. Discussion of Medicare Payment Advisory Commission Recommendations

Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 15 of each year, in which MedPAC reviews and makes recommendations on Medicare payment policies. MedPAC's March 2021 recommendations concerning hospital inpatient payment policies address the update factor for hospital inpatient operating costs and capital-related costs for hospitals under the IPPS. We address these recommendations in Appendix B of this proposed rule. For further information relating specifically to the MedPAC March 2021 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.

To further interoperability in post-acute care settings, CMS and the Office of the National Coordinator for Health Start Printed Page 25086Information Technology (ONC) participate inin the Post-Acute Care Interoperability Workgroup (PACIO http://pacioproject.org/​) to facilitate collaboration with industry stakeholders to develop FHIR standards. These standards could support the exchange and reuse of patient assessment data derived from the Minimum Data Set (MDS), Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI), LTCH Continuity Assessment Record and Evaluation (CARE Data Set (LCDS), Outcome and Assessment Information Set (OASIS), and other sources. The PACIO Project has focused on FHIR implementation guides for functional status, cognitive status and new use cases on advance directives and speech language pathology. We encourage post-acute care (PAC) provider and health information technology (IT) vendor participation as the efforts advance.

The CMS Data Element Library (DEL) continues to be updated and serves as the authoritative resource for PAC assessment data elements and their associated mappings to health IT standards, such as Logical Observation Identifiers Names and Codes (LOINC) and Systematized Nomenclature of Medicine Clinical Terms (SNOMED). The DEL furthers CMS' goal of data standardization and interoperability. These interoperable data elements can reduce provider burden by allowing the use and exchange of healthcare data; supporting provider exchange of electronic health information for care coordination, person-centered care; and supporting real-time, data driven, clinical decision-making. Standards in the Data Element Library (https://del.cms.gov/​DELWeb/​pubHome)can be referenced on the CMS website and in the ONC Interoperability Standards Advisory (ISA). The 2021 ISA is available at https://www.healthit.gov/​isa.

The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted December 13, 2016) requires HHS to take new steps to enable the electronic sharing of health information ensuring interoperability for providers and settings across the care continuum. The Cures Act includes a trusted exchange framework and common agreement (TEFCA) provision [1] that will enable the nationwide exchange of electronic health information across health information networks and provide an important way to enable bi-directional health information exchange in the future. For more information on current developments related to TEFCA, we refer readers to https://www.healthit.gov/​topic/​interoperability/​trusted-exchange-framework-and-common-agreement and https://rce.sequoiaproject.org/​.

The ONC final rule entitled “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” (85 FR 25642) published in the May 1, 2020 Federal Register, (hereinafter referred to as “ONC Cures Act Final Rule”) implemented policies related to information blocking as authorized under section 4004 of the 21st Century Cures Act. Information blocking is generally defined as a practice by a health IT developer of certified health IT, health information network, health information exchange, or health care provider that, except as required by law or specified by the HHS Secretary as a reasonable and necessary activity, is likely to interfere with access, exchange, or use of electronic health information. For a health care provider (as defined in 45 CFR 171.102), the definition of information blocking (see 45 CFR 171.103) specifies that the provider knows that the practice is unreasonable, as well as likely to interfere with access, exchange, or use of electronic health information.[2] To deter information blocking, health IT developers of certified health IT, health information networks and health information exchanges whom the HHS Inspector General determines, following an investigation, have committed information blocking, are subject to civil monetary penalties of up to $1 million per violation. Appropriate disincentives for health care providers need to be established by the Secretary through rulemaking. Stakeholders can learn more about information blocking at https://www.healthit.gov/​curesrule/​final-rule-policy/​information-blocking. ONC has posted information resources including fact sheets (https://www.healthit.gov/​curesrule/​resources/​fact-sheets), frequently asked questions (https://www.healthit.gov/​curesrule/​resources/​information-blocking-faqs), and recorded webinars (https://www.healthit.gov/​curesrule/​resources/​webinars).

We invite providers to learn more about these important developments and how they are likely to affect LTCHs.

F. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS Ratesetting

We primarily use two data sources in the IPPS and LTCH PPS ratesetting: Claims data and cost report data. The claims data source is the MedPAR file, which includes fully coded diagnostic and procedure data for all Medicare inpatient hospital bills for discharges in a fiscal year. Our goal is always to use the best available data overall for ratesetting. Ordinarily, the best available MedPAR data would be the most recent MedPAR file that contains claims from discharges for the fiscal year that is 2 years prior to the fiscal year that is the subject of the rulemaking. For FY 2022 ratesetting, under ordinary circumstances, the best available data would be the FY 2020 MedPAR file. The cost report data source is the Medicare hospital cost report data files from the most recent quarterly HCRIS release. For example, ordinarily, the best available cost report data used in relative weight calculations would be based on the cost reports beginning 3 fiscal years prior to the fiscal year that is the subject of the rulemaking. For the FY 2022 ratesetting, under ordinary circumstances, that would be the FY 2019 cost report data from HCRIS, which would contain many cost reports ending in FY 2020 based on each hospital's cost reporting period.

The FY 2020 MedPAR claims file and the FY 2019 HCRIS dataset both contain data significantly impacted by the COVID-19 PHE, primarily in that the utilization of inpatient services was generally markedly different for certain types of services in FY 2020 than would have been expected in the absence of the PHE, as we discuss in this section. Accordingly, we question whether these data sources are the best available data to use for the FY 2022 ratesetting. One factor in assessing whether these data sources represent the best available data is to what extent the FY 2019 data from before the COVID-19 PHE is a better overall approximation of FY 2022 inpatient experience (for example, whether the share of total inpatient utilization for elective surgeries will be more similar to FY 2019 than to FY 2020), or alternatively, to what extent the FY 2020 data which include the COVID-19 PHE time period is a better overall approximation of FY 2022 inpatient experience (for example, whether the share of total inpatient utilization for respiratory infections will be more similar to FY 2020 than to FY Start Printed Page 250872019). Another factor is to what extent the decision to use the FY 2019 or FY 2020 data differentially impacts the FY 2022 IPPS ratesetting.

In order to help assess likely inpatient utilization in FY 2022, we examined the trend in the number of COVID-19 vaccinations in the United States as reported to the Centers for Disease Control (CDC) (see https://www.cdc.gov/​coronavirus/​2019-ncov/​covid-data/​covidview/​index.html, accessed April 16, 2021).

The U.S. COVID-19 Vaccination Program began December 14, 2020. As of April 15, 2021, 198.3 million vaccine doses have been administered. Overall, about 125.8 million people, or 37.9 percent of the U.S. population, have received at least one dose of vaccine as of this date. About 78.5 million people, or 23.6 percent of the U.S. population have been fully vaccinated.[3] As of April 15, the 7-day average number of administered vaccine doses reported to CDC per day was 3.3 million, a 10.3 percent increase from the previous week. As of April 15, 80 percent of people 65 or older have received at least one dose of vaccine; 63.7 percent are fully vaccinated. Nearly one-half (48.3 percent) of people 18 or older have received at least one dose of vaccine; 30.3 percent are fully vaccinated. Nationally, COVID-19-related emergency department visits as well as both hospital admissions and current hospitalizations have risen among patients ages 18 to 64 years in recent weeks, but emergency department visits and hospitalizations among people ages 65 years and older have decreased, likely demonstrating the important role vaccination plays in protecting against COVID-19.

As indicated by the CDC, COVID-19 vaccines are effective at preventing COVID-19.[4] For example, a recent CDC report on the effectiveness of the Pfizer-BioNTech and Moderna COVID-19 vaccines when administered in real-world conditions found that after being fully vaccinated with either of these vaccines a person's risk of infection is reduced by up to 90 percent. With respect to inpatient utilization in FY 2020, we believe that COVID-19 and the risk of disease were drivers of the different utilization patterns observed. Therefore, the continuing rapid increase in vaccinations coupled with the overall effectiveness of the vaccines leads us to conclude based on the information available to us at this time that there will be significantly lower risk of COVID-19 in FY 2022 and fewer hospitalizations for COVID-19 for Medicare beneficiaries in FY 2022 than there were in FY 2020. This calls into question the applicability of inpatient data from FY 2020 to the FY 2022 time period for hospitals paid under the IPPS and LTCH PPS.

We also reviewed CDC guidance to healthcare facilities during the COVID-19 PHE (see https://www.cdc.gov/​coronavirus/​2019-ncov/​hcp/​guidance-hcf.html). In its most recent guidance, the CDC described how the COVID-19 pandemic has changed how health care is delivered in the United States and has affected the operations of healthcare facilities. Effects cited by the CDC include increases in patients seeking care for respiratory illnesses, patients deferring and delaying non-COVID-19 care, disruptions in supply chains, fluctuations in facilities' occupancy, absenteeism among staff because of illness or caregiving responsibilities, and increases in mental health concerns.

In order to investigate the effects cited by the CDC, we examined the claims data from the FY 2020 MedPAR compared to the FY 2019 MedPAR. Overall, in FY 2020, inpatient admissions under the IPPS dropped by approximately 14 percent compared to FY 2019. Elective surgeries declined significantly, and the share of admissions for MS-DRGs associated with the treatment of COVID-19 increased. For example, the number of inpatient admissions for MS-DRG 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC) dropped by 40 percent in FY 2020. Its share of inpatient admissions dropped from 4.0 percent in FY 2019 to 2.8 percent in FY 2020. The number of inpatient admissions for MS-DRG 177 (Respiratory Infections and Inflammations with MCC) increased by +133 percent. Its share of inpatient admissions increased from 0.8 percent in FY 2019 to 2.2 percent in FY 2020. This data analysis is consistent with the observations in the CDC's guidance that COVID-19 increased the number of patients seeking care for respiratory illnesses, and caused patients to defer and delay non-COVID-19 care. We note that these observed changes in the claims data also extend to the cost reports submitted by hospitals that include the COVID-19 PHE time period, since those cost reports that extend into the COVID-19 PHE are based in part on the discharges that occurred during that time.

The effects noted by the CDC are specific to the pandemic and to the extent that the effects on healthcare facilities noted by the CDC are not expected to continue into FY 2022, it would suggest that the inpatient data from FY 2020 impacted by the COVID-19 PHE may be less suitable for use in the FY 2022 ratesetting.

We also considered the analysis of 2020 IPPS real case-mix included in the notice titled “CY 2021 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts” that appeared in the Federal Register on November 12, 2020 (85 FR 71916). Section 1813(b) of the Act prescribes the method for computing the amount of the inpatient hospital deductible. The inpatient hospital deductible is an amount equal to the inpatient hospital deductible for the preceding CY, adjusted by the best estimate of the payment-weighted average of the applicable percentage increases used for updating the payment rates to hospitals, and adjusted to reflect changes in real case-mix.

To develop the adjustment to reflect changes in real case-mix, we first calculated an average case-mix for each hospital that reflected the relative costliness of that hospital's mix of cases compared to those of other hospitals. We then computed the change in average case-mix for hospitals paid under the IPPS in FY 2020 compared to FY 2019, using Medicare bills from IPPS hospitals received as of July 2020. Those bills represented a total of about 6.1 million Medicare discharges for FY 2020 and provided the most recent case-mix data available at the time of that analysis. Based on these bills, the change in average case-mix in FY 2020 was 2.8 percent. Based on these bills and past experience, we expected the overall case-mix change to be 3.8 percent as the year progressed and more FY 2020 data became available.

Real case-mix is that portion of case-mix that is due to changes in the mix of cases in the hospital and not due to coding optimization. As stated in the November 2020 notice, COVID-19 has complicated the determination of real case-mix increase. COVID-19 cases typically group to higher-weighted MS-DRGs, and hospitals have experienced a concurrent reduction in cases that group Start Printed Page 25088to lower weighted MS-DRGs. Both of these factors cause a real increase in case-mix. We compared the average case-mix for February 2020 through July 2020 (COVID-19 period) with average case-mix for October 2019 through January 2020 (pre-COVID-19 period). Since this increase applies for only a portion of CY 2020, we allocated this increase by the estimated discharges over the 2 periods—a 2.5 percent increase for FY 2020. The 1.3-percent residual case-mix increase is a mixture of real case-mix and coding optimization. Over the past several years, we have observed total case-mix increases of about 0.5 percent per year and have assumed that they are real. Thus, based on the information available, we expect that 0.5 percent of the residual 1.3 percent change in average case-mix for FY 2020 will be real. The combination of the 2.5 percent COVID-19 effect and the remaining residual 0.5-percent real case-mix increase results in an estimated 3.0 percent increase in real case-mix for FY 2020.

Because this analysis was based on Medicare bills from IPPS hospitals received as of July 2020, for this proposed rule, we calculated case-mix values for FY 2019 and FY 2020 based on the full year FY 2019 and FY 2020 MedPAR files to help assess the change in case-mix based on more complete data. For FY 2019 we calculated a case-mix value of 1.813 and for FY 2020 we calculated a case-mix value of 1.883, an increase in total case-mix of 3.9 percent. These were calculated using the MS-DRG relative weights in effect for those time periods.[5] This is consistent with the estimate in the Notice of the CY 2021 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts that the change in total case-mix for FY 2020 would be 3.8 percent when more complete data was available.

The increases in patients seeking care for respiratory illnesses and patients deferring and delaying non-COVID-19 care during FY 2020, the increasing number of vaccinations for COVID-19, and the high estimate of FY 2020 real case-mix growth all lead us to believe that FY 2020 is not the best overall approximation of inpatient experience in FY 2022. We believe that FY 2019 as the most recent complete FY prior to the COVID-19 PHE is a better approximation of FY 2022 inpatient experience.

As we indicated earlier, whether the data is a better overall approximation of FY 2022 inpatient experience is one factor in assessing which data source represents the best available data for the FY 2022 rulemaking. Another factor is to what extent the decision to use the FY 2019 or FY 2020 data differentially impacts the FY 2022 ratesetting. One way to assess this factor is to model the change in the total case-mix, which is a driver of spending, if our assumption regarding the FY 2022 inpatient experience used in calculating the MS-DRG relative weights turns out to be less accurate based on actual FY 2022 experience. We estimated the difference in the total case-mix if we calculated the MS-DRG relative weights based on the FY 2019 claims data and the actual utilization is ultimately more similar to the FY 2020 data, as compared to if we calculated the MS-DRG relative weights based on the FY 2020 data and the actual utilization is ultimately more similar to the FY 2019 data.

We first calculated a set of MS-DRG relative weights using an assumption that the FY 2022 inpatient experience would be similar to the FY 2019 data. Specifically, we used the proposed version 39 GROUPER (which would be applicable to discharges occurring in FY 2022) and the FY 2019 MedPAR data to calculate MS-DRG relative weights. We refer to these MS-DRG relative weights as the FY 2019-based weights.

We next calculated a set of MS-DRG relative weights using an assumption that the FY 2022 inpatient experience would be more similar to the FY 2020 data. Specifically, we used the proposed version 39 GROUPER and the FY 2020 MedPAR data to calculate MS-DRG relative weights. This is how we would ordinarily calculate the proposed FY 2022 MS-DRG relative weights. We refer to these MS-DRG relative weights as the FY 2020-based weights.

We then estimated the difference in case-mix under the FY 2019-based weights and the FY 2020-based weights if the FY 2022 inpatient experience ended up being the reverse of the assumption made when calculating that set of relative weights. In other words, we compared estimated case-mix calculated under four different scenarios. For the FY 2019-based weights, we calculated the case-mix using claims from the FY 2019 MedPAR as an approximation of the actual FY 2022 experience (Scenario A), and using claims from the FY 2020 MedPAR as an approximation of the actual FY 2022 experience (Scenario B). For the FY 2020-based weights, we calculated the case-mix using claims from the FY 2020 MedPAR as an approximation of the actual FY 2022 experience (Scenario C), and using claims from the FY 2019 MedPAR as an approximation of the actual FY 2022 experience (Scenario D).

The results are shown in the following table.

Start Printed Page 25089

In Scenario A and Scenario C, there is by definition no differential impact on total case-mix due to a less accurate assumption made when the MS-DRG relative weights were calculated: The FY 2022 inpatient experience matches the assumption used when the MS-DRG relative weights were calculated. In Scenario B and Scenario D, it is the reverse of the assumption used when the MS-DRG relative weights were calculated.

In Scenario B, when the FY 2019-based weights were used, but the FY 2022 inpatient experience turns out to be more similar to FY 2020 data, the less accurate assumption does not differentially impact the modelled case-mix. This can be seen by comparing the modelled case-mix under Scenario B (1.885) with the modelled case-mix under Scenario C (also 1.885). In other words, if the FY 2019-based weights and inpatient experience turn out to be more similar to the FY 2020 data, then the modelled case-mix is approximately the same as if we had used the FY 2020-based weights. The results show that use of the FY 2019-based weights did not impact the modelled case-mix compared to using the FY 2020-based weights.

The same conclusion is not true of Scenario D where the FY 2020-based weights were used, but the FY 2022 inpatient experience turns out to be more similar to FY 2019 data. Here the less accurate assumption does differentially impact the modelled case-mix, by −0.2 percent. This can be seen by comparing the modelled case-mix under Scenario D (1.816) with the modelled case-mix under Scenario A (1.820). In other words, if we use the FY 2020-based weights, and FY 2022 inpatient experience turns out to be more similar to FY 2019 data, the modelled case-mix is −0.2 percent lower than if we had used the FY 2019-based weights. This shows that use of the FY 2020-based weights does impact the modelled case-mix compared to a result from using the FY 2019-based weights.

Putting aside that we believe FY 2019 is a more likely approximation of the FY 2022 inpatient experience for the reasons discussed earlier, the previous analysis indicates that the differential effect of the FY 2022 MS-DRG relative weights is more limited if the FY 2019-based weights are used than it is if the FY 2020-based weights are used, should the FY 2022 inpatient experience not match the assumption used to calculate the MS-DRG relative weights.

Another payment factor that is impacted by the use of the FY 2019 or FY 2020 data in the FY 2022 ratesetting is the outlier fixed-loss threshold. As discussed in section II.A.4.j. of this proposed rule, section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for “outlier” cases involving extraordinarily high costs. To qualify for outlier payments, a case must have costs greater than the sum of certain payments and the “outlier threshold” or “fixed-loss” amount (a dollar amount by which the costs of a case must exceed payments in order to qualify for an outlier payment). In accordance with section 1886(d)(5)(A)(iv) of the Act, outlier payments for any year are projected to be not less than 5 percent nor more than 6 percent of total operating DRG payments plus outlier payments. We target 5.1 percent within this range. Section 1886(d)(3)(B) of the Act requires the Secretary to reduce the average standardized amount by a factor to account for the estimated proportion of total DRG payments made to outlier cases. In other words, outlier payments are prospectively estimated to be budget neutral overall under the IPPS.[6]

Under an assumption that the FY 2022 inpatient experience will be more similar to FY 2019 data, we estimate an outlier fixed-loss amount of $30,967. Under an assumption that FY 2022 inpatient experience will be more similar to FY 2020 data, we estimate an outlier fixed-loss amount of $36,843, a difference of $5,876 or approximately 20 percent higher. Again, putting aside that we believe FY 2019 is a better approximation of the FY 2022 inpatient experience for the reasons discussed earlier, the difference between the two estimated outlier fixed-loss amounts means there is a consequence to making a decision as to the best available data for estimating the FY 2022 outlier fixed-loss amount in the form of potentially exceeding or falling short of the targeted 5.1 percent of total operating DRG payments plus outlier payments.

In summary, we have highlighted two factors in the decision regarding the best available data to use in the FY 2022 ratesetting. The first factor is to what extent the FY 2019 data from before the COVID-19 PHE is a better overall approximation of FY 2022 inpatient experience, or alternatively, to what extent the FY 2020 data including the COVID-19 PHE time period is a better overall approximation of FY 2022 inpatient experience. After analyzing this issue and for the reasons discussed, we believe for purposes of this proposed rule that FY 2019 is generally a better overall approximation of FY 2022. The second factor is to what extent the decision to use the FY 2019 or FY 2020 data differentially impacts the FY 2022 IPPS ratesetting. After analyzing this issue, and as discussed previously, we have determined that the decision does differentially impact the overall FY 2022 IPPS ratesetting in two primary ways. First, a decision to base the MS-DRG relative weights on the FY 2020 data has an impact of −0.2 percent if the FY 2022 inpatient experience is more like FY 2019 data. Second, the decision to use the FY 2019 or FY 2020 data results in an approximately 20 percent difference in the estimate of the outlier fixed-loss amount.

Taking these factors into account, we are proposing to use the FY 2019 data for the FY 2022 ratesetting for circumstances where the FY 2020 data is significantly impacted by the COVID-19 PHE, primarily in that the data reflect generally markedly different utilization for certain types of services in FY 2020 than would have been expected in the absence of the PHE, as discussed previously. For example, we are proposing to use the FY 2019 MedPAR claims data for purposes where we ordinarily would have used the FY 2020 MedPAR claims data, such as in our analysis of changes to MS-DRG classifications (as discussed in greater detail section II.D. of the preamble of this proposed rule). Similarly, we are proposing to use cost report data from the FY 2018 HCRIS file for purposes where we ordinarily would have used the FY 2019 HCRIS file, such as in determining the proposed FY 2022 IPPS MS-DRG relative weights (as discussed in greater detail section II.E. of the preamble of this proposed rule). (As noted previously, the FY 2019 HCRIS data would contain many cost reports ending in FY 2020 based on each hospital's cost reporting period.) We note that MedPAR claims data and cost report data from the HCRIS file are examples of the data sources for which we discuss the proposed use of the FY 2019 data for the FY 2022 ratesetting in this proposed rule. We have clearly identified throughout this proposed rule where and how we are proposing to use alternative data than what ordinarily would be used for the proposed FY 2022 IPPS and LTCH PPS ratesetting, including certain provider specific information.

As discussed in section I.O. of Appendix A of this proposed rule, we are also considering, as an alternative to this proposal, the use of the same FY 2020 data that we would ordinarily use for purposes of FY 2022 ratesetting, and Start Printed Page 25090which we may consider finalizing based on consideration of comments received. To facilitate comment on this alternative for FY 2022, we are making available the FY 2020 MedPAR file and the FY 2019 HCRIS file that we would ordinarily have provided in conjunction with this proposed rule. We are also making available the MS-DRG and MS-LTC-DRG relative weighting factors and length of stay information calculated using the FY 2020 data we would have ordinarily used. We are providing a file comparing the budget neutrality and other ratesetting adjustments calculated under our proposal with those adjustments calculated under this alternative approach. Finally, we are making available other proposed rule supporting data files based on the use of the FY 2020 data that we ordinarily would have provided, including: The IPPS and LTCH PPS Impact Files; the AOR/BOR File; the Case Mix Index File; and, the Standardizing File. We refer the reader to section I.O. of Appendix A of this proposed rule for more information on where these supplemental files may be found.

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

A. Background

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

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

B. 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 2021 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, 84 FR 42058 through 42165, and 85 FR 58445 through 58596 respectively).

C. Proposed FY 2022 MS-DRG Documentation and Coding Adjustment

1. Background on the Prospective MS-DRG Documentation and Coding Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and the Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA)

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

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

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

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

In addition, as discussed in prior rulemakings and most recently in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009), section 631 of the American Taxpayer Relief Act of 2012 (ATRA) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment or adjustments totaling $11 billion by FY 2017. This adjustment represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013.Start Printed Page 25091

2. Adjustments Made for FYs 2018, 2019, 2020 and 2021 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), the FY 2020 IPPS/LTCH PPS final rule (84 FR 42057), and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58444-58445), 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, FY 2020, and FY 2021, respectively. We indicated the FY 2018, FY 2019, FY 2020, and FY 2021 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 2022 and 2023 in future rulemaking.

3. Proposed Adjustment for FY 2022

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

D. Proposed Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for Proposed FY 2022 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 Proposed FY 2022 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 five weeks for the data analysis and review process. In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32472), we stated 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 proposed updates. We further stated we were changing the deadline to request changes to the MS-DRGs to October 20 of each year to allow for additional time for the review and consideration of any proposed updates. However, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58445), due to the unique circumstances for the FY 2021 IPPS/LTCH PPS final rule for which we waived the delayed effective date, we maintained the deadline of November 1, 2020 for FY 2022 MS-DRG classification change requests. We also noted that we expected to reconsider a change in the deadline beginning with comments and suggestions submitted for FY 2023. While we continue to believe that a change in the deadline from November 1 to October 20 will provide hospitals sufficient time to assess potential impacts and inform future MS-DRG recommendations, we are maintaining the deadline of November 1 for FY 2023 MS-DRG classification change requests.

As noted, interested parties had to submit MS-DRG classification change requests for FY 2022 by November 1, 2020, and the comments that were submitted in a timely manner for FY 2022 are discussed in this section of the preamble of this proposed rule. As we discuss in the sections that follow, we may not be able to fully consider all of the requests that we receive for the upcoming fiscal year. We have found that, with the implementation of ICD-10, some types of requested changes to the MS-DRG classifications require more extensive research to identify and analyze all of the data that are relevant to evaluating the potential change. We note in the discussion that follows those topics for which further research and analysis are required, and which we will continue to consider in connection with future rulemaking. Interested parties should continue to submit any comments and suggestions for FY 2023 by November 1, 2021 via the CMS MS-DRG Classification Change Request Mailbox located at: MSDRGClassificationChange@cms.hhs.gov.

As we did for the FY 2021 IPPS/LTCH PPS proposed rule, for this FY 2022 IPPS/LTCH PPS proposed rule we are providing a test version of the ICD-10 MS-DRG GROUPER Software, Version 39, so that the public can better analyze and understand the impact of the proposals included in this proposed rule. We note that this test software reflects the proposed GROUPER logic for FY 2022. Therefore, it includes the new diagnosis and procedure codes that are effective for FY 2022 as reflected in Table 6A.—New Diagnosis Codes—FY 2022 and Table 6B.—New Procedure Codes—FY 2022 associated with this proposed rule and does not include the diagnosis codes that are invalid beginning in FY 2022 as reflected in Table 6C.—Invalid Diagnosis Codes—FY 2022 and Table 6D.—Invalid Procedure Codes—FY 2022 associated with this proposed rule. These tables are not published in the Addendum to this proposed rule, but are available via the Start Printed Page 25092internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html as described in section VI. of the Addendum to this proposed rule. Because the diagnosis and procedure codes no longer valid for FY 2022 are not reflected in the test software, we are making available a supplemental file in Table 6P.1a that includes the mapped Version 39 FY 2022 ICD-10-CM codes and the deleted Version 38 FY 2021 ICD-10-CM codes that should be used for testing purposes with users' available claims data. In addition, we are making available a supplemental file in Table 6P.1b that includes the mapped Version 39 FY 2022 ICD-10-PCS codes and the deleted Version 38 FY 2021 ICD-10-PCS codes that should be used for testing purposes with users' available claims data. Therefore, users will have access to the test software allowing them to build case examples that reflect the proposals included in this proposed rule. In addition, users will be able to view the draft version of the ICD-10 MS-DRG Definitions Manual, Version 39.

The test version of the ICD-10 MS-DRG GROUPER Software, Version 39, the draft version of the ICD-10 MS-DRG Definitions Manual, Version 39, and the supplemental mapping files in Table 6P.1a and Table 6P.1b of the FY 2021 and FY 2022 ICD-10-CM diagnosis and ICD-10-PCS procedure codes are available at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

Following are the changes that we are proposing to the MS-DRGs for FY 2022. We are inviting public comments on each of the MS-DRG classification proposed changes, as well as our proposals to maintain certain existing MS-DRG classifications discussed in this proposed rule. In some cases, we are proposing changes to the MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. In other cases, we are proposing to maintain the existing MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. As discussed in section I.F of the preamble of this proposed rule, we are proposing to use claims data from the March 2020 update of the FY 2019 MedPAR file in our analysis of proposed MS-DRG classification changes for FY 2022, consistent with our goal of using the best available data overall for ratesetting. Alternatively, we are also providing the results of our analysis of proposed MS-DRG classification changes using claims data from the September 2020 update of the FY 2020 MedPAR file. As a result, for this FY 2022 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data from the March 2020 update of the FY 2019 MedPAR file, which contains hospital bills received from October 1, 2018 through March 31, 2020, for discharges occurring through September 30, 2019. In addition, we also analyzed ICD-10 claims data from the September 2020 update of the FY 2020 MedPAR file, which contains hospital bills received from October 1, 2019 through September 30, 2020, for discharges occurring through September 30, 2020. In our discussion of the proposed MS-DRG reclassification changes, we refer to these claims data as the “March 2020 update of the FY 2019 MedPAR file” and “the September 2020 update of the FY 2020 MedPAR file.”

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

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized our proposal to expand our existing criteria to create a new complication or comorbidity (CC) or major complication or comorbidity (MCC) subgroup within a base MS-DRG. Specifically, we finalized the expansion of the criteria to include the NonCC subgroup for a three-way severity level split. We stated we believed that applying these criteria to the NonCC subgroup would better reflect resource stratification as well as promote stability in the relative weights by avoiding low volume counts for the NonCC level MS-DRGs. We noted that in our analysis of MS-DRG classification requests for FY 2021 that were 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. We also noted that the application of the 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. We stated that any proposed modifications to the MS-DRGs would be addressed in future rulemaking consistent with our annual process and reflected in 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.

In our analysis of the MS-DRG classification requests for FY 2022 that we received by November 1, 2020, 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.

Start Printed Page 25093

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 typically evaluate the most recent year of MedPAR claims data available. For example, we stated earlier that for this FY 2022 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data from both the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 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 typically analyze the most recent two 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 is 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.

For this FY 2022 IPPS/LTCH PPS proposed rule, using the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, we also analyzed how applying the NonCC subgroup criteria to all MS-DRGs currently split into three severity levels would affect the MS-DRG structure beginning in FY 2022. Findings from our analysis indicated that approximately 32 MS-DRGs would be subject to change based on the three-way severity level split criterion finalized in FY 2021. Specifically, we found that applying the NonCC subgroup criteria to all MS-DRGs currently split into three severity levels would result in the deletion of 96 MS-DRGs (32 MS-DRGs × 3 severity levels = 96) and the creation of 58 new MS-DRGs. These updates would also involve a redistribution of cases, which would impact the relative weights, and, thus, the payment rates proposed for particular types of cases. We refer the reader to Table 6P.1c for the list of the 96 MS-DRGs that would be subject to deletion and the list of the 58 new MS-DRGs that would be proposed for creation for FY 2022 under this policy if the NonCC subgroup criteria were applied.Start Printed Page 25094

In light of the public health emergency (PHE), we have concerns about the impact of implementing this volume of MS-DRG changes at this time, and believe it may be appropriate to delay application of the NonCC subgroup criteria to existing MS-DRGs in order to maintain more stability in the current MS-DRG structure. Therefore, we are proposing to delay the application of the NonCC subgroup criteria to existing MS-DRGs with a three-way severity level split until FY 2023, and proposing for FY 2022 to maintain the current structure of the 32 MS-DRGs that currently have a three-way severity level split (total of 96 MS-DRGs) that would otherwise be subject to these criteria.

2. Pre-MDC: MS-DRG 018 Chimeric Antigen Receptor (CAR) T-Cell Therapy

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58451 through 58453), we finalized our proposal to create Pre-MDC MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy) and to reassign cases reporting 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) from Pre-MDC MS-DRG 016 (Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy), to new Pre-MDC MS-DRG 018 effective with discharges on and after October 1, 2020. We also finalized our proposal 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” to reflect these changes.

Additionally, in the FY 2021 IPPS/LTCH PPS final rule in response to public comments expressing concern that Pre-MDC MS-DRG 018 is specific to one mechanistic approach to cellular therapy, and in response to commenters who sought clarification on how future CAR T-cell and non-CAR T-cell therapy products would be assigned, we stated that if additional cellular therapies should become available, we would use our established process to determine the MS-DRG assignment. The commenters requested that CMS provide flexibility for future cellular therapies, as they are made available and not restrict Pre-MDC MS-DRG 018 to CAR T-cell therapies alone. In this section of this rule, we discuss the assignment of these therapies in more detail.

During the September 8-9, 2020 ICD-10 Coordination and Maintenance Committee meeting, several topics involving requests for new procedure codes related to CAR T-cell therapies, non-CAR T-cell therapies and other immunotherapies were discussed. We refer the reader to the CMS website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​C-and-M-Meeting-Materials for additional detailed information regarding these requests for new procedure codes. As noted in prior rulemaking (85 FR 32543), for new procedure codes that have been finalized through the ICD-10 Coordination and Maintenance Committee meeting process and are proposed to be classified as O.R. procedures or non-O.R. procedures affecting the MS-DRG, our clinical advisors recommend the MS-DRG assignment which is then made available in association with the proposed rule (Table 6B.—New Procedure Codes) and subject to public comment. These proposed assignments are generally based on the assignment of predecessor codes or the assignment of similar codes. As discussed in section II.D.13 of the preamble of this proposed rule, Table 6B.—New Procedure Codes, lists the new procedure codes that have been approved to date that will be effective with discharges on and after October 1, 2021. Included in Table 6B are the following new procedure codes that describe the administration of CAR T-cell and non-CAR T-cell therapies and other immunotherapies. Consistent with our established process, we examined the MS-DRG assignment for the predecessor codes to determine the most appropriate MS-DRG assignment and, consistent with the assignment of those predecessor codes, we are proposing to classify the following new procedure codes as non-O.R. procedures affecting Pre-MDC MS-DRG 018, as shown in Table 6B.—New Procedure Codes associated with this proposed rule and available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​.

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In connection with our proposed assignment of the listed procedure codes to Pre-MDC MS-DRG 018, we are also proposing to revise the title for Pre-MDC MS-DRG 018 “Chimeric Antigen Receptor (CAR) T-cell Immunotherapy” to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies” to better reflect the cases reporting the administration of non-CAR T-cell therapies and other immunotherapies that would also be assigned to this MS-DRG (for example, Introduction of lifileucel immunotherapy into peripheral vein, percutaneous approach, new technology group 7), in addition to CAR T-cell therapies.

3. MDC 03 (Diseases and Disorders of Ear, Nose and Throat)

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58462 through 58471), we finalized 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 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) and 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 provided the list of procedure codes that were finalized to define the logic for the new MS-DRGs in Tables 6P.2a, 6P.2b, and 6P.2c associated with the final rule and available via the internet on the CMS website at https://www.cms.gov/​Start Printed Page 25096Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​. We received two separate but related requests to review and reconsider the MS-DRG assignments for a subset of the procedure codes listed in Table 6P.2a (procedure codes assigned to MS-DRGs 140, 141, and 142) and Table 6P.2b (procedure codes assigned to MS-DRGs 143, 144, and 145). In this section of this proposed rule, we discuss each of these separate, but related requests.

a. Major Head and Neck Procedures

The requestor provided the following procedure codes from Table 6P.2a associated with the FY 2021 IPPS/LTCH PPS final rule for CMS to examine.

The requestor stated that the listed procedure codes do not appear appropriately assigned to MS-DRGs 140, 141, and 142. According to the requestor, if any one of the five procedure codes describing a procedure performed on the cranial cavity (0W9100Z, 0W910ZZ, 0WC10ZZ, 0WC13ZZ, or 0WX14ZZ) is assigned in conjunction with a principal diagnosis from MDC 03 (Diseases and Disorders of Ear, Nose, Mouth, and Throat), it appears more appropriate that cases reporting the diagnosis and procedure combination would group to MS-DRGs 25, 26, and 27 (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC, and without CC/MCC, respectively) (for example, “craniotomy” MS-DRGs) in MDC 01 (Diseases and Disorders of the Central Nervous System) or to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). The requestor stated that drainage and extirpation from the cranial cavity always involves drilling or cutting through the skull regardless of the approach, therefore the five procedure codes identified warrant assignment to the “craniotomy” MS-DRGs. For the three procedure codes describing excision of subcutaneous tissue of chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), the requestor stated those codes should group to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) because they are not pertinent to the ear, nose, mouth, or throat.

We reviewed this request and note that the five procedure codes describing procedures performed on the cranial cavity are already assigned to MDC 01 and group to the “craniotomy” MS-DRGs (25, 26, and 27) when reported with a principal diagnosis from MDC 01, and are also currently classified as Extensive O.R. procedures, resulting in assignment to MS-DRGs 981, 982, and 983 when any one of the five procedure codes is reported on the claim and is unrelated to the MDC to which the case was assigned based on the principal diagnosis. We also note that in addition to MS-DRGs 25, 26, and 27, MS-DRG 23 (Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-DRG 24 (Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis without MCC) include procedures performed on structures located within the cranial cavity, are included in the range of MS-DRGs known as the “craniotomy” MS-DRGs in MDC 01, and the five procedure codes submitted by the requestor describing procedures performed on the cranial cavity are also assigned to these MS-DRGs. We refer the requestor to Appendix E of the ICD-10 MS-DRG Definitions Manual for further discussion of how each procedure code may be assigned to multiple MDCs and MS-DRGs under the IPPS. The ICD-10 MS-DRG Definitions Manual is located on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software. We also note that these five procedure codes were previously assigned to MS-DRGs 131 and 132 (Cranial and Facial Procedures with and without CC/MCC, respectively) in MDC 03 under version 37 of the ICD-10 MS-DRGs prior to the restructuring that was finalized effective FY 2021 for MS-DRG 129 (Major Head and Neck Procedures with CC/MCC or Major Device) and MS-DRG 130 (Major Head and Neck Procedures without CC/MCC), MS-DRGs 131 and 132, and MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R. Procedures with and without CC/MCC, respectively).

With regard to the three procedure codes describing excision of subcutaneous tissue of chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), the requestor suggested that the codes should group to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) specifically because they are not pertinent to the ear, nose, mouth, or throat, however, it is unclear if the requestor was concerned more broadly that the three procedure codes should not group to any MS-DRGs in MDC 03 (Diseases and Disorders of Ear, Nose and Throat), given the stated rationale for the request.

Upon our review, we believe that the three procedure codes describing excision of subcutaneous tissue of chest, back, and abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), which do not describe major head and neck procedures, were inadvertently included in Table 6P.2a for assignment to MS-DRGs 140, 141, and 142. However, we also believe that the codes are appropriate for assignment Start Printed Page 25097in MDC 03 and note that the three procedure codes were previously assigned to MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R. Procedures with and without CC/MCC, respectively) in MDC 03 prior to the restructuring that was finalized effective FY 2021 for MS-DRGs 129, 130, 131, 132, 133, and 134. We also provided the following clarification in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58470), 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.”

During our review of procedure codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ (describing excision of subcutaneous tissue of chest, back, and abdomen, respectively) we also confirmed that these procedures are currently designated as Extensive O.R. procedures. Consistent with other procedure codes on the Non-extensive procedure code list, we do not believe the procedures described by these procedure codes necessarily utilize the resources or have the level of technical complexity as the procedures on the Extensive O.R. procedures list. Therefore, we agree that the procedure codes describing these procedures would be more appropriately designated as Non-extensive procedures and group to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when any one of the three procedure codes is reported on a claim and is unrelated to the MDC to which the case was assigned based on the principal diagnosis. We refer the reader to section II.D.10. of the preamble of this proposed rule for further discussion regarding our proposal to reassign these procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.

Therefore, we are proposing to reassign the three procedure codes describing excision of subcutaneous tissue of chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ) from MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 03 for FY 2022. We refer the reader to section II.D.10. of the preamble of this proposed rule for further discussion regarding the designation of these codes as Extensive O.R. procedures versus Non-extensive O.R. procedures and our proposed reassignment of these codes from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989 for FY 2022.

b. Other Ear, Nose, Mouth and Throat O.R. Procedures

As stated earlier, we received two separate but related requests to review and reconsider the MS-DRG assignments for a subset of the procedure codes listed in Table 6P.2a and Table 6P.2b. In this section of this proposed rule, we discuss the second request related to procedure codes listed in Table 6P.2b associated with the FY 2021 IPPS/LTCH PPS final rule and currently assigned to MS-DRGs 143, 144 and 145.

The requestor provided a list of 82 procedure codes from Table 6P.2b associated with the FY 2021 IPPS/LTCH PPS final rule for CMS to examine. We refer the reader to Table 6P.1d associated with this FY 2022 IPPS/LTCH PPS proposed rule and available via the internet at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​ for the list of procedure codes that were provided by the requestor. According to the requestor, if any one of the 82 procedure codes is assigned in conjunction with a principal diagnosis code from MDC 03, it appears more appropriate that cases reporting the diagnosis and procedure code combination would group to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) versus MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). However, the requestor also stated that of the 82 procedure codes, the following three procedure codes describing control of bleeding in the cranial cavity warrant grouping to MS-DRGs 25, 26, and 27 (for example, “craniotomy” MS-DRGs) in MDC 01, for the same reasons previously described in the prior section pertaining to the five other procedures performed on the cranial cavity.

We reviewed this request and similar to the discussion in the prior section for the separate but related request, we note that 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. We continue to believe that the 82 Start Printed Page 25098procedure codes provided by the requestor are appropriately assigned to MS-DRGs 143, 144, and 145 in MDC 03. With regard to the requestor's assertion that cases reporting any one of the 82 procedure codes would more appropriately group to the MS-DRGs for Extensive O.R. procedures or Non-extensive O.R. procedures when reported in conjunction with a principal diagnosis from MDC 03, we note that, as shown in Table 6P.2b associated with the FY 2021 IPPS/LTCH PPS final rule, the procedure codes that were finalized for assignment to MS-DRGs 143, 144, and 145 were previously assigned to MS-DRGs 129 and 130, 131 and 132, or 133 and 134 in MDC 03. We also note that, as discussed in prior rulemaking, 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. For these reasons, we are proposing to maintain the current structure for MS-DRGs 143, 144, and 145 for FY 2022.

With regard to the three procedure codes describing control of bleeding in the cranial cavity (0W310ZZ, 0W313ZZ, and 0W314ZZ), and the requestor's suggestion that the codes should group to MS-DRGs 25, 26, and 27 in MDC 01, we consulted with our clinical advisors who stated these procedures are consistent with the existing procedure codes included in the logic for case assignment to MS-DRGs 25, 26, and 27. We refer the reader to section II.D.10. of the preamble of this proposed rule for further discussion of this request, as well as our proposed assignment of these codes to MS-DRGs 23, 24, 25, 26, and 27 for FY 2022.

4. MDC 04 (Diseases and Disorders of the Respiratory System)

a. Bronchiectasis

We received a request to reassign cases reporting diagnosis codes describing bronchiectasis from MS-DRGs 190, 191, and 192 (Chronic Obstructive Pulmonary Disease with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 177, 178, and 179 (Respiratory Infections and Inflammation with MCC, with CC, and without CC/MCC, respectively). Bronchiectasis is described by the following diagnosis codes

According to the requestor, the underlying pathophysiology of bronchiectasis is more similar to cystic fibrosis than it is to chronic obstructive pulmonary disease (COPD). The requestor stated that in bronchiectasis, there is an inciting event that creates scarring in the lung which prevents the lung from clearing out mucous like it normally would. The accumulation of abnormal mucous results in an environment conducive to bacterial growth and commonly found bacteria in this setting is very similar to those of cystic fibrosis with staphylococcus aureus, pseudomonas aeruginosa, and non-tuberculous mycobacterium. The requestor reported that when patients develop an exacerbation of bronchiectasis, this is because of a buildup of mucous compounded by overwhelming growth of the previously mentioned bacteria. The requestor also stated that patients admitted to the hospital for bronchiectasis exacerbation are treated aggressively with intravenous (IV) antibiotics to suppress the bacterial infection in combination with airway clearance therapies. The requestor further stated that, unlike in an acute COPD exacerbation, these patients do not always require steroids as there is not necessarily airway reactivity.

The requestor maintained that the underlying reason for admission to the hospital for these patients is the bacterial infection component of the exacerbation, with the standard course of treatment for these pulmonary bacterial infections averaging a minimum of 10-14 days due to the slow growing nature of the bacteria commonly encountered in these patients.

We reviewed this request and believe that bronchiectasis is appropriately assigned to MS-DRGs 190, 191, and 192 (Chronic Obstructive Pulmonary Disease with MCC, with CC, and without CC/MCC, respectively) because bronchiectasis, like COPD, is a chronic condition. With respect to the requestor's comments, cystic fibrosis, a genetic disease that affects mucous producing cells resulting in recurring lung infections, can lead to bronchiectasis. However, our clinical advisors indicated that the cause of bronchiectasis can be multifactorial or even remain undefined. Regardless of the cause, when present, bronchiectasis is an irreversible chronic pulmonary condition due to abnormal change to or destruction of normal pulmonary anatomy (the major bronchi and bronchiole walls), resulting in impaired air movement in and out of the lungs. COPD, regardless of the cause (smoking, pollution, other exposures), is a chronic pulmonary condition due to change/destruction of normal pulmonary anatomy, resulting in impaired air movement in and out of the lungs. Both bronchiectasis and COPD patients have abnormal pulmonary function tests and abnormal anatomic findings on chest x-ray and/or chest CT. Therefore, for these reasons, we are proposing to maintain the structure of MS-DRGs 190, 191, and 192 for FY 2022.

b. Major Chest Procedures

In the FY 2020 IPPS/LTCH PPS proposed (84 FR 19234) and final rules (84 FR 42148), we stated that in review of the procedures that are currently assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC and without CC/MCC, respectively) and 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively), that further refinement of these MS-DRGs may be warranted. In this section of this proposed rule, we discuss our review of the procedures and our proposal for Start Printed Page 25099restructuring these MS-DRGs for FY 2022.

We began our review of MS-DRGs 163, 164, 165, 166, 167, and 168 by first examining all the procedures currently assigned to these MS-DRGs. We refer the reader to the ICD-10 MS-DRG Definitions Manual Version 38.1, which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS for complete documentation of the GROUPER logic for MS-DRGs 163, 164, 165, 166, 167, and 168.

In our review of the procedures currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168, we found 17 procedure codes in MS-DRGs 163, 164, and 165 describing laser interstitial thermal therapy (LITT) of body parts that do not describe areas within the respiratory system, which would not be clinically appropriate to maintain in the logic. These procedure codes are listed in the following table.

During our review of these 17 procedure codes, we identified additional MDCs and MS-DRG assignments that are also not clinically appropriate to maintain in the logic because the body parts described by the codes are not consistent with the organ system, etiology or clinical specialty of the MDC to which the procedure code is currently assigned. For example, 16 of the 17 procedure codes (all except procedure code DVY0KZZ) are included in the logic for case assignment to MDC 12 (Diseases and Disorders of the Male Reproductive System) in MS-DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for Malignancy with and without CC/MCC, respectively) and MS-DRGs 717 and 718 (Other Male Reproductive System O.R. Procedures Except Malignancy with and without CC/MCC, respectively) which is not clinically appropriate. Therefore, we are proposing to reassign these 17 procedure codes from their current MS-DRG assignments in MDC 04, and from the additional MDCs and MS-DRGs identified during our review that were found to be clinically inappropriate, to their clinically appropriate MDC and MS-DRGs as shown in Table 6P.2b associated with this proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS).

During our review of the procedure codes describing LITT of various body parts we also confirmed that these procedures are currently designated as Extensive O.R. procedures. We do not believe the procedures described by these procedure codes necessarily utilize the resources or have the level of technical complexity as the other procedures on the Extensive O.R. procedures list. We believe that the procedure codes describing these procedures would be more appropriately designated as Non-extensive procedures and group to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when any one of the procedure codes is reported on a claim and is unrelated to the MDC to which the case was assigned based on the principal diagnosis. We refer the reader to section II.D.10. of the preamble of this proposed rule for further discussion regarding our proposal to reassign these procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.

We also identified five procedure codes describing repair of the esophagus procedures currently assigned to MS-DRGs 163, 164, and 165 that would not be clinically appropriate to maintain in the logic. The procedure codes are 0DQ50ZZ (Repair esophagus, open approach), 0DQ53ZZ (Repair esophagus, percutaneous approach), 0DQ54ZZ (Repair esophagus, percutaneous Start Printed Page 25100endoscopic approach), 0DQ57ZZ (Repair esophagus, via natural or artificial opening), and 0DQ58ZZ (Repair esophagus, via natural or artificial opening endoscopic), and are currently assigned to the following MDCs and MS-DRGs.

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The five procedure codes describing repair of esophagus procedures are not clinically coherent with the other procedures in MS-DRGs 163, 164, and 165 that describe procedures performed on major chest structures. Therefore, we are proposing to remove procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ from the logic in MDC 04 for FY 2022.

During our review of procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ (describing repair of esophagus procedures) we also confirmed that these procedures are currently designated as Extensive O.R. procedures. We do not believe the procedures described by procedure codes 0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ necessarily utilize the resources or have the level of technical complexity as the other procedures on the Extensive O.R. procedures list. We believe that the procedure codes describing these procedures would be more appropriately designated as Non-extensive procedures and group to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when any one of the three procedure codes is reported on a claim and is unrelated to the MDC to which the case was assigned based on the principal diagnosis. We refer the reader to section II.D.10. of the preamble of this proposed rule for further discussion regarding our proposal to reassign these procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.

Next, we examined claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for all cases in MS-DRGs 163, 164, 165, 166, 167, and 168. Our findings are shown in the following tables.

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As shown in the tables, there were a higher number of cases reported in MS-DRGs 163, 164, 165, 166, 167, and 168 from the March 2020 update of the FY 2019 MedPAR file in comparison to the September 2020 update of the FY 2020 MedPAR file and overall, the cases reported have comparable average lengths of stay and comparable average costs for both fiscal years.

We then examined claims data from both the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for MS-DRGs 163, 164, 165, 166, 167, and 168 to compare costs, complexity of service and clinical coherence for each procedure code currently assigned to these MS-DRGs to assess any potential reassignment of the procedures. We refer the reader to Table 6P.1e and Table 6P.1f associated with this proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) for the detailed claims data analysis. Table 6P.1e contains the data analysis findings of procedure codes currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168 from the March 2020 update of the FY 2019 MedPAR file and Table 6P.1f contains the data analysis findings of procedure codes currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168 from the September 2020 update of the FY 2020 MedPAR file. We note that if a procedure code that is currently assigned to MS-DRGs 163, 164, 165, 166, 167, or 168 is not displayed, it is because there were no cases found reporting that code in the assigned MS-DRG.

As shown in Table 6P.1e and Table 6P.1f associated with this proposed rule, in our examination of the claims data from both the March 2020 update of the FY 2019 MedPAR file and September 2020 update of the FY 2020 MedPAR file, we found there is wide variation in the volume, length of stay, and average costs for the procedures currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168. There were several instances in which only one occurrence of a procedure was reported with a procedure code from MS-DRGs 163, 164, 165, 166, 167, or 168, and the average length of stay for these specific cases ranged from 1 day to 97 days. For example, in the analysis of claims data from the March 2020 update of the FY 2019 MedPAR file, during our review of MS-DRG 163, we found 153 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 2 days to 65 days and the average costs ranging from $3,760 to $195,447 for these cases. For MS-DRG 164, we found 145 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 28 days and the average costs ranging from $1,886 to $137,810 for these cases. For MS-DRG 165, we found 111 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 23 days and the average costs ranging from $2,656 to $73,092 for these cases. For MS-DRG 166, we found 150 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 61 days and the average costs ranging from $3,230 to $246,679 for these cases. For MS-DRG 167, we found 110 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 23 days and the average costs ranging from $2,058 to $149,220 for these cases. For MS-DRG 168, we found 68 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 18 days and the average costs ranging from $2,033 to $35,576 for these cases.

Our analysis of the claims data from the September 2020 update of the FY 2020 MedPAR file resulted in similar findings to those from the March 2020 update of the FY 2019 MedPAR file; there were several instances in which only one occurrence of a procedure was reported with a procedure code from MS-DRGs 163, 164, 165, 166, 167, or 168. During our review of MS-DRG 163, we found 139 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 2 days to 97 days and the average costs ranging from $5,697 to $205,696 for these cases. For MS-DRG 164, we found 122 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 35 days and the average costs ranging from $3,204 to $120,128 for these cases. For MS-DRG 165, we found 92 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 16 days and the average costs ranging from $2,682 to $164,014 for these cases. For MS-DRG 166, we found 141 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 45 days and the average costs ranging from $3,230 to $246,679 for these cases. For MS-DRG 167, we found 105 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 22 days and the average costs ranging from $2,150 to $112,465 for these cases. For MS-DRG 168, we found 72 procedures for which only one occurrence of the procedure was reported with the average length of stay ranging from 1 day to 9 days and the average costs ranging from $1,563 to $76,061 for these cases.

Our clinical advisors reviewed the procedures currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168 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. This process included separating the procedures according to the surgical approach (open, percutaneous, percutaneous endoscopic, via natural or artificial opening, via natural or artificial opening endoscopic, and external).Start Printed Page 25104

We also considered the claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for MS-DRGs 163, 164, 165, 166, 167, and 168 to further analyze the average length of stay and average costs for the cases reporting procedures assigned to any one of these MS-DRGs as well as clinical coherence for these cases. 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 procedures, such as procedures performed on the sternum and ribs (for example, major chest) from the less complex procedures such as bypass procedures performed on peripheral vessels or diagnostic biopsies.

As an initial step in our proposed restructuring of these MS-DRGs, we identified the following 26 procedure codes that are currently assigned to MS-DRGs 166, 167, and 168 that we believe represent procedures performed on structures that align more appropriately with the procedures assigned to MS-DRGs 163, 164, and 165 that describe major chest procedures.

We analyzed claims data from the March 2020 update of the FY 2019 MedPAR file for the listed procedure codes in MS-DRGs 166, 167, and 168. We note that if a listed procedure code is not displayed, it is because there were no cases found reporting that code among MS-DRGs 166, 167, and 168. Our findings are shown in the following table.

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We then analyzed claims data from the September 2020 update of the FY 2020 MedPAR file for the listed procedure codes in MS-DRGs 166, 167, and 168. We note that if a listed procedure code is not displayed, it is because there were no cases found reporting that code among MS-DRGs 166, 167, and 168. Our findings are shown in the following table.

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We refer the reader to Tables 6P.1e and 6P.1f for detailed claims data for the previously listed procedures in MS-DRGs 163, 164, 165, 166, 167, and 168 from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, respectively, and note that while some of the 26 listed procedure codes identified in MS-DRGs 166, 167, and 168 may not have been reported in either year's MedPAR claims data or only had one occurrence in which the procedure was reported, we believe these procedures described by the listed 26 procedure codes are clinically coherent with the other procedures that are currently assigned to MS-DRGs 163, 164, and 165. For example, in our analysis of the March 2020 update of the FY 2019 MedPAR file, as shown in the table, we found procedure code 02QW0ZZ reported with one occurrence with an average length of stay of 15 days and average costs of $46,829. Despite finding only one case, we believe procedures described by this procedure code, as well as related procedure codes describing procedures performed on the great vessels, are more clinically coherent with the procedures assigned to MS-DRGs 163, 164, and 165 and align more appropriately with the average length of stay and average costs of those MS-DRGs. Similarly, in our analysis of the September 2020 update of the FY 2020 MedPAR file, as shown in the table, we found procedure code 0PS204Z reported with 344 occurrences with an average length of stay of 9.6 days and average costs of $48,340. We believe procedures described by this procedure code, as well as related procedure codes describing procedures performed to repair or resect the ribs, are more clinically coherent with the procedures assigned to MS-DRGs 163, 164, and 165 and also align more appropriately with the average length of stay and average costs of those MS-DRGs.

As a result of our preliminary review of MS-DRGs 163, 164, 165, 166, 167, and 168, for FY 2022 we are proposing the reassignment of the listed 26 procedure codes (9 procedure codes describing repair of pulmonary or thoracic structures, and 17 procedure codes describing procedures performed on the sternum or ribs) from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04. Our data analysis shows that for the cases reporting any one of the 26 procedure codes, generally, they have an average length of stay and average costs that appear more consistent with the average length of stay and average costs of cases in MS-DRGs 163, 164, and 165. Our clinical advisors also agree that these procedures clinically align with the other procedures that are currently assigned to MS-DRGs 163, 164, and 165. We refer the reader to Table 6P.2c associated with this proposed rule for the list of procedure codes we are proposing for reassignment from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04.

After this initial review of all the procedures currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168, in combination with the results of the data analysis as reflected in Tables 6P.1e and 6P.1f, our clinical advisors support a phased restructuring of these MS-DRGs. We believe further analysis of the procedures assigned to these MS-DRGs is warranted based on the creation of new procedure codes that have been assigned to these MS-DRGs in recent years for which claims data are not yet available and the need for additional time to examine the procedures currently assigned to those MS-DRGs by clinical intensity, complexity of service and resource utilization. We will continue to evaluate the procedures assigned to these MS-DRGs as additional claims data become available.

5. MDC 05 (Diseases and Disorders of the Circulatory System)

a. Short-Term External Heart Assist Device

Impella® Ventricular Support Systems are temporary heart assist devices intended to support blood pressure and provide increased blood flow to critical organs in patients with cardiogenic shock, by drawing blood out of the heart and pumping it into the aorta, partially or fully bypassing the left ventricle to provide adequate circulation of blood (replace or supplement left ventricle pumping) while also allowing damaged heart muscle the opportunity to rest and recover in patients who need short-term support for up to 6 days. The ICD-10-PCS codes that describe the insertion of Impella® heart assist devices are Start Printed Page 25107currently assigned to MS-DRG 215 (Other Heart Assist System Implant). We refer the reader to the ICD-10 MS-DRG Definitions Manual Version 38.1, 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-DRG 215.

In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41159 through 41170), we discussed public comments that recommended that CMS continue to monitor the data in MS-DRG 215 for future consideration of distinctions (for example, different approaches and evolving technologies) that may impact the clinical and resource use of procedures utilizing heart assist devices. Our data analysis showed a wide range in the average length of stay and the average costs for cases reporting procedures that involve a biventricular short-term external heart assist system versus a short-term external heart assist system. We noted we were aware that the AHA published Coding Clinic advice that clarified coding and reporting for certain external heart assist devices due to the technology being approved for new indications but the claims data current at that time did not yet reflect that updated guidance. We also noted that there had been recent updates to the descriptions of the codes for heart assist devices. The qualifier “intraoperative” was added effective October 1, 2017 (FY 2018) to the procedure codes describing the insertion of short-term external heart assist system procedures to distinguish between procedures where the device was only used intraoperatively and was removed at the conclusion of the procedure versus procedures where the device was not removed at the conclusion of the procedure and for which that qualifier would not be reported. We agreed with the commenters that continued monitoring of the data and further analysis was necessary prior to proposing any modifications to MS-DRG 215 and finalized our proposal to maintain the current structure of MS-DRG 215 for FY 2019.

In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42167) we discussed public comments on our proposals related to recalibration of the FY 2020 relative weights and the changes in relative weights from FY 2019. Several commenters expressed concern about significant reductions to the relative weight for MS-DRG 215. Commenters stated that the reduction in the proposed relative weight was 29 percent, the largest decrease of any MS-DRG; commenters also noted that the cumulative decrease to the relative weight for MS-DRG 215 would be 43 percent since FY 2017. Commenters stated that the proposed relative weights would result in significant underpayments to facilities, which would in turn limit access to heart assist devices. After reviewing the comments received and the data used in our ratesetting calculations, we acknowledged an outlier circumstance where the weight for a MS-DRG was seeing a significant reduction for each of the 3 years since CMS began using the ICD-10 data in calculating the relative weights. Therefore, for the reasons discussed in the FY 2020 final rule, we adopted a temporary one-time measure for FY 2020 where the FY 2020 relative weight was set equal to the FY 2019 relative weight, which in turn had been set equal to the FY 2018 relative weight.

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58598) we again acknowledged an outlier circumstance where the weight for MS-DRG 215 was seeing a significant reduction for each of the 4 years since CMS began using the ICD-10 data in calculating the relative weights. We stated while we would ordinarily consider this weight change to be appropriately driven by the underlying data, given the comments received, and in an abundance of caution because this may be the MS-DRG assigned when a hospital provides temporary right ventricular support for up to 14 days in critical care patients for the treatment of acute right heart failure or decompensation caused by complications related to COVID-19, including pulmonary embolism, we adopted a temporary one-time measure for FY 2021 for MS-DRG 215. Specifically, we set the 2021 relative weight for MS-DRG 215 equal to the average of the FY 2020 relative weight and the otherwise applicable FY 2021 weight.

For this FY 2022 IPPS/LTCH PPS proposed rule, we received a request to reassign certain cases reporting procedure codes describing the insertion of a percutaneous short-term external heart assist device from MS-DRG 215 to MS-DRGs 216, 217, and 218 (Cardiac Valve and Other Major Cardiothoracic Procedures with Cardiac Catheterization with MCC, with CC, and without CC/MCC, respectively). According to the requestor, there are two distinct clinical populations within MS-DRG 215: High-risk Percutaneous Coronary Intervention (PCI) patients receiving short term “intraoperative” external heart assist systems where the device is only used intraoperatively and is removed at the conclusion of the procedure, and those patients in or at risk of cardiogenic shock requiring longer heart pump support and ICU stays. The requestor stated that cases in which short-term external heart assist systems are placed intraoperatively require fewer resources. The requestor suggested that moving the less resource intensive cases that report a procedure code that describes the intraoperative insertion of short-term external heart assist systems from MS-DRG 215 into MS-DRG 216, 217, and 218, will clinically align the two distinctly different patient populations, and consequently will address the potential decrease in the relative weight of MS-DRG 215.

The requestor stated it performed its own analysis of claims in MS-DRG 215 that involve the intraoperative insertion of a short-term external heart assist device (as identified by the presence of ICD-10-PCS codes 02HA3RJ (Insertion of short-term external heart assist system into heart, intraoperative, percutaneous approach) and 5A0221D (Assistance with cardiac output using impeller pump, continuous). The requestor stated that its analysis found that if procedures involving intraoperative placement of a short-term external heart assist device were moved into MS-DRGs 216, 217 and 218, it would result in an increase in the average costs and average lengths of stay for the cases that would remain to be assigned to MS-DRG 215.

During our review of this issue, we noted that when a patient is admitted and has an Impella® external heart assist device inserted two ICD-10-PCS codes are assigned: A code that describes the insertion of the device and code 5A0221D that describes assistance with an impeller pump. Therefore, our analysis included procedure code 02HA3RJ as identified by the requestor as well as similar procedure codes 02HA0RJ (Insertion of short-term external heart assist system into heart, intraoperative, open approach) and 02HA4RJ (Insertion of short-term external heart assist system into heart, intraoperative, percutaneous endoscopic approach) that also describe the intraoperative insertion of a short-term heart assist device, differing only in approach. Because the assistance with an Impella® is coded with ICD-10-PCS code 5A0221D whether the device is used only intraoperatively or in instances where the device is left in place at the conclusion of the procedure, we did not include this code in our analysis. We also note that the requestor suggested that the cases reporting a procedure code describing Start Printed Page 25108the intraoperative insertion of a short-term external heart assist device be moved to MS-DRGs 216, 217 and 218 but these MS-DRGs are defined by the performance of cardiac catheterization. Therefore, we expanded our analysis to also include MS-DRGs 219, 220 and 221 (Cardiac Valve and Other Major Cardiothoracic Procedures without Cardiac Catheterization with MCC, with CC, and without CC/MCC, respectively).

First, we examined claims data from the March 2020 update of the FY 2019 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ and a procedure code describing the performance of a cardiac catheterization. Our findings are shown in the following table:

As shown in the table, we identified a total of 7,741 cases within MS-DRG 215 with an average length of stay of 7.8 days and average costs of $68,234. Of these 7,741 cases, there are 2,943 cases that include both a procedure code describing the intraoperative insertion of a short-term external heart assist device and a procedure code describing the performance of a cardiac catheterization with an average length of stay of 7.1 days and average costs of $60,449. Of these 2,943 cases, there are 23 cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization with an average length of stay of 8.9 days and average costs of $85,806. There are 2,904 cases reporting a procedure code describing a percutaneous intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization with an average length of stay of 7.1 days and average costs of $60,227. There are 16 cases reporting a procedure code describing a percutaneous endoscopic intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization approach with an average length of stay of 6.4 days and average costs of $64,217. The data analysis shows that for the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing the performance of a cardiac catheterization, generally, the average length of stay is shorter and the average costs are lower than the average length of stay and average costs (with the exception of the average costs and length of stay for the 23 cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization which are higher) compared to all cases in that MS-DRG.

We also examined claims data from the March 2020 update of the FY 2019 MedPAR file for MS-DRGs 216, 217 and 218. Our findings are shown in the following table.

Because MS-DRG 215 is a base DRG and there is a three-way split within MS-DRGs 216, 217, and 218, we also analyzed the cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization for the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC).

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This data analysis shows the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing the performance of a cardiac catheterization when distributed based on the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC) have average costs generally more similar to the average costs in the FY 2019 MedPAR file for MS-DRGs 216, 217 and 218 respectively, while the average lengths of stay are shorter. While the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization “with CC” and “without CC/MCC” have higher average costs than the average costs of MS-DRGs 217 and 218, these costs are closer to the average costs of those MS-DRGs than they are to the average costs of MS-DRG 215. The average costs of the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization “with MCC” are lower than the average costs of both MS-DRGs 215 and 216.

Next, we examined claims data from the March 2020 update of the FY 2019 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing the performance of a cardiac catheterization. Our findings are shown in the following table:

As shown in the table, of the 7,741 cases within MS-DRG 215, there are 432 cases that include a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization with an average length of stay of 4.8 days and average costs of $53,607. Of these 432 cases, there are eight cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization with an average length of stay of 8.8 days and average costs of $141,242. There are 423 cases reporting a procedure code describing a percutaneous intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization with an average length of stay of 4.7 days and average costs of $51,964. There is one case reporting a procedure code describing a percutaneous endoscopic intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization approach with a length of stay of 2 days and costs of $47,289. The data analysis shows that for the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a Start Printed Page 25110procedure code describing the performance of a cardiac catheterization, generally, the average length of stay is shorter and the average costs are lower than the average length of stay and average costs (with the exception of the average costs and length of stay for the eight cases describing the open intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization which are higher) compared to all cases in that MS-DRG.

We also examined claims data from the March 2020 update of the FY 2019 MedPAR file for MS-DRGs 219, 220 and 221. Our findings are shown in the following table.

Similarly, because MS-DRG 215 is a base DRG and there is a three-way split within MS-DRGs 219, 220 and 221, we also analyzed the cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization for the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC).

This data analysis shows the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing the performance of a cardiac catheterization when distributed based on the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC) have average costs generally more similar to the average costs in the FY 2019 MedPAR file for MS-DRGs 219, 220 and 221 respectively, while the average lengths of stay are shorter. While the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device, without a procedure code describing the performance of a cardiac catheterization “with MCC”, “with CC” and “without CC/MCC” have higher average costs than the average costs MS-DRGs 219, 220 and 221, respectively, these costs are closer to the average costs of those MS-DRGs than they are to the average costs of MS-DRG 215.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing the performance of a cardiac catheterization. Our findings are shown in the following table:

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As shown in the table, we identified a total of 6,275 cases within MS-DRG 215 with an average length of stay of 7.9 days and average costs of $72,144. Of these 6,275 cases, there are 2,395 cases that include both a procedure code describing the intraoperative insertion of a short-term external heart assist device and a procedure code describing the performance of a cardiac catheterization with an average length of stay of 6.8 days and average costs of $62,260. Of these 2,395 cases, there were 25 cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization with an average length of stay of 8.2 days and average costs of $85,954. There are 2,360 cases reporting a procedure code describing a percutaneous intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization with an average length of stay of 6.8 days and average costs of $61,965. There are 10 cases reporting a procedure code describing a percutaneous endoscopic intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization approach with an average length of stay of 6.9 days and average costs of $72,564. The data analysis shows that for the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing the performance of a cardiac catheterization, when examined collectively, the average length of stay is shorter (6.8 days versus 7.9 days) and the average costs are lower ($62,260 versus $72,144) than the average length of stay and average costs (of all cases in that MS-DRG). There were some differences noted in cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization when examined by operative approach. For the 25 cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization, the average costs were higher ($85,954 versus $72,144) and average length of stay was slightly longer (8.2 days versus 7.9 days) when compared to all cases in that MS-DRG. For the 10 cases reporting a procedure code describing the percutaneous endoscopic intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization, the average costs were nearly equal ($72,564 versus $72,144) and average length of stay was shorter (6.9 days versus 7.9 days) when compared to all cases in that MS-DRG.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for MS-DRGs 216, 217 and 218. Our findings are shown in the following table.

Because MS-DRG 215 is a base DRG and there is a three-way split within MS-DRGs 216, 217, and 218, we also analyzed the cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization for the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC).

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This data analysis shows the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing the performance of a cardiac catheterization when distributed based on the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC) have average costs generally more similar to the average costs in the FY 2020 MedPAR file for MS-DRGs 216, 217 and 218 respectively, while the average lengths of stay are shorter. While the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization “with CC” and “without CC/MCC” have higher average costs than the average costs of MS-DRGs 217 and 218, these costs are closer to the average costs of those MS-DRGs than they are to the average costs of MS-DRG 215. The average costs of the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with a procedure code describing the performance of a cardiac catheterization “with MCC” are lower than the average costs of both MS-DRGs 215 and 216.

Next, we examined claims data from the September 2020 update of the FY 2020 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing the performance of a cardiac catheterization. Our findings are shown in the following table:

As shown in the table, of the 6,275 cases within MS-DRG 215, there are 331 cases that include a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization with an average length of stay of 4.5 days and average costs of $52,181. Of these 331 cases, there are eight cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization with an average length of stay of 8.9 days and average costs of $80,314. There are 332 cases reporting a procedure code describing a percutaneous intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization with an average length of stay of 4.4 days and average costs of $51,569. There is one case reporting a procedure code describing a percutaneous endoscopic intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization approach with a length of stay of 2 days and costs of $24,379. The data analysis shows that for the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a Start Printed Page 25113procedure code describing the performance of a cardiac catheterization, generally, the average length of stay is shorter and the average costs are lower than the average length of stay and average costs (with the exception of the average costs and length of stay for the eight cases reporting a procedure code describing the open intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization which are higher) compared to all cases in that MS-DRG.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for MS-DRGs 219, 220 and 221. Our findings are shown in the following table.

Similarly, because MS-DRG 215 is a base DRG and there is a three-way split within MS-DRGs 219, 220 and 221, we also analyzed the 331 cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization for the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC).

This data analysis shows the cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing the performance of a cardiac catheterization when distributed based on the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC) have average costs generally more similar to the average costs in the FY 2020 MedPAR file for MS-DRGs 219, 220 and 221 respectively, while the average lengths of stay are shorter. While the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization “with CC” and “without CC/MCC” have higher average costs than the average costs of MS-DRGs 220 and 221, these costs are closer to the average costs of those MS-DRGs than they are to the average costs of MS-DRG 215. The average costs of the cases from MS-DRG 215 reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing the performance of a cardiac catheterization “with MCC” are lower than the average costs of both MS-DRGs 215 and 219.

Our clinical advisors reviewed the clinical issues and the claims data and agreed that cases reporting a procedure code that describes the intraoperative insertion of a short-term external heart assist device are generally less resource intensive and are clinically distinct from other cases reporting procedure codes describing the insertion of other types of heart assist devices currently assigned to MS-DRG 215. Our clinical advisors state that critically ill patients who are experiencing or at risk for cardiogenic shock from an emergent event such as heart attack or virus that impacts the functioning of the heart and requires longer heart pump support are different from those patients who require intraoperative support only. Patients receiving a short-term external heart assist device intraoperatively during coronary interventions often have an underlying disease pathology such as heart failure related to occluded coronary vessels that is broadly similar in kind to other patients also receiving these interventions without the need for an insertion of a short-term external heart assist device. In the post-operative period, these patients can recover and can be sufficiently rehabilitated prior to discharge. For these reasons, our clinical advisors support reassigning Start Printed Page 25114ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ that describe the intraoperative insertion of a short-term external heart assist device to MS-DRGs 216, 217, 218, 219, 220 and 221 in MDC 05. They stated this reassignment would improve clinical coherence in these MS-DRGs.

To compare and analyze the impact of our suggested modifications, we ran a simulation using the Version 38.1 ICD-10 MS-DRG GROUPER and the claims data from the March 2020 update of the FY 2019 MedPAR file. The following table reflects our simulation for ICD-10-PCS procedure codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the intraoperative insertion of a short-term external heart assist device if they were moved to MS-DRGS 216, 217, 218, 219, 220 and 221.

We believe the resulting proposed MS-DRG assignments would be more clinically homogeneous, coherent and better reflect hospital resource use while at the same time addressing concerns related to the relative weight of MS-DRG 215. A review of this simulation shows that this distribution of ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the intraoperative insertion of a short-term external heart assist device if moved to MS-DRGs 216, 217, 218, 219, 220 and 221, increases the average costs of the cases remaining in MS-DRG 215 by over $4,500, while generally having a more limited effect on the average costs of MS-DRGs 216, 217, 218, 219, 220 and 221.

We also ran a simulation using the Version 38.1 ICD-10 MS-DRG GROUPER and the claims data from the September 2020 update of the FY 2020 MedPAR file. The following table reflects our simulation for ICD-10-PCS procedure codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the intraoperative insertion of a short-term external heart assist device if they were moved to MS-DRGS 216, 217, 218, 219, 220 and 221.

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As with our simulation based on the March 2020 update of the FY 2019 MedPAR file, we believe that this simulation supports that the resulting proposed MS-DRG assignments would be more clinically homogeneous, coherent and better reflect hospital resource use while at the same time addressing concerns related to the relative weight of MS-DRG 215. A review of this simulation shows that this distribution of ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the intraoperative insertion of a short-term external heart assist device if moved to MS-DRGs 216, 217, 218, 219, 220 and 221, increases the average costs of the cases remaining in MS-DRG 215 by over $6,000, while generally having a more limited effect on the average costs of MS-DRGS 216, 217, 218, 219, 220 and 221.

Therefore, for FY 2022, we are proposing to reassign ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ from MDC 05 in MS-DRG 215 to MS-DRGs 216, 217, 218, 219, 220 and 221 in MDC 05.

b. Type II Myocardial Infarction

We received a request to review the MS-DRG assignment of ICD-10-CM diagnosis code I21.A1 (Myocardial infarction type 2). The requestor stated that when a type 2 myocardial infarction is documented, per coding guidelines, it is to be coded as a secondary diagnosis since it is due to an underlying cause. This requestor also noted that when a type 2 myocardial infarction is coded with a principal diagnosis in MDC 05 (Diseases and Disorders of the Circulatory System), the GROUPER logic assigns MS-DRGs 280 through 282 (Acute Myocardial Infarction, Discharged Alive with MCC, with CC, and without CC/MCC, respectively). The requestor questioned if this GROUPER logic was correct or if the logic should be changed so that a type 2 myocardial infarction, coded as a secondary diagnosis, does not result in the assignment of a MS-DRG that describes an acute myocardial infarction.

To begin our analysis, we reviewed the GROUPER logic. The requestor is correct that when diagnosis code I21.A1 is reported as a secondary diagnosis in combination with a principal diagnosis in MDC 05, the case currently groups to medical MS-DRGs 280 through 282 in the absence of a surgical procedure, when the patient is discharged alive. We note that if the patient expires, GROUPER logic instead will assign MS-DRGs 283 through 285 (Acute Myocardial Infarction, Expired with MCC, with CC, and without CC/MCC, respectively) when diagnosis code I21.A1 is reported as a secondary diagnosis in combination with a principal diagnosis in MDC 05.

According to the Universal Definition of Myocardial Infarction (MI), developed by a global task force that included the European Society of Cardiology, the American College of Cardiology, the American Heart Association and the World Heart Federation (WHF), the diagnosis of MI requires the rise and/or fall of cardiac biomarkers with clinical evidence of ischemia in which there is evidence of myocardial injury or necrosis, defined by symptoms, electrocardiographic (ECG) changes, or new regional wall motion abnormalities. Since 2007, this definition further classifies myocardial infarctions into five distinct subtypes. While a type 1 MI is defined as a MI due to an acute coronary syndrome, type 2 MI is defined as a mismatch in myocardial oxygen supply and demand due to other causes such as coronary dissection, vasospasm, emboli, or hypotension that is not attributed to unstable coronary artery disease (CAD).

Our clinical advisors reviewed this issue and do not recommend changing the current MS-DRG assignment of ICD-10-CM diagnosis code I21.A1. As noted by the requestor, the ICD-10-CM Official Guidelines for Coding and Reporting state “Type 2 myocardial infarction, (myocardial infarction due to demand ischemia or secondary to ischemic imbalance) is assigned to code I21.A1, Myocardial infarction type 2 with a code for the underlying cause coded first.” Our clinical advisors believe that cases reporting diagnosis code I21.A1 as a secondary diagnosis are associated with a severity of illness on par with cases reporting a principal diagnosis of another type myocardial infarction. They state the diagnosis of myocardial infarction describes myocardial cell death due to inadequate Start Printed Page 25116oxygen supply to the myocardium for a prolonged period, regardless of the subtype. Our clinical advisors state, for clinical consistency, it is more appropriate to maintain the current assignment of ICD-10-CM diagnosis code I21.A1 with the other codes that describe myocardial infarction. Therefore, we are not proposing to reassign diagnosis code I21.A1 from MS-DRGs 280 through 285.

During our review of this issue we noted that code I21.A1 (Myocardial infarction type 2) is currently one of the listed principal diagnoses in the GROUPER logic for MS-DRGs 222 and 223 (Cardiac Defibrillator Implant with Cardiac Catheterization with AMI, HF or Shock with and without MCC, respectively). However, code I21.A1 is not currently recognized in these same MS-DRGs when coded as a secondary diagnosis. As a result, when coded as a secondary diagnosis in combination with a principal diagnosis in MDC 05, MS-DRGs 224 and 225 (Cardiac Defibrillator Implant with Cardiac Catheterization without AMI, HF, or Shock with and without MCC, respectively) are instead assigned when reported with a listed procedure code. We refer the reader to the ICD-10 MS-DRG Definitions Manual Version 38.1, 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 222, 223, 224, and 225.

Acknowledging that coding guidelines instruct to code I21.A1 after the diagnosis code that describes the underlying cause, our clinical advisors recommend adding special logic in MS-DRGs 222 and 223 to have code I21.A1 also qualify when coded as a secondary diagnosis in combination with a principal diagnosis in MDC 05 since these diagnosis code combinations also describe acute myocardial infarctions.

As a result, we are proposing modifications to the GROUPER logic to allow cases reporting diagnosis code I21.A1 (Myocardial infarction type 2) as a secondary diagnosis to group to MS-DRGs 222 and 223 when reported with a listed procedure code for clinical consistency with the other MS-DRGs describing acute myocardial infarction.

A diagnosis code may define the logic for a specific MS-DRG assignment in three different ways. The diagnosis code may be listed as principal or as any one of the secondary diagnoses, as a secondary diagnosis, or only as a secondary diagnosis as noted in more detail in this proposed rule.

  • Principal or secondary diagnoses. Indicates that a specific set of diagnoses are used in the definition of the MS-DRG. The diagnoses may be listed as principal or as any one of the secondary diagnoses. A special case of this condition is MS-DRG 008 in which two diagnoses (for example, renal and diabetic) must both be present somewhere in the list of diagnoses in order to be assigned to MS-DRG 008.
  • Secondary diagnoses. Indicates that a specific set of secondary diagnoses are used in the definition of the MS-DRG. For example, a secondary diagnosis of acute leukemia with chemotherapy is used to define MS-DRG 839.
  • Only secondary diagnoses. Indicates that in order to be assigned to the specified MS-DRG no secondary diagnoses other than those in the specified list may appear on the patient's record. For example, in order to be assigned to MS-DRG 795, only secondary diagnoses from the specified list may appear on the patient's record.

We note that whenever there is a secondary diagnosis component to the MS-DRG logic, the diagnosis code can either be used in the logic for assignment to the MS-DRG or to act as a CC/MCC. For this specific scenario, we propose that code I21.A1, as a secondary diagnosis, be used in the definition of the logic for assignment to MS-DRGs 222 and 223, similar to the example described previously, where a secondary diagnosis of acute leukemia with chemotherapy is used to define MS-DRG 839, and therefore will not act as a MCC in these MS-DRGs.

In summary, for FY 2022, we are proposing to maintain the current structure of MS-DRGs 280 through 285. We are also proposing to modify the GROUPER logic to allow cases reporting diagnosis code I21.A1 (Myocardial infarction type 2) as a secondary diagnosis to group to MS-DRGs 222 and 223 when reported with qualifying procedures.

c. Viral Cardiomyopathy

We received three separate but related requests to add ICD-10-CM diagnosis code B33.24 (Viral cardiomyopathy) to the list of principal diagnoses for MS-DRGs 314, 315, and 316 (Other Circulatory System Diagnoses with MCC, with CC, and without CC/MCC, respectively) in MDC 05. The requestors noted that a discontinuity exists in the current MDC assignment of diagnosis codes in ICD-10-CM subcategory B33.2. The list of the five ICD-10-CM diagnosis codes in subcategory B33.2, as well as their current MDC assignments, is found in the following table.

A requestor noted ICD-10-CM codes B33.20, B33.21, B33.22, and B33.23 are assigned to MDC 05 (Diseases and Disorders of the Circulatory System), while code B33.24 is assigned to MDC 18 (Infectious and Parasitic Diseases, Systemic or Unspecified Sites). The requestor stated that the placement of ICD-10-CM diagnosis code B33.24 within subcategory B33.2 is clinically appropriate, as all the diagnoses within this subcategory share a common etiology, involve the heart and supporting structures, and require the same intensity of hospital care. However, the assignment of code B33.24 to a different MDC is clinically incongruous with the placement of the other codes in the subcategory. According to the requestor, all of the conditions share similar etiology, anatomic location, and needs for care, therefore the five codes should all be assigned to MDC 05. This requestor also stated that reassigning code B33.24 to MDC 05 would ensure both clinical continuity and coding consistency within the B33.2 subcategory. Another requestor stated MDC 05 surgical MS-DRGs should be assigned when Start Printed Page 25117procedures such as cardiac catheterization or coronary angioplasty are performed for a principal diagnosis of viral cardiomyopathy.

To begin our analysis, we reviewed the GROUPER logic. Currently, cases reporting ICD-10-CM diagnosis code B33.24 as a principal diagnosis group to medical MS-DRGs 865 and 866 (Viral Illness with and without MCC, respectively) in MDC 18 in the absence of a surgical procedure. Our clinical advisors reviewed this issue and noted viral cardiac infections may present as endocarditis (inflammation of the heart's inner lining), myocarditis (inflammation of the middle layer of the heart), pericarditis (inflammation of the pericardium), or cardiomyopathy (disease of the heart muscle). The infection usually begins somewhere other than the heart, often in the nose, lungs, or stomach. As the infection progresses, and the microbe multiplies and gets into the bloodstream, it can infiltrate the heart muscle. The growth and replication of viruses inside the heart can endanger the heart by destroying heart cells. The management of viral cardiomyopathy is similar to the management of other viral cardiac infections and can include bed rest, control of pain with non-steroidal anti-inflammatory agents and anti-microbial therapy to avoid permanent myocardial damage, cardiomegaly, and/or congestive cardiac failure.

Our clinical advisors agree that the diagnosis of viral cardiomyopathy is clinically related to the other diagnoses in ICD-10-CM subcategory B33.2. They believe it is clinically appropriate for all five diagnoses in subcategory B33.2 to group to MDC 05 (Diseases and Disorders of the Circulatory System) as these conditions describe circulatory system conditions and complications and that this modification will improve clinical coherence. Therefore, we are proposing to reassign ICD-10-CM diagnosis code B33.24 from MDC 18 in MS DRGs 865 and 866 (Viral Illness with and without MCC, respectively) to MDC 05 in MS DRGs 314, 315, and 316 (Other Circulatory System Diagnoses with MCC, with CC, and without CC/MCC, respectively). Under this proposal, cases reporting procedure codes from MDC 05 in conjunction with principal diagnosis B33.24, would group to MS-DRGs in MDC 05.

d. Left Atrial Appendage Closure (LAAC)

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58471 through 58477), we identified nine ICD-10-PCS procedure codes that describe Left Atrial Appendage Closure (LAAC) procedures and noted their corresponding MS-DRG assignments in the ICD-10 MS-DRGs Version 37 as listed in the following table.

As discussed in the FY 2021 IPPS/LTCH PPS final 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 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent with and without MCC, respectively). Our analysis showed that the cases reporting a LAAC procedure with an open approach in MS-DRGs 250 and 251 had higher average costs and longer average length of stay compared to all cases in MS-DRGs 250 and 251. We also stated our clinical advisors believed that ICD-10-PCS codes 02L70CK, 02L70DK, and 02L70ZK that describe a LAAC procedure with an open approach were more suitably grouped to MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with and without MCC, respectfully). Therefore, we finalized 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. We also finalized 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.

In response to this final policy, for this FY 2022 IPPS/LTCH PPS proposed rule, we received a request to again review the MS-DRG assignment of cases involving LAAC procedures with an open approach. The requestor disagreed with CMS's FY 2021 IPPS/LTCH PPS final rule decision to move the three procedure codes describing the open occlusion of left atrial appendage to MS-DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures with and without MCC, respectively). The requestor stated they believe that MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively), would more appropriately correspond with the open procedural resources and longer length of stay expected with open heart procedures.

Our clinical advisors reviewed this request and continue to support the reassignment of ICD-10-PCS procedure Start Printed Page 25118codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274 because it allows all LAAC procedures to be grouped together under the same MS-DRGs and improves clinical coherence. Our clinical advisors state open LAAC procedures are primarily performed in the absence of another O.R. procedure and generally are not performed with a more intensive open chest procedure. When performed as standalone procedures, open LAAC procedures share similar factors such as complexity and resource utilization with all other LAAC procedures. Our clinical advisors continue to state our FY 2021 final policy results in MS-DRG assignments that are more clinically homogeneous and better reflect hospital resource use. Therefore, we are proposing to maintain the assignment of codes 02L70CK, 02L70DK, and 02L70ZK that describe the open occlusion of the left atrial appendage in MS-DRGs 273 and 274.

e. Surgical Ablation

We received a two-part request to review the MS-DRG assignments for cases involving the surgical ablation procedure for atrial fibrillation. Atrial fibrillation (AF) is an irregular and often rapid heart rate that occurs when the two upper chambers of the heart experience chaotic electrical signals. AF presents as either paroxysmal (lasting <7 days), persistent (lasting >7 days, but less than 1 year), or long standing persistent (chronic) (lasting >1 year) based on time duration and can increase the risk for stroke, heart failure, and mortality. Management of AF has two primary goals: Optimizing cardiac output through rhythm or rate control, and decreasing the risk of cerebral and systemic thromboembolism. Patients that worsen in symptomology or fail to respond to pharmacological treatment or other interventions may be referred for surgical ablation to treat their AF. Surgical ablation is a procedure that works by burning or freezing tissue on the inside of the heart to disrupt faulty electrical signals causing the arrhythmia, which can help the heart maintain a normal heart rhythm.

The first part of this request was to create a new classification of surgical ablation MS-DRGs to better accommodate the costs of open concomitant surgical ablations. According to the requestor, patients undergoing surgical ablation are treated under two potential scenarios: (1) Open concomitant (combination) surgical ablation, meaning open surgical ablation performed during another open-heart surgical procedure such as mitral valve repair or replacement (MVR), aortic valve repair or replacement (AVR), or coronary artery bypass grafting (CABG) and (2) minimally invasive, percutaneous endoscopic, standalone surgical ablation as the sole therapeutic procedure performed. According to the requestor, open concomitant surgical ablation is an efficient procedure, as it allows treatment of AF and another clinical pathology in one procedure thereby decreasing the risk of future readmits, need for future repeat catheter ablation procedures, and patient mortality.

The requestor identified the following potential procedure combinations that would comprise an “open concomitant surgical ablation” procedure.

  • Open CABG + open surgical ablation
  • Open MVR + open surgical ablation
  • Open AVR + open surgical ablation
  • Open MVR + open AVR + open surgical ablation
  • Open MVR + open CABG + open surgical ablation
  • Open MVR + open AVR + open CABG + open surgical ablation
  • Open AVR + open CABG + open surgical ablation

The requestor performed its own analysis of these procedure code combinations and stated that it found the average costs for open concomitant surgical ablation procedures were consistently higher compared to the average costs within their respective MS-DRGs, which could limit beneficiary access to these procedures.

The requestor suggested that the following four MS-DRGs be created to address the differences in average costs and average lengths of stay it found in its data analysis:

  • Suggested New MS-DRG XXX—Open Surgical Ablation with or without Other Cardiothoracic Procedure with Cardiac Catheterization with MCC;
  • Suggested New MS-DRG XXX—Open Surgical Ablation with or without Other Cardiothoracic Procedure with Cardiac Catheterization without MCC;
  • Suggested New MS-DRG XXX—Open Surgical Ablation with or without Other Cardiothoracic Procedure without Cardiac Catheterization with MCC; and
  • Suggested New MS-DRG XXX—Open Surgical Ablation with or without Other Cardiothoracic Procedure without Cardiac Catheterization without MCC.

In reviewing this request, we identified nine ICD-10-PCS codes that describe open surgical ablation. These codes and their corresponding MDC and MS-DRG assignments are listed in the following table.

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In the ICD-10 MS-DRGs Definitions Manual Version 38.1, for open concomitant surgical ablation procedures, the GROUPER logic assigns MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively) in most instances because MS-DRGs 228 and 229 are high in the surgical hierarchy GROUPER logic of MDC 05 (Diseases and Disorders of the Circulatory System). Since patients can have multiple procedures reported with a principal diagnosis during a particular hospital stay, and a patient can be assigned to only one MS-DRG, the surgical hierarchy GROUPER logic provides a hierarchical order of surgical classes from the most resource-intensive to the least resource-intensive. Patients with multiple procedures are generally assigned to the MS-DRG that correlates to the most resource-intensive surgical class.

Our clinical advisors reviewed this grouping issue and noted in open concomitant surgical ablation procedures, the CABG, MVR, and/or AVR components of the procedure are more technically complex than the open surgical ablation procedure. Our clinical advisors stated that in open concomitant surgical ablation procedures, the MS-DRG assigned should be based on the most resource-intensive procedure performed. Therefore, we believe this request would be better addressed by proposing to revise the surgical hierarchy in MDC 05 rather than creating four new MS-DRGs. For FY 2022, we are proposing to revise the surgical hierarchy for the MS-DRGs in MDC 05 to sequence MS-DRGs 231-236 (Coronary Bypass) above MS-DRGs 228 and 229 to enable more appropriate MS-DRG assignment for these types of cases. Under this proposal, if a procedure code describing a CABG and a procedure code describing an open surgical ablation are present, the GROUPER logic would assign the CABG surgical class because a CABG would be sequenced higher in the hierarchy than an open surgical ablation. We refer the reader to section II.D.15. of the preamble of this proposed rule for the discussion of the surgical hierarchy and the complete list of our proposed modifications to the surgical hierarchy in MDC 05.

As mentioned earlier in this section, this request involved two parts. The second part of the request was to reassign cases describing standalone percutaneous endoscopic surgical ablation. According to the requestor, standalone, percutaneous endoscopic surgical ablation is a rapidly growing therapy, indicated for highly symptomatic patients that have already failed medical management and/or percutaneous catheter ablation procedures. The requestor identified nine ICD-10-PCS codes that they stated describe percutaneous endoscopic surgical ablation. These codes and their corresponding MDC and MS-DRG assignments are listed in the following table.

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The requestor performed its own analysis and stated that it found the most common MS-DRG assignment for cases describing standalone percutaneous endoscopic surgical ablation was MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively) and that in those MS-DRGs, the standalone surgical ablation procedures cost more than all the procedures in their currently assigned MS-DRGs 228 and 229. Therefore, the requestor recommended CMS reassign these procedures to higher weighted MS-DRGs 219 and 220 (Cardiac Valve and Other Major Cardiothoracic Procedures without Cardiac Catheterization with MCC and with CC, respectively).

We examined claims data from the March 2020 update of the FY 2019 MedPAR file for all cases in MS-DRGs 228 and 229 and compared the results to cases with a procedure code describing a standalone percutaneous endoscopic surgical ablation procedure. Our findings are shown in the following table.

As shown in the table, the data analysis performed indicates that the 99 cases in MS-DRG 228 reporting a procedure code that describes percutaneous endoscopic surgical ablation have an average length of stay that is shorter than the average length of stay for all the cases in MS-DRG 228 (7.1 days versus 10.7 days) and higher average costs when compared to all the cases in MS-DRG 228 ($48,281 versus $45,772). The 497 cases in MS-DRG 229 reporting a procedure code that describes percutaneous endoscopic surgical ablation have an average length of stay that is shorter than the average length of stay for all the cases in MS-DRG 229 (3.7 days versus 5.8 days) and higher average costs when compared to all the cases in MS-DRG 229 ($35,516 versus $29,454).

We then examined the claims data from the March 2020 update of the FY 2019 MedPAR file to identify the average length of stay and average costs for all cases in MS-DRGs 219 and 220. Our findings are shown in the table.

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As shown in the table, for MS-DRG 219, there were a total of 15,597 cases with an average length of stay of 10.9 days and average costs of $57,845. For MS-DRG 220, there were a total of 15,074 cases with an average length of stay of 6.5 days and average costs of $39,565.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for all cases in MS-DRGs 228 and 229 and compared the results to cases with a procedure code describing a standalone percutaneous endoscopic surgical ablation procedure. Our findings are shown in the following table.

As shown in the table, the data analysis performed indicates that the 84 cases in MS-DRG 228 reporting a procedure code that describes percutaneous endoscopic surgical ablation have an average length of stay that is shorter than the average length of stay for all the cases in MS-DRG 228 (6.9 days versus 10.2 days) and lower average costs when compared to all the cases in MS-DRG 228 ($44,710 versus $46,508). The 393 cases in MS-DRG 229 reporting a procedure code that describes percutaneous endoscopic surgical ablation have an average length of stay that is shorter than the average length of stay for all the cases in MS-DRG 229 (3.4 days versus 4.9 days) and higher average costs when compared to all the cases in MS-DRG 229 ($34,237 versus $29,885).

We then examined the claims data from the September 2020 update of the FY 2020 MedPAR file to identify the average length of stay and average costs for all cases in MS-DRGs 219 and 220. Our findings are shown in the table.

As shown in the table, for MS-DRG 219, there were a total of 11,863 cases with an average length of stay of 10.9 days and average costs of $61,934. For MS-DRG 220, there were a total of 10,072 cases with an average length of stay of 6.5 days and average costs of $41,800.

Our analysis indicates that MS-DRGs 219 and 220 generally have much higher average costs and longer average lengths of stay than the cases with a procedure code describing a standalone percutaneous endoscopic surgical ablation procedure currently assigned to MS-DRGs 228 and 229. Instead, the average costs and average length of stay for cases reporting a standalone percutaneous endoscopic surgical ablation appear to be generally more aligned with the average costs and average length of stay for all cases in MS-DRGs 228 and 229, where they are currently assigned. Our clinical advisors reviewed this issue and do not recommend changing the assignment of procedure codes describing percutaneous endoscopic surgical ablation. Therefore, for these reasons, we are proposing to maintain the current structure of MS-DRGs 219 and 220.

f. Drug-Eluting Stents

We received a request to review the MS-DRG assignments of claims involving the insertion of coronary stents in percutaneous coronary interventions. The requestor suggested that CMS eliminate the distinction between drug-eluting and bare-metal coronary stents in the MS-DRG classification. According to the requestor, coated stents have a clinical performance comparable to drug-eluting stents however they are grouped with bare-metal stents because they do not contain a drug. The requestor asserted that this comingling muddies the Start Printed Page 25122clinical coherence of the MS-DRG structure, as one cannot infer distinctions in clinical performance or benefits among the groups and potentially creates a barrier (based on hospital decision-making) to patient access to modern coated stents.

The requestor listed the following MS-DRGs in its request.

  • MS-DRG 246 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Arteries or Stents);
  • MS-DRG 247 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent without MCC);
  • MS-DRG 248 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents); and
  • MS-DRG 249 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent without MCC).

According to the requestor, the non-drug-eluting stent MS-DRGs have outlived their usefulness in the stent market. The requestor performed its own analysis of MedPAR data from FY 2015 through FY 2019 and stated that it found the volume of cases describing non-drug-eluting coronary stents has declined since 2015, culminating in FY 2019, with drug-eluting stents accounting for 96.1% of all stent cases within the Medicare program, while non-drug-eluting stents accounted for only 3.9% that year. The requestor asserted that the assignment of coated stents to the non-drug-eluting stent category creates a market distortion as this newer technology is being comingled with very old technology at a payment disadvantage large enough to influence hospitals' willingness to prescribe, while at the same time acknowledging that the separation in average charges and costs between the non-drug-eluting stent category and the drug-eluting stent category is minimal in their analysis of the claims data.

Based on a review of the procedure codes that are currently assigned to MS-DRGs 246, 247, 248 and 249, our clinical advisors agree that further refinement of these MS-DRGs may be warranted. However, in ICD-10-PCS, a stent is considered an intraluminal device. The distinction between drug-eluting and non-drug eluting intraluminal devices is found elsewhere in the ICD-10-PCS procedure code classification and evaluating this request requires a more extensive analysis to assess potential impacts across the MS-DRGs. For these reasons, at this time, our clinical advisors recommend that rather than evaluating the procedure codes assigned to MS-DRGs 246, 247, 248 and 249 in isolation, additional analysis should be performed for this subset of procedure codes across the MS-DRGs, as part of the comprehensive procedure code review described in section II.D.11. of the preamble of this proposed rule. Therefore, we believe it would be more appropriate to consider this request further during our comprehensive procedure code review in future rulemaking.

6. MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue)

a. Knee Joint Procedures

We received a request to examine the procedure code combinations for procedures describing a right knee joint removal and replacement and procedures describing a left knee joint removal and replacement in MS-DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively). According to the requestor, when using the MS-DRG GROUPER software version 37, the left knee joint procedure combinations group correctly to MS-DRG 468, while the exact same right knee procedure code combinations group incorrectly to MS-DRG 465 (Wound Debridement and Skin Graft Except Hand for Musculoskeletal and Connective Tissue Disorders without CC/MCC).

The requestor provided the following procedure codes that describe the procedure code combinations for the left knee joint removal and replacement procedures currently assigned to MS-DRGs 466, 467, and 468.

The requestor also provided the following procedure codes that describe the procedure code combinations for right knee joint removal and replacement procedures for CMS's review and consideration.

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We reviewed the procedure code combinations listed and agree with the requestor that the procedure codes that describe the procedure code combinations for right knee joint removal and replacement procedures were inadvertently excluded from the logic for MS-DRGs 466, 467, and 468.

During our review of the previously listed procedure code combinations describing removal and replacement of the right and left knee joints, we identified additional MS-DRGs in which the listed procedure code combinations for the left knee joint are in the logic, however, the listed procedure code combinations for the right knee joint were inadvertently excluded from the logic. Specifically, the listed procedure code combinations describing removal and replacement of the left knee joint are also included in the logic for case assignment to MS-DRGs 461 and 462 (Bilateral or Multiple Major Joint Procedures of Lower Extremity with and without MCC, respectively) in MDC 08 and in the logic for case assignment to 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). Our clinical advisors stated that the procedure code combinations describing removal and replacement of the right knee joint should be added to MS-DRGs 461, 462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629, and 630 in MDC 10 for consistency with the procedure code combinations describing removal and replacement of the left knee joint that are currently assigned to those MS-DRGs. Adding these procedure codes will improve clinical coherence and ensure more appropriate MS-DRG assignment for these cases.

Therefore, for FY 2022, we are proposing to add the three procedure code combinations listed previously describing removal and replacement of the right knee joint that were inadvertently omitted from the logic to MS-DRGs 461, 462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629, and 630 in MDC 10.

b. Pelvic Trauma With Internal Fixation

We received a request to reassign cases reporting a diagnosis code describing a pelvic fracture in combination with a procedure code describing repair of a pelvic fracture with internal fixation, from the lower (NonCC) severity level MS-DRG of its current base MS-DRG assignment to the higher (MCC) severity level MS-DRG of its current base MS-DRG assignment. According to the requestor, there has been steady growth in the volume of internal fixation procedures performed for pelvic fractures since 2008. The requestor stated that due to this growth rate and the anticipated increase in utilization of these internal fixation devices in these procedures in the future that CMS should reconsider the payment structure for these cases it referred to as “internal fixation for pelvic trauma”.

The requestor provided data for the Healthcare Common Procedural Coding System (HCPCS) code G0413 (Percutaneous skeletal fixation of posterior pelvic bone fracture and/or dislocation, for fracture patterns which disrupt the pelvic ring, unilateral or bilateral, (includes ileum, sacroiliac joint and/or sacrum) and current procedural terminology (CPT) code 22848 (Pelvic fixation (attachment of caudal end of instrumentation to pelvic bony structures) other than sacrum) from 2008 through 2018 that it crosswalked to ICD-10-PCS procedure codes. The requestor stated that this CPT coded data indicated that physicians have used pelvic fracture fixation, and pelvic instrumentation, for an increasing number of trauma/fracture repair cases, demonstrating expanded use of these devices in the pelvic area overall.

The requestor reported that sacral fractures are often underdiagnosed and once the diagnosis is made, bedrest is common, although prolonged bedrest is not recommended for the elderly. In addition, the requestor stated that pelvic fractures may be isolated or they may be associated with surrounding structures. For example, the requester reported that the sacroiliac joint is involved in approximately 30 to 35% of pelvic fracture cases. According to the requestor, the standard of care has also transitioned, from bedrest-only to surgery, and current medical practice has evolved to lower the threshold for fracture repair surgery. For instance, the requestor stated that smaller 5mm Start Printed Page 25124fractures that were once left untreated now have standard treatment protocols involving the use of pelvic instrumentation. As a result, the requestor asserted that there will be greater utilization of internal fixation devices to treat these smaller pelvic fractures.

The requestor provided the following procedure codes that it stated describe procedures involving the use of internal fixation devices for pelvic fracture repair.

The requestor also provided the following diagnosis code subcategories that it stated identify diagnoses describing pelvic fracture.

The requestor performed its own analysis of claims data and reported findings for cases reporting a combination of the diagnosis codes found in the listed diagnosis code subcategories and the listed procedure codes (internal fixation for pelvic trauma) for MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively); MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively); and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively). According to the requestor, its findings support reassignment of these internal fixation for pelvic trauma cases from the lower severity level MS-DRG 517 to the higher severity level MS-DRG 515, from the lower severity level MS-DRG 909 to the higher severity level 907, and from the lower severity level MS-DRG 959 to the higher severity level 957. The requestor suggested that approximately 2,000 cases would be impacted by its recommendation to reassign internal fixation for pelvic trauma cases. The requestor also stated that these internal fixation for pelvic trauma cases currently result in a high rate of CMS outlier payments to institutions that perform a high volume of these procedures. Finally, the requestor stated that there is precedent for reassignment of cases from the lower severity level MS-DRGs to the higher severity level MS-DRG for cases involving the use of a device in orthopedic surgery. The requestor provided the examples of total ankle replacement procedures, spinal disc replacement procedures and neurostimulator implantation procedures to demonstrate how CMS has previously reassigned cases from the lower severity level MS-DRG to the higher severity level MS-DRG.

We first examined the claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for all cases in MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and 909; and MS-DRGs 957, 958, and 959. Our findings are shown in the following tables.

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We then examined claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for cases reporting any combination of the diagnosis and procedure codes that the requestor provided to identify internal fixation for pelvic trauma cases in MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and 909; and MS-DRGs 957, 958, and 959.

We note that our analysis identified two types of cases in which the combination of a diagnosis code and a procedure code (that the requestor provided to identify internal fixation for pelvic trauma cases) was reported. The first type of case consisted of a diagnosis code describing a pelvic fracture reported in combination with a single procedure code describing repair of a pelvic fracture with internal fixation on a claim, and the second type of case consisted of a diagnosis code describing a pelvic fracture reported in combination with two procedure codes describing repair of a pelvic fracture with internal fixation (for example, one for the right side and one for the left side) on a claim. These cases are described as single and bilateral internal fixation procedures for pelvic trauma, respectively. We refer the reader to Tables 6P.1h and 6P.1i associated with this proposed rule (which are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) for the list of diagnosis and procedure code combinations reflecting single internal fixation for pelvic trauma procedures reported by case ID in each MS-DRG, by fiscal year, along with the detailed claims analysis. We refer the reader to Tables 6P.1j and 6P.1k associated with this proposed rule (which are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) for the list of diagnosis and procedure code combinations reflecting bilateral internal fixation for pelvic trauma procedures reported by case ID in each MS-DRG, by fiscal year, along with the detailed claims analysis. For example, Table 6P.1h shows the claims data analysis findings from the March 2020 update of the FY 2019 MedPAR file. Line 2 identifies the section for single cases reported in MS-DRG 515, line 13 identifies the section for single cases reported in MS-DRG 516, and line 42 identifies the single cases reported in MS-DRG 517. The following table summarizes the information found in each column of the tables.

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As shown in Table 6P.1h, line 4, column A, displays the Case ID “Single-A” for the first case; column B displays MS-DRG 515; column C displays the diagnosis code S32.111A; column D displays the description of the diagnosis code (Minimally displaced Zone 1 fracture of sacrum, initial encounter for closed fracture); column E displays the procedure code 0QS234Z; column F displays the description of the procedure code (Reposition right pelvic bone with internal fixation device, percutaneous approach); column G displays the case count 1; column H displays an average length of stay of 3.0 days; column I displays average costs of $8,433 for the case; column J displays the frequency of the procedure reported was one (1) occurrence; column K displays a 3.0 day length of stay for the case; and column L displays $8,433 for the cost of the case.

In our analysis of the claims data from the March 2020 update of the FY 2019 MedPAR file, we found that there were no cases reporting any combination of the diagnosis codes and procedure codes previously listed in MS-DRGs 907, 908, and 909 or MS-DRGs 957, 958, and 959. Our findings are shown in the following table for any cases found to report a diagnosis code describing a pelvic trauma in combination with a procedure code describing single internal fixation in MS-DRGs 515, 516, and 517.

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As shown in the table, there were only three cases found in MS-DRG 517 reporting single internal fixation for pelvic trauma procedures, with an average length of stay of 5.33 days and average costs of $12,147. The average length of stay is longer and the average costs of these three cases higher compared to the average length of stay and the average costs for all cases in MS-DRG 517 (5.33 days versus 2.6 days and $12,147 versus $10,316, respectively); however, overall, we believe the data findings are comparable. Our clinical advisors did not support reassignment of the three cases from MS-DRG 517 to MS-DRG 515 based on the claims data analysis and also stated it would not be appropriate to reassign these cases into the higher severity level MS-DRG in the absence of a MCC and noted that the cases would not be clinically coherent with regard to resource utilization.

In our analysis of the claims data from the March 2020 update of the FY 2019 MedPAR file for cases in which a bilateral internal fixation for pelvic trauma procedure was performed, we identified one case in MS-DRG 517. As shown in Table 6P.1j, the average length of stay for this case was 4.0 days and the average costs were $24,258, which is longer than the average length of stay and greater than the average costs for all cases in MS-DRG 517 (2.6 days and $10,316, respectively). We also identified cases reporting various code combinations for MS-DRGs 515 and 516, and provide the details in Table 6P.1j associated with this proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS).

In our analysis of the claims data from the September 2020 update of the FY 2020 MedPAR file we found that there were no cases reporting any combination of the diagnosis codes and procedure codes previously listed in MS-DRG 909 or in MS-DRGs 957, 958, and 959. Our findings are shown in the following table for any cases found to report a diagnosis code describing a pelvic trauma in combination with a procedure code describing single internal fixation in MS-DRGs 515, 516, 517, 907, and 908.

As shown in the table, there were only four cases found in MS-DRG 517 reporting single internal fixation for pelvic trauma procedures, with an average length of stay of 2.5 days and average costs of $10,136. For the same reasons described previously based on the FY 2019 analysis, our clinical advisors did not support reassignment of the cases in the lower severity level MS-DRG 517 to the higher severity level MS-DRG 515. In addition, the average length of stay and average costs for these four cases reporting single internal fixation for pelvic trauma procedures are less than the average length of stay and average costs for all the cases in MS-DRG 517 (2.5 days versus 2.6 days and $10,136 versus $11,301, respectively)); however, overall, we believe the data findings are comparable.

In our analysis of the claims data from the September 2020 update of the FY 2020 MedPAR file for cases in which a bilateral internal fixation for pelvic trauma procedure was performed, we identified one case in MS-DRG 517. As shown in Table 6P.1k, the average length of stay for this case was 2.0 days and the average costs were $10,103, which is shorter than the average length of stay and less than the average costs for all cases in MS-DRG 517 (2.6 days and $11,301, respectively). We also identified cases reporting various combinations for MS-DRGs 515, 516 and MS-DRG 907, and provide the details in Table 6P.1k associated with this proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS).

We believe further analyses of these internal fixation for pelvic trauma cases in the claims data is warranted. We note that our analysis for both the single and bilateral cases was centered on the reporting of a principal diagnosis code describing a pelvic trauma (fracture) in combination with a procedure code describing internal fixation based on the codes provided by the requestor. However, we also identified cases in the claims data in which a pelvic trauma diagnosis code was reported as a secondary diagnosis code in combination with a procedure code describing internal fixation and believe these cases require further evaluation. In addition, during our review of the diagnosis and procedure codes that the requestor provided, we identified diagnosis codes that we believe do not warrant consideration for purposes of this request and additional procedure codes that describe internal fixation for pelvic trauma procedures, which we believe do warrant further analysis. For example, as previously noted, the requestor provided the subcategories for Start Printed Page 25128the diagnosis codes that it requested we consider for analysis. We do not agree that diagnosis codes describing a pelvic fracture that include the term “sequela” should be considered in the analysis to examine this request because, in the ICD-10-CM classification, the term sequela is defined as the residual effect (condition produced) after the acute phase of an illness or injury has terminated.

We refer the reader to Table 6P.1g for the list of diagnosis codes that are included in the diagnosis subcategories provided by the requestor and the list of procedure codes provided by the requestor, which also contains the procedure codes we identified. Additional time is needed for data analysis given the volume of these code combinations and corresponding data. We also believe that additional time is needed to allow for further analysis of the claims data to determine the causes of the fractures and other possible contributing factors with respect to the length of stay and costs of these cases, as well as the rate of outlier payments as identified by the requestor. Our clinical advisors also believe that future data findings may demonstrate additional variance in resource utilization for this patient population. We further note that, as discussed in the FY 2021 IPPS/LTCH PPS final rule, we finalized the addition of 161 procedure codes to MS-DRGs 957, 958, and 959 in MDC 24 (Multiple Significant Trauma) that include the insertion of internal fixation devices. We believe it would be beneficial to examine future claims data to determine if there is a change in the volume of cases in those specific MS-DRGs as a result of that update. For these reasons, we are proposing to maintain the structure of MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and 909; and MS-DRGs 957, 958, and 959 for FY 2022.

7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract): Chronic Renal Replacement Therapy (CRRT)

We received a request to create new MS-DRGs for cases where the patient receives continuous renal replacement therapy (CRRT) during the inpatient stay. According to the requestor, hospitals incur higher costs related to CRRT and current MS-DRG definitions do not adequately account for the clinical and resource requirements of CRRT. The requestor stated Medicare reimbursement is insufficient to cover the costs of administering CRRT, creating a disincentive in offering this dialysis modality and is a barrier to further adoption of CRRT. The requestor suggested that the following two new MS-DRGs be created:

  • Suggested New MS-DRG XXX—Continuous Renal Replacement Therapy with CC/MCC; and
  • Suggested New MS-DRG XXX—Continuous Renal Replacement Therapy without CC/MCC.

Renal replacement therapy (RRT) replaces kidney function by exchanging solute and removing fluid from the blood as a means to prevent or treat renal failure in patients with acute kidney injury (AKI). Modalities of renal support include CRRT, conventional intermittent hemodialysis (IHD), and prolonged intermittent renal replacement therapies (PIRRTs), which are a hybrid of CRRT and IHD. IHD provides solute clearance and filtration during relatively brief treatment sessions, generally lasting from three to five hours. CRRT provides gradual fluid removal and solute clearance over prolonged treatment times, typically over a 24-hour period, mimicking the natural function of the kidney to allow for the continuous removal or replacement of fluid. The most common CRRT modalities are continuous venovenous hemofiltration, continuous venovenous hemodialysis, and continuous venovenous hemodiafiltration.

According to the requestor, CRRT is used primarily to treat critically ill, hospitalized patients who experience AKI requiring more intensive and continuous treatment than other dialysis modalities. The requestor stated that CRRT offers fluid balance and convective clearance that may be precisely adjusted for each patient, and has been associated with a higher likelihood of kidney recovery as compared to other modalities of RRT. The requestor asserted that IHD may worsen the neurological status of patients with acute brain injury or other causes of increased intracranial pressure by compromising their cerebral perfusion by raising intracranial pressure. The ongoing modulation of fluid balance and targeted fluid management capabilities of CRRT enables its use in situations other than renal failure. According to the requestor, CRRT, a slow continuous therapy, is preferred for patients who are hemodynamically unstable because it helps prevent the hemodynamic fluctuations common with the more rapid IHD. In light of the COVID-19 pandemic, the requestor noted the National Institutes of Health's Coronavirus Disease 2019 (COVID-19) Treatment Guidelines and The American Society of Nephrology recommend CRRT as the preferred renal replacement therapy for critically ill, COVID-19 patients experiencing AKI, who develop indications for renal replacement therapy, due to the hemodynamic instability often experienced in this condition.

The requestor acknowledged that under the current MS-DRG definitions, Medicare cases with beneficiaries receiving CRRT are assigned to more than 300 MS-DRGs. Although these beneficiaries are clinically similar in that they are critically ill patients who experience AKI requiring more intensive and continuous treatment than other dialysis modalities, the principal diagnoses for their inpatient stays vary. The requestor stated their analysis of the variability in principal diagnosis of the cases examined with beneficiaries receiving CRRT indicated that, in general, IHD tends to be used more for patients with chronic illnesses, and CRRT tends to be used for more acute injuries and end of life scenarios. Therefore, the requestor suggested that CMS create new MS-DRGs specific to CRRT, without regard to principal diagnosis, in order to group the resource intensive, clinically coherent, CRRT cases together in contrast to the existing GROUPER definitions.

According to the requestor, continuing to assign CRRT to existing MS-DRGs would be clinically inappropriate and remain financially devastating to providers even when treating the most routine, uncomplicated CRRT patients. The requestor performed its own data analysis and stated hospitals lose over $22,000 per CRRT case on average, even when outliers are considered, which they state is a shortfall of more than 30 percent. The requestor asserted these losses create a disincentive for providers to offer CRRT despite its clinical benefits. The requestor also asserted the magnitude of financial losses associated with the provision of CRRT at the current level of MS-DRG payment could force many hospitals to examine the capacity and scope of their CRRT programs if facilities continue to determine that the financial burden of treating Medicare beneficiaries with CRRT is more than the facility can sustain. As COVID-19 continues to strain hospital resources, the requestor asserts the availability of CRRT should not be impeded by inadequate MS-DRG payments related to CRRT.

The following ICD-10-PCS procedure code identifies the performance of CRRT.

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In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure code 5A1D90Z is currently recognized as a non-O.R. procedure that affects the MS-DRG to which it is assigned. Our clinical advisors agree that the principal diagnosis assigned for inpatient admissions where continuous renal replacement of therapy is utilized can vary. To examine the impact of the use of CRRT, we examined claims data from the March 2020 update of the FY 2019 MedPAR file for the top ten MS-DRGs reporting the use of CRRT. Our findings are reflected in the following table:

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As shown in this table, our data findings demonstrate the average lengths of stay were longer and the average costs were higher for the cases reporting the use of CRRT when compared to all cases in their respective MS-DRG. We note that the claims data demonstrate that the MS-DRG with the largest number of cases reporting CRRT is MS-DRG 871 with 2,912 cases. Of the top 10 MS-DRGs reporting CRRT, the MS-DRG with the smallest number of cases is MS-DRG 682 with 401 cases. The average length of stay of this subset of cases ranges from a high of 35.5 days in MS-DRG 004 to a low of 7.9 days in MS-DRG 871 for cases reporting the use of CRRT. The average costs of this subset of cases ranges from a high of $174,085 in MS-DRG 003 to a low of $27,681 in MS-DRG 871 for cases reporting the use of CRRT.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for the top ten MS-DRGs reporting the use of CRRT. Our similar findings are reflected in the following table:

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As shown in this table, our data findings show that the average lengths of stay were longer and the average costs were higher for the cases reporting the use of CRRT when compared to all cases in their respective MS-DRG. We note that the claims data demonstrate that the MS-DRG with the largest number of cases reporting CRRT is MS-DRG 871 with 3,023 cases. Of the top 10 MS-DRGs reporting CRRT, the MS-DRG with the smallest number of cases is MS-DRG 219 with 374 cases. The average length of stay of this subset of cases ranges from a high of 34.9 days in MS-DRG 004 to a low of 7.9 days in MS-DRG 871 for cases reporting the use of CRRT. The average costs of this subset of cases ranges from a high of $182,952 in MS-DRG 003 to a low of $29,248 in MS-DRG 871 for cases reporting the use of CRRT.

While the results of the claims analysis indicate that the average costs and average lengths of stay for cases reporting the use of CRRT are higher compared to the average costs for all cases in their assigned MS-DRG, we are unable to ascertain from the claims data the resource use specifically attributable to CRRT during a hospital stay. There is large variability in the differences in average costs from MS-DRG to MS-DRG, indicating there may have been other factors contributing to the higher costs. When reviewing consumption of hospital resources for this subset of cases, the claims data clearly demonstrate the patients typically have a major complication or co-morbid (MCC) condition reported based on the MS-DRGs assigned. The claims data also reflects, based on the top ten MS-DRGS, that the procedure frequently occurs in cases with other procedures with higher than average resource use such as mechanical ventilation, tracheostomy, extracorporeal membrane oxygenation (ECMO) and other major cardiovascular procedures that also may be contributing to the higher average costs for these cases.

To further examine the variability in cases reporting the use of CRRT, we also reviewed the claims data to identify the number (frequency) and types of principal diagnoses that were reported to determine what factors may also be contributing to the higher average costs for these cases.Start Printed Page 25132

Our findings for the top 10 principal diagnoses that were reported within the claims data from the March 2020 update of the FY 2019 MedPAR file for this subset of cases is shown in the following table:

The claims data in this table reflects a wide variance with regard to the frequency and types of principal diagnoses that were reported along with the procedure code describing the use of CRRT. We note that the claims data demonstrate that the diagnosis with the largest number of cases reporting CRRT is A41.9 (Sepsis, unspecified organism) with 4,226 cases. Of the top 10 principal diagnoses reporting CRRT, the diagnosis with the smallest number of cases is A41.01 (Sepsis due to Methicillin susceptible Staphylococcus aureus) with 271 cases. The average length of stay of this subset of cases ranges from a high of 20 days with a diagnosis of I13.0 (Hypertensive heart and chronic kidney disease with heart failure and stage 1 through stage 4 chronic kidney disease, or unspecified chronic kidney disease) to a low of 12.6 days with a diagnosis of A41.9 (Sepsis, unspecified organism) for cases reporting the use of CRRT. The average costs of this subset of cases ranges from a high of $85,557 with a diagnosis of I21.4 (Non-ST elevation (NSTEMI) myocardial infarction) to a low of $40,908 with a diagnosis of N17.9 (Acute kidney failure, unspecified) for cases reporting the use of CRRT.

Our findings for the top 10 principal diagnoses that were reported within the claims data from the September 2020 update of the FY 2020 MedPAR file for this subset of cases is shown in the following table:

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The claims data in this table also reflects a wide variance with regard to the frequency and types of principal diagnoses that were reported along with the procedure code describing the use of CRRT. As shown, the claims data demonstrate that the diagnosis with the largest number of cases reporting CRRT is A41.9 (Sepsis, unspecified organism) with 4,128 cases. Of the top 10 principal diagnoses reporting CRRT, the diagnosis with the smallest number of cases is N17.0 (Acute kidney failure with tubular necrosis) with 270 cases. The average length of stay of this subset of cases ranges from a high of 21.4 days with a diagnosis of U07.1 (COVID-19) to a low of 11.8 days with a diagnosis of J96.01 (Acute respiratory failure with hypoxia) for cases reporting the use of CRRT. The average costs of this subset of cases ranges from a high of $ 86,717 with a diagnosis of I21.4 (Non-ST elevation (NSTEMI) myocardial infarction) to a low of $ 48,882 with a diagnosis of J96.01 (Acute respiratory failure with hypoxia) for cases reporting the use of CRRT.

To evaluate the frequency with which the use of CRRT is reported for different clinical scenarios, we examined claims from the March 2020 update of the FY 2019 MedPAR file across each of the 25 MDCs to determine the number of cases reporting the use of CRRT. Our findings are shown in this table.

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As shown in the table, the top five MDCs with the largest number of cases reporting CRRT are MDC 18, with 6,761 cases; MDC 05, with 6,027 cases; MDC 04, with 1,370 cases; MDC 11, with 1,134 cases; and MDC 06, with 987 cases. The top five MDCs with the highest average costs for cases reporting the use of CRRT were MDC 13, with average costs of $131,252; MDC 22, with average costs of $104,749; MDC 17, with average costs of $95,309; MDC 07, with average costs of $87,272; and MDC 05, with average costs of $86,024. The claims data indicate that the average length of stay ranges from a high of 47.3 days in MDC 13 to a low of 8 days in MDC 14 for cases reporting the use of CRRT across each of the 25 MDCs.

We also examined claims from the September 2020 update of the FY 2020 MedPAR file across each of the 25 MDCs to determine the number of cases Start Printed Page 25136reporting the use of CRRT. Our findings are shown in this table.

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As shown in the table, the top five MDCs with the largest number of cases reporting CRRT are MDC 18, with 7,678 cases; MDC 05, with 5,516 cases; MDC Start Printed Page 2513804, with 2,191 cases; MDC 11, with 1,066 cases; and MDC 06, with 838 cases. The top five MDCs with the highest average costs for cases reporting the use of CRRT were MDC 22, with average costs of $139,244; MDC 17, with average costs of $88,182; MDC 05, with average costs of $87,875; MDC 07, with average costs of $86,894; and MDC 08, with average costs of $ 77,515. The claims data indicate that the average length of stay ranges from a high of 26.7 days in MDC 22 to a low of 11 days in MDC 20 for cases reporting the use of CRRT across each of the 25 MDCs.

Our clinical advisors reviewed the clinical issues and the claims data, and did not support creating new MS-DRGs for CRRT without regard to principal diagnosis. Our clinical advisors noted that more than one modality for RRT can be utilized for managing patients with AKI given the needs of the patient. For example, a patient may initially start on CRRT when they are hemodynamically unstable, but transition to IHD as their condition is managed during the admission. While patients requiring CRRT can be more resource intensive, it would not be practical to create new MS-DRGs specifically for this subset of patients given the various clinical presentations for which CRRT may be utilized, and the variation of costs in their assigned MS-DRGs. We believe that additional analysis and efforts toward a broader approach to refining the MS-DRGs for cases of patients requiring renal replacement therapy would be needed to address the concerns expressed by the requestor. These data do show cases reporting the use of CRRT can present greater treatment difficulty. However, when reviewing consumption of hospital resources for this subset of cases, the claims data also suggest that the increased costs may be attributable to the severity of illness of the patient and other circumstances of the admission.

In summary, the claims data reflect a wide variance with regard to the frequency and average costs for cases reporting the use of CRRT. Depending on the number of cases in each MS-DRG, it is difficult to detect patterns of complexity and resource intensity. We believe the creation of new MS-DRGs for cases with procedure codes reporting the use of CRRT has the potential for creating instability in the relative weights and disrupting the integrity of the MS-DRG system. Therefore, we are not proposing to create new MS-DRGs for cases reporting the use of continuous renal replacement therapy.

8. MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs and Immunologic Disorders)

a. ANDEXXA® (Coagulation Factor Xa (Recombinant), Inactivated-zhzo)

ANDEXXA® (coagulation factor Xa (recombinant), inactivated-zhzo) is a recombinant decoy protein that rapidly reverses the anticoagulant effects of two direct oral anticoagulants, apixaban and rivaroxaban, when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding in indications such as intracranial hemorrhages (ICHs) and gastrointestinal bleeds (GIBs). ANDEXXA® received FDA approval on May 3, 2018. When administered as a bolus followed by continuous infusion, ANDEXXA® blocks the anticoagulants ability to inhibit FXa. ANDEXXA® was approved for new technology add on payments in FY 2019 (83 FR 41362). We refer readers to section II.H.5.j. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41355 through 41362), and section II.H.4.k. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42193 through 42194) for a complete discussion of the new technology add on payment application and payment amount for ANDEXXA® for FY 2019 and FY 2020.

In section II.H.4.i. of the preamble of the FY 2021 IPPS/LTCH PPS final rule (85 FR 58614 through 58615), we noted the 3-year anniversary date of the entry of ANDEXXA® onto the U.S. market (May 3, 2021) will occur in the second half of FY 2021. We stated in general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the upcoming fiscal year. After consideration of the public comments received, we finalized our proposal to continue new technology add-on payments for this technology for FY 2021.

We received a request from the manufacturer to review potential access issues in the inpatient setting for this drug in the future. The requestor acknowledged that CMS approved the new technology add-on payment for ANDEXXA® beginning in FY 2019 and noted that FY 2021 will be the last year before the add-on payments expire. According to the requestor, ANDEXXA® is the only indicated factor Xa inhibitor reversal agent, and the requestor stated a concern for the future of access to ANDEXXA® for patients experiencing uncontrolled bleeds caused by factor Xa inhibitors. The requestor stated their claims modeling showed a significant drop in hospital payment for cases involving use of ANDEXXA® following the expiration of new technology add-on payments. Specifically, after new technology add-on payments expire, the requestor stated their model projects that approximately 59% of cases are likely to be paid less than the wholesale acquisition costs for ANDEXXA®.

The following ICD-10-PCS procedure codes identify the intravenous administration of ANDEXXA®.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes XW03372 and XW04372 are designated as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors agree that the principal diagnosis assigned for inpatient admissions where the intravenous administration of ANDEXXA® is indicated can vary.

To evaluate the frequency with which the intravenous administration of Start Printed Page 25139ANDEXXA® is reported for different clinical scenarios, we examined claims data from the March 2020 update of the FY 2019 MedPAR file across the Pre-MDC category, each of the 25 MDCs and the surgical class referred to as “unrelated operating room procedures” to determine the number of cases reporting the use of ANDEXXA®. Our findings are shown in the following table.

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As shown in the table, there were 461 cases reporting the intravenous administration of ANDEXXA® with procedure codes XW03372 or XW04372. The top five MDCs with the largest number of cases reporting ANDEXXA® are MDC 01, with 250 cases; MDC 06 with 53 cases; MDC 05, with 33 cases; MDC 18, with 25 cases; and the Pre-MDC category, with 16 cases. The claims data indicate that the average costs range from a high of $107,741 in the Pre-MDC category to a low of $22,242 in MDC 09 for cases reporting the use of ANDEXXA® across the claims data. The claims data also indicates that the average length of stay ranges from a high of 19.9 days in the Pre-MDC category to a low of 4 days in MDC 09 for cases reporting the use of ANDEXXA®.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file across the Pre-MDC category, each of the 25 MDCs and the surgical class referred to as “unrelated operating room procedures” to determine the number of cases reporting the use of ANDEXXA®. Our findings are shown in the following table.

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As shown in the table, there were 719 cases reporting the intravenous administration of ANDEXXA® with procedure codes XW03372 or XW04372. The top five MDCs with the largest number of cases reporting ANDEXXA® are MDC 01, with 364 cases; MDC 06 with 98 cases; MDC 18, with 52 cases; MDC 05, with 50 cases; and MDC 24, with 30 cases. The claims data indicate that the average costs range from a high Start Printed Page 25143of $123,750 in the Pre-MDC category to a low of $27,922 in MDC 09 for cases reporting the use of ANDEXXA® across the claims data. The claims data also indicates that the average length of stay ranges from a high of 25 days in the Pre-MDC category to a low of 4.2 days in MDC 21 for cases reporting the use of ANDEXXA® across the claims data.

To further examine the impact of the intravenous administration of ANDEXXA®, we examined claims data from the March 2020 update of the FY 2019 MedPAR file for the top ten MS-DRGs reporting procedure codes XW03372 or XW04372. Our findings are reflected in the following table:

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As shown in this table, the claims data demonstrate that the MS-DRG with the largest number of cases reporting ANDEXXA® is MS-DRG 064 with 78 cases. Of the top 10 MS-DRGs reporting ANDEXXA®, the MS-DRG with the smallest number of cases is MS-DRG 003 with 13 cases. The average length of stay of this subset of cases ranges from a high of 21.5 days in MS-DRG 003 to a low of 4.2 days in MS-DRG 086 for cases reporting the use of ANDEXXA®. The average costs of this subset of cases ranges from a high of $117,265 in MS-DRG 003 to a low of $26,992 in MS-DRG 083 for cases reporting the use of ANDEXXA®. We note while our data findings demonstrate the average costs were higher for the cases reporting the intravenous administration of ANDEXXA® when compared to all cases in their respective MS-DRG, these cases represent a very small percentage of the total number of cases reported in these MS-DRGs. We also note that the top 10 MS-DRGs identified only account for 239 of the 461 cases in total that were identified in the March 2020 update of the FY 2019 MedPAR file reporting ICD-10-PCS codes XW03372 or XW04372. The remainder of the cases are distributed in small numbers across the MS-DRGs.

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for the top ten MS-DRGs reporting procedure codes XW03372 or XW04372. Our findings are reflected in the following table:

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As shown in this table, the claims data demonstrate that the MS-DRG with the largest number of cases reporting ANDEXXA® is MS-DRG 064 with 111 cases. Of the top 10 MS-DRGs reporting ANDEXXA®, the MS-DRG with the smallest number of cases is MS-DRG 083 with 23 cases. The average length of stay of this subset of cases ranges from a high of 10 days in MS-DRG 023 to a low of 3.5 days in MS-DRG 378 for cases reporting the use of ANDEXXA®. The average costs of this subset of cases ranges from a high of $59,478 in MS-DRG 025 to a low of $24,348 in MS-DRG 378 for cases reporting the use of ANDEXXA®. As with our analysis of the Start Printed Page 25146FY 2019 claims data, while these data findings demonstrate the average costs were higher for the cases reporting the intravenous administration of ANDEXXA® when compared to all cases in their respective MS-DRG, these cases represent a very small percentage of the total number of cases reported in these MS-DRGs. We also note that the top 10 MS-DRGs identified only account for 385 of the 719 cases in total that were identified in the September 2020 update of the FY 2020 MedPAR file reporting ICD-10-PCS codes XW03372 or XW04372. The remainder of the cases are distributed in small numbers across the MS-DRGs.

After reviewing the claims data, we believe it is premature to consider a proposal for cases involving ANDEXXA® therapy for FY 2022. While the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file do contain claims reporting the procedure codes identifying the intravenous administration of ANDEXXA®, the number of cases is small across the MDCs and MS-DRGs. The claims data also reflect a wide variance with regard to the frequency and average costs for these cases reporting the use of ANDEXXA®. Moreover, we were unable to identify another MS-DRG that would be a more appropriate MS-DRG assignment for these cases based on the indication for this therapeutic drug. As noted previously, ANDEXXA® reverses the anticoagulant effects of apixaban and rivaroxaban, when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding. The underlying cause of the life-threatening or uncontrolled bleeding can vary which means the principal diagnosis assigned for inpatient admissions where ANDEXXA® is administered can vary. The MS-DRGs are a classification system intended to group together diagnoses and procedures with similar clinical characteristics and utilization of resources. We generally seek to identify sufficiently large sets of claims data with a resource/cost similarity and clinical similarity in developing diagnostic-related groups rather than smaller subsets based on the drugs administered. In reviewing this issue, our clinical advisors expressed concern regarding making potential MS-DRG changes based on a specific, single therapeutic agent, identified by unique procedure codes rather than based on a group of related procedure codes that can be reported to describe that same type or class of treatment or technology, which is more consistent with the intent of the MS-DRGs.

We recognize the average costs of the small numbers of cases involving the intravenous administration of ANDEXXA® are greater when compared to the average costs of all cases in their respective MS-DRG. The MS-DRG system is a system of averages and it is expected that within the diagnostic related groups, some cases may demonstrate higher than average costs, while other cases may demonstrate lower than average costs. We further note that section 1886(d)(5)(A) of the Act provides for Medicare payments to Medicare-participating hospitals in addition to the basic prospective payments for cases incurring extraordinarily high costs.

We acknowledge the importance of ensuring that patients diagnosed with an indication for a factor Xa inhibitor reversal agent have adequate access to care and receive the necessary treatment. While we are sensitive to the requestors' concerns about continued access to treatment for beneficiaries who require the reversal of anticoagulation due to life-threatening or uncontrolled bleeding, additional time is needed to explore options and other mechanisms through which to address low volume high-cost drugs outside of the MS-DRGs.

Furthermore, we note that we are proposing to continue new technology add-on payments for ANDEXXA® for FY 2022. We refer the reader to section II.F.4.b of the preamble of this proposed rule for further discussion regarding our proposal to allow a one-time extension of new technology add-on payments for FY 2022 for 15 technologies for which the new technology add-on payment would otherwise be discontinued, in connection with our proposal to use the FY 2019 data to develop the proposed FY 2022 relative weights.

Therefore for the reasons stated previously, for FY 2022 we are not proposing any MS-DRG changes for cases involving the intravenous administration of ANDEXXA®.

b. Cytokine Release Syndrome (CRS) Logic

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58557 through 58561), we finalized modifications to the proposed severity level designations for a subset of the diagnosis codes describing Cytokine Release Syndrome (CRS) based upon further review of the conditions and in response to public comments. We provided the following table to display the finalized severity level designations and stated that 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 connection with the finalized severity level designations for the listed CRS codes, we also finalized modifications to the ICD-10 MS-DRG GROUPER logic V38 for MS-DRGs 814, 815, and 816 (Reticuloendothelial and Immunity Disorders with MCC, with CC, and without CC/MCC, respectively) to conform to the updates the CDC finalized in the ICD-10-CM Tabular List instructions for assigning and reporting the CRS codes effective with discharges on and after October 1, 2020. The following modifications to the GROUPER logic were finalized effective with discharges on and after October 1, 2020, for case assignment involving CRS following CAR T-cell therapy to MS-Start Printed Page 25147DRGs 814, 815, and 816. We noted that the GROUPER logic for MS-DRGs 814, 815, and 816 will include a principal diagnosis of T89.89XA with a secondary diagnosis of any CRS code as shown in this section of this proposed rule.

Principal Diagnosis

T80.89XA Other complications following infusion, transfusion and therapeutic injection, initial encounter

with

Secondary Diagnosis

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 discussed in section II.D.13 of the preamble of this proposed rule, Table 6A.-New Diagnosis Codes, lists the new diagnosis codes that have been approved to date and will be effective with discharges on and after October 1, 2021. Included in Table 6A are the following codes that describe complication of immune effector cellular therapy identifying the timeframe of the encounter.

Also included in Table 6A are the following diagnosis codes that describe immune effector cell-associated neurotoxicity syndrome (ICANS), with varying degrees of severity.

Consistent with the Tabular List instruction for these two sets of diagnosis codes as presented and discussed by the CDC at the September 8-9, 2020 ICD-10 Coordination and Maintenance Committee meeting, the diagnosis codes describing a complication of the immune effector cellular therapy (T80.82XA, T80.82XD, and T80.82XS) are to be sequenced first, followed by the applicable diagnosis code to identify the specified condition resulting from the complication. For example, the types of complications that may result from immune effector cellular therapy treatment (for example, CAR T-cell therapy) include ICANS or CRS, as described by the listed diagnosis codes. Accordingly, the CDC included the following instructional note in the Tabular List modifications for code T80.82-

“Use additional code to identify the specific complication, such as:

cytokine release syndrome (D89.83-) immune effector cell-associated neurotoxicity syndrome (G92.0-)”

Materials relating to the discussions involving the diagnosis codes from the September 8-9, 2020 ICD-10 Coordination and Maintenance Committee meeting can be obtained from the CDC website at: https://www.cdc.gov/​nchs/​icd/​icd10cm_​maintenance.htm.

As noted previously, the current logic for case assignment involving CRS following CAR T-cell therapy to MS-DRGs 814, 815, and 816 includes a principal diagnosis of T89.89XA with a secondary diagnosis of any CRS code. However, with the finalization of new diagnosis code T80.82-, diagnosis code T89.89XA would no longer be reported and these cases would instead report new diagnosis code T80.82XA, effective with discharges on and after October 1, 2020. As shown in Table 6A associated with this proposed rule, we are proposing to assign diagnosis code T80.82XA to MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, and Immunologic Disorders) in MS-DRGs 814, 815, and 816. If the MDC and MS-DRG assignment for new diagnosis code T80.82XA is finalized, the current logic for MS-DRGs 814, 815, and 816 that includes a principal diagnosis code of T89.89XA with a secondary diagnosis code of any CRS code would no longer be appropriate or necessary.

Therefore, we are proposing to revise the structure of MS-DRGs 814, 815, and 816 by removing the logic that includes a principal diagnosis of T89.89XA with a secondary diagnosis of any CRS code from MS-DRGs 814, 815, and 816 effective FY 2022.

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

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58517 through 58520), we Start Printed Page 25148discussed the ICD-10-PCS codes that describe the insertion of an intraluminal device into the inferior vena cava that are listed in the following table.

We finalized a change in the designation of ICD-10-PCS procedure code 06H03DZ from O.R. procedure to non-O.R. procedure and maintained the O.R. designation of procedure codes 06H00DZ and 06H04DZ. In that discussion, we noted our clinical advisors supported changing the O.R. designation of procedures describing insertion of an intraluminal device into the inferior vena cava performed via a percutaneous approach since the procedure does not require the resources of an operating room, while concurring that 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. We also noted 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 and not whether the change in designation would impact payment in a particular direction.

In response to this final policy, for this FY 2022 IPPS/LTCH PPS proposed rule, we received a request to revise MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedures with and without CC/MCC, respectively) by removing the current two-way severity level split and creating a three-way severity level split. The requestor respectfully disagreed with the FY 2021 IPPS/LTCH PPS final rule decision to change the designation of the procedure code describing the insertion of an inferior vena cava intraluminal device via percutaneous approach to a non-O.R. procedure, and stated vena cava filters are most often placed in interventional radiology suites and require a high level of skill to prevent rupture of the vena cava; and although they are long-term devices, they must be placed skillfully to allow for removal later if needed.

According to the requestor, it is a conundrum that patients with principal and secondary diagnoses that qualify for 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) group to lower weighted surgical MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedures with and without CC/MCC, respectively) when a non-major O.R. procedure is performed. The requestor stated the difference in relative weights might be occurring because of the two-way split within MS-DRGs 829 and 830 and the three-way split within MS-DRGs 837, 838 and 839. The requestor theorized that removing the current two-way severity level split of MS-DRGs 829 and 830 and creating a three-way severity level split could help resolve the relative weight discrepancy when any non-major O.R. procedures are performed during hospitalizations for chemotherapy for acute leukemia.

This requestor also suggested that if CMS' analysis did not support creating a three-way split for MS-DRGs 829 and 830, exclusion of PCS code 06H03DZ from the list of qualifying procedures and reinstatement of O.R. procedure status to appropriately compensate providers for the cost of devices and resources to place inferior vena cava filters across the patient population should be proposed.

To evaluate the request to create a three-way severity split MS-DRG for cases reporting myeloproliferative disorders or poorly differentiated neoplasms with other procedures, we conducted an analysis of base MS-DRG 829. 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 829 using the September 2018 update of the FY 2018 MedPAR file and the March 2020 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 2022, respectively. Our findings are shown in the table:

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We applied the criteria to create subgroups for the three-way severity level split. We found that the criterion that there be at least 500 cases for each subgroup was not met based on the data in both the FY 2018 and FY 2019 MedPAR files, as shown in the table for both years. Specifically, for the “with MCC”, “with CC”, and “without CC/MCC” split, there were only 333 cases in the “without CC/MCC” subgroup based on the data in the FY 2019 MedPAR file and only 333 cases in the “without CC/MCC” subgroup based on the data in the FY 2018 MedPAR file. Accordingly, the claims data do not support a three-way severity level split for base MS-DRG 829.

We also reviewed the claims data for base MS-DRG 829 using the September 2019 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, which were used in our analysis of claims data for MS-DRG reclassification requests for FY 2021 and FY 2022, respectively. Our findings are shown in the table:

We applied the criteria to create subgroups for the three-way severity level split. We found that the criterion that there be at least 500 cases for each subgroup was not met based on the data in both the FY 2019 and FY 2020 MedPAR files, as shown in the table for both years. Specifically, for the “with MCC”, “with CC”, and “without CC/MCC” split, there were only 303 cases in the “without CC/MCC” subgroup based on the data in the FY 2020 MedPAR file and, as previously noted, only 333 cases in the “without CC/MCC” subgroup based on the data in the FY 2019 MedPAR file. As shown in both sets of data and stated previously, the claims data do not support a three-way severity level split for base MS-DRG 829.

In response to the request to exclude ICD-10-PCS code 06H03DZ from a list of qualifying procedures if CMS's analysis did not support creating a three-way split for MS-DRGs 829 and 830, by definition, procedure codes designated as non-O.R. procedures, not further classified as “affecting the MS-DRG assignment”, do not influence the MS-DRG assignment. As stated previously, in the FY 2021 IPPS/LTCH PPS final rule we finalized our proposal to change the designation of ICD-10-PCS procedure code 06H03DZ from O.R. procedure to non-O.R. procedure, therefore as a non-O.R. procedure, there is no need to exclude ICD-10-PCS code 06H03DZ from a list of qualifying procedure codes for MS-DRGs 829 and 830.

In response to the request to reinstate the O.R. procedure designation of ICD-10-PCS code 06H03DZ if CMS's analysis did not support creating a three-way split for MS-DRGs 829 and 830, the change in designation from O.R. procedure to non-O.R. procedure is recent, only becoming effective October 1, 2020. Our clinical advisors continue to indicate that code 06H03DZ, describing the percutaneous insertion of an intraluminal device into the inferior vena cava, does not require the resources of an operating room, that the procedure to insert an IVC filter percutaneously is not surgical in nature and that the resources involved in furnishing this procedure are comparable to the related ICD-10-PCS procedure codes that describe the insertion of infusion devices into the inferior vena cava that are currently designated as non-O.R. procedures. Our clinical advisors state our FY 2021 final policy results in an O.R. designation of 06H03DZ that better reflects the associated technical complexity and hospital resource use of this procedure. We continue to explore 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, as discussed in the FY 2021 IPPS/LTCH PPS final rule and in section II.D.11. of the preamble of this proposed rule. We continue to develop our process and methodology, and will provide more detail in future rulemaking.

In summary, based on the results of our analysis, for FY 2022, we are proposing to maintain the current structure of MS-DRGs 829 and 830.

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.Start Printed Page 25150

Based on the results of our review of the claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, as well as our review of the requests that we received to examine cases found to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, we are proposing to move the cases reporting the procedures and/or principal diagnosis codes described in this section of this rule from MS-DRGs 981 through 983 or MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC into which the principal diagnosis or procedure is assigned.

As discussed in section II.D.3.b. of the preamble of this proposed rule, we received a request to reassign cases with procedures describing control of bleeding in the cranial cavity when reported with a central nervous system diagnosis 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 MDC 01 (Diseases and Disorders of the Central Nervous System) in MS-DRGs 25, 26, and 27 (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC, and without CC/MCC, respectively (for example, “craniotomy” MS-DRGs). We note that in addition to MS-DRGs 25, 26, and 27, MS-DRG 23 (Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-DRG 24 (Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis without MCC) also include procedures performed on structures located within the cranial cavity and are included in the range of MS-DRGs known as the “craniotomy” MS-DRGs in MDC 01.

The management and treatment for bleeding (or hemorrhage) within the cranial cavity varies depending on the location, cause and the severity (or extent) of the bleed. Common causes include head trauma or cerebral aneurysm. Control of bleeding in the cranial cavity procedures are identified by ICD-10-PCS procedure codes 0W310ZZ (Control bleeding in cranial cavity, open approach), 0W313ZZ (Control bleeding in cranial cavity, percutaneous approach) and 0W314ZZ (Control bleeding in cranial cavity, percutaneous endoscopic approach) and are currently assigned to the following MDCs and MS-DRGs.

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According to the requestor, procedures performed within the cranial cavity always involve drilling or cutting through the skull regardless of the Start Printed Page 25152approach, therefore the three procedure codes identified (0W310ZZ, 0W313ZZ, and 0W314ZZ) warrant assignment to the “craniotomy” MS-DRGs.

Our analysis of this grouping issue confirmed that when a procedure describing control of bleeding in the cranial cavity is reported with a principal diagnosis from MDC 01, these cases group to MS-DRGs 981, 982, and 983. 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 a MS-DRG assignment to a surgical class referred to as “unrelated operating room procedures”.

We examined claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for cases reporting any one of the three procedure codes (0W310ZZ, 0W313ZZ or 0W314ZZ) in MS-DRGs 981 through 983 with a principal diagnosis from MDC 01. Our findings are shown in the following tables.

As noted previously, the requestor asked that we consider reassignment of these cases to the craniotomy MS-DRGs (identified as MS-DRGs 23, 24, 25, 26, and 27). We therefore examined the data for all cases in MS-DRGs 23, 24, 25, 26, and 27. Our findings are shown in the following tables.

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As shown, in our analyses of the claims data for MS-DRGs 981 through 983, we found a total of ten cases reporting procedures describing control of bleeding in cranial cavity with a principal diagnosis from MDC 01 in the March 2020 update of the FY 2019 MedPAR file, and a total of two cases reporting procedures describing control of bleeding in cranial cavity with a principal diagnosis from MDC 01 in the September 2020 update of the FY 2020 MedPAR file.

Our clinical advisors stated these procedures describing control of bleeding in the cranial cavity are consistent with the existing procedure codes included in the logic for case assignment to MS-DRGs 25, 26, and 27, in addition to MS-DRG 23 (Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-DRG 24 (Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis without MCC) that also describe procedures performed on structures located within the cranial cavity and are included in the range of MS-DRGs known as the “craniotomy” MS-DRGs. While the claims analysis based on the March 2020 update of the FY 2019 MedPAR file identified only ten cases and the September 2020 update of the FY 2020 MedPAR file identified only two cases for which these procedures were reported as a stand-alone procedure resulting in assignment to MS-DRGs 981 through 983, and the average length of stay and average costs for these cases vary in comparison to the average length of stay and average costs of all cases in MS-DRGs 23, 24, 25, 26, and 27, given the nature of head trauma cases, the resource use would be expected to vary based on the extent of the patient's injuries. We believe it is clinically appropriate to add these procedure codes describing control of bleeding in the cranial cavity to MS-DRGs 23, 24, 25, 26, and 27 in MDC 01.

Therefore, we are proposing to add procedure codes 0W310ZZ, 0W313ZZ, and 0W314ZZ to MDC 01 in MS-DRGs 23, 24, 25, 26, and 27 (“craniotomy” MS-DRGs) for FY 2022.

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.

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 for the cases to be reassigned from one of the MS-DRG groups to the other.

Based on the results of our review of the claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, as well as our review of the requests that we received to examine cases found to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, we are proposing to move the cases reporting the procedures codes described in this section of this rule from MS-DRGs 981 through 983 to MS-DRGs 987 through 989.Start Printed Page 25154

As discussed in section II.D.3.a. of the preamble of this proposed rule, we received a request that we understood to be for our consideration of the reassignment of the following three procedure codes from Extensive O.R. procedures to Non-extensive O.R. procedures.

In conducting our review of this request, our clinical advisors noted that ICD-10-PCS codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ currently group 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. While our claims analysis of both the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file did not identify any cases reporting any one of the three listed procedure codes in MS-DRGs 981, 982, or 983, our clinical advisors believe that these procedures would be more appropriately designated as Non-extensive procedures because they are more consistent with other procedures on the Non-extensive procedure code list. They stated that these procedures do not consume the resources or require a similar level of technical complexity as the procedures on the Extensive O.R. procedures list.

Therefore, we are proposing to reassign the three procedure codes listed 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) for FY 2022.

As discussed in section II.D.4.b. of the preamble of this proposed rule, we identified 17 procedure codes describing laser interstitial thermal therapy (LITT) that are currently designated as extensive O.R. procedures. In addition to those 17 procedure codes, we identified additional procedure codes describing LITT of various body parts that are also designated as extensive O.R. procedures. The ICD-10-PCS codes describing LITT of various body parts are as follows.

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Whenever one of these listed procedure codes is reported on a claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it currently results in assignment to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively). Our clinical advisors stated that all of the listed procedure codes warrant redesignation from the extensive procedure list and MS-DRGs 981, 982, and 983 to the non-extensive procedure list and to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively). Specifically, our clinical advisors stated the procedures described by these codes are minimally invasive and are consistent with other ablation (root operation Destruction) type procedures that are designated as non-extensive procedures in the ICD-10-PCS classification.

In our analysis of claims from the March 2020 update of the FY 2019 MedPAR file, we identified a total of six cases reporting procedure codes describing LITT of various body sites in MS-DRGs 981, 982, and 983 with an average length of stay of 2.5 days and average costs of $7,734. Specifically, we found one case reporting procedure code DVY0KZZ (Laser interstitial thermal therapy of prostate) in MS-DRG 981 with an average length of stay of 4.0 days and average costs of $7,348. For MS-DRG 982, we found five cases in which procedure codes describing LITT of various body sites were reported. The first case reported procedure code D0Y0KZZ (Laser interstitial thermal therapy of brain) with an average length of stay of 1.0 day and average costs of $4,142, the second case reported procedure code D0Y6KZZ (Laser interstitial thermal therapy of spinal cord) with an average length of stay of 3.0 days and average costs of $20,007, the third case reported procedure code DDY1KZZ (Laser interstitial thermal therapy of stomach) with an average length of stay of 2.0 days and average costs of $3,424, the fourth case reported procedure code DDY7KZZ (Laser interstitial thermal therapy of rectum) with an average length of stay of 3.0 days and average costs of $3,735, and Start Printed Page 25156the fifth case reported procedure code DVY0KZZ (Laser interstitial thermal therapy of prostate) with an average length of stay of 2.0 days and average costs of $7,750. There were no cases found to report procedures describing LITT in MS-DRG 983. Our findings are summarized in the following table.

In our analysis of claims from the September 2020 update of the FY 2020 MedPAR file, we identified one case reporting procedure code D0Y6KZZ (Laser interstitial thermal therapy of spinal cord) with an average length of stay of 6 days and average costs of $5,130, and two cases reporting procedure code DVY0KZZ (Laser interstitial thermal therapy of prostate) with an average length of stay of 8.5 days and average costs of $20,329 in MS-DRGs 981, 982, or 983. Although our claims analysis identified a limited number of cases reporting procedures describing LITT, our clinical advisors believe that these procedures would be more appropriately designated as Non-extensive procedures because they are more consistent with other procedures on the Non-extensive procedure code list.

Therefore, we are proposing to reassign the listed procedure codes describing LITT of various body parts from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.

As also discussed in section II.D.4.b. of the preamble of this proposed rule, we identified five procedure codes describing repair of the esophagus that are currently designated as extensive O.R. procedures. The procedure codes are 0DQ50ZZ (Repair esophagus, open approach), 0DQ53ZZ (Repair esophagus, percutaneous approach), 0DQ54ZZ (Repair esophagus, percutaneous endoscopic approach), 0DQ57ZZ (Repair esophagus, via natural or artificial opening), and 0DQ58ZZ (Repair esophagus, via natural or artificial opening endoscopic). Whenever one of these five procedure codes is reported on a claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it currently results in assignment to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively). Our clinical advisors stated that three of these five procedures warrant redesignation from the extensive procedure list and MS-DRGs 981, 982, and 983 to the non-extensive procedure list and to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively). Specifically, our clinical advisors stated the procedures identified by procedure codes 0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ do not involve the same utilization of resources with respect to the performance of the procedure in comparison to the procedures identified by procedure codes 0DQ50ZZ and 0DQ540ZZ. In our analysis of claims from the March 2020 update of the FY 2019 MedPAR file, we identified three cases reporting procedure code 0DQ58ZZ in MS-DRGs 981, 982, and 983 with an average length of stay of 14 days and average costs of $34,894. In our analysis of claims from the September 2020 update of the FY 2020 MedPAR file, we identified two cases reporting procedure code 0DQ58ZZ in MS-DRGs 981, 982, or 983 with an average length of stay of 8 days and average costs of $12,037. Our clinical advisors believe that these procedures would be more appropriately designated as Non-extensive procedures because they are more consistent with other procedures on the Non-extensive procedure code list. Therefore, we are proposing to reassign these three procedure codes (0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ) from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.

As discussed in section II.D.11.c.24. of the preamble of this proposed rule, we identified procedure code 0T9D0ZZ (Drainage of urethra, open approach) during our review of procedure code 0U9L0ZZ (Drainage of vestibular gland, open approach), which is currently designated as a non-O.R. procedure. We noted that the procedure described by procedure code 0T9D0ZZ represents the male equivalent of the female procedure described by procedure code 0U9L0ZZ. Procedure code 0T9D0ZZ is currently designated as an extensive O.R. procedure and is reported to describe procedures performed on the Cowper's (bulbourethral) gland in males. Whenever this procedure code is reported on a claim that is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it currently results in assignment to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Start Printed Page 25157Diagnosis with MCC, with CC, without CC/MCC, respectively).

Our clinical advisors stated that this procedure warrants redesignation from the extensive procedure list and MS-DRGs 981, 982, and 983 to the non-extensive procedure list and to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively). Specifically, our clinical advisors stated that the procedure described by procedure code 0T9D0ZZ continues to warrant an O.R. designation because it is performed on deeper structures and requires a higher level of technical skill and it is a more complex procedure when compared to the non-O.R. procedure described by procedure code 0U9L0ZZ, however, abscess formation in the Cowper's (bulbourethral) glands is uncommon and can often be treated with ultrasound guided percutaneous aspiration. The need for open surgical management is rare and includes chronic infection unresponsive to non-operative management and complicated acute infection such as perineal fistula formation. Open surgical management would require use of the operating room for both appropriate anesthesia and for the resources required to perform the more invasive perineal surgical dissection. Therefore, our clinical advisors believe a non-extensive O.R. designation is suitable for this procedure.

We analyzed claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file for cases reporting procedure code 0T9D0ZZ in MS-DRGs 981, 982, and 983. We found one case in MS-DRG 981 with an average length of stay of 8.0 days and average costs of $23,566 in the March 2020 update of the FY 2019 MedPAR file, and no cases in the September 2020 update of the FY 2020 MedPAR file. Although our claims analysis identified only one case reporting procedure code 0T9D0ZZ, our clinical advisors believe that these procedures would be more appropriately designated as Non-extensive procedures because they are more consistent with other procedures on the Non-extensive procedure code list.

Therefore, we are proposing to reassign procedure code 0T9D0ZZ from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.

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. procedures or non-O.R. procedures affecting the MS-DRG, our clinical advisors recommend the MS-DRG assignment which is then made available in association with the proposed rule (Table 6B.—New Procedure Codes) and subject to public comment. These proposed assignments are generally based on the assignment of predecessor codes or the assignment of similar codes. For example, we generally examine the MS-DRG assignment for similar procedures, such as the other approaches for that procedure, to determine the most appropriate MS-DRG assignment for procedures proposed to be newly designated as O.R. procedures. As discussed in section II.D.13 of the preamble of this proposed rule, we are making Table 6B.—New Procedure Codes—FY 2022 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 38.1 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, Start Printed Page 25158particularly 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.

In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58540 through 58541), we provided a summary of the comments we had received in response to our request for 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.

In consideration of the PHE, we believe it may be appropriate to allow additional time for the claims data to stabilize prior to selecting the timeframe to analyze for this review. Additional time is also necessary as we continue to develop our process and methodology. Therefore, we will provide more detail on this analysis and the methodology for conducting this review in future rulemaking.

In this proposed rule, we are addressing requests that we received regarding changing the designation of specific ICD-10-PCS procedure codes from non-O.R. to O.R. procedures, or changing the designation from O.R. procedure to non-O.R. procedure. In this section of the rule we discuss the process that was utilized for evaluating the requests that were received for FY 2022 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 are proposing to change the designation of procedure codes from non-O.R. procedures to O.R. procedures, we also are proposing one or more MS-DRGs with which these procedures are clinically aligned and to which the procedure code would be assigned.

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

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

We received several requests to change the designation of specific ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures, or to change the designation from O.R. procedures to non-O.R. procedures. In this section of this rule, we detail and respond to some of those requests. With regard to the remaining requests, our clinical advisors believe it is appropriate to consider these requests as part of our comprehensive review of the procedure codes as previously discussed.

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

(1) Open Drainage of Subcutaneous Tissue and Fascia

One requestor identified the following ICD-10-PCS procedure code that describes the open drainage of right lower leg subcutaneous tissue and fascia, shown in the following table.

In the ICD-10 MS-DRG Version 38.1 Definitions Manual, this ICD-10-PCS procedure code is currently recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor noted that this procedure consumes resources comparable to related ICD-10-PCS procedure code 0J9N00Z (Drainage of right lower leg subcutaneous tissue and fascia with drainage device, open approach) that describes the open drainage of right lower leg subcutaneous tissue and fascia with a drainage device, which is currently designated as a Non-O.R. procedure. The requestor stated that these comparable procedures should be recognized similarly for purposes of MS-DRG assignment.

During our review of this issue, we identified 21 ICD-10-PCS procedure codes that describe the open drainage of subcutaneous tissue and fascia, shown in the following table that are clinically similar to ICD-10-PCS code 0J9N0ZZ, and are also designated as O.R. Start Printed Page 25159procedures in the ICD-10 MS-DRG Version 38.1 Definitions Manual.

We reviewed these procedures and our clinical advisors agree that procedures that describe the open drainage of subcutaneous tissue and fascia consume resources comparable to the related ICD-10-PCS procedure codes that describe the open drainage of subcutaneous tissue and fascia with a drainage device that are currently designated as non-O.R. procedures. These procedures do not typically require the resources of an operating room, and are not surgical in nature. Therefore, we are proposing to remove the 22 codes listed in the following table from the FY 2022 ICD-10 MS-DRGs Version 39 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.

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Start Printed Page 25161

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

(1) Percutaneous Introduction of Substance Into Cranial Cavity and Brain

One requestor identified ICD-10-PCS procedure code XW0Q316 (Introduction of eladocagene exuparvovec into cranial cavity and brain, percutaneous approach, new technology group 6) that the requestor stated is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor recommended that this procedure be designated as an O.R. procedure because the procedure requires traversing the skull in order to place a substance within the cranial cavity or brain. The requestor noted that CMS disagreed with designating this procedure as an O.R. procedure last year in the absence of claims data; however, the requestor stated that because the skull must be opened by drilling or cutting a burr hole through the skull, this procedure warrants O.R. status similar to other transcranial procedures performed with an open or percutaneous approach that are classified as O.R. procedures.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure code XW0Q316 is currently designated as a non-O.R. procedure for purposes of MS-DRG assignment. We agree with the requestor that procedure code XW0Q316 describes a procedure that involves the creation of a burr hole in the skull. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58579 through 58580), we stated that, consistent with our annual process of assigning new procedure codes to MDCs and MS-DRGs, and designating a procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor procedure code assignment. The predecessor code for procedure code XW0Q316 is procedure code 3E0Q3GC (Introduction of other therapeutic substance into cranial cavity and brain, percutaneous approach) which is designated as a non-O.R. procedure. In the absence of claims data, our clinical advisors also considered the indication for the specific procedure being described by the new procedure code, the treatment difficulty, and the resources utilized.

Upon further review and consideration, our clinical advisors agree that procedure code XW0Q316 describing a procedure that is performed by creating a burr hole in the skull warrants designation as an O.R. procedure consistent with other percutaneous procedures performed on the cranial cavity and brain body parts. Therefore, we are proposing to add this procedure code to the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E- Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure, assigned to 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) 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).

(2) Open Drainage of Maxilla and Mandible

One requestor identified three ICD-10-PCS procedure codes that describe the open drainage of maxilla or mandible that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The three procedure codes are listed in the following table.

The requestor stated that procedures that describe the open drainage of the maxilla or mandible should be designated as O.R. procedures because these procedures, indicated for diagnoses such as subperiosteal abscesses, are performed in the operating room under general anesthesia and involve making open incisions through muscle and stripping away the periosteum. The requestor identified procedure codes 0W950ZZ (Drainage of lower jaw, open approach) and 0W940ZZ (Drainage of upper jaw, open approach) that are currently designated as O.R. procedures. The requestor noted that ICD-10-PCS guidelines instruct that the procedure codes in Anatomical Regions, General, can be used when the procedure is performed on an anatomical region rather than a specific body part, or on the rare occasion when no information is available to support assignment of a code to a specific body part. The requestor stated that because bone is a specific body part in ICD-10-PCS, procedure codes should be assigned for subperiosteal drainage of mandible and maxilla bones from table 0N9, Drainage of Head and Facial Bones, instead of codes from table 0W9, Drainage of Anatomical Regions, General, when these procedures are performed. Therefore, the requestor stated that procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ should also be recognized as O.R. procedures for purposes of MS-DRG assignment.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors reviewed this issue and disagree that the procedures describing the open drainage of the maxilla or mandible are typically performed in the operating room under general anesthesia. Our clinical advisors state that these procedures can be done in an oral surgeon's office or an outpatient setting and are rarely performed in the inpatient setting. Our clinical advisors also state a correlation cannot be made between procedures performed in general anatomic regions and procedures performed in specific body parts because these procedures coded with the general anatomic regions body part represent a broader range of procedures that cannot be coded to a specific body part. Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ.

(3) Thoracoscopic Extirpation of Pleural Cavities

One requestor identified ICD-10-PCS procedure codes 0WC94ZZ (Extirpation of matter from right pleural cavity, percutaneous endoscopic approach) and 0WCB4ZZ (Extirpation of matter from left pleural cavity, percutaneous Start Printed Page 25162endoscopic approach) that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor stated that these procedures should be designated as O.R. procedures because they are thoracoscopic procedures that are always performed in the operating room under general anesthesia. The requestor stated procedure codes 0W994ZZ (Drainage of right pleural cavity, percutaneous endoscopic approach) and 0W9B4ZZ (Drainage of left pleural cavity, percutaneous endoscopic approach) are currently designated as O.R. procedures, therefore procedure codes 0WC94ZZ and 0WCB4ZZ should also be recognized as O.R. procedures for purposes of MS-DRG assignment because they utilize the same resources.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0WC94ZZ and 0WCB4ZZ are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors reviewed this issue and disagree that procedure codes describing the thoracoscopic drainage of the pleural cavities should necessarily have the same designation as procedure codes describing the thoracoscopic extirpation of matter from the pleural cavities. We note that our review of the designation of ICD-10-PCS codes as an O.R. procedure or a non-O.R. procedure considers the resources used as well as whether that procedure should affect the MS-DRG assignment, and if so, in what way. Our clinical advisors state that thoracoscopic drainage of the pleural cavities is performed for distinct indications in clinically different scenarios. Our clinical advisors state that drainage is the process of taking out, or letting out, fluids and/or gases from a body part and is typically performed in the pleural cavity for indications such as congestive heart failure, infection, hemothorax and empyema. In contrast, the procedures describing the thoracoscopic extirpation of the pleural cavities are performed for a wider range of indications because the solid matter removed may be an abnormal byproduct of a biological function or a foreign body. Our clinical advisors note that the thoracoscopic extirpation of the pleural cavities is generally performed with other procedures such as heart transplant, lung transplant mechanical ventilation, and other major chest procedures and would not be the main reason for inpatient hospitalization or be considered the principal driver of resource expenditure.

Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ.

(4) Open Pleural Biopsy

One requestor identified ICD-10-PCS procedure codes 0BBN0ZX (Excision of right pleura, open approach, diagnostic) and 0BBP0ZX (Excision of left pleura, open approach, diagnostic), that describe an open pleural biopsy that the requestor stated are performed in the operating room with general anesthesia. The requestor also stated that procedure codes 0BBN0ZZ (Excision of right pleura, open approach) and 0BBP0ZZ (Excision of left pleura, open approach) describing open pleural biopsy for non-diagnostic purposes are justifiably designated as O.R. procedures. According to the requestor, these procedure codes describing an open pleural biopsy should be designated as O.R. procedures regardless of whether they are performed for diagnostic or therapeutic purposes.

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 procedures performed for a pleural biopsy by an open approach, regardless of whether it is a diagnostic or therapeutic procedure, should be designated as an O.R. procedure, we examined procedure codes 0BBN0ZX, 0BBN0ZZ, 0BBP0ZX, and 0BBP0ZZ.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0BBN0ZZ and 0BBP0ZZ are currently designated as O.R. procedures, however, procedure codes 0BBN0ZX and 0BBP0ZX are not recognized as O.R. procedures for purposes of MS-DRG assignment. We agree with the requestor that procedure codes 0BBN0ZX and 0BBP0ZX would typically require the resources of an operating room. Our clinical advisors also agree that procedure codes 0BBN0ZX and 0BBP0ZX would typically require the resources of an operating room. Therefore, we are proposing to add these 2 procedure codes to the FY 2022 ICD-10 MS-DRGs Version 39 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).

(5) Percutaneous Revision of Intraluminal Devices

One requestor identified five ICD-10-PCS procedure codes that describe the percutaneous revision of intraluminal vascular devices that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The five procedure codes are listed in the following table.

The requestor stated that the procedure codes that describe the percutaneous revision of intraluminal vascular devices within arteries, veins, and great vessels should be designated as O.R. procedures to compensate for the resources needed to perform these procedures. The requestor also stated procedures to reattach, realign, or otherwise revise intraluminal devices percutaneously require anesthesia, specialized equipment for intravascular visualization, significant skill, and time, therefore, it is important for these codes Start Printed Page 25163to be designated with O.R. procedure status.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 02WY3DZ, 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. We agree with the requestor that these five ICD-10-PCS procedure codes typically require the resources of an operating room. Therefore, to the FY 2022 ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index, we are proposing to add code 02WY3DZ as an O.R. procedure assigned to MS-DRGs 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). We are also proposing to add codes 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ as O.R. procedures assigned to MS-DRGs 252, 253, and 254 (Other Vascular Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the Circulatory System).

(6) Occlusion of Left Atrial Appendage

One requestor identified nine ICD-10-PCS procedure codes that describe left atrial appendage closure (LAAC) procedures that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment in all instances. The nine procedure codes are listed in the following table.

The requestor stated that these procedures are currently designated as non-O.R. procedures that route to surgical MS-DRGs only when assigned in combination with a principal diagnosis within MDC 05 (Diseases and Disorders of the Circulatory System). The requestor stated these procedures should also be designated as O.R. procedures when assigned in combination with diagnoses outside of the circulatory system, such as sepsis or trauma, to compensate for the associated resource use, skill requirements, and device costs.

In the ICD-10 MS-DRG Version 38.1 Definitions Manual, the nine ICD-10-PCS procedure codes that describe left atrial appendage closure are currently recognized as non-O.R. procedures that affect the MS-DRG to which they are assigned. We refer readers to section II.D.5.d of the preamble of this proposed rule, where we address ICD-10-PCS procedure codes 02L70CK, 02L70DK, and 02L70ZK that describe a LAAC procedure performed with an open approach. These codes were discussed in response to a request to reassign these codes to MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively) and, for the reasons discussed, we are proposing to maintain the assignment in MS-DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures with and without MCC, respectively) in MDC 05.

Our clinical advisors reviewed this related issue and believe the current designation of LAAC procedures as non-O.R. procedures that affect the assignment for MS-DRGs 273 and 274 is clinically appropriate to account for the subset of patients undergoing left atrial appendage closure specifically. LAAC is indicated and approved as a treatment option for patients diagnosed with atrial fibrillation, a heart rhythm disorder that can lead to cardiovascular blood clot formation, who are also at increased risk for stroke. LAAC procedures block off the left atrial appendage to prevent emboli that may form in the left atrial appendage from exiting and traveling to other sites in the vascular system, thereby preventing the occurrence of ischemic stroke and systemic thromboembolism. The ICD-10-CM diagnosis codes used to report atrial fibrillation are currently assigned to MDC 05 (Diseases and Disorders of the Circulatory System). Our clinical advisors believe that circumstances in which a patient is admitted for a principal diagnosis outside of MDC 05 and a left atrial appendage closure is performed as the only surgical procedure in the same admission are infrequent, and if they do occur, the LAAC procedure would not be a significant contributing factor in the increased intensity of resources needed for facilities to manage these complex cases. Our clinical advisors state LAAC procedures generally do not require the resources of an operating room. LAAC procedures are most often performed percutaneously in settings such as cardiac catheterization laboratories and take approximately one hour. When performed with an open approach or percutaneous endoscopic approach, these procedures share similar factors such as complexity, and resource Start Printed Page 25164utilization with all other LAAC procedures. Therefore, we are proposing to maintain the current designation of ICD-10-PCS procedure codes 02L70CK, 02L70DK, 02L70ZK, 02L73CK, 02L73DK, 02L73ZK, 02L74CK, 02L74DK, and 02L74ZK as non-O.R. procedures affecting the MS-DRGs to which they are assigned.

(7) Arthroscopic Drainage of Joints

One requestor identified six ICD-10-PCS procedure codes that describe the percutaneous endoscopic drainage of joints that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The six procedure codes are listed in the following table.

The requestor stated that these procedures should be designated as O.R. procedures because procedures describing the arthroscopic drainage of major joints such as knee, hip, and shoulder are performed in the operating room under general anesthesia. The requestor stated these procedures are indicated for conditions such as symptomatic septic/pyogenic arthritis, which can require inpatient admission for intravenous antibiotics and arthroscopic drainage to resolve infection. Therefore, the requestor stated it is reasonable for these arthroscopic procedures to be designated as O.R. procedures to compensate for operating room resources.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors reviewed this issue and disagree that procedures describing the percutaneous endoscopic drainage of major joints such as knee, hip, and shoulder are typically performed in the operating room under general anesthesia. With development of better instrumentation and surgical techniques, many patients now have arthroscopic procedures performed in an outpatient setting and return home several hours after the procedure. Our clinical advisors also state the percutaneous endoscopic drainage of joints can be performed using local or regional anesthesia, and general anesthesia is not always required. In cases where the patient is admitted for diagnoses such as septic/pyogenic arthritis, as identified by the requestor, the requirement for intravenous antibiotics would be the main reason for admission because the percutaneous endoscopic drainage procedure could be done as an outpatient. Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ.

(8) Arthroscopic Irrigation of Joints

One requestor identified ICD-10-PCS procedure codes 3E1U48X (Irrigation of joints using irrigating substance, percutaneous endoscopic approach, diagnostic) and 3E1U48Z (Irrigation of joints using irrigating substance, percutaneous endoscopic approach) that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor stated that these procedures should be designated as O.R. procedures because the arthroscopic irrigation of joints such as knee, hip, and shoulder is performed in the operating room under general anesthesia. The requestor states procedure codes 3E1U48X and 3E1U48Z are used to describe surgical joint irrigations in the absence of more definitive procedures, therefore procedure codes 3E1U48X and 3E1U48Z should be recognized as O.R. procedures for purposes of MS-DRG assignment.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 3E1U48X and 3E1U48Z are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors reviewed this issue and disagree that procedure codes describing the arthroscopic irrigation of joints should be designated as O.R. procedures. Our clinical advisors note the arthroscopic irrigation of joints is rarely performed independently as a standalone procedure in the inpatient setting to be considered the principal driver of resource expenditure in those admissions. Instead, the arthroscopic irrigation of joints is generally performed with other definitive procedures such as debridement or synovectomy. We note that in the operative note sent by the requestor to support the requested change in O.R. status, the arthroscopic irrigation of the joint was performed along with a surgical debridement procedure. Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 3E1U48X and 3E1U48Z.

(9) Percutaneous Reposition With Internal Fixation

One requestor identified four ICD-10-PCS procedure codes describing procedures performed on the sacroiliac and hip joints that involve percutaneous repositioning with internal fixation that the requestor stated are not recognized as O.R. procedures for purposes of MS-DRG assignment but warrant an O.R. designation. The procedure codes are listed in the following table.

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Our clinical advisors reviewed the procedures described by these four procedure codes and agree that these percutaneous reposition procedures involving internal fixation in the sacroiliac and hip joint warrant an O.R. designation. They noted that these procedures are major operations that would require the resources of an operating room, involve a higher level of technical complexity and a greater utilization of hospital resources.

Therefore, we are proposing to add the two procedure codes describing percutaneous reposition of the sacroiliac joint with internal fixation procedures (0SS734Z and 0SS834Z) to the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures, assigned to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) 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 proposing to add the two procedure codes describing percutaneous reposition of the hip joint with internal fixation procedures (0SS934Z and 0SSB34Z) to the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures, assigned to MS-DRGs 480, 481, and 482 (Hip and Femur Procedures Except Major Joint with MCC, with CC, and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) 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).

(10) Open Insertion and Removal of Spacer Into Shoulder Joint

One requestor identified four ICD-10-PCS procedure codes describing procedures performed on the shoulder joint that involve the insertion or removal of a spacer by an open approach that the requestor stated are not recognized as O.R. procedures for purposes of MS-DRG assignment. The procedure codes are listed in the following table.

According to the requestor, insertion and removal of joint spacers from the hips and knees are designated with an O.R. procedure status and although similar procedures performed on the shoulder joint may be performed less frequently, these procedures warrant an O.R. designation because they are performed in the operating room under general anesthesia. During our review, we noted that the following procedure codes describing procedures performed on the shoulder joint that involve the insertion or removal of a spacer by a percutaneous endoscopic approach are also not recognized as O.R. procedures for purposes of MS-DRG assignment.

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Our clinical advisors reviewed the procedures described by these eight procedure codes and agree that these procedures involving the insertion or removal of a spacer in the shoulder joint with an open or percutaneous endoscopic approach warrant an O.R. designation. They noted that the insertion of a spacer is typically performed to treat an infection at the site of a previously placed prosthesis and the removal of a spacer is typically performed once the infection is healed and the site is ready for a new prosthetic replacement or to exchange for a new spacer if the infection is not yet healed.

Therefore, we are proposing to add the listed procedure codes describing the insertion or removal of spacer in the shoulder joint to the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures, assigned to MS-DRGs 510, 511, and 512 (Shoulder, Elbow or Forearm Procedures, Except Major Joint Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) 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).

(11) Open/Percutaneous Extirpation of Jaw

One requestor identified four ICD-10-PCS procedure codes that describe the extirpation of matter from the upper or lower jaw that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The four procedure codes are listed in the following table.

The requestor stated that the procedure codes that describe the extirpation of matter from the upper or lower jaw by an open or percutaneous endoscopic approach should be designated as O.R. procedures. The requestor stated these procedures would commonly be performed under general anesthesia and require the resources of an operating room. The requestor also stated that these ICD-10-PCS codes were specifically created to describe the surgical evacuation of solid matter from deep jaw structures therefore, it is important for these codes to be designated with O.R. procedure status.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. We agree with the requestor that these four ICD-10-PCS procedure codes typically require the resources of an operating room. Therefore, to the FY 2022 ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index, we are proposing to add codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ as O.R. procedures assigned to MS-DRGs 143, 144 and 145 (Other Ear, Nose, Mouth and Throat O.R. procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat).

(12) Open Extirpation of Subcutaneous Tissue and Fascia

One requestor identified 22 ICD-10-PCS procedure codes that describe the open extirpation of matter from the subcutaneous tissue and fascia that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The 22 procedure codes are listed in the following table.

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The requestor stated that procedure codes that describe the open extirpation of matter from the subcutaneous tissue and fascia should be designated as O.R. procedures because these procedures are performed through open incisions with direct visualization of subcutaneous tissue and fascia in the operating room under general anesthesia. The requestor noted procedure codes that describe the open drainage of subcutaneous tissue and fascia and use comparable resources are currently designated as O.R. procedures. The requestor noted that root operation “Drainage” is assigned when fluid is drained; and root operation of “Extirpation” is assigned when any of the substance evacuated is solid. The requestor stated whether the evacuated substance is fluid, gelatinous, or solid, a procedure involving an open incision with direct visualization of subcutaneous tissue and fascia for evacuation of substances should be classified as an O.R. procedure. Therefore, the requestor stated that these procedures should also be recognized as O.R. procedures for purposes of MS-DRG assignment.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, the 22 ICD-10-PCS procedure codes listed in the table are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. While we disagree that drainage procedures are comparable to extirpation procedures, we agree with the requestor that these 22 ICD-10-PCS procedure codes typically require the resources of an operating room. Our clinical advisors state that drainage is the process of taking out, or letting out, fluids and/or gases from a body part and is typically performed for indications such as abscess, infection, and other systemic conditions. In contrast, extirpation procedures are performed for a wider range of indications because the solid matter removed may be an abnormal byproduct of a biological function or a retained foreign body. Therefore, to the FY 2022 ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index, we are proposing to add the 22 ICD-10-PCS listed previously as O.R. procedures assigned to MS-DRGs 579, 580 and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 09 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) 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).

(13) Open Revision and Removal of Devices From Subcutaneous Tissue and Fascia

One requestor identified six ICD-10-PCS procedure codes describing open revision and removal of neurostimulator generators, monitoring devices, and totally implantable vascular access devices (TIVADs) procedures that are not currently designated 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 that although removal of these devices is often performed in outpatient surgery, device complications can require removal or revision during inpatient hospitalizations. The requestor indicated it is reasonable for these open procedures to be designated as O.R. procedures to compensate for operating room resources during such inpatient stays.

Our clinical advisors reviewed this request and do not agree that these procedures warrant an O.R. designation. They noted that these procedures are generally performed in the outpatient setting and when performed during a hospitalization, it is typically in conjunction with another O.R. procedure. Therefore, we are proposing to maintain the current non-O.R. designation for procedure codes 0JPT0MZ, 0JPT02Z, 0JPT0WZ, 0JWT0MZ, 0JWT0WZ, and 0JWT03Z for FY 2022.

(14) Open Insertion of Feeding Device

One requestor identified ICD-10-PCS procedure code 0DHA0UZ (Insertion of feeding device into jejunum, open approach) that the requestor stated is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor stated the open insertion of a feeding device into the jejunum should be designated as an O.R. procedure because this procedure is performed in the operating room under general anesthesia. The requestor noted comparable procedure code 0DH60UZ (Insertion of feeding device into stomach, open approach) is currently designated as an O.R. procedure. Therefore, the requestor stated that procedure code 0DHA0UZ should also be recognized as an O.R. procedure for purposes of MS-DRG assignment.

Our analysis of this issue confirmed that in the ICD-10 MS-DRG Version 38.1 Definitions Manual, for purposes of MS-DRG assignment, 0DHA0UZ is recognized as a non-O.R. procedure and 0DH60UZ is currently recognized as an O.R. procedure. In reviewing this request, we also identified the following four related codes:

In the ICD-10 MS-DRGs Version 38.1, these four ICD-10-PCS codes are currently recognized as non-O.R. procedure for purposes of MS-DRG assignment. While we agree with the requestor that procedures describing the open insertion of a feeding device into the jejunum are comparable to procedures describing the open insertion of a feeding device into the stomach, we do not agree that these procedures should be designated as O.R. procedures. Our clinical advisors state the procedures that describe the open insertion of a feeding device into the jejunum or the stomach should instead have the same designation as the related ICD-10-PCS procedure codes that describe the open insertion of a feeding device into the esophagus, small intestine, duodenum and ileum that are currently designated as non-O.R. procedures.

With advancements in procedural techniques, feeding devices are most commonly placed using a percutaneous endoscopic approach. Our clinical advisors state feeding devices are usually not placed using an open surgical approach; this approach is Start Printed Page 25169generally only used if the patient requires another surgical procedure at the same time. When placed at the same time as another surgical procedure, our clinical advisors state the surgical procedure, as the main determinant of resource use for those cases, should drive the MS-DRG assignment, not the procedure that describes the open insertion of a feeding device. For these reasons, our clinical advisors state procedures that describe the open insertion of a feeding device in the gastrointestinal system should all have the same non-O.R. designation in the ICD-10 MS-DRGs Version 39 for coherence.

Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure code 0DHA0UZ. We are also proposing to remove ICD-10-PCS procedure code 0DH60UZ from the FY 2022 ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. Under this proposal, this procedure would no longer impact MS-DRG assignment.

(15) Laparoscopic Insertion of Feeding Tube

One requestor identified ICD-10-PCS procedure codes 0DH64UZ (Insertion of feeding device into stomach, percutaneous endoscopic approach) and 0DHA4UZ (Insertion of feeding device into jejunum, percutaneous endoscopic approach) that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor stated the procedures describing the percutaneous endoscopic insertion of a feeding device into the stomach or the jejunum should be designated as O.R. procedures because these procedures are performed in the operating room under general anesthesia. The requestor stated all laparoscopic procedures, regardless if they are diagnostic or therapeutic, should be classified as O.R. procedures to compensate for operating room resources.

Our analysis of this issue confirmed that in the ICD-10 MS-DRG Version 38.1 Definitions Manual, 0DH64UZ and 0DHA4UZ are currently designated as non-O.R. procedures for purposes of MS-DRG assignment. In reviewing this request, we also identified the following four related codes:

In the ICD-10 MS-DRGs Version 38.1, these four ICD-10-PCS codes are currently recognized as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors reviewed this request and do not agree that unilaterally all laparoscopic procedures should be designated as O.R. procedures. While the procedural approach is an important consideration in the designation of a procedure, there are other clinical factors such as the site of procedure, the procedure complexity, and resource utilization that should also be considered. In this regard, our clinical advisors indicated that codes 0DH64UZ and 0DHA4UZ describing the percutaneous endoscopic insertion of a feeding device into the stomach or the jejunum, do not require the resources of an operating room, are not surgical in nature, and are generally performed in the outpatient setting. The percutaneous endoscopic insertion of a feeding device also does not require general anesthesia. As opposed to being rendered unconscious, patients can receive a local anesthetic (usually a lidocaine spray), an intravenous (IV) pain reliever, and a mild sedative if needed. Patients receiving these devices usually return home the same day after placement, unless they are in the hospital for treatment of another condition.

Our clinical advisors state the percutaneous endoscopic insertion of a feeding device into the stomach or the jejunum is comparable to the related ICD-10-PCS procedure codes that describe the insertion of feeding devices of other gastrointestinal system body parts that are currently designated as non-O.R. procedures. Our clinical advisors believe all procedures that describe the percutaneous endoscopic insertion of a feeding device in the gastrointestinal system should continue to have the same non-O.R. designation in the ICD-10 MS-DRGs Version 39 for coherence. Therefore, for the reasons discussed, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0DH64UZ and 0DHA4UZ.

(16) Endoscopic Fragmentation and Extirpation of Matter of Urinary Tract

One requestor sent two separate but related requests related to endoscopic procedures performed in the urinary system. With regard to the first request, the requestor identified six ICD-10-PCS procedure codes that describe endoscopic fragmentation in the kidney pelvis, ureter, bladder, and bladder neck 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 that these procedures should be designated as O.R. procedures because procedures such as the endoscopic fragmentation of calculi within the kidney pelvis, ureter, bladder, and bladder neck are performed in the operating room under anesthesia. The requestor stated that procedures that describe the endoscopic extirpation of calculi from the kidney pelvis or ureter use comparable resources, and are designated as O.R. procedures. Therefore, the requestor asserted it is reasonable that procedure codes that describe endoscopic fragmentation in kidney pelvis, ureter, bladder, and bladder neck also be designated as O.R. procedures.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and 0TFC8ZZ are designated as non-O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors reviewed this issue and disagree that procedures describing the endoscopic fragmentation of calculi within the kidney pelvis, ureter, bladder, and bladder neck are typically performed in the operating room. In endoscopic fragmentation procedures in the kidney pelvis, ureter, bladder, and bladder neck, the scope is passed through a natural or artificial orifice. The procedure is not surgical in nature and involves no skin incisions. With advancements in scope size, deflection capabilities, video imaging, and instrumentation, many patients now have these endoscopic urinary procedures performed in an outpatient setting, instead of the inpatient setting. Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and 0TFC8ZZ.

In the second request, the requestor also identified two ICD-10-PCS procedure codes that describe endoscopic extirpation of matter from the bladder and bladder neck that the requestor stated are also currently not recognized as O.R. procedures for purposes of MS-DRG assignment. The two procedure codes are listed in the following table.

The requestor stated that these procedures also should be designated as O.R. procedures because they performed in the operating room under anesthesia.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0TCB8ZZ and 0TCC8ZZ are currently designated as a non-O.R. procedure for purposes of MS-DRG assignment. To review the request to designate 0TCB8ZZ and 0TCC8ZZ as O.R. procedures and in response to the requestor's suggestion that resource consumption is comparable in procedures describing endoscopic fragmentation in the urinary system and procedures describing the endoscopic extirpation in the urinary system, we examined the following procedure codes:

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In the ICD-10 MS-DRG Version 38.1 Definitions Manual, these six ICD-10-PCS procedure codes are currently recognized as O.R. procedures for purposes of MS-DRG assignment. Our clinical advisors indicated that these procedures are not surgical in nature. In endoscopic extirpation procedures, the scope enters the urinary tract through the urethra, which is the tube that carries urine out of the body, or through an artificial orifice. Our clinical advisors state the urinary system is one conduit so the scope continues to pass through the urethra, bladder, and into the ureter or kidney (if necessary) to access the stone. For that reason, the procedures describing endoscopic extirpation from a urinary body part should all have the same non-O.R. designation in the ICD-10 MS-DRGs Version 39 for coherence.

Therefore, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0TCB8ZZ and 0TCC8ZZ. We are also proposing to remove ICD-10-PCS procedure codes 0TC08ZZ, 0TC18ZZ, 0TC38ZZ, 0TC48ZZ, 0TC68ZZ, and 0TC78ZZ from the FY 2022 ICD-10 MS-DRG Version 39 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.

(17) Endoscopic Removal of Ureteral Stent

One requestor identified ICD-10-PCS procedure code 0TP98DZ (Removal of intraluminal device from ureter, via natural or artificial opening endoscopic) that the requestor stated is not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor suggested that this procedure warrants an O.R. designation because the procedure code describes a procedure that is performed in the operating room with anesthesia. The requestor stated that while most ureteral stents can be removed by string, some complicated cases require endoscopic removal using forceps in the operating room under general anesthesia and may be performed during inpatient stays precipitated by severe urinary tract infection, sepsis, or urinary obstructions. The requestor asserted that procedure codes for insertion of ureteral stent(s) via a ureteroscopic, endoscopic approach have been justifiably designated as O.R. procedures because they are performed in the O.R. under anesthesia. Therefore, the requestor suggested it is reasonable for endoscopic removal of the stent to be designated with OR procedure status to compensate for operating room resources and anesthesia.

Our clinical advisors reviewed this procedure and do not agree that it warrants an O.R. designation. They noted that this procedure is generally not the focus of the admission when it is performed and does not reflect the technical complexity or resource intensity in comparison to other procedures that are designated as O.R. procedures. Therefore, we are proposing to maintain the current non-O.R. designation for procedure code 0TP98DZ for FY 2022.

(18) Endoscopic/Transorifice Inspection of Ureter

One requestor identified ICD-10-PCS procedure code 0TJ98ZZ (Inspection of ureter, via natural or artificial opening endoscopic), that describes procedures involving endoscopic viewing of the ureter that the requestor stated is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment.

The requestor stated this ureteroscopy procedure is performed in the operating room with anesthesia. According to the requestor, the inspection of ureter procedure code is assigned when obstruction is found during the ureteroscopy and procedures to break up (fragmentation), remove calculi (extirpation), or place a ureteral stent cannot be performed.

Our clinical advisors reviewed this procedure and disagree that it warrants an O.R. designation. They noted that this procedure typically does not require hospitalization and is generally not the reason for the patient's admission since it is often performed in connection with another O.R. procedure when it is performed. Therefore, we are proposing to maintain the current non-O.R. designation for procedure code 0TJ789ZZ for FY 2022.

(19) Endoscopic Biopsy of Ureter and Kidney

One requestor identified six ICD-10-PCS procedure codes that describe endoscopic biopsy procedures performed on the ureter and kidney structures that the requestor stated are currently not recognized as O.R. procedures for purposes of MS-DRG assignment. According to the requestor, regardless of whether it is a diagnostic or therapeutic procedure, these procedures should be designated as O.R. procedures because the procedures utilize operating room, anesthesia and recovery room resources. The requestor stated that after the surgeon places the scope into the bladder that ureteral orifices must be identified and instruments carefully navigated to obtain excisional biopsies from within the ureter or further within the kidney. Start Printed Page 25172The six procedure codes are listed in the following table.

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.

Our clinical advisors do not agree that endoscopic biopsy procedures performed on the ureter and kidney structures warrant an O.R. designation. They stated these procedures are typically not the focus for the patient's admission and are frequently performed in conjunction with another O.R. procedure. Therefore, we are proposing to maintain the current non-O.R. designation for procedure codes 0TB08ZX, 0TB18ZX, 0TB38ZX, 0TB48ZX, 0TB68ZX, and 0TB78ZX for FY 2022.

(20) Transorifice Insertion of Ureteral Stent

One requestor identified three ICD-10-PCS procedure codes that the requestor stated are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor suggested that the procedure described by these procedure codes warrants an O.R. designation because it involves the insertion of an indwelling ureteral stent through a nephrostomy with image-guidance in the interventional radiology suite. According to the requestor, image-guided technology now allows placement of ureteral stents through nephrostomy tracts. The requestor stated this procedure may or may not be performed in the operating room, however, it involves placement of device(s), interventional radiology resources, sedation, and continuous monitoring of vital signs. The three procedure codes are shown in the following table.

Our clinical advisors reviewed this request and do not agree that this procedure warrants an O.R. designation. They noted that this procedure is not surgical in nature, does not require the resources of an operating room and is not a technically complex procedure requiring increased hospital resources. Therefore, we are proposing to maintain the current non-O.R. designation for procedure codes 0T767DZ, 0T777DZ, and 0T787DZ for FY 2022.

(21) Percutaneous Insertion of Ureteral Stent

One requestor identified three ICD-10-PCS procedure codes that the requestor stated are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor suggested that the procedure described by these procedure codes warrants an O.R. designation because the procedure is typically performed following a failed ureteral stent insertion procedure in the operating room, which can only be reported as a cystoscopy or ureteroscopy, neither of which are designated as O.R. procedures. According to the requestor, percutaneous ureteral stenting through the abdominal wall is subsequently performed in an interventional radiology suite with image-guidance, sedation, and continuous vital sign monitoring. The three procedure codes are shown in the following table.

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Our clinical advisors reviewed this request and do not agree that the procedure warrants an O.R. designation. They noted that this procedure is not surgical in nature, does not involve technical complexity or require the resources of an operating rom. Therefore, we are proposing to maintain the current non-O.R. designation for procedure codes 0T763DZ, 0T773DZ, and 0T783DZ for FY 2022.

(22) Endoscopic Dilation of Urethra

One requestor identified ICD-10-PCS procedure code 0T7D8DZ (Dilation of urethra with intraluminal device, via natural or artificial opening endoscopic) that the requestor stated is not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor suggested that this procedure warrants an O.R. designation because the procedure code describes a procedure that utilizes the UroLift® System, a minimally invasive technology to treat lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH). According to the requestor, the technology is placed endoscopically within the prostatic urethra in the operating room under anesthesia.

Our clinical advisors reviewed this request and do not agree that the procedure warrants an O.R. designation. They noted that this procedure is performed without incision, resection or thermal injury to the prostate and is primarily performed in the outpatient setting. It is generally not the cause for the patient's admission and utilization of resources when it is performed. Therefore, we are proposing to maintain the current non-O.R. designation for procedure code 00T7D8DZ for FY 2022.

(23) Open Repair of Scrotum

One requestor identified ICD-10-PCS procedure code 0VQ50ZZ (Repair scrotum, open approach) that the requestor stated is not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor suggested that this procedure warrants an O.R. designation because it involves repair of scrotal tissue deeper than the skin with direct visualization and utilizes general anesthesia in the operating room.

Our clinical advisors do not agree that open repair of the scrotum merits an O.R. designation. They stated this procedure would not typically require the resources of an operating room and would generally not be a contributing factor impacting hospital resource use during the patient's admission when it is performed. Therefore, we are proposing to maintain the current non-O.R. designation for procedure code 0VQ50ZZ for FY 2022.

(24) Open Drainage of Vestibular Gland

One requestor identified ICD-10-PCS procedure code 0U9L0ZZ (Drainage of vestibular gland, open approach) that describes a procedure commonly performed for the treatment of an abscess that the requestor stated is performed in the operating room under general anesthesia and therefore warrants an O.R designation. The requestor stated this procedure is comparable to the procedure described by procedure code 0UBL0ZZ (Excision of vestibular gland, open approach) which is currently designated as an O.R. procedure.

During our review of procedure code 0U9L0ZZ, we also examined procedure codes 0U9L0ZX (Drainage of vestibular gland, open approach, diagnostic), 0U9LXZX (Drainage of vestibular gland, external approach, diagnostic), and 0UBL0ZZ. Separately, we reviewed procedure code 0T9D0ZZ (Drainage of urethra, open approach) because it represents the male equivalent of the female procedure described by procedure code 0U9L0ZZ.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure codes 0T9D0ZZ, 0U9L0ZX, 0U9LXZX, and 0UBL0ZZ are currently designated as O.R. procedures, however, procedure code 0U9L0ZZ is not recognized as an O.R. procedure for purposes of MS-DRG assignment. We examined procedure code 0U9L0ZZ and do not believe this drainage procedure warrants an O.R. designation, nor do we agree that this drainage of the vestibular gland procedure (0U9L0ZZ) is comparable to an excision of the vestibular gland procedure (0UBL0ZZ), which is currently designated as an O.R. procedure.

In the ICD-10-PCS classification, drainage is defined as taking or letting out fluids and/or gases from a body part and excision is defined as cutting out or off, without replacement, a portion of a body part. Therefore, the classification specifically defines and distinguishes the underlying objectives of each distinct procedure. Our clinical advisors stated a drainage procedure is frequently performed in the outpatient setting and is generally not the cause for the patient's admission and utilization of resources when it is performed. Drainage of the vestibular gland, also known as Bartholin's glands, is typically indicated when a cyst or abscess is present and may or may not involve the placement of a Word catheter. Conversely, excision of the vestibular gland is not considered an office-based procedure and is generally reserved for a vulvar mass or for patients who have not responded to more conservative attempts to create a drainage tract. In addition, after review, our clinical advisors recommended changing the O.R. status for procedure codes 0U9L0ZX and 0U9LXZX from O.R. to non-O.R. for similar reasons. These procedures do not typically require the resources of an operating room.

Therefore, we are proposing to remove procedure codes 0U9L0ZX and 0U9LXZX from the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E- Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under this proposal, these procedure codes would no longer impact MS-DRG assignment. We refer the reader to section II.D.10 of the preamble of this proposed rule for further discussion related to procedure code 0T9D0ZZ.

(25) Transvaginal Repair of Vagina

One requestor identified ICD-10-PCS procedure code 0UQG7ZZ (Repair vagina, via natural or artificial opening) that the requestor stated is currently not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor stated that procedures described by this code such as the non-obstetric transvaginal repair of the vaginal cuff and the non-obstetric transvaginal repair of vaginal lacerations should be designated as O.R. procedures because these procedures are performed in the operating room under general anesthesia. The requestor noted procedure codes 0USG7ZZ (Reposition vagina, via natural or artificial opening), 0UBG7ZZ (Excision of vagina, via natural or artificial opening), and 0UQG8ZZ (Repair vagina, via natural or artificial opening endoscopic) are currently designated as O.R. procedures, therefore procedure code 0UQG7ZZ should also be recognized as an O.R. procedure for purposes of MS-DRG assignment.

In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure code 0UQG7ZZ is currently designated as a non-O.R. procedure for purposes of MS-DRG assignment. Our clinical advisors reviewed this issue and disagree that a correlation can be made between procedures described as the transvaginal repair of the vagina and the procedures described by ICD-10-PCS codes 0USG7ZZ, 0UBG7ZZ, and 0UQG8ZZ. The root operation “repair” represents a broad range of procedures for restoring the anatomic structure of a body part such as suture of lacerations, while the root operations “reposition,” and “excision” define procedures with more Start Printed Page 25174distinct objectives. Also the approach “via natural or artificial opening”, for example, transvaginal, is defined as the entry of instrumentation through a natural or artificial external opening to reach the site of the procedure while the “via natural or artificial opening endoscopic approach” is defined as the entry of instrumentation (for example a scope) through a natural or artificial external opening to both reach and visualize the site of the procedure. Our clinical advisors also disagree that procedures described as the transvaginal repair of the vagina are typically performed in the operating room under general anesthesia. Our clinical advisors state transvaginal repair can be performed using regional anesthesia, used to numb only the area of the body that requires surgery instead of rendering the patient unconscious. Therefore, for the reasons described, we are proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure code 0UQG7ZZ.

(26) Percutaneous Tunneled Vascular Access Devices

One requestor identified ten ICD-10-PCS procedure codes describing percutaneous insertion of tunneled vascular access devices into various body parts that the requestor stated are not recognized as an O.R. procedure for purposes of MS-DRG assignment. The requestor suggested that these procedures warrant an O.R. designation because they are placed in an interventional radiology suite or in the operating room under anesthesia. The ten procedure codes are shown in the following table.

According to the requestor, it does not make sense for tunneled vascular access devices to group to procedural MS-DRGs in limited circumstances as is the case currently with the logic in MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract). The requestor stated that these procedures should be grouping to procedural MS-DRGs across all MDCs.

We note that we have addressed requests related to these procedures in previous rulemaking (85 FR 58511 through 58517). Our clinical advisors reviewed this request and disagree that procedures performed to insert a tunneled vascular access device should group to procedural MS-DRGs across all MDCs. They stated that these percutaneous procedures are generally performed in the outpatient setting and when performed during a hospitalization, they are frequently performed in combination with another O.R. procedure. Therefore, we are proposing to maintain the current non-O.R. status for the ten procedure codes listed previously for FY 2022.

12. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2022

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 Start Printed Page 25175of 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 (NonCC, 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 NonCC 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 assigning severity levels to new codes and 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 through 19246) that with the transition to ICD-10-CM and the significant changes that have occurred to diagnosis codes since the FY 2008 review, we believed it was necessary to conduct a comprehensive analysis once again. Based on this analysis, we proposed changes to the severity level designations for 1,492 ICD-10-CM diagnosis codes and invited public comments on those proposals. As summarized in the FY 2020 IPPS/LTCH PPS final rule, many commenters expressed concern with the proposed severity level designation changes overall and recommended that CMS conduct further analysis prior to finalizing any proposals. After careful consideration of the public comments we received, as discussed further in the FY 2020 final rule, we generally did not finalize our proposed changes to the severity designations for the ICD-10-CM diagnosis codes, other than the changes to the severity level designations for the diagnosis codes in category Z16- (Resistance to antimicrobial drugs) from a NonCC to a CC. We stated that postponing adoption of the proposed comprehensive changes in the severity level designations would allow further opportunity to provide additional background to the public on the methodology utilized and clinical rationale applied across diagnostic categories to assist the public in its review. We refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42150 through 42152) for a complete discussion of our response to public comments regarding the proposed severity level designation changes for FY 2020.

We discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58550 through 58554) 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 nine guiding principles and plan to present the findings and proposals in future rulemaking. The nine guiding principles are 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.

We refer readers to the FY 2021 IPPS/LTCH PPS final rule for a complete discussion of our response to public comments regarding the nine guiding principles. 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 ensure that the severity designation appropriately reflects resource use for any diagnosis code.

For new diagnosis codes approved for FY 2022, consistent with our annual process for designating a severity level (MCC, CC or NonCC) for new diagnosis codes, we first review the predecessor code designation, followed by review and consideration of other factors that may be relevant to the severity level designation, including the severity of illness, treatment difficulty, complexity of service and the resources utilized in the diagnosis and/or treatment of the condition. We note that this process does not automatically result in the new diagnosis code having the same designation as the predecessor code. We refer the reader to II.D.13 of this proposed rule for the discussion of the proposed changes to the ICD-10-CM and ICD-10-PCS coding systems for FY 2022.

For this FY 2022 IPPS/LTCH PPS proposed rule, we received several requests to change the severity level designations of specific ICD-10-CM diagnosis codes. Our clinical advisors believe it is appropriate to consider these requests in connection with our continued comprehensive CC/MCC analysis in future rulemaking, rather than proposing to change the designation of individual ICD-10-CM diagnosis codes at this time. As stated earlier in this section, 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 will consider these individual requests received for changes to severity level designations as we continue our comprehensive CC/MCC analysis and will provide more detail in future rulemaking.

c. Potential Change to Severity Level Designation for Unspecified Diagnosis Codes for FY 2022

For this FY 2022 IPPS/LTCH PPS proposed rule, as another interval step as we continue to address the comprehensive review of the severity designations of ICD-10-CM diagnosis codes in which we have been engaged over the past two years, we are requesting public comments on a potential change to the severity level designations for “unspecified” ICD-10-CM diagnosis codes that we are considering adopting for FY 2022. Start Printed Page 25176Specifically, we are considering changing the severity level designation of all “unspecified” diagnosis codes to a NonCC where there are other codes available in that code subcategory that further specify the anatomic site, effective for FY 2022, after consideration of the public comments we receive in response to this proposed rule.

According to the ICD-10-CM Official Guidelines for Coding and Reporting, codes titled “unspecified” are for use when the information in the medical record is insufficient to assign a more specific code. In our review of severity level designation of the codes in the ICD-10-CM classification, we noted 3,490 “unspecified” diagnosis codes designated as either CC or MCC, where there are other codes available in that code subcategory that further specify the anatomic site with an equivalent severity level designation. For example, ICD-10-CM code L89.003 (Pressure ulcer of unspecified elbow, stage 3) is currently designated as a MCC. In the same code subcategory of L89.0- (Pressure ulcer of elbow), ICD-10-CM codes L89.013 (Pressure ulcer of right elbow, stage 3) and code L89.023 (Pressure ulcer of left elbow, stage 3) are also designed as MCCs.

In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described the categorization of diagnoses as an MCC, a CC, or a NonCC, 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. As such, the designation of CC or MCC is intended to account for the increased resources required to address a condition as a secondary diagnosis. The usage of “unspecified” diagnosis codes where there are other codes available in that code subcategory that further specify the anatomic site may contribute to and eventually result in less reliable data for researching clinical outcomes. If documentation is not available to code to the highest level of specificity as to the laterality of the condition treated, and an unspecified code is reported by the hospital, it may be harder to quantify in the claims data what additional resources were expended to address that condition in terms of requiring clinical evaluation, therapeutic treatment, diagnostic procedures, extended length of hospital stay, increased nursing care and/or monitoring.

As stated previously, we discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58550 through 58554) that 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, and plan to present the findings and proposals in future rulemaking. As patients present with a variety of diagnoses, in examining the secondary diagnoses, we stated we would consider what additional resources are required, that surpasses 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. We believe more robust claims data would facilitate this effort to determine the impact on resource use and inform our decision-making in determining the most appropriate CC subclass (NonCC, CC, or MCC) assignment for each diagnosis as a secondary diagnosis. As part of this effort, we are soliciting comments on adopting a change to the severity level designation of the 3,490 “unspecified” diagnosis codes currently designated as either CC or MCC, where there are other codes available in that code subcategory that further specify the anatomic site, to a NonCC for FY 2022.

As discussed in the HIPAA Administrative Simplification: Modification to Medical Data Code Set Standards To Adopt ICD-10-CM and ICD-10-PCS proposed rule (73 FR 49796 through 49803), in proposing the adoption of ICD-10-CM and ICD-10-PCS, we listed that the addition of laterality in ICD-10-CM— specifying which organ or part of the body is involved when the location could be on the right, the left, or could be bilateral, was one of several improvements over ICD-9-CM. We also noted that in comparison to ICD-9-CM, ICD-10-CM diagnosis codes are very specific and that this specificity improves the richness of data for analysis and improves the accuracy of data used for medical research. In the Modifications to Medical Data Code Set Standards To Adopt ICD-10-CM and ICD-10-PCS final rule (74 FR 3328 through 3362), we adopted the ICD-10-CM and ICD-10-PCS as medical data code sets under HIPAA, replacing ICD-9-CM Volumes 1 and 2, and Volume 3 and noted that ICD-10-CM and ICD-10-PCS provide specific diagnosis and treatment information that can improve quality measurements and patient safety, and the evaluation of medical processes and outcomes. We continue to believe that reporting the most specific diagnosis codes supported by the available medical record documentation and clinical knowledge of the patient's health condition would more accurately reflect the health care encounter and improve the reliability and validity of the coded data.

We believe that changing the severity level for these “unspecified codes” as compared to the more specific codes in the same subcategory recognizing laterality would leverage the additional specificity available under the ICD-10 system, by fostering the reporting of the most specific diagnosis codes supported by the available medical record documentation and clinical knowledge of the patient's health condition to more accurately reflect each health care encounter and improve the reliability and validity of the coded data. However in consideration of the PHE, and to the extent that some providers may not currently have programs in place that focus on improving documentation, we are requesting public comments on making this change to the severity level designation for these unspecified ICD-10-CM diagnosis codes for FY 2022.

The diagnosis codes for which we are soliciting comments on a change in severity level designation as described in this proposed rule are shown in Table 6P.2a (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html). We note we are also making available the data describing the impact on resource use when reported as a secondary diagnosis for all 3,490 ICD-10-CM unspecified diagnosis codes. While these claims data were not used in our identification of the “unspecified” diagnosis codes for which there are other codes available in the code subcategory that further specify the anatomic site, as mentioned earlier in this section, these data are consistent with data historically used to mathematically measure impact on resource use for secondary diagnoses, and the data which we plan to use in combination with application of the nine guiding principles as we continue a comprehensive CC/MCC analysis. Therefore, we are displaying the data on these unspecified codes in order to facilitate public comment on these potential changes in the severity level designation for these codes.

In Table 6P.2a associated with this proposed rule, column C displays the FY 2020 severity level designation for these diagnosis codes in MS-DRG Grouper Version 37.2. Column D displays CMS' current FY 2021 severity level designation in MS-DRG Grouper Start Printed Page 25177Version 38.1 and column E displays the potential changes to the severity level designation that we are considering adopting. Columns F-O show data on the impact on resource use generated using discharge claims from the September 2019 update of the FY 2019 MedPAR file and MS-DRG Grouper Version 37.2. Columns Q-Z show data on the impact on resource use generated using discharge claims from the September 2020 update of the FY 2020 MedPAR file and MS-DRG Grouper Version 38.1.

For further information on the data on the impact on resource use as displayed in Columns F-O and Columns Q-Z, we refer readers to the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion of the methodology utilized to mathematically measure the impact on resource use. Also, 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 this methodology utilized to mathematically measure the impact on resource use. 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/​MedicareFee-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.

This table shows the Version 38.1 ICD-10 MS-DRG categorization of diagnosis codes by severity level.

We are requesting public comments on a modification to the Version 38.1 severity level subclass assignments for 4.8 percent of the ICD-10-CM diagnosis codes, potentially effective with the Version 39 ICD-10 MS-DRG MCC/CC list. The following table compares the Version 38.1 ICD-10 MS-DRG MCC/CC list and the potential Version 39 ICD-10 MS-DRG MCC/CC list. There are 17,957 diagnosis codes on the Version 38.1 MCC/CC lists. These potential MCC/CC severity level changes would reduce the number of diagnosis codes on the MCC/CC lists to 14,467 (2,771+ 11,696).

The net result of these potential changes to the Version 39 ICD-10 MS-DRG MCC/CC list, for the 72,621 diagnosis codes in the ICD-10-CM classification, would be a decrease of 507 (3,278−2,771) codes designated as an MCC, a decrease of 2,983 (14,679−11,696) codes designated as a CC, and an increase of 3,490 (58,154−54,664) codes designated as a NonCC.

The following table compares the Version 38.1 ICD-10 MS-DRG severity level list and the potential Version 39 ICD-10 MS-DRG severity level list by each of the 22 chapters of the ICD-10-CM classification to display how each chapter of ICD-10-CM might be affected by these modifications.

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As shown in the table, the Diseases of the Musculoskeletal System and Connective Tissue (M00-M99) chapter of ICD-10-CM would have the largest percentage reduction in codes designated as CC/MCC. Twelve chapters would have a zero percentage change to the percentage of codes designated as CC/MCC.

As stated previously, we are requesting public comments on our possible adoption of a change to the severity level designation of these 3,490 “unspecified” diagnosis codes currently designated as either CC or MCC, where there are other codes available in that code subcategory that further specify the anatomic site, to a NonCC, potentially effective with the Version 39 ICD-10 MS-DRG MCC/CC list. As part of this request, we would be interested in comments regarding whether this modification might present operational challenges and how we might otherwise foster the reporting of the most specific diagnosis codes supported by the available medical record documentation and clinical knowledge of the patient's health condition to more accurately Start Printed Page 25180reflect each health care encounter and improve the reliability and validity of the coded data.

d. Proposed Additions and Deletions to the Diagnosis Code Severity Levels for FY 2022

The following tables identify the proposed additions and deletions to the diagnosis code MCC severity levels list and the proposed additions to the diagnosis code CC severity levels list for FY 2022 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—FY2022;

Table 6I.2— Proposed Deletions to the MCC List—FY2022; and

Table 6J.1— Proposed Additions to the CC List—FY2022.

e. Proposed CC Exclusions List for FY 2022

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 38.1 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/​index.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 reported as the principal diagnosis, would cause the CC or MCC diagnosis to be considered as a NonCC. Part 2 is the list of diagnosis codes designated as a MCC only for patients discharged alive; otherwise, they are assigned as a NonCC.

As discussed in section II.D.12.c. of the preamble of this proposed rule, we are requesting public comments on potential changes to the severity level for 3,490 diagnosis codes describing an “unspecified” anatomic site, from a CC severity level to a NonCC severity level, for FY 2022. We refer the reader to Table 6P.3a associated with this proposed rule (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html ) for the list of the 3,490 diagnosis codes that are currently listed in Part 1 of the CC Exclusions List and are defined as a CC when reported as a secondary diagnosis. Table 6P.3a is divided into several tabs, with the first tab titled “SDX Codes and Exclu Categories” containing columns A, B, and C. Column A (titled “ICD-10-CM Code”) lists the “unspecified” diagnosis codes that are currently listed in Part 1 of Appendix C of the CC Exclusions List, column B (titled “Description”) lists the narrative description of each diagnosis code, and column C (titled Exclusion Category) contains a hyperlink to the collection of diagnosis codes which, when reported as the principal diagnosis, would cause the CC diagnosis to be considered as a NonCC. For example, for line 2, Column A displays diagnosis code C34.00, column B displays “Malignant neoplasm of unspecified main bronchus” and column C displays a hyperlink to Exclusion Category number 280. When the user clicks on the hyperlink for number 280, they are directed to another tab labeled “PDX Category 280” that contains the list of diagnosis codes which, when reported as the principal diagnosis, would cause the corresponding CC diagnosis to be considered as a NonCC. In connection with the request for public comments on the potential changes to the severity level for 3,490 diagnosis codes describing an “unspecified” anatomic site, from a CC severity level to a NonCC severity level for FY 2022, Table 6P.3a is being made available for readers to review and consider the list of the 3,490 “unspecified” diagnosis codes that are currently included in Part 1 of the CC Exclusions List and the principal diagnosis exclusion category with which they are currently associated. If we were to finalize the potential changes to the severity level for the 3,490 diagnosis codes describing an “unspecified” anatomic site from a CC severity level to a NonCC severity level for FY 2022, we would also finalize the removal of these codes from the CC Exclusions List for FY 2022.

We received three requests related to the CC Exclusions List logic, as we discuss in this section of this proposed rule.

We received a request to review the secondary diagnoses that are excluded as a CC or MCC in the CC Exclusions List logic when any one of the following three diagnosis codes is reported as the principal diagnosis.

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According to the requestor, in the ICD-10 MS-DRGs version 37.2 CC Exclusions List logic, the predecessor code for the listed diagnosis codes, diagnosis code O99.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium) is listed in the collection of principal diagnosis list number 1000, therefore, when a CC or MCC secondary diagnosis associated with that principal diagnosis list describes a condition as occurring in pregnancy, childbirth or the puerperium, the CC Exclusions List logic will render that diagnosis code as a NonCC. The requestor stated that because diagnosis code O99.89 under version 37.2 of the ICD-10 MS-DRGs is now a subcategory under version 38.1 of the ICD-10 MS-DRGs, with three unique diagnosis codes to specify which obstetric stage the patient is in, that further analysis of the new diagnosis codes (O99.891, O99.892, and O99.893) should occur to determine if changes to the collection of principal diagnosis list is warranted. The requestor provided three examples for CMS to review and consider for possible changes to the CC Exclusions List logic.

In the first example, the requestor noted that diagnosis code O72.1 (Other immediate postpartum hemorrhage) is listed as a CC secondary diagnosis associated with the collection of principal diagnosis list number 1000, and that under the ICD-10 MS-DRGs version 38.1 CC Exclusions List logic, the diagnosis listed in principal diagnosis collection 1000 is now diagnosis code O99.893 (Other specified diseases and conditions complicating puerperium). Thus, both diagnosis codes (O72.1 and O99.893) are describing conditions occurring specifically in the postpartum or puerperium period. The postpartum period is defined as the period beginning immediately after delivery and continues for six weeks following delivery. A postpartum complication is any complication occurring within the six-week period. The requestor stated that because diagnosis code O72.1 is assigned for documented postpartum uterine atony with hemorrhage when it occurs immediately following the delivery of the baby and placenta, that CMS should review diagnosis code O99.892 (Other specified diseases and conditions complicating childbirth) and determine if it should be added to the collection of principal diagnosis list number 1000 to cause diagnosis code O72.1 to be considered as a NonCC when diagnosis code O99.892 is reported as the principal diagnosis.

In the second example, the requestor noted that diagnosis code O98.32 (Other infections with a predominantly sexual mode of transmission complicating childbirth) is associated with principal diagnosis collection number 1012. The requestor also noted that principal diagnosis collection number 1012 does not list diagnosis codes O99.891, O99.892, or O99.893 as a principal diagnosis to exclude the CC secondary diagnosis code O98.32, however, it does list diagnosis codes O98.311 (Other infections with a predominantly sexual mode of transmission complicating pregnancy, first trimester), O98.312 (Other infections with a predominantly sexual mode of transmission complicating pregnancy, second trimester), and O98.313 (Other infections with a predominantly sexual mode of transmission complicating pregnancy, third trimester) as a principal diagnosis to exclude the CC secondary diagnosis code O98.32. The requestor recommended CMS review diagnosis codes O98.32 (Other infections with a predominantly sexual mode of transmission complicating childbirth) and O98.33 (Other infections with a predominantly sexual mode of transmission complicating the puerperium), to determine if diagnosis codes O99.891, O99.892 or O99.893, when reported as a principal diagnosis, should exclude CC secondary diagnosis codes O98.32 and O98.33. Thus, the requestor suggested CMS consider if it is appropriate to add diagnosis codes O99.891, O99.892 and O99.893 to principal diagnosis collection number 1012 to cause diagnosis code O98.32 to be considered as a NonCC when diagnosis codes O99.891, O99.892 or O99.893 are reported as the principal diagnosis.

In the third example, the requestor noted that diagnosis code O87.2 (Hemorrhoids in the puerperium) is associated with principal diagnosis collection number 4041. The requestor also noted that principal diagnosis collection number 4041 lists diagnosis code O99.893 as a principal diagnosis to exclude the CC diagnosis code O87.2, however, it does not list diagnosis code O99.892. The requestor further noted that the “Includes” note at Category O87 (Venous complications and hemorrhoids in the puerperium) in the FY 2021 ICD-10-CM Tabular List includes “venous complications in labor, delivery and the puerperium”, therefore, diagnosis code O87.2 would also be reported for documented hemorrhoids during labor and delivery. The requestor recommended CMS review diagnosis code O99.892 to determine if, when reported as a principal diagnosis, it should exclude CC diagnosis code O87.2. Thus, the requestor suggested CMS consider if it is appropriate to add diagnosis code O99.892 to principal diagnosis collection number 4041 to cause diagnosis code O87.2 to be considered as a NonCC when diagnosis code O99.892 is reported as the principal diagnosis.

We reviewed diagnosis codes O99.891, O99.892 and O99.893 with respect to the principal diagnosis collection list and because these diagnosis codes are specifically describing “other specified diseases and conditions complicating pregnancy, childbirth, and the puerperium,” respectively, we do not believe that any of these three diagnosis codes, when reported as a principal diagnosis, should exclude any CC secondary diagnosis. In cases where any one of these three diagnosis codes is reported as a principal diagnosis, which are generally anticipated to be rare, it is understood that there is not a more specific diagnosis code available in the classification to report as the principal diagnosis that identifies the underlying or associated cause of the disease or the condition complicating the specific obstetric stage (pregnancy, childbirth, or puerperium), hence the “other specified” in the code title. Specifically, the title of category O99 is “Other maternal diseases classifiable elsewhere but complicating pregnancy, childbirth and the puerperium” and there are nine subcategories, each of which is generally associated with a single organ Start Printed Page 25182system or etiology, with the exception of the “other specified” subcategory (O99.8) as displayed in the following table.

The instructional note at category O99 states “use additional code to identify specific condition” and included at each subcategory (O99.0-O99.7) are a range of codes that refer to diagnoses that are associated with the condition in the title of the subcategory that are to be reported in addition to the applicable code within the respective subcategory. For example, at subcategory O99.0 (Anemia complicating pregnancy, childbirth, and the puerperium), the range of associated codes to identify the specific condition (for example, type of anemia) includes conditions in diagnosis code range D50-D64, meaning that when any one of the diagnosis codes under subcategory O99.0 describing anemia complicating a specific obstetric stage (pregnancy, childbirth, or puerperium) is reported, a code within the D50-D64 code range to identify the specific type of anemia would also be expected to be reported when supported by the medical record documentation. It is therefore reasonable to associate the two conditions (one from subcategory O99.0 and one from code range D50-D64) when reported on a claim. However, the same cannot be stated for subcategory O99.8. There is no range of associated codes from which users are instructed to report located at this particular subcategory in addition to the specific code under sub-subcategory O99.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium). We note that subcategory O99.8 and sub-subcategory O99.89 have the same title. Therefore, when a diagnosis code from other than that sub-subcategory is reported that describes a condition occurring in any one of the obstetric stages (pregnancy, childbirth, or puerperium) it is not clear if the condition can reasonably be associated to correspond to the “other specified diseases and conditions” diagnosis. In addition, the code ranges included at subcategory O99.8 are D00-D48, H00-H95, M00-N99, and Q00-Q99. Consequently, diagnosis codes within those code ranges would be expected to be reported with one of the diagnosis codes under subcategory O99.8 when reported as a principal diagnosis.

In all three of the requestor's examples, the diagnosis codes provided for CMS to review and consider are located in the “O” code range (O72.1, O98.32, and O87.2 in addition to O99.891, O99.892, and O99.893). As noted previously, the code ranges included at subcategory O99.8 as listed, do not include any codes in “O” code range. Upon review of the diagnosis codes provided by the requestor, it is also reasonable to expect that any one of those diagnosis codes (O72.1, O98.32, and O87.2) could be reported as a principal diagnosis alone. For instance, there are no instructional notes at diagnosis code O72.1 that preclude that diagnosis code from being reported as the principal diagnosis.

During our review of the CC Exclusions List logic in response to the requestor's recommendations, we also identified some diagnosis codes describing the specific trimester of pregnancy that we believe warrant further examination. We are unable to fully evaluate these conditions for FY 2022, therefore, we will continue to analyze for future rulemaking.

For the reasons discussed, we do not believe that any of the three diagnosis codes (O99.891, O99.892, and O99.893), when reported as a principal diagnosis, should exclude any CC secondary diagnosis. Therefore, we are proposing to remove diagnosis codes O99.891, O99.892, and O99.893 from the CC Exclusions List logic principal diagnosis collection lists. Specifically, we are proposing to remove those diagnosis codes from the following principal Start Printed Page 25183diagnosis collection list numbers 0085, 0954, 0956 through 0963, 0972, 0988, 0991 through 0998, 1000 through 1002, 1004, 1006, 1009, 1011, 1014, 1015, 1019, 3999, 4000, 4002 through 4006, 4008, 4010, through 4013, 4017, 4020, 4021, 4023 through 4026, 4030, 4031, 4033 through 4043, 4050 through 4054, 4059 through 4063, 4065 and 4067, effective FY 2022.

We also received a request to review diagnosis codes describing oxygen dependence, chronic obstructive pulmonary disease with exacerbation, and chronic respiratory failure with regard to assignment in MS-DRG 191 (Chronic Obstructive Pulmonary Disease with CC) and to consider whether any changes to principal diagnosis collection number 0744 in the CC Exclusions List logic are warranted.

The requestor provided diagnosis codes J44.1 (Chronic obstructive pulmonary disease with (acute) exacerbation), J96.11 (Chronic respiratory failure with hypoxia (CC)) and Z99.81 (Dependence on supplemental oxygen) for CMS to review. Specifically, the requestor suggested that if oxygen dependence, by definition, is clinically inherent to chronic respiratory failure, then CMS should consider adding diagnosis code J44.1 to the CC Exclusions List logic principal diagnosis collection list number 0744 and cause diagnosis code J96.11 to be considered as a NonCC when J44.1 is reported as the principal diagnosis.

We reviewed the diagnosis codes and MS-DRG assignment as the requestor suggested. We confirmed that when diagnosis code J44.1 is reported as the principal diagnosis with the CC secondary diagnosis code J96.11, and secondary diagnosis code Z99.81, the resulting MS-DRG assignment is MS-DRG 191. We believe that diagnosis code J96.11 should continue to group as a CC, to the “with CC” MS-DRG 191, when reported as a secondary diagnosis code with diagnosis code J44.1 reported as the principal diagnosis. We disagree with the requestor's suggestion that every oxygen-dependent COPD patient has chronic respiratory failure, and that separately reporting the chronic respiratory failure is clinically redundant. Patients can be oxygen-dependent with COPD and not have a diagnosis of chronic respiratory failure. Therefore, we are proposing to maintain the structure of principal diagnosis collection list number 0744 in the CC Exclusions List logic for FY 2022.

Finally, we received a request to reconsider the MCC exclusions for diagnosis code I11.0 (Hypertensive heart disease with heart failure) when reported as the principal diagnosis. According to the requestor, there appears to be an inconsistency for the CC Exclusions List logic. Specifically, the requestor noted that when diagnosis code I11.0 is reported as the principal diagnosis, it causes the following MCC secondary diagnosis codes to be considered as a NonCC.

However, the requestor stated that diagnosis codes I50.21 (Acute systolic (congestive) heart failure) and I50.31 (Acute diastolic (congestive) heart failure) are not excluded from acting as MCCs when diagnosis code I11.0 is reported as the principal diagnosis. The requestor also stated that all diagnosis codes in category I50 (Heart Failure) share common etiologies and demonstrate comparable severity of illness. Therefore, the requestor suggested that none of the conditions in this category (I50) should be excluded from acting as a MCC when diagnosis code I11.0 is reported as a principal diagnosis.

We examined all the diagnosis codes in category I50 with regard to the CC Exclusions List logic. In addition to diagnosis code I11.0, we also reviewed 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) when reported as a principal diagnosis because that diagnosis code also has the Tabular instruction “use additional code to identify the type of heart failure”.

We found additional inconsistencies in the CC secondary diagnosis heart failure codes where some diagnoses were excluded depending on the principal diagnosis reported and others were not excluded. As a result, we are proposing to revise the CC Exclusions Logic list for diagnosis codes I11.0 and I13.2 when reported as a principal diagnosis to ensure they are consistent in the CC and MCC diagnoses they exclude. In the following table we show the findings for each diagnosis code in category I50 with respect to the current severity level (MCC, CC or NonCC), if it is currently excluded as a CC or MCC when reported with either diagnosis code I11.0 or I13.2 as the principal diagnosis, and what our proposal is under the CC Exclusions List logic for FY 2022.

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We are proposing additional changes to the ICD-10 MS-DRGs Version 39 CC Exclusion List based on the diagnosis and procedure code updates as discussed in section II.D.13. of this FY 2022 IPPS/LTCH PPS proposed rule. Therefore, we have developed Table 6G.1.—Proposed Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2022; Table 6G.2.—Proposed Principal Diagnosis Order Additions to the CC Exclusions List—FY 2022; Table 6H.1.—Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2022; and Table 6H.2.—Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2022. For Table 6G.1, each secondary diagnosis code proposed for addition to the CC Exclusion List is shown with an asterisk and the principal diagnoses proposed to exclude the secondary diagnosis code are provided in the indented column immediately following it. For Table 6G.2, each of the principal diagnosis codes for which there is a CC exclusion is shown with an asterisk and the conditions proposed for addition to the CC Exclusion List that will not count as a CC are provided in an indented column immediately following the affected principal diagnosis. For Table 6H.1, each secondary diagnosis code proposed for deletion from the CC Exclusion List is shown with an asterisk followed by the principal diagnosis codes that currently exclude it. For Table 6H.2, each of the principal diagnosis codes is shown with an asterisk and the proposed deletions to the CC Exclusions List are provided in an indented column immediately following the affected principal diagnosis. Tables 6G.1., 6G.2., 6H.1., and 6H.2. associated with this proposed rule are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html.Start Printed Page 25186

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

To identify new, revised and deleted diagnosis and procedure codes, for FY 2022, we have developed Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, Table 6D.—Invalid Procedure Codes and Table 6E.—Revised Diagnosis Code Titles for this proposed rule.

These tables are not published in the Addendum to this proposed rule, but are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html as described in section VI. of the Addendum to this proposed rule. As discussed in section II.D.16. of the preamble of this proposed rule, the code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting process. Therefore, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules.

We are proposing the MDC and MS-DRG assignments for the new diagnosis codes and procedure codes as set forth in Table 6A.—New Diagnosis Codes and Table 6B.—New Procedure Codes. In addition, the proposed severity level designations for the new diagnosis codes are set forth in Table 6A. and the proposed O.R. status for the new procedure codes are set forth in Table 6B. Consistent with our established process, we examined the MS-DRG assignment and the attributes (severity level and O.R. status) of the predecessor diagnosis or procedure code, as applicable, to inform our proposed assignments and designations. Specifically, we review the predecessor code and MS-DRG assignment most closely associated with the new diagnosis or procedure code, and in the absence of claims data, we consider other factors that may be relevant to the MS-DRG assignment, including the severity of illness, treatment difficulty, complexity of service and the resources utilized in the diagnosis and/or treatment of the condition. We note that this process does not automatically result in the new diagnosis or procedure code being proposed for assignment to the same MS-DRG or to have the same designation as the predecessor code.

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

  • Table 6A.—New Diagnosis Codes—FY 2022;
  • Table 6B.—New Procedure Codes—FY 2022;
  • Table 6C.—Invalid Diagnosis Codes—FY 2022;
  • Table 6D.—Invalid Procedure Codes—FY 2022;
  • Table 6E.—Revised Diagnosis Code Titles—FY 2022;
  • Table 6G.1.—Proposed Secondary Diagnosis Order Additions to the CC Exclusions List—FY 2022;
  • Table 6G.2.—Proposed Principal Diagnosis Order Additions to the CC Exclusions List—FY 2022;
  • Table 6H.1.—Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List—FY 2022;
  • Table 6H.2.—Proposed Principal Diagnosis Order Deletions to the CC Exclusions List—FY 2022;
  • Table 6I.1.—Proposed Additions to the MCC List—FY 2022;
  • Table 6I.2.—Proposed Deletions to the MCC List—FY 2022; and
  • Table 6J.1.—Proposed Additions to the CC List—FY 2022.

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

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

As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we made available the FY 2021 ICD-10 MCE Version 38 manual file. The manual contains the definitions of the Medicare code edits, including a description of each coding edit with the corresponding diagnosis and procedure code edit lists. The link to this MCE manual file, along with the link to the mainframe and computer software for the MCE Version 38 (and ICD-10 MS-DRGs) are posted on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

For this FY 2022 IPPS/LTCH PPS proposed rule, we address the MCE requests we received by the November 1, 2020 deadline. We also discuss the proposals we are making based on our internal review and analysis.

a. External Causes of Morbidity Codes as Principal Diagnosis

In the MCE, the external cause codes (V, W, X, or Y codes) describe the circumstance causing an injury, not the nature of the injury, and therefore should not be used as a principal diagnosis.

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2021. We are proposing to add the following new ICD-10-CM diagnosis codes to the External Causes of Morbidity edit code list.

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b. Age Conflict Edit

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

  • Perinatal/Newborn—Age 0 years only; a subset of diagnoses which will only occur during the perinatal or newborn period of age 0 (for example, tetanus neonatorum, health examination for newborn under 8 days old).
  • Pediatric—Age is 0-17 years inclusive (for example, Reye's syndrome, routine child health exam).
  • Maternity—Age range is 9-64 years inclusive (for example, diabetes in pregnancy, antepartum pulmonary complication).
  • Adult—Age range is 15-124 years inclusive (for example, senile delirium, mature cataract).

(1) Pediatric Diagnoses

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

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2021. We are proposing to add the following new ICD-10-CM diagnosis codes to the Pediatric diagnoses category code list under the Age conflict edit.

c. Sex Conflict Edit

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

(1) Diagnoses for Females Only Edit

As discussed in section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the new diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2021. We are proposing to add the following new ICD-10-CM diagnosis codes to the edit code list for the Diagnoses for Females Only edit.

d. Unacceptable Principal Diagnosis Edit

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

As discussed in Section II.D.13. of the preamble of this proposed rule, Table 6A.—New Diagnosis Codes, lists the new diagnosis codes that have been approved to date which will be effective with discharges on and after October 1, 2021. In addition, as a result of proposed new instructional notes to “Code first underlying disease” (which indicate the proper sequencing order of the codes) for existing diagnosis codes found at subcategory M40.1 (Other secondary kyphosis) and subcategory M41.5 (Other secondary scoliosis) discussed at the September 8-9, 2020 ICD-10 Coordination and Maintenance Committee meeting, we are proposing to add the following new and, if these instructional notes are finalized, existing ICD-10-CM diagnosis codes at subcategories M40.1 and M41.5, to the Unacceptable Principal Diagnosis edit code list.

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In addition, as discussed in section II.D.13. of the preamble of this proposed rule, Table 6C.—Invalid Diagnosis Codes, lists the diagnosis codes that are Start Printed Page 25189no longer effective October 1, 2021. Included in this table are the following ICD-10-CM diagnosis codes that are currently listed on the Unacceptable Principal Diagnosis edit code list. We are proposing to delete these codes from the Unacceptable Principal Diagnosis edit code list.

e. Unspecified Codes

As discussed in section II.D.12.c. of the preamble of this proposed rule, we are requesting public comments on a potential change to the severity level designations for “unspecified” ICD-10-CM diagnosis codes that we are considering adopting for FY 2022. In connection with that request, we are also requesting public comments on the potential creation of a new MCE code edit involving these “unspecified” codes for FY 2022. Specifically, this MCE code edit could trigger when an “unspecified” diagnosis code currently designated as either a CC or MCC, that includes other codes available in that code subcategory that further specify the anatomic site, is entered. We refer the reader to table 6P.3a (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html) for the list of unspecified diagnosis codes that would be subject to this edit. This edit could signal to the provider that a more specific code is available to report. We believe this edit aligns with documentation improvement efforts and leverages the specificity within ICD-10. As part of our request for comment on the potential creation of this new MCE code edit for these “unspecified” codes, we are interested in comments on how this MCE code edit may be developed for FY 2022 to more accurately reflect each health care encounter and improve the reliability and validity of the coded data.

f. Future Enhancement

In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through 38054) we noted the importance of ensuring accuracy of the coded data from the reporting, collection, processing, coverage, payment and analysis aspects. Subsequently, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20235) we stated that we engaged a contractor to assist in the review of the limited coverage and non-covered procedure edits in the MCE that may also be present in other claims processing systems that are utilized by our MACs. The MACs must adhere to criteria specified within the National Coverage Determinations (NCDs) and may implement their own edits in addition to what is already incorporated into the MCE, resulting in duplicate edits. The objective of this review is to identify where duplicate edits may exist and to determine what the impact might be if these edits were to be removed from the MCE.

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

As we continue to evaluate the purpose and function of the MCE with respect to ICD-10, we encourage public input for future discussion. As we have discussed in prior rulemaking, we recognize a need to further examine the current list of edits and the definitions of those edits. We continue to encourage public comments on whether there are additional concerns with the current edits, including specific edits or language that should be removed or revised, edits that should be combined, or new edits that should be added to assist in detecting errors or inaccuracies in the coded data. Comments should be directed to the MS-DRG Classification Change Mailbox located at MSDRGClassificationChange@cms.hhs.gov by November 1, 2021.

15. Proposed Changes to Surgical Hierarchies

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

A surgical class can be composed of one or more MS-DRGs. For example, in MDC 11, the surgical class “kidney transplant” consists of a single MS-DRG (MS-DRG 652) and the class “major bladder procedures” consists of three MS-DRGs (MS-DRGs 653, 654, and 655). Consequently, in many cases, the surgical hierarchy has an impact on more than one MS-DRG. The methodology for determining the most resource-intensive surgical class involves weighting the average resources for each MS-DRG by frequency to determine the weighted average resources for each surgical class. For example, assume surgical class A includes MS-DRGs 001 and 002 and surgical class B includes MS-DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG 001 are higher than that of MS-DRG 003, but the average costs of MS-DRGs 004 and 005 Start Printed Page 25190are higher than the average costs of MS-DRG 002. To determine whether surgical class A should be higher or lower than surgical class B in the surgical hierarchy, we would weigh the average costs of each MS-DRG in the class by frequency (that is, by the number of cases in the MS-DRG) to determine average resource consumption for the surgical class. The surgical classes would then be ordered from the class with the highest average resource utilization to that with the lowest, with the exception of “other O.R. procedures” as discussed in this proposed rule.

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

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

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

For this FY 2022 IPPS/LTCH PPS proposed rule, we received a request to examine the MS-DRG hierarchy within MDC 05 (Diseases and Disorders of the Circulatory System). The requestor stated its request to review the hierarchy within MDC 05 was based on the relative weights within each MS-DRG subdivision which they stated are supportive of higher position within the hierarchy. The requestor stated that when multiple procedures are performed, it is reasonable for providers to be compensated for the highest weighted procedure. The requestor did not specify which data year it analyzed to identify the relative weights. As discussed in this section, in reviewing the surgical hierarchy, we weigh the average costs of each MS-DRG in the class by frequency (that is, by the number of cases in the MS-DRG), not the relative weights of each MS-DRG as suggested by the requestor, to determine average resource consumption for the surgical class; therefore, consistent with our annual process, we used the methodology as described previously to review the surgical hierarchy within MDC 05.

Based on our review of the surgical hierarchy within MDC 05 in response to this request, and in response to the request we received to review the MS-DRG assignments for cases involving the surgical ablation procedure for atrial fibrillation as discussed in section II.D.5.e. of the preamble of this proposed rule, we are proposing to revise the surgical hierarchy for the MS-DRGs in MDC 05 for FY 2022. Specifically, we are proposing to sequence MS-DRGs 231-236 above MS-DRGs 222-227 and below MS-DRGs 216-221, sequence MS-DRGs 222-227 above MS-DRGs 266-227 and below MS-DRGs 231-236, sequence MS-DRGs 266-267 above MS-DRGs 268-269 and below MS-DRGs 222-227, sequence MS-DRGs 228-229 above MS-DRGs 319-320 and below MS-DRGs 268-269.

Our proposal for Appendix D MS-DRG Surgical Hierarchy by MDC and MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 39 is illustrated in the following table.

16. Maintenance of the ICD-10-CM and ICD-10-PCS Coding Systems

In September 1985, the ICD-9-CM Coordination and Maintenance Committee was formed. This is a Federal interdepartmental committee, co-chaired by the Centers for Disease Control and Prevention's (CDC) National Center for Health Statistics (NCHS) and CMS, charged with maintaining and updating the ICD-9-CM system. The final update to ICD-9-CM codes was made on October 1, 2013. Thereafter, the name of the Committee was changed to the ICD-10 Coordination and Maintenance Committee, effective with the March 19-20, 2014 meeting. The ICD-10 Coordination and Maintenance Committee addresses updates to the ICD-10-CM and ICD-10-PCS coding systems. The Committee is jointly responsible for approving coding changes, and developing errata, addenda, and other modifications to the coding systems to reflect newly developed procedures and technologies and newly identified diseases. The Committee is also responsible for promoting the use of Federal and non-Federal educational programs and other communication techniques with a view toward standardizing coding applications and upgrading the quality of the classification system.

The official list of ICD-9-CM diagnosis and procedure codes by fiscal year can be found on the CMS website at: http://cms.hhs.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​Start Printed Page 25191codes.html. The official list of ICD-10-CM and ICD-10-PCS codes can be found on the CMS website at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​index.html.

The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM diagnosis codes included in the Tabular List and Alphabetic Index for Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-9-CM procedure codes included in the Tabular List and Alphabetic Index for Procedures.

The Committee encourages participation in the previously mentioned process by health-related organizations. In this regard, the Committee holds public meetings for discussion of educational issues and proposed coding changes. These meetings provide an opportunity for representatives of recognized organizations in the coding field, such as the American Health Information Management Association (AHIMA), the American Hospital Association (AHA), and various physician specialty groups, as well as individual physicians, health information management professionals, and other members of the public, to contribute ideas on coding matters. After considering the opinions expressed during the public meetings and in writing, the Committee formulates recommendations, which then must be approved by the agencies.

The Committee presented proposals for coding changes for implementation in FY 2022 at a public meeting held on September 8-9, 2020 and finalized the coding changes after consideration of comments received at the meetings and in writing by November 09, 2020.

The Committee held its 2021 meeting on March 9-10, 2021. The deadline for submitting comments on these code proposals was April 9, 2021. It was announced at this meeting that any new diagnosis and procedure codes for which there was consensus of public support and for which complete tabular and indexing changes would be made by June 2021 would be included in the October 1, 2021 update to the ICD-10-CM diagnosis and ICD-10-PCS procedure code sets. As discussed in earlier sections of the preamble of this proposed rule, there are new, revised, and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that are captured in Table 6A.—New Diagnosis Codes, Table 6B.—New Procedure Codes, Table 6C.—Invalid Diagnosis Codes, Table 6D.—Invalid Procedure Codes, and Table 6E.—Revised Diagnosis Code Titles for this proposed rule, which are available via the internet on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. The code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we make the code titles available for the IPPS proposed rule, they are not subject to comment in the proposed rule. Because of the length of these tables, they are not published in the Addendum to the proposed rule. Rather, they are available via the internet as discussed in section VI. of the Addendum to the proposed rule.

Recordings for the virtual meeting discussions of the procedure codes at the Committee's September 8-9, 2020 meeting and the March 9-10, 2021 meeting can be obtained from the CMS website at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​C-and-M-Meeting-Materials. The materials for the discussions relating to diagnosis codes at the September 8-9, 2020 meeting and March 9-10, 2021 meeting can be found at: http://www.cdc.gov/​nchs/​icd/​icd10cm_​maintenance.html. These websites also provide detailed information about the Committee, including information on requesting a new code, participating in a Committee meeting, timeline requirements and meeting dates.

We encourage commenters to submit questions and comments on coding issues involving diagnosis codes via Email to: nchsicd10cm@cdc.gov.

Questions and comments concerning the procedure codes should be submitted via Email to: ICDProcedureCodeRequest@cms.hhs.gov .

As a result of the ongoing COVID-19 public health emergency, the CDC implemented six new diagnosis codes describing conditions related to COVID-19 into the ICD-10-CM effective with discharges on and after January 1, 2021. The diagnosis codes are

We refer the reader to the CDC web page at https://www.cdc.gov/​nchs/​icd/​icd10cm.htm for additional details regarding the implementation of these new diagnosis codes.

We provided the MS-DRG assignments for the six diagnosis codes effective with discharges on and after January 1, 2021, consistent with our established process for assigning new diagnosis codes. Specifically, we review the predecessor diagnosis code and MS-DRG assignment most closely associated with the new diagnosis code, and consider other factors that may be relevant to the MS-DRG assignment, including the severity of illness, treatment difficulty, and the resources utilized for the specific condition/diagnosis. We note that this process does not automatically result in the new Start Printed Page 25192diagnosis code being assigned to the same MS-DRG as the predecessor code. The assignments for the previously listed diagnosis codes are reflected in Table 6A- New Diagnosis Codes (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS). As with the other new diagnosis codes and MS-DRG assignments included in Table 6A of this proposed rule, we are soliciting public comments on the most appropriate MDC, MS-DRG, and severity level assignments for these codes for FY 2022, as well as any other options for the GROUPER logic.

In addition, CMS implemented 21 new procedure codes describing the introduction or infusion of therapeutics, including monoclonal antibodies and vaccines for COVID-19 treatment, into the ICD-10-PCS effective with discharges on and after January 01, 2021. The 21 procedure codes listed in this section of this rule are designated as non-O.R. and do not affect any MDC or MS-DRG assignment as shown in the following table

Start Printed Page 25193

The ICD-10 MS-DRG assignment for cases reporting any one of the 21 procedure codes is dependent on the reported principal diagnosis, any secondary diagnoses defined as a CC or MCC, procedures or services performed, age, sex, and discharge status. The 21 procedure codes are reflected in Table 6B—New Procedure Codes (which is available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS .) As with the other new procedure codes and MS-DRG assignments included in Table 6B of this proposed rule, we are soliciting public comments on the most appropriate MDC, MS-DRG, and operating room status assignments for Start Printed Page 25194these codes for FY 2022, as well as any other options for the GROUPER logic.

We note that Change Request (CR) 11895, Transmittal 10654, titled “Fiscal Year (FY) 2021 Annual Update to the Medicare Code Editor (MCE) and International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and Procedure Coding System (ICD-10-PCS)”, was issued on March 12, 2021 (available via the internet on the CMS website at: https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​Transmittals/​Transmittals/​r10654cp) regarding the release of an updated version of the ICD-10 MS-DRG GROUPER and Medicare Code Editor software, Version 38.1, effective with discharges on and after January 1, 2021, reflecting the new diagnosis and procedure codes. The updated software, along with the updated ICD-10 MS-DRG V38.1 Definitions Manual and the Definitions of Medicare Code Edits V38.1 manual is available at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

In the September 7, 2001 final rule implementing the IPPS new technology add-on payments (66 FR 46906), we indicated we would attempt to include proposals for procedure codes that would describe new technology discussed and approved at the Spring meeting as part of the code revisions effective the following October.

Section 503(a) of Public Law 108-173 included a requirement for updating diagnosis and procedure codes twice a year instead of a single update on October 1 of each year. This requirement was included as part of the amendments to the Act relating to recognition of new technology under the IPPS. Section 503(a) of Public Law 108-173 amended section 1886(d)(5)(K) of the Act by adding a clause (vii) which states that the Secretary shall provide for the addition of new diagnosis and procedure codes on April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis-related group classification) until the fiscal year that begins after such date. This requirement improves the recognition of new technologies under the IPPS by providing information on these new technologies at an earlier date. Data will be available 6 months earlier than would be possible with updates occurring only once a year on October 1.

While section 1886(d)(5)(K)(vii) of the Act states that the addition of new diagnosis and procedure codes on April 1 of each year shall not require the Secretary to adjust the payment, or DRG classification, under section 1886(d) of the Act until the fiscal year that begins after such date, we have to update the DRG software and other systems in order to recognize and accept the new codes. We also publicize the code changes and the need for a mid-year systems update by providers to identify the new codes. Hospitals also have to obtain the new code books and encoder updates, and make other system changes in order to identify and report the new codes.

The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance Committee holds its meetings in the spring and fall in order to update the codes and the applicable payment and reporting systems by October 1 of each year. Items are placed on the agenda for the Committee meeting if the request is received at least 3 months prior to the meeting. This requirement allows time for staff to review and research the coding issues and prepare material for discussion at the meeting. It also allows time for the topic to be publicized in meeting announcements in the Federal Register as well as on the CMS website. A complete addendum describing details of all diagnosis and procedure coding changes, both tabular and index, is published on the CMS and NCHS websites in June of each year. Publishers of coding books and software use this information to modify their products that are used by health care providers. Historically, this 5-month time period has proved to be necessary for hospitals and other providers to update their systems.

A discussion of this timeline and the need for changes are included in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance Committee Meeting minutes. The public agreed that there was a need to hold the fall meetings earlier, in September or October, in order to meet the new implementation dates. The public provided comment that additional time would be needed to update hospital systems and obtain new code books and coding software. There was considerable concern expressed about the impact this April update would have on providers.

In the FY 2005 IPPS final rule, we implemented section 1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law 108-173, by developing a mechanism for approving, in time for the April update, diagnosis and procedure code revisions needed to describe new technologies and medical services for purposes of the new technology add-on payment process. We also established the following process for making these determinations. Topics considered during the Fall ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting are considered for an April 1 update if a strong and convincing case is made by the requestor during the Committee's public meeting. The request must identify the reason why a new code is needed in April for purposes of the new technology process. Meeting participants and those reviewing the Committee meeting materials are provided the opportunity to comment on this expedited request. All other topics are considered for the October 1 update. Participants of the Committee meeting and those reviewing the Committee meeting materials are encouraged to comment on all such requests. There were no code requests approved for an expedited April 1, 2021 implementation at the September 8-9, 2020 Committee meetings. Therefore, there were no new codes implemented April 1, 2021.

At the March 9-10, 2021 ICD-10 Coordination and Maintenance Committee meeting we announced our consideration of an April 1 implementation date for ICD-10-CM diagnosis and ICD-10-PCS procedure code updates, in addition to the current October 1 annual update for ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes. We stated that this April 1 code update would be in addition to the existing April 1 update under section 1886(d)(5)(k)(vii) of the Act for diagnosis or procedure code revisions needed to describe new technologies and medical services for purposes of the new technology add-on payment process. As explained during the March 9-10, 2021 meeting, we believe this additional April 1 implementation date for new codes would allow for earlier recognition of diagnoses, conditions, and illnesses as well as procedures, services, and treatments in the claims data. We also believe this earlier recognition would be beneficial for purposes of reporting, data collection, tracking clinical outcomes, claims processing, surveillance, research, policy decisions and data interoperability. We note, as previously summarized, that in 2005, in connection with the implementation of the current April 1 update for diagnosis or procedure code revisions for purposes of the new technology add-on payment process, stakeholders expressed concerns with an April 1 update, specifically with regard to the time needed to update hospital systems and obtain new code books and coding software. We believe that the advances in technology that have occurred since Start Printed Page 25195that time, including the use of electronic health records (EHRs), electronic coding books, and updated encoder software that are now utilized by the majority of providers, would alleviate those concerns and make a broader April 1 update more feasible today. Consistent with our established process for the existing April 1 update under section 1886(d)(5)(k)(vii) of the Act, if adopted, any new ICD-10 code updates finalized for implementation on the following April 1 would be announced in November of the prior year, which would provide a 4-month timeframe for the public to receive notice about the diagnosis and/or procedure code updates with respect to the codes, code descriptions, code designations (severity level for diagnosis codes or O.R. status for procedure code) and code assignment under the ICD-10 MS-DRGs. As discussed during the March 9-10, 2021 meeting, all April 1 code update files would be made publicly available by February 1, providing a 2-month timeframe for providers to incorporate systems updates. We also do not anticipate any need for code book publishers to issue new code books as a result of an April 1 code update, if adopted. Rather, as was done in the past at the publisher's discretion, supplemental pages containing the code update information were made available and sent to purchasers of the code book products. We further note that historically, coders would hand-write any updates or notes directly into their code books. In addition, with the availability of electronic code book files, we would anticipate any April 1 code updates, if adopted, could be reasonably completed in the allotted timeframe. For these same reasons, we also do not believe a 5-month time period would continue to be needed to update providers' systems to reflect newly approved coding changes. We further note that if an April 1 update were to be adopted, it could be through a phased approach, such that initially, the number and nature of the code updates would be fewer and less comprehensive as compared to the existing October 1 update. For example, it was discussed during the meeting that consideration could first be given to proposals identified as “Addenda”. For diagnosis codes, the proposed addenda updates typically consist primarily of minor revisions to the Index and Tabular List, such as corrections to typos and changes to instructional notes. For procedure codes, the proposed addenda updates typically consist primarily of minor revisions to the Index and Tables, such as adding or deleting entries to describe a body part or approach value or making changes to the Substance and Device Keys. We would use our established process to implement an April 1 code update, which would include presenting proposals for April 1 consideration at the September ICD-10 Coordination and Maintenance Committee meeting, requesting public comments, reviewing the public comments, finalizing codes, and announcing the new codes with their assignments consistent with the new GROUPER release information. Under our contemplated process, requestors would indicate whether they are submitting their code request for consideration for an April 1 implementation date, if adopted, or an October 1 implementation date. The ICD-10 Coordination and Maintenance Committee would make efforts to accommodate the requested implementation date for each request submitted. However, the Committee would determine which requests would be presented for consideration for an April 1 implementation date or an October 1 implementation date. We refer the reader to the Agenda packet from the meeting at: https://www.cms.gov/​Medicare/​Coding/​ICD10/​C-and-M-Meeting-Materials for additional information regarding this announcement and our request for comments.

If this new April 1 implementation date is adopted, we would assign the codes approved for the April 1 update to an MS-DRG(s) using our established process for GROUPER assignments for new diagnosis and procedure codes. Specifically, consistent with our established process for assigning new diagnosis and procedure codes, we would review the predecessor code and MS-DRG assignment most closely associated with the new diagnosis or procedure code, and in the absence of claims data, we would consider other factors that may be relevant to the MS-DRG assignment, including the severity of illness, treatment difficulty, complexity of service and the resources utilized in the diagnosis and/or treatment of the condition. We note that this process would not automatically result in the new diagnosis or procedure code being assigned to the same MS-DRG or having the same designation as the predecessor code.

ICD-9-CM addendum and code title information is published on the CMS website at: http://www.cms.hhs.gov/​Medicare/​Coding/​ICD9ProviderDiagnosticCodes/​index.html?​redirect=​/​icd9ProviderDiagnosticCodes/​01overview.asp#TopofPage. ICD-10-CM and ICD-10-PCS addendum and code title information is published on the CMS website at: http://www.cms.gov/​Medicare/​Coding/​ICD10/​index.html. CMS also sends electronic files containing all ICD-10-CM and ICD-10-PCS coding changes to its Medicare contractors for use in updating their systems and providing education to providers.

Information on ICD-10-CM diagnosis codes, along with the Official ICD-10-CM Coding Guidelines, can be found on the CDC website at: https://www.cdc.gov/​nchs/​icd/​icd10cm.htm.

Additionally, information on new, revised, and deleted ICD-10-CM diagnosis and ICD-10-PCS procedure codes is provided to the AHA for publication in the Coding Clinic for ICD-10. The AHA also distributes coding update information to publishers and software vendors.

For FY 2021, there are currently 72,621 diagnosis codes and 78,136 ICD-10-PCS procedure codes. As displayed in Table 6A.—New Diagnosis Codes and in Table 6B.—New Procedure Codes associated with this proposed rule (and available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​, there are 147 new diagnosis codes and 106 new procedure codes that have been finalized for FY 2022 at the time of the development of this proposed rule. The code titles are adopted as part of the ICD-10 Coordination and Maintenance Committee process. Thus, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules. We will continue to provide the October updates in this manner in the IPPS proposed and final rules.

17. Replaced Devices Offered Without Cost or With a Credit

a. Background

In the FY 2008 IPPS final rule with comment period (72 FR 47246 through 47251), we discussed the topic of Medicare payment for devices that are replaced without cost or where credit for a replaced device is furnished to the hospital. We implemented a policy to reduce a hospital's IPPS payment for certain MS-DRGs where the implantation of a device that subsequently failed or was recalled determined the base MS-DRG assignment. At that time, we specified that we will reduce a hospital's IPPS payment for those MS-DRGs where the hospital received a credit for a replaced device equal to 50 percent or more of the cost of the device.Start Printed Page 25196

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

b. Proposed Changes for FY 2022

For FY 2022 we are proposing not to add any MS-DRGs to the policy for replaced devices offered without cost or with a credit. We are proposing to continue to include the existing MS-DRGs currently subject to the policy as displayed in the following table.

Start Printed Page 25197

Start Printed Page 25198

The final list of MS-DRGs subject to the IPPS policy for replaced devices offered without cost or with a credit will be included in the FY 2022 IPPS/LTCH PPS final rule and also will be issued to providers in the form of a Change Request (CR).

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

E. Recalibration of the FY 2022 MS-DRG Relative Weights

1. Data Sources for Developing the Relative Weights

In accordance with our proposal as discussed in section I.F. of this proposed rule, for the purposes of establishing the FY 2022 MS-DRG relative weights, we are proposing to use the FY 2019 MedPAR claims data, based on claims received by CMS through March 31, 2020, and the March 2020 update of the FY 2018 HCRIS file where we ordinarily would have used the FY 2020 MedPAR claims data, based on claims received by CMS through December 31, 2020, and the December 2020 update of the FY 2019 HCRIS file. We refer the reader to section I.F. of this Start Printed Page 25199proposed rule for further discussion of our analysis of the best available data for purposes of the FY 2022 ratesetting and our related proposals.

Consistent with our established policy, in developing the MS-DRG relative weights for FY 2022, we are proposing to use two data sources: Claims data and cost report data. The claims data source is the MedPAR file, which includes fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2019 MedPAR data used in this proposed rule include discharges occurring on October 1, 2018, through September 30, 2019, based on bills received by CMS through March 31, 2020, from all hospitals subject to the IPPS and short-term, acute care hospitals in Maryland (which at that time were under a waiver from the IPPS).

The FY 2019 MedPAR file used in calculating the proposed relative weights includes data for approximately 9,217,828 Medicare discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in a Medicare Advantage managed care plan are excluded from this analysis. These discharges are excluded when the MedPAR “GHO Paid” indicator field on the claim record is equal to “1” or when the MedPAR DRG payment field, which represents the total payment for the claim, is equal to the MedPAR “Indirect Medical Education (IME)” payment field, indicating that the claim was an “IME only” claim submitted by a teaching hospital on behalf of a beneficiary enrolled in a Medicare Advantage managed care plan. In addition, the March 31, 2020 update of the FY 2019 MedPAR file complies with version 5010 of the X12 HIPAA Transaction and Code Set Standards, and includes a variable called “claim type.” Claim type “60” indicates that the claim was an inpatient claim paid as fee-for-service. Claim types “61,” “62,” “63,” and “64” relate to encounter claims, Medicare Advantage IME claims, and HMO no-pay claims. Therefore, the calculation of the proposed relative weights for FY 2022 also excludes claims with claim type values not equal to “60.” The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. We note that the proposed FY 2022 relative weights are based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes from the FY 2019 MedPAR claims data, grouped through the ICD-10 version of the proposed FY 2022 GROUPER (Version 39).

The second data source used in the cost-based relative weighting methodology is the Medicare cost report data files from the HCRIS. Normally, we use the HCRIS dataset that is 3 years prior to the IPPS fiscal year. However, as discussed earlier in this section, we are proposing to use the March 31, 2020 update of the FY 2018 HCRIS for calculating the proposed FY 2022 cost-based relative weights. Consistent with our historical practice, for this FY 2022 proposed rule, we are providing the version of the HCRIS from which we calculated these proposed 19 CCRs on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. Click on the link on the left side of the screen titled “FY 2022 IPPS Proposed Rule Home Page” or “Acute Inpatient Files for Download.” We note that this file is identical to the file used for the FY 2021 IPPS/LTCH PPS final rule. As discussed previously, we are also making available the FY 2019 HCRIS and the FY 2020 MedPAR file as well as other related information and data files for purposes of public comment on our alternative approach of using the same FY 2020 data that we would ordinarily use for purposes of FY 2022 ratesetting.

2. Methodology for Calculation of the Relative Weights

a. General

We calculated the proposed FY 2022 relative weights based on 19 CCRs, as we did for FY 2021. The methodology we are proposing to use to calculate the FY 2022 MS-DRG cost-based relative weights based on claims data in the FY 2019 MedPAR file and data from the FY 2018 Medicare cost reports is as follows:

  • To the extent possible, all the claims were regrouped using the proposed FY 2022 MS-DRG classifications discussed in sections II.B. and II.F. of the preamble of this proposed rule.
  • The transplant cases that were used to establish the relative weights for heart and heart-lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare-approved transplant centers that have cases in the FY 2019 MedPAR file. (Medicare coverage for heart, heart-lung, liver and/or intestinal, and lung transplants is limited to those facilities that have received approval from CMS as transplant centers.)
  • Organ acquisition costs for kidney, heart, heart-lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis.

Because these acquisition costs are paid separately from the prospective payment rate, it is necessary to subtract the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average cost for each MS-DRG and before eliminating statistical outliers.

Section 108 of the Further Consolidated Appropriations Act, 2020 provides that, for cost reporting periods beginning on or after October 1, 2020, costs related to hematopoietic stem cell acquisition for the purpose of an allogeneic hematopoietic stem cell transplant shall be paid on a reasonable cost basis. We refer the reader to the FY 2021 IPPS/LTCH PPS final rule for further discussion of the reasonable cost basis payment for cost reporting periods beginning on or after October 1, 2020 (85 FR 58835 to 58842). For FY 2022 and subsequent years, we are proposing to subtract the hematopoietic stem cell acquisition charges from the total charges on each transplant bill that showed hematopoietic stem cell acquisition charges before computing the average cost for each MS-DRG and before eliminating statistical outliers.

  • Claims with total charges or total lengths of stay less than or equal to zero were deleted. Claims that had an amount in the total charge field that differed by more than $30.00 from the sum of the routine day charges, intensive care charges, pharmacy charges, implantable devices charges, supplies and equipment charges, therapy services charges, operating room charges, cardiology charges, laboratory charges, radiology charges, other service charges, labor and delivery charges, inhalation therapy charges, emergency room charges, blood and blood products charges, anesthesia charges, cardiac catheterization charges, CT scan charges, and MRI charges were also deleted.
  • At least 92.8 percent of the providers in the MedPAR file had charges for 14 of the 19 cost centers. All claims of providers that did not have charges greater than zero for at least 14 of the 19 cost centers were deleted. In other words, a provider must have no more than five blank cost centers. If a provider did not have charges greater than zero in more than five cost centers, the claims for the provider were deleted.
  • Statistical outliers were eliminated by removing all cases that were beyond 3.0 standard deviations from the geometric mean of the log distribution of both the total charges per case and the total charges per day for each MS-DRG.Start Printed Page 25200
  • Effective October 1, 2008, because hospital inpatient claims include a POA indicator field for each diagnosis present on the claim, only for purposes of relative weight-setting, the POA indicator field was reset to “Y” for “Yes” for all claims that otherwise have an “N” (No) or a “U” (documentation insufficient to determine if the condition was present at the time of inpatient admission) in the POA field.

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

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

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

The participation of hospitals in the BPCI initiative concluded on September 30, 2018. The participation of hospitals in the BPCI Advanced model started on October 1, 2018. The BPCI Advanced model, tested under the authority of section 1115A of the Act, is comprised of a single payment and risk track, which bundles payments for multiple services beneficiaries receive during a Clinical Episode. Acute care hospitals may participate in BPCI Advanced in one of two capacities: As a model Participant or as a downstream Episode Initiator. Regardless of the capacity in which they participate in the BPCI Advanced model, participating acute care hospitals will continue to receive IPPS payments under section 1886(d) of the Act. Acute care hospitals that are Participants also assume financial and quality performance accountability for Clinical Episodes in the form of a reconciliation payment. For additional information on the BPCI Advanced model, we refer readers to the BPCI Advanced web page on the CMS Center for Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/​initiatives/​bpci-advanced/​. Consistent with our policy for FY 2021, and consistent with how we have treated hospitals that participated in the BPCI Initiative, for FY 2022, we continue to believe it is appropriate to include all applicable data from the subsection (d) hospitals participating in the BPCI Advanced model in our IPPS payment modeling and ratesetting calculations because, as noted previously, these hospitals are still receiving IPPS payments under section 1886(d) of the Act. Consistent with the FY 2021 IPPS/LTCH PPS final rule, we are also proposing to include all applicable data from subsection (d) hospitals participating in the Comprehensive Care for Joint Replacement (CJR) Model in our IPPS payment modeling and ratesetting calculations. The charges for each of the 19 cost groups for each claim were standardized to remove the effects of differences in area wage levels, IME and DSH payments, and for hospitals located in Alaska and Hawaii, the applicable cost-of-living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in geographic adjustment factors, cost-of-living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS-DRG for each of the 19 cost groups so that each MS-DRG had 19 standardized charge totals. Statistical outliers were then removed. These charges were then adjusted to cost by applying the proposed national average CCRs developed from the FY 2018 cost report data, consistent with our proposed FY 2022 ratesetting discussed in section II.A.4 of the Addendum of this proposed rule.

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

Consistent with historical practice, we account for rare situations of non-monotonicity in a base MS-DRG and its severity levels, where the mean cost in the higher severity level is less than the mean cost in the lower severity level, in determining the relative weights for the different severity levels. If there are initially non-monotonic relative weights Start Printed Page 25201in the same base DRG and its severity levels, then we combine the cases that group to the specific non-monotonic MS-DRGs for purposes of relative weight calculations. For example, if there are two non-monotonic MS-DRGs, combining the cases across those two MS-DRGs results in the same relative weight for both MS-DRGs. The relative weight calculated using the combined cases for those severity levels is monotonic, effectively removing any non-monotonicity with the base DRG and its severity levels. For this FY 2022 proposed rule, this calculation was applied to address non-monotonicity for cases that grouped to MS-DRG 504 and MS-DRG 505. We note that cases were also combined in calculating the relative weights for these two MS-DRGs for FY 2021. In the supplemental file titled AOR/BOR File, we include statistics for the affected MS-DRGs both separately and with cases combined.

We are inviting public comments on our proposals related to recalibration of the proposed FY 2022 relative weights and the changes in relative weights from FY 2021.

b. Relative Weight Calculation for MS-DRG 018

As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58599 through 58600), we created MS-DRG 018 for cases that include procedures describing CAR T-cell therapies, which were reported using ICD-10-PCS procedure codes XW033C3 or XW043C3. We refer the reader to section II.D.2. of this proposed rule for discussion of the procedure codes for CAR T-cell and non-CAR T-cell therapies and other immunotherapies that we are proposing for assignment to MS-DRG 018 for FY 2022.

In the FY 2021 IPPS/LTCH PPS final rule, we finalized our proposals to modify our existing relative weight methodology to ensure that the relative weight for new MS-DRG 018 appropriately reflects the relative resources required for providing CAR T-cell therapy outside of a clinical trial, while still accounting for the clinical trial cases in the overall average cost for all MS-DRGs, with additional refinements in response to comments. For cases that group to MS-DRG 018, we finalized to not include claims determined to be clinical trial claims that group to new MS-DRG 018 when calculating the average cost for new MS-DRG 018 that is used to calculate the relative weight for this MS-DRG, with the additional refinements that (a) when the CAR T-cell therapy product is purchased in the usual manner, but the case involves a clinical trial of a different product, the claim will be included when calculating the average cost for new MS-DRG 018 to the extent such claims can be identified in the historical data, and (b) when there is expanded access use of immunotherapy, these cases will not be included when calculating the average cost for new MS-DRG 018 to the extent such claims can be identified in the historical data (85 FR 58600). We also finalized our proposal to calculate an adjustment to account for the CAR T-cell therapy cases determined to be clinical trial cases, as described in the FY 2021 IPPS/LTCH PPS final rule, with the additional refinement of including revenue center 891 in our calculation of standardized drug charges for MS-DRG 018. Applying this finalized methodology, based on the March 2020 update of the FY 2019 MedPAR file for the FY 2021 IPPS/LTCH PPS final rule, we estimated that the average costs of CAR T-cell therapy cases determined to be clinical trial cases ($46,062) were 17 percent of the average costs of CAR T cell therapy cases determined to be non-clinical trial cases ($276,042), and therefore, in calculating the national average cost per case for purposes of the FY 2021 IPPS/LTCH PPS final rule, each case identified as a clinical trial case was adjusted by 0.17. We also noted that we were applying this adjustor for cases determined to be CAR T-cell therapy clinical trial cases for purposes of budget neutrality and outlier simulations. We refer the reader to the FY 2021 IPPS/LTCH PPS final rule for complete discussion of our finalized modifications to the relative weight calculation for MS-DRG 018.

Since we are proposing to use the same FY 2019 MedPAR claims data for FY 2022 ratesetting that we did for the FY 2021 final rule, we are also proposing to continue to use the same process to identify clinical trial claims in the FY 2019 MedPAR for purposes of calculating the FY 2022 relative weights. We continue to use the proxy of standardized drug charges of less than $373,000, which was the average sales price of KYMRIAH and YESCARTA, which are the two CAR T-cell biological products in the MedPAR data used for the FY 2021 final rule and this proposed rule. Using the same methodology from the FY 2021 IPPS/LTCH PPS final rule, we are proposing to apply an adjustment to account for the CAR T cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case that is used to calculate the relative weights for all MS-DRGs:

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

Additionally, we are continuing our finalized methodology for calculating this payment adjustment, such that: (a) When the CAR T-cell therapy product is purchased in the usual manner, but the case involves a clinical trial of a different product, the claim will be included when calculating the average cost for cases not determined to be clinical trial cases and (b) when there is expanded access use of immunotherapy, these cases will be included when calculating the average cost for cases determined to be clinical trial cases. However, we continue to believe to the best of our knowledge there are no claims in the historical data (FY 2019 MedPAR) used in the calculation of the adjustment for cases involving a clinical trial of a different product, and to the extent the historical data contain claims for cases involving expanded access use of immunotherapy we believe those claims would have drug charges less than $373,000. Consistent with our proposal to use the FY 2019 data for the FY 2022 ratesetting, we are also proposing to calculate this adjustor based on the March 2020 update of the FY 2019 MedPAR file for purposes of establishing the FY 2022 relative weights. Accordingly, as we did for FY 2021, we are proposing to adjust the transfer-adjusted case count for MS-DRG 018 by applying the proposed adjustor of 17 percent to the applicable clinical trial cases, and to use this adjusted case count for MS-DRG 018 in calculating the national average cost per case, which is used in the calculation of the relative weights. Therefore, in calculating the national average cost per case for purposes of this proposed rule, each case identified as a clinical trial case was adjusted by 17 percent. As we did for FY 2021, we are proposing to apply this same adjustor for the applicable cases that group to MS-DRG 018 for purposes of budget neutrality and outlier simulations.

As discussed in section I.F. of this proposed rule, we are also soliciting Start Printed Page 25202comments on an alternative approach of using the same FY 2020 data that we would ordinarily use for purposes of the FY 2022 rulemaking, which we may consider finalizing for FY 2022 based on consideration of comments received. We note that using the methodology as finalized in the FY 2021 IPPS/LTCH PPS final rule, we calculated an adjustor of 0.25 based on this alternative approach of using the FY 2020 MedPAR file.

3. Development of Proposed National Average CCRs

Consistent with our proposal to use the FY 2019 data for the FY 2022 ratesetting, as discussed earlier in this section, we are proposing to continue to use the national average CCRs that were calculated for the FY 2021 final rule using that same data. Specifically, we calculated these national average CCRs as follows:

Using the FY 2018 cost report data, we removed CAHs, Indian Health Service hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland because we include their charges in our claims database. Then we created CCRs for each provider for each cost center (see the supplemental data file for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. Then we took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-3 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare-specific charges for each line item from Worksheet D-3. Once each hospital's Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs.

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

The proposed FY 2022 cost-based relative weights were then normalized by an adjustment factor of 1.820783 so that the average case weight after recalibration was equal to the average case weight before recalibration. The normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.

The proposed 19 national average CCRs for FY 2022 are as follows:

Start Printed Page 25203

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

When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We are proposing to use that same case threshold in recalibrating the proposed MS-DRG relative weights for FY 2022. Using data from the FY 2019 MedPAR file, there were 7 MS-DRGs that contain fewer than 10 cases. For FY 2022, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for these low-volume MS-DRGs, we are proposing to compute relative weights for the low-volume MS-DRGs by adjusting their final FY 2021 relative weights by the percentage change in the average weight of the cases in other MS-DRGs from FY 2021 to FY 2022. The crosswalk table is as follows.

F. Add-On Payments for New Services and Technologies for FY 2022

1. Background

Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as “new technologies”) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that a new medical service or technology may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate. We note that, beginning with discharges occurring in FY 2008, CMS transitioned from CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these provisions and 42 CFR 412.87(b) specifies three criteria for a new medical service or technology to receive the additional payment: (1) The medical service or technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies. In addition, certain transformative new devices and antimicrobial products may qualify under an alternative inpatient new technology add-on payment pathway, as set forth in the regulations at § 412.87(c) and (d). We note that section 1886(d)(5)(K)(i) of the Act requires that the Secretary establish a mechanism to recognize the costs of new medical services and technologies under the payment system established under that subsection, which establishes the system for paying for the operating costs of inpatient hospital services. The system of payment for capital costs is established under section 1886(g) of the Act. Therefore, as discussed in prior rulemaking (72 FR 47307 through 47308), we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs. In this rule, we highlight some of the major statutory and regulatory provisions relevant to the new technology add-on payment criteria, as well as other information. For a complete discussion of the new technology add-on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51572 through 51574), FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42300) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58736 through 58742).

a. New Technology Add On Payment Criteria

(1) Newness Criterion

Under the first criterion, as reflected in § 412.87(b)(2), a specific medical service or technology will no longer be considered “new” for purposes of new medical service or technology add-on payments after CMS has recalibrated the MS-DRGs, based on available data, to reflect the cost of the technology. We note that we do not consider a service or technology to be new if it is substantially similar to one or more existing technologies. That is, even if a medical product receives a new FDA approval or clearance, it may not necessarily be considered “new” for purposes of new technology add-on payments if it is “substantially similar” to another medical product that was approved or cleared by FDA and has been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814), we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically: (1) Start Printed Page 25204Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a product is assigned to the same or a different MS-DRG; and (3) whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered “new” for purposes of new technology add-on payments. For a detailed discussion of the criteria for substantial similarity, we refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 47352) and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814).

(2) Cost Criterion

Under the second criterion, § 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the MS-DRG prospective payment rate otherwise applicable to discharges involving the new medical service or technology must be assessed for adequacy. Under the cost criterion, consistent with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess the adequacy of payment for a new technology paid under the applicable MS-DRG prospective payment rate, we evaluate whether the charges of the cases involving a new medical service or technology will exceed a threshold amount that is the lesser of 75 percent of the standardized amount (increased to reflect the difference between cost and charges) or 75 percent of one standard deviation beyond the geometric mean standardized charge for all cases in the MS-DRG to which the new medical service or technology is assigned (or the case-weighted average of all relevant MS-DRGs if the new medical service or technology occurs in many different MS-DRGs). The MS-DRG threshold amounts generally used in evaluating new technology add-on payment applications for FY 2022 are presented in a data file that is available, along with the other data files associated with the FY 2021 IPPS/LTCH PPS final rule and correction notice, on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.

We note that, under the policy finalized in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58603 through 58605), beginning with FY 2022, we use the proposed threshold values associated with the proposed rule for that fiscal year to evaluate the cost criterion for all applications for new technology add-on payments and previously approved technologies that may continue to receive new technology add-on payments, if those technologies would be assigned to a proposed new MS-DRG for that same fiscal year.

As finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275), beginning with FY 2020, we include the thresholds applicable to the next fiscal year (previously included in Table 10 of the annual IPPS/LTCH PPS proposed and final rules) in the data files associated with the prior fiscal year. Accordingly, the proposed thresholds for applications for new technology add-on payments for FY 2023 are presented in a data file that is available on the CMS website, along with the other data files associated with this FY 2022 proposed rule, by clicking on the FY 2022 IPPS Proposed Rule Home Page at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index. We note, for the reasons discussed in section I.F of the preamble of this proposed rule, we are proposing to use the FY 2019 MedPAR claims data where we ordinarily would have used the FY 2020 MedPAR claims data for purposes of proposed FY 2022 ratesetting. We refer the reader to section I.F. of the preamble of this proposed rule for further discussion of our analysis of the best available data for FY 2022 ratesetting and our related proposals. For the FY 2023 proposed threshold values, consistent with our proposal, we are proposing to use FY 2019 claims data to evaluate whether the charges of the cases involving a new medical service or technology will exceed a threshold amount that is the lesser of 75 percent of the proposed FY 2022 standardized amount (increased to reflect the difference between cost and charges) or 75 percent of one standard deviation beyond the geometric mean standardized charge (using FY 2019 claims data) for all cases in the MS-DRG (using FY 2019 claims data) to which the new medical service or technology is assigned (or the case-weighted average of all relevant MS-DRGs if the new medical service or technology occurs in many different MS-DRGs), rather than the FY 2020 data we would otherwise use. As discussed in section I.F of the preamble of this proposed rule, we are also considering, as an alternative to our proposal, the use of the same FY 2020 data that we would ordinarily use for purposes of FY 2022 ratesetting. If we were to finalize this alternative approach for FY 2022, we would use the FY 2020 claims data for purposes of the final thresholds for applications for new technology add-on payments for FY 2023 in the FY 2022 IPPS/LTCH PPS final rule. We are making available the threshold values calculated using the FY 2020 claims data at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS. In the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed that applicants should submit a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Specifically, applicants should submit a sample of sufficient size to enable us to undertake an initial validation and analysis of the data. We also discussed in the September 7, 2001 final rule (66 FR 46917) the issue of whether the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims information that providers submit with applications for new medical service or technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this issue.

(3) Substantial Clinical Improvement Criterion

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

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

++ The new medical service or technology offers a treatment option for a patient population unresponsive to, or Start Printed Page 25205ineligible for, currently available treatments;

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

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

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

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

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

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

c. Alternative Inpatient New Technology Add-On Payment Pathway

Beginning with applications for FY 2021 new technology add-on payments, under the regulations at § 412.87(c), a medical device that is part of FDA's Breakthrough Devices Program may qualify for the new technology add-on payment under an alternative pathway. Additionally, under the regulations at § 412.87(d) for certain antimicrobial products, beginning with FY 2021, a drug that is designated by the FDA as a Qualified Infectious Disease Product (QIDP), and, beginning with FY 2022, a drug that is approved by the FDA under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD), may also qualify for the new technology add-on payment under an alternative pathway. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for a complete discussion on this policy. We note that a technology is not required to have the specified FDA designation at the time the new technology add-on payment application is submitted. CMS will review the application based on the information provided by the applicant under the alternative pathway specified by the applicant. However, to receive approval for the new technology add-on payment under that alternative pathway, the technology must have the applicable FDA designation and meet all other requirements in the regulations in § 412.87(c) and (d), as applicable.

(1) Alternative Pathway for Certain Transformative New Devices

For applications received for new technology add-on payments for FY 2021 and subsequent fiscal years, if a medical device is part of FDA's Breakthrough Devices Program and received FDA marketing authorization, it will be considered new and not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS, and will not need to meet the requirement under § 412.87(b)(1) that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. This policy is codified at § 412.87(c). Under this alternative pathway, a medical device that has received FDA marketing authorization (that is, has been approved or cleared by, or had a De Novo classification request granted by, FDA) and that is part of FDA's Breakthrough Devices Program will need to meet the cost criterion under § 412.87(b)(3), and will be considered new as reflected in § 412.87(c)(2). We note, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736), we clarified our policy that a new medical device under this alternative pathway must receive marketing authorization for the indication covered by the Breakthrough Devices Program designation. We refer the reader to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736) for a complete discussion regarding this clarification.

(2) Alternative Pathway for Certain Antimicrobial Products

For applications received for new technology add-on payments for certain antimicrobial products, beginning with FY 2021, if a technology is designated by FDA as a QIDP and received FDA marketing authorization, and, beginning with FY 2022, if a drug is approved under FDA's LPAD pathway and used for the indication approved under the LPAD pathway, it will be considered new and not substantially similar to an existing technology for purposes of new technology add-on payments and will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. We codified this policy at § 412.87(d). Under this alternative pathway for QIDPs and LPADs, a medical product that has received FDA marketing authorization and is designated by FDA Start Printed Page 25206as a QIDP or approved under the LPAD pathway will need to meet the cost criterion under § 412.87(b)(3), and will be considered new as reflected in § 412.87(d)(2).

We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for a complete discussion on this policy. We note, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739), we clarified that a new medical product seeking approval for the new technology add-on payment under the alternative pathway for QIDPs must receive marketing authorization for the indication covered by the QIDP designation. We also finalized our policy to expand our alternative new technology add-on payment pathway for certain antimicrobial products to include products approved under the LPAD pathway and used for the indication approved under the LPAD pathway.

d. Additional Payment for New Medical Service or Technology

The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. As noted previously, we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs (72 FR 47307 through 47308).

For discharges occurring before October 1, 2019, under § 412.88, if the costs of the discharge (determined by applying operating cost-to-charge ratios (CCRs) as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), CMS made an add-on payment equal to the lesser of: (1) 50 percent of the costs of the new medical service or technology; or (2) 50 percent of the amount by which the costs of the case exceed the standard DRG payment.

Beginning with discharges on or after October 1, 2019, for the reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300), we finalized an increase in the new technology add-on payment percentage, as reflected at § 412.88(a)(2)(ii). Specifically, for a new technology other than a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 65 percent of the costs of the new medical service or technology; or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment. For a new technology that is a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. For a ne