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

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Start Preamble Start Printed Page 44774

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This final rule revises 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. The final rule also updates 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. It also finalizes a May 10, 2021 interim final rule with comment period regarding rural reclassification through the Medicare Geographic Classification Review Board (MGCRB). The final rule also implements changes and updates for the Medicare Promoting Interoperability, Hospital Value-Based Purchasing, Hospital Readmissions Reduction, Hospital Inpatient Quality Reporting, Hospital-Acquired Condition Reduction, the PPS-Exempt Cancer Hospital Reporting, and the Long-Term Care Hospital Quality Reporting programs. It also finalizes provisions that alleviate a longstanding problem related to claiming Medicare bad debt and provide a participation opportunity for eligible accountable care organizations (ACOs).

DATES:

This final rule is effective October 1, 2021.

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, Capital Prospective Payment, Excluded Hospitals, Medicare Disproportionate Share Hospital (DSH) Payment Adjustment, 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 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.

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:

Tables Available Through the Internet on the CMS Website

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

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

Table of Contents

I. Executive Summary and Background

A. Executive Summary

B. Background Summary

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

D. Issuance of Proposed and Interim Final RulemakingsStart Printed Page 44775

E. Advancing Health Information Exchange

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

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

A. Background

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

C. FY 2022 MS-DRG Documentation and Coding Adjustment

D. Changes to Specific MS-DRG Classifications

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

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

III. 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. Occupational Mix Adjustment to the FY 2022 Wage Index

F. Analysis and Implementation of the 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 Budget Neutrality Adjustment

H. FY 2022 Wage Index Tables

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

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

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

L. Process for Requests for Wage Index Data Corrections

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

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

A. Background

B. Rebasing and Revising the IPPS Market Basket

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 System

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

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

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

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

E. 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: Updates and Changes (§§  412.150 through 412.154)

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

I. Hospital-Acquired Conditions (HAC) Reduction Program: 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—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. Changes to the IPPS for Capital-Related Costs

A. Overview

B. Additional Provisions

C. Annual Update for FY 2022

VII. Changes for Hospitals Excluded From the IPPS

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

B. Critical Access Hospitals (CAHs)

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

IX. 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. Changes to the Medicare Promoting Interoperability Programs

X. 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—Policy Changes (§ 455.410)

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

XI. MedPAC Recommendations

XII. Other Required Information

A. Publicly Available Files

B. Collection of Information Requirements

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

C. Calculation of the Prospective Payment Rates

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

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

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

C. Capital Input Price Index

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

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

A. LTCH PPS Standard Federal Payment Rate for FY 2022

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

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

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

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

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

VI. Tables Referenced in This Rule Generally Available Through the internet on the CMS website

Appendix A—Economic Analyses

I. Regulatory Impact Analysis

A. Statement of Need

B. Overall Impact

C. Objectives of the IPPS and the LTCH PPS

D. Limitations of Our Analysis

E. Hospitals Included in and Excluded From the IPPS

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

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

H. Effects of Other Policy Changes

I. Effects of Changes in the Capital IPPS

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

K. Effects of Requirements for Hospital Inpatient Quality Reporting (IQR) ProgramStart Printed Page 44776

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

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

N. Effects of Requirements Regarding the Promoting Interoperability Program

O. Alternatives Considered

P. 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. FY 2022 Inpatient Hospital Update

B. Update for SCHs and MDHs for FY 2022

C. FY 2022 Puerto Rico Hospital Update

D. Update for Hospitals Excluded from the IPPS for FY 2022

E. 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 final rule makes payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. In addition, it makes payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). This final rule also makes policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2022 final rule, we are continuing policies to address wage index disparities impacting low wage index hospitals. We are finalizing our implementation of Section 9831 of the American Rescue Plan Act of 2021, which permanently established the imputed floor wage index policy. In addition, we are finalizing the regulations implemented in CMS-1762-IFC (86 CFR 24735-24739), which allowed hospitals with a rural redesignation under the Act to reclassify through the MGCRB using the rural reclassified area as the geographic area in which the hospital is located. This final rule includes policies related to new technology add-on payments. We are also finalizing our proposal to repeal the collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology.

We are establishing new requirements and revising 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 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 finalizing our proposal 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 implementing 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.

We note that the FY 2022 IPPS/LTCH PPS proposed rule included our proposals related to the implementation of the provisions of the Consolidated Appropriations Act (CAA) of 2021 related to payments to hospitals for direct graduate medical education (GME) and indirect medical education (IME) costs. Please refer to the proposed rule (86 FR 25502 through 25524) for additional background information on these proposals. Due to the number and nature of the comments that we received on the implementation of sections 126, 127 and 131 of the CAA of 2021 relating to payments to hospitals for direct GME and IME costs, we will address public comments associated with these issues in future rulemaking.

In addition, we note that the FY 2022 IPPS/LTCH PPS proposed rule included our proposals related to the organ acquisition payment policy for transplant hospitals, donor community hospitals and organ procurement organizations. Please refer to the proposed rule (86 FR 25656 through 25676) for additional background information on these proposals. Due to the number and nature of the comments that we received on the organ acquisition payment policy proposals we will address public comments associated with these issues in future rulemaking.

Under various statutory authorities, we either discuss continued program implementation or are making 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 Start Printed Page 44777educational 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 care 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(kk)(3) of the Act, as amended by section 6401(b) of the Affordable Care Act, which mandates that states require providers and suppliers to comply with the same disclosure requirements established by the Secretary under section 1866(j)(5) of the Act.
  • Section 2107(e)(1) of the Act, as amended by section 6401(c) of the Affordable Care Act, which makes the requirements of section 1902(kk) of the Act, including the disclosure requirements, applicable to CHIP.

2. Summary of the Major Provisions

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

a. MS-DRG Documentation and Coding Adjustment

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

b. Extension of 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 Start Printed Page 44778of 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). After review of public comments received, and for the reasons discussed in section II.F. of the preamble of this final rule, we are finalizing to extend the NCTAP through the end of the fiscal year in which the PHE ends for all eligible products, including those approved for new technology add-on payments for FY 2022, with any new technology add-on payment reducing the amount of the NCTAP.

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 final rule, we discuss our analysis of the best available data for use in the development of this FY 2022 IPPS/LTCH PPS final 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 final rule, we are using 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.

d. Continuation of the Low Wage Index Hospital Policy

To help mitigate wage index disparities between high wage and low hospitals, in the FY 2020 IPPS/LTCH PPS 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 will be effective for at least 4 years, beginning in FY 2020, in order to allow employee compensation increases implemented by these hospitals sufficient time to be reflected in the wage index calculation. Therefore, for FY 2022, we are continuing the low-wage index hospital policy, and are also applying this policy in a budget neutral manner by applying an adjustment to the standardized amounts.

e. 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 final rule for a summary of the provisions of section 9831 of Public Law 117-2 that we are implementing in this final rule.

f. DSH Payment Adjustment and Additional Payment for Uncompensated Care

Section 3133 of the Affordable Care Act modified the Medicare disproportionate share hospital (DSH) payment methodology beginning in FY 2014. Under section 1886(r) of the Act, which was added by section 3133 of the Affordable Care Act, starting in FY 2014, 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 final rule, we are updating our estimates of the three factors used to determine uncompensated care payments for FY 2022. We are also continuing 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 finalizing our proposal to continue to use the low-income insured days proxy to calculate Factor 3 for these hospitals for FY 2022. We are also finalizing certain methodological changes for calculating Factor 3 for FY 2022.

g. Modification of Limitations on Redesignation by the Medicare Geographic Classification Review Board (MGCRB)

In May 10, 2021 Federal Register (86 FR 24735), concurrent with the FY 2022 IPPS/LTCH PPS proposed rule, we published an interim final rule with comment period (IFC) (CMS-1762-IFC) that amended our current regulations to allow hospitals with a rural redesignation under the Act to reclassify through the Medicare MGCRB using the rural reclassified area as the geographic area in which the hospital is located. These regulatory changes align our policy with the decision in Bates County Memorial Hospital v. Azar, effective with reclassifications beginning with fiscal year (FY) 2023. We respond to the public comments on CMS-1762-IFC in this final rule, and finalize the regulatory changes made therein.

h. Reduction of Hospital Payments for Excess Readmissions

We are making changes to policies for the Hospital Readmissions Reduction Program, which was established under section 1886(q) of the Act, as amended by section 15002 of the 21st Century Start Printed Page 44779Cures 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 final rule, we are finalizing the following policies: (1) To adopt a cross-program measure suppression policy for the duration of the public health emergency for COVID-19; (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 also requested 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 also sought 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.

i. Hospital Value-Based Purchasing (VBP) Program

Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year. In this final rule, we are finalizing our proposals 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, All-Cause, Risk-Standardized Mortality Rate Following Pneumonia (PN) Hospitalization (MORT-30-PN) measure for the FY 2023 program year. We are also finalizing our proposal to revise the scoring and payment methodology for the FY 2022 program year such that hospitals will not receive Total Performance Scores. 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 not awarding a TPS to any hospital for the FY 2022 program year. Instead, we are finalizing our proposal 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 finalizing our proposal to remove the CMS Patient Safety and Adverse Events Composite (CMS 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 finalizing our proposal to update the baseline periods for certain measures affected by the ECE granted in response to the COVID-19 PHE and making a technical update to our terminology used in the Hospital VBP Program regulations.

j. Hospital-Acquired Condition (HAC) Reduction Program

Section 1886(p) of the Act establishes an incentive to hospitals to reduce the incidence of hospital-acquired conditions by requiring the Secretary to make an adjustment to payments to applicable hospitals, effective for discharges beginning on October 1, 2014. This 1-percent payment reduction applies to hospitals that rank in the worst-performing quartile (25 percent) of all applicable hospitals, relative to the national average, of conditions acquired during the applicable period and on all of the hospital's discharges for the specified fiscal year. In this FY 2022 IPPS/LTCH PPS final rule, we are: (1) Clarifying our ECE policy; (2) finalizing our proposal to adopt a cross-program measure suppression policy for the duration of the public health emergency for COVID-19; (3) finalizing our proposal to apply that measure suppression policy to suppress certain program data from FY 2022, FY 2023, and FY 2024 HAC Reduction Programs; and (4) finalizing our proposal to update the regulatory text to reflect that the Hospital Compare website has been renamed and is now referred to as Care Compare.

k. Hospital Inpatient Quality Reporting (IQR) Program

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

In this FY 2022 IPPS/LTCH PPS final rule, we are making several changes. We are finalizing the adoption of 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 finalizing the removal of three measures: (1) Exclusive Breast Milk Feeding (PC-05) (NQF #0480) beginning with the FY 2026 payment determination; (2) Admit Decision Time to ED Departure Time for Admitted Patients (ED-2) (NQF #0497) beginning with the FY 2026 payment determination; and (3) the Discharged on Statin Medication eCQM (STK-06) Start Printed Page 44780(NQF #0439), beginning with the FY 2026 payment determination. We are not finalizing our proposals to remove the following two measures: (1) Death Among Surgical Inpatients with Serious Treatable Complications (CMS PSI-04); and (2) Anticoagulation Therapy for Atrial Fibrillation/Flutter eCQM (STK-03) (NQF #0436).

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25070), we requested 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 also requested 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. We also requested 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, we are finalizing our proposal that beginning with the CY 2023 reporting period/FY 2025 payment determination, hospitals will be required 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 finalizing our provision 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 revising 42 CFR 412.140(a)(2) and 42 CFR 412.140(e)(2)(iii) to replace 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 revising 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 finalizing our proposal to extend the effects of the educational review process for chart-abstracted measures beginning with validations affecting the FY 2024 payment determination.

l. 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 final rule, we are removing the Oncology: Plan of Care for Pain—Medical Oncology and Radiation Oncology (NQF #0383) (PCH-15) measure beginning with the FY 2024 program year, adopting the COVID-19 Vaccination Coverage among Healthcare Personnel measure beginning with the FY 2023 program year, making a technical update to the terminology we use in the program, and codifying existing PCHQR Program policies in our regulations.

m. Medicare Promoting Interoperability Program

For purposes of reducing the burden on eligible hospitals and CAHs, we are making several changes to the Medicare Promoting Interoperability Program. Specifically, we are: (1) Continuing 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 increasing 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) maintaining the Electronic Prescribing Objective's Query of PDMP measure as optional while increasing its available bonus from 5 points to 10 points for the EHR reporting period in CY 2022; (3) adding 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; (4) requiring 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); (5) 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; (6) removing attestation statements 2 and 3 from the Promoting Interoperability Program's prevention of information blocking requirement; (7) increasing 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 (8) adopting 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 three eCQMs from the measure set beginning with the reporting period in CY 2024, which updates are in alignment with the eCQM updates being finalized for the Hospital IQR Program. We are amending our regulation texts as necessary to incorporate several of these changes. We are not finalizing our proposal to remove the Anticoagulation Therapy for Atrial Fibrillation/Flutter eCQM (STK-03) (NQF #0436) in alignment with the Hospital IQR Program. We are also not finalizing our proposal to modify the Provide Patients Electronic Access to Their Health Information measure by requiring eligible hospitals and CAHs to ensure that patient health information remains available to the patient (or patient-authorized representative). We will consider the feedback we received for future rulemaking.

n. 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 final rule, we are finalizing our proposal, without modification, 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 finalizing our proposal, without modification, 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 solicited comment on alternative approaches or data sources that could be used in Medicare fee-for-service (FFS) ratesetting. We will continue to consider these comments as applicable.Start Printed Page 44781

o. Medicare Shared Savings Program

We are making 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 the policy we are adopting in this final rule, 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 will 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 final 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 updates to the LTCH PPS are included Start Printed Page 44786along with the IPPS annual update in this document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, cancer hospitals, hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs continue to be paid solely under a reasonable cost-based system, subject to a rate-of-increase ceiling on inpatient operating costs. Similarly, extended neoplastic disease care hospitals are paid on a reasonable cost basis, subject to a rate-of-increase ceiling on inpatient operating costs.

The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR parts 412 and 413.

3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

The Medicare prospective payment system (PPS) for LTCHs applies to hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective for cost reporting periods beginning on or after October 1, 2002. The LTCH PPS was established under the authority of sections 123 of the BBRA and section 307(b) of the BIPA (as codified under section 1886(m)(1) of the Act). Section 1206(a) of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) established the site neutral payment rate under the LTCH PPS, which made the LTCH PPS a dual rate payment system beginning in FY 2016. Under this statute, effective for LTCH's cost reporting periods beginning in FY 2016 cost reporting period, LTCHs are generally paid for discharges at the site neutral payment rate unless the discharge meets the patient criteria for payment at the LTCH PPS standard Federal payment rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR part 412, subpart O. Beginning October 1, 2009, we issue the annual updates to the LTCH PPS in the same documents that update the IPPS.

4. Critical Access Hospitals (CAHs)

Under sections 1814(l), 1820, and 1834(g) of the Act, payments made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are generally based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v) of the Act and existing regulations under 42 CFR part 413.

5. Payments for Graduate Medical Education (GME)

Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR part 413.

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

1. 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. The American Rescue Plan Act of 2021 (Pub. L. 117-2)

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.

D. Issuance of Proposed and Interim Final Rulemakings

1. FY 2022 IPPS/LTCH PPS Proposed Rule

In the FY 2022 IPPS/LTCH PPS proposed rule appearing in the May 10, 2021 Federal Register (86 FR 25070), 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 proposed to make.

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

In section II. of the preamble of the 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 Pub. L. 108-173, obtained in a town hall meeting) for applications not submitted under an alternative pathway, and a discussion of the proposed status of FY 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.

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

In section III. of the preamble of the proposed rule, we proposed to revise 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 Start Printed Page 44787FY 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.

c. Proposed Rebasing and Revising of the Hospital Market Baskets

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

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

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

  • Proposed 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

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

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

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

In section VII. of the preamble of the proposed rule, we discussed the following:

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

g. Proposed Changes to the LTCH PPS

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

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

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

  • We requested information on CMS's future plans to define digital quality measures (dQMs) in CMS Hospital Quality Programs and on CMS' continued efforts to close the health equity gap in CMS Hospital Quality Programs.
  • 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 also sought 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.

i. Other Proposals Included in the Proposed Rule

Section X. of the preamble of the proposed rule included 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.

j. Other Provisions of the Proposed Rule

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

Section XII. of the preamble to the 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.

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

In sections II. and III. of the Addendum to the proposed rule, we set Start Printed Page 44788forth 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 the proposed rule, we addressed 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.

l. 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.

m. 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.

n. 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.

o. 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 addressed these recommendations in Appendix B of the 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.

2. Medicare Geographic Classification Review Board (MGCRB) Interim Final Rule With Comment Period

In the interim final rule with comment period appearing in the May 10, 2021 Federal Register (86 FR 25735) (hereinafter referred to as CMS-1762-IFC), we implemented regulations which allowed hospitals with a rural redesignation under the section XXXX of the Act to reclassify through the Medicare Geographic Classification Review Board (MGCRB) using the rural reclassified area as the geographic area in which the hospital is located.

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 Information Technology (ONC) participate in 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”) Start Printed Page 44789implemented 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 claims 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.

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25086 through 25090), we discussed that 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. Accordingly, we questioned whether these data sources are the best available data to use for the FY 2022 ratesetting. In the proposed rule, we identified two factors for assessing whether these data sources represent the best available data. 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 (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 2019). 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.

In the proposed rule, 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 had been administered. Overall, about 125.8 million people, or 37.9 percent of the U.S. population, had 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 had 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 had received at least one dose of vaccine; 63.7 percent were fully vaccinated. Nearly one-half (48.3 percent) of people 18 or older had received at least one dose of vaccine; 30.3 percent were fully vaccinated. Nationally, COVID-19-related emergency department visits as well as both hospital admissions and current hospitalizations had risen among patients ages 18 to 64 years in recent weeks, but emergency department visits and hospitalizations among people ages 65 years and older had 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 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, in the proposed rule we stated our belief 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 led us to conclude based on the information Start Printed Page 44790available at the time of the proposed rule 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 called 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.

In the proposed rule, 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 available at the time of the proposed rule, 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 the proposed rule, 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 from the proposed rule was 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. In the proposed rule, we noted 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.

In the proposed rule, we concluded that 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.

In the proposed rule, 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 claims from IPPS hospitals received as of July 2020. Those claims 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 claims, the change in average case-mix in FY 2020 was 2.8 percent. Based on these claims 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 to 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 claims from IPPS hospitals received as of July 2020, in the 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 was 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 led us to believe that FY 2020 is not the best overall approximation of inpatient experience in FY 2022 and 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 in the proposed rule, whether the data is a better overall Start Printed Page 44791approximation 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. In the proposed rule, 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.

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 the proposed rule, we explained that 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.

In the proposed rule, we explained that 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 from the proposed rule 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.Start Printed Page 44792

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 the 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]

In the proposed rule, under an assumption that the FY 2022 inpatient experience will be more similar to FY 2019 data, we estimated 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 estimated 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, we concluded in the proposed rule that 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, in the proposed rule, we highlighted two factors in the decision regarding the best available data to use in the FY 2022 ratesetting. The first factor was 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, in the proposed rule we stated our belief that FY 2019 is generally a better overall approximation of FY 2022. The second factor was 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, in the proposed rule we 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, in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25089) we proposed 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 proposed 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 in section II.D. of the preamble of the proposed rule). Similarly, we proposed 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 FY 2022 IPPS MS-DRG relative weights (as discussed in greater detail in section II.E. of the preamble of the 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.)

In section I.O. of Appendix A of the proposed rule, we stated that we were 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. To facilitate comment on this alternative for FY 2022, we made data and other supplemental files available. We refer the reader to section I.O. of Appendix A of the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25784) for more information on these supplemental files and where they may be found.

Comment: The vast majority of commenters were fully supportive of our proposal 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. A commenter was supportive of our proposal but noted that transplant volume was higher in 2020 than 2019. However, the commenter stated that it recognized that due to the nature of hospital admissions during 2020 and the number and types of procedures provided in the hospital during the PHE, use of 2019 data is necessary.

A commenter who stated they did not disagree with our proposal, expressed a concern that surges in COVID-19 cases could still occur in the future, making it impossible to predict what FY 2022 will look like. The commenter mentioned the slowing COVID-19 vaccination rate in many areas and the emergence of new COVID-19 variants that the COVID-19 vaccines were not tested against as reasons to support this concern.

Some commenters were supportive of our proposal, but urged CMS to make or consider certain technical adjustments when calculating the FY 2022 relative weights. We refer readers to section II.E. of the preamble to this final rule for a complete discussion of these comments. A few commenters objected to CMS not using FY 2020 data to calculate the payment adjustment for CAR T-cell clinical trial and expanded access use immunotherapy cases. We refer readers to section V.M. of the preamble to this final rule for a complete discussion of these comments. A commenter expressed concern about not using FY 2020 data in FY 2022 ratesetting for the LTCH PPS, in particular with respect to how the additional costs LTCHs incurred in 2020 will be reflected in future years' rates. We believe this commenter may have misunderstood the role of the market basket update and refer readers to section VIII.A.4. of the preamble to this final rule for a complete discussion of this comment.

Response: We appreciate the commenters' support of our proposal 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. In response to the commenter who expressed concerns about the possibility of future surges in COVID-19 making it impossible to predict what FY 2022 will look like, we appreciate the feedback. However, we believe the most recent vaccination and Start Printed Page 44793hospitalization data reported by the CDC, discussed later in this section, support our assumption 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. To address to the extent possible the commenter's concerns about the efficacy of the COVID-19 vaccines against new variants, we refer the reader to the June 25th weekly summary report from the CDC that states “recent studies have shown that the vaccines available in the United States are effective against variants currently circulating, including B.1.617.2.” [7]

Since the publication of the proposed rule, we have continued to monitor the vaccination and hospitalization data reported by the CDC (see https://www.cdc.gov/​coronavirus/​2019-ncov/​covid-data/​covidview/​past-reports/​07022021.html, accessed July 6, 2021). As of July 1, 2021, 328.2 million vaccine doses have been administered. Overall, about 181.3 million people, or 54.6 percent of the U.S. population, have received at least one dose of vaccine as of this date. About 155.9 million people, or 47.0 percent of the U.S. population have been fully vaccinated. As of July 1, the 7-day average number of administered vaccine doses reported to CDC per day was 334,816, a 45.3 percent decrease from the previous week. As of July 1, 2021, 88.2 percent of people 65 or older have received at least one dose of vaccine; 78.3 percent are fully vaccinated. Two-thirds (66.7 percent) of people 18 or older have received at least one dose of vaccine; 57.7 percent are fully vaccinated. Nationally, the COVID-19-related 7-day moving average for new hospital admissions has been generally decreasing since publication of the proposed rule, demonstrating the important role vaccination is playing in protecting against COVID-19. As of July 3, 2021 (the most recent date with data available at the time of writing), the 7-day moving average for new hospital admissions was 1,821, down significantly from the 7-day moving average peak of 16,492 recorded on January 9th, 2021 and the 7-day moving average of 5,075 recorded on April 27, 2021, the date the proposed rule was issued.[8]

In the proposed rule, we analyzed the significant growth in real-case mix observed in the FY 2020 MedPAR claims data. This analysis was 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. While we acknowledge that the rate of vaccination for the U.S. population has slowed considerably since we released the proposed rule, the total number of vaccines administered, especially for people 65 or older, along with the latest hospitalization trends, lead us to continue to believe that there will be a 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. For these reasons, we continue to believe that FY 2020 is not the best overall approximation of inpatient experience in FY 2022 and that FY 2019 as the most recent complete FY prior to the COVID-19 PHE is a better approximation of FY 2022 inpatient experience.

Therefore, after considering the comments received and evaluating the most recent vaccination and hospitalization data from the CDC, we are finalizing our proposal 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, in this final rule we used 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 in section II.D. of the preamble of this final rule). Similarly, we used 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 FY 2022 IPPS MS-DRG relative weights (as discussed in greater detail in section II.E. of the preamble of this final 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 use of the FY 2019 data for the FY 2022 ratesetting in this final rule. We have clearly identified throughout this final rule where and how we are using alternative data than what ordinarily would be used for the FY 2022 IPPS and LTCH PPS ratesetting, including certain provider specific information.

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

A. Background

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

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

B. 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).Start Printed Page 44794

C. 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.

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 and 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. Adjustment for FY 2022

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

Comment: A commenter reiterated their position from prior year comments that CMS misinterpreted the relevant statutory authority, which they believe explicitly assumes that the ATRA recoupment would result in negative adjustments totaling −3.2 percentage points completed through FY 2017, rather than the cumulative −3.9 percentage point adjustment made by CMS. The commenter stated that CMS should have made an additional 0.7 percent positive adjustment to the standardized amount in FY 2018. The commenter stated that the failure to make this adjustment resulted in an incorrect reduction in the standardized amount for all subsequent years. We also received multiple comments recommending that CMS commit to use its authority (a commenter specifically citing CMS's authority under § 1886(d)(5)(I) of the Act) to restore the full amount of the cumulative −3.9 percentage point adjustment made to achieve the $11 billion targeted by the ATRA. A commenter requested CMS Start Printed Page 44795specify the method for full repayment of this reduction to all providers by FY 2023 in the final rule, instead of waiting until future rulemaking to propose the final adjustment for FY 2023.

Response: As we discussed in response to a similar comment in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58444 through 58445) and in prior rules, we believe section 414 of the MACRA and section 15005 of the 21st Century Cures Act set forth the levels of positive adjustments for FYs 2018 through 2023. We are not convinced that the adjustments prescribed by MACRA were predicated on a specific adjustment level estimated or implemented by CMS in previous rulemaking. We see no evidence that Congress enacted these adjustments with the intent that CMS would make an additional +0.7 percentage point adjustment in FY 2018 to compensate for the higher than expected final ATRA adjustment made in FY 2017, nor are we persuaded that it would be appropriate to use the Secretary's exceptions and adjustments authority under section 1886(d)(5)(I) of the Act to adjust payments in FY 2022 to restore any additional amount of the original 3.9 percentage point reduction, given Congress' prescriptive adjustment levels under section 414 of the MACRA and section 15005 of the 21st Century Cures Act. CMS did not propose the specific level of adjustment to be made in FY 2023, and therefore we will proceed as planned to discuss the future (and final) adjustment under section 414 of the MACRA in FY 2023 rulemaking.

After consideration of the public comments we received, we are finalizing our proposal to implement a 0.5 percentage point adjustment to the standardized amount for FY 2022.

D. Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for 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 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. We stated in the proposed rule that 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.

Comment: Commenters expressed support for a future change to the deadline for requesting updates to the MS-DRG classifications from November 1 to October 20. The commenters also recommended that CMS consider implementing an additional submission deadline, such as earlier in the calendar year. According to the commenters, while the current process to submit requests for changes to the MS-DRG classifications may be submitted at any time prior to the fall deadline, a second target submission date may encourage interested parties to submit requests earlier in the year and enable additional time for CMS to carefully evaluate requested changes, analyze claims data and consider proposed changes.

Response: We appreciate the commenters feedback and support for our discussion regarding a future change to the deadline for requesting updates to the MS-DRG classifications from November 1 to October 20. We also thank the commenters for the suggestion to add a second submission date, and may consider any changes to the deadline and/or the frequency for submissions of requests for MS-DRG classification changes for future fiscal years.

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 final rule. As we discuss in the sections that follow, we may not be able to fully consider all of the requests that we receive for the upcoming fiscal year. We have found that, with the implementation of ICD-10, some types of requested changes to the MS-DRG classifications require more extensive research to identify and analyze all of the data that are relevant to evaluating the potential change. We note in the discussion that follows those topics for which further research and analysis are required, and which we will continue to consider in connection with future rulemaking. 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.

We provided a test version of the ICD-10 MS-DRG GROUPER Software, Version 39, in connection with the FY 2022 IPPS/LTCH PPS proposed rule so that the public could better analyze and understand the impact of the proposals included in the proposed rule. We noted that this test software reflected the proposed GROUPER logic for FY 2022. Therefore, it included 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 that were associated with the proposed rule and did not include the diagnosis codes that are invalid beginning in FY 2022 as reflected in Table 6C.—Invalid Diagnosis Codes—Start Printed Page 44796FY 2022 and Table 6D.—Invalid Procedure Codes—FY 2022 that was associated with the proposed rule. Those tables were not published in the Addendum to the proposed rule, but are available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html as described in section VI. of the Addendum to the proposed rule. Because the diagnosis and procedure codes no longer valid for FY 2022 are not reflected in the test software, we made available a supplemental file in Table 6P.1a that included 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 made available a supplemental file in Table 6P.1b that included 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 had access to the test software allowing them to build case examples that reflect the proposals that were included in the proposed rule. In addition, users were able to view the draft version of the ICD-10 MS-DRG Definitions Manual, Version 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 proposed to the MS-DRGs for FY 2022. We invited public comments on each of the MS-DRG classification proposed changes, as well as our proposals to maintain certain existing MS-DRG classifications discussed in the proposed rule. In some cases, we proposed changes to the MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. In other cases, we proposed to maintain the existing MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. As discussed in section I.F of the preamble of the proposed rule, we proposed 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 also provided 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 the 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 claims 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 claims 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 referred 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.”

In this FY 2022 IPPS/LTCH PPS final rule, we summarize the public comments we received on our proposals, present our responses, and state our final policies. For this FY 2022 final rule, we generally did not perform any further MS-DRG analysis of claims data. Therefore, the MS-DRG analysis is 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, as set forth in the proposed rule, except as otherwise noted. As explained in previous rulemaking (76 FR 51487), in deciding whether to propose to make further modifications to the MS-DRGs for particular circumstances brought to our attention, we consider whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients represented in the MS-DRG. We evaluate patient care costs using average costs and lengths of stay and rely on the judgment of our clinical advisors to determine whether patients are clinically distinct or similar to other patients represented in the MS-DRG. In evaluating resource costs, we consider both the absolute and percentage differences in average costs between the cases we select for review and the remainder of cases in the MS-DRG. We also consider variation in costs within these groups; that is, whether observed average differences are consistent across patients or attributable to cases that are extreme in terms of costs or length of stay, or both. Further, we consider the number of patients who will have a given set of characteristics and generally prefer not to create a new MS-DRG unless it would include a substantial number of cases.

In 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 44797

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, in the FY 2022 IPPS/LTCH PPS proposed rule we stated 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.

In the FY 2022 IPPS/LTCH PPS proposed rule, we stated that using the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, we 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. We noted that 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. We further noted that 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 referred the reader to Table 6P.1c associated with the proposed rule 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.

We stated in the proposed rule that in light of the public health emergency (PHE), we had concerns about the impact of implementing this volume of MS-DRG changes at this time, and our belief that 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 proposed to delay the application of the NonCC subgroup criteria to existing MS-DRGs with a three-way severity level split until FY 2023, and proposed 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.

Comment: Several commenters expressed support for our proposal to delay the application of the expanded three-way severity level split criteria to the NonCC subgroup until fiscal year 2023 in light of the PHE, and to maintain the current structure of the MS-DRGs. Many commenters also recommended that a complete analysis of the MS-DRG changes to be proposed for fiscal year 2023 in connection with the expanded three-way severity split criteria be conducted and made available to enable the public an opportunity to review and consider the redistribution of cases, the impact to the relative weights (for example, Table 5—Proposed List of Medicare Severity Start Printed Page 44798Diagnosis Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay), payment rates and hospital case mix to allow meaningful comment prior to implementation. A few commenters suggested delaying the application of the expanded three-way severity split NonCC subgroup criteria until fiscal year 2024 to allow analysis of claims data from FY 2022 that may better reflect post pandemic utilization. Another commenter recommended delaying any changes until FY 2025.

A commenter expressed concern that changes to the underlying MS-DRG structure may inadvertently exacerbate payment differentials between different types of hospitals (e.g., urban versus rural) based on the types of services they provide, which may negatively impact Medicare beneficiary access to some services. Another commenter stated it reviewed its hospital specific data and had concerns that the “with cc” level will be reduced on several MS-DRGs. This commenter stated that if its case mix remains the same it would continue to treat many patients with comorbid conditions and receive payment consistent with a MS-DRG at the “without CC” level. The commenter identified the following four MS-DRGs that appeared to be impacted the most with respect to lost revenue, MS-DRG 617 (Amputation of Lower Limb for Endocrine, Nutritional and Metabolic Disorder with CC); MS-DRG 847 (Chemotherapy without Acute Leukemia as Secondary Diagnosis with CC); MS-DRG 854 (Infectious and Parasitic Diseases with O.R. Procedure with CC) and MS-DRG 958 (Other O.R. Procedures for Multiple Significant Trauma with CC). Lastly, the commenter recommended that CMS also further assess other proposed groupings, such as the maternity MS-DRGs, due to historically low volumes in these MS-DRGs and to determine if it would be appropriate to combine any of them.

Another commenter requested that CMS provide data transparency to illustrate volumes by MS-DRG that support the proposal for changes to the 96 MS-DRGs discussed in the FY 2022 IPPS/LTCH PPS proposed rule and to also consider patient mix for the obstetric MS-DRGs. This commenter also suggested that CMS examine the impact for surgical versus medical MS-DRGs with respect to redistribution and associated impacts to the relative weights. According to the commenter, the impact appears to be greater for surgical MS-DRGs.

Finally, a commenter who expressed support for CMS' proposal to delay implementation of the expanded three-way severity split criteria to the NonCC subgroup recommended that any proposed changes to the structure of the MS-DRGs should consist of the impact of the proposed CC/MCC redesign and not the current CC/MCC structure that is scheduled to be changed.

Response: We appreciate the commenters' support. In response to the recommendation that a complete analysis of the MS-DRG changes to be proposed for FY 2023 in connection with the application of the expanded three-way severity split criteria to the NonCC subgroup be conducted and made publicly available, we plan to perform and make publicly available a more detailed analysis in connection with any future proposed changes, consistent with our annual claims analysis for MS-DRG classification change proposals. With respect to the commenters who suggested delaying the application of the expanded three-way severity split NonCC subgroup criteria until fiscal year 2024 or later, including to allow the use of FY 2022 claims data, we appreciate the feedback and will take these suggestions under consideration.

In response to the commenters who expressed concern that changes to the underlying MS-DRG structure may inadvertently exacerbate payment differentials between different types of hospitals based on the types of services they provide, or would have the greatest impacts with respect to particular MS-DRGs, we note that generally, changes to the MS-DRG classifications and related policies under the IPPS that are implemented on an annual basis may affect payment for different types of hospitals depending on the services they provide, and, note that we intend to conduct and make publicly available analysis of the application of the NonCC subgroup criteria in connection with any future proposed changes, consistent with our annual MS-DRG analysis, including with respect to particular MS-DRGs.

We appreciate the commenters' feedback suggesting further review of the maternity (obstetric) MS-DRGs and agree that these groupings warrant special consideration. As discussed in prior rulemaking (83 FR 41210), we cannot adopt the same approach to refine the maternity and newborn MS-DRGs because of the extremely low volume of Medicare patients there are in these DRGs.

In response to the commenter who requested that CMS provide data transparency to illustrate volumes by MS-DRG that support the proposal for changes to the 96 MS-DRGs discussed in the FY 2022 IPPS/LTCH PPS proposed rule, we refer the reader to Table 6P.1l associated with this final rule and available via the internet at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS. This table displays the volume (case counts) by each MS-DRG based on claims data from the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file.

We also thank the commenter for its suggestion to examine the impact for surgical versus medical MS-DRGs and agree that type of information can be useful for stakeholders.

With respect to the commenter who recommended that any proposed changes to the structure of the MS-DRGs should consist of the impact of the proposed CC/MCC redesign and not the current CC/MCC structure that is scheduled to be changed, it is not clear to us from the limited comment if the commenter is referring to the potential changes in connection with the comprehensive CC/MCC analysis that is currently in progress. We note that any proposed modifications to the MS-DRGs would be addressed in future rulemaking, including any proposed changes to the severity level designation of diagnosis codes, and would be considered and taken into account with application of the NonCC subgroup criteria.

After consideration of the public comments we received, we are finalizing our proposal to delay the application of the NonCC subgroup criteria to existing MS-DRGs with a three-way severity level split until FY 2023 or later, and are finalizing for FY 2022 to maintain the current structure of the 32 MS-DRGs that currently have a three-way severity level split.

We are making the FY 2022 ICD-10 MS-DRG GROUPER and Medicare Code Editor (MCE) Software Version 39, the ICD-10 MS-DRG Definitions Manual files Version 39 and the Definitions of Medicare Code Edits Manual Version 39 available to the public on our CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

2. Pre-MDC: 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 Start Printed Page 44799immunotherapy 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.

As discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25094), 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 referred 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 the proposed rule and this final 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. As stated in the proposed rule, 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 proposed 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 the 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 also proposed 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.

Comment: Several commenters agreed with the proposal to assign the listed ICD-10-PCS procedure codes to Pre-MDC MS-DRG 018 and to revise the title to include “Other Immunotherapies.” A commenter who expressed support for the change to Pre-MDC MS-DRG 018 stated its view that the domain of cellular therapeutics will become increasingly important in the care of Medicare beneficiaries with cancer in the future and that creating sufficient plasticity in the diagnostic coding system to permit the continued integration of new and innovative therapeutics into the evidence-based care of Medicare beneficiaries is essential. Another commenter stated they appreciated the recognition of the differentiated nature of cancer care, as well as the importance of innovation in Start Printed Page 44801the domain of immune-oncology, which it stated was a necessary part of effective, equitable cancer care delivery to CMS beneficiaries who receive their care at both PPS and PPS-Exempt centers to ensure equitable access. A commenter stated the proposed change to Pre-MDC MS-DRG 018 furthers the goal of securing expedited access for Medicare beneficiaries to innovative therapies. Another commenter stated the proposal responds to stakeholder concerns that currently, Pre-MDC MS-DRG 018 is specific to one mechanistic approach to cellular therapy. This same commenter and other commenters stated the proposal is also responsive to stakeholder requests 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.

However, some commenters who expressed appreciation of CMS' recognition of non-CAR T-cell immunotherapy and a need to revise the description for Pre-MDC MS-DRG 018 requested further clarification from CMS on what the “Other Immunotherapies” terminology is intended to include. The commenters stated the term “Other Immunotherapies” is very general and may lead to confusion since “immunotherapy” is a broad term that is applied across several therapeutic areas (for example Diabetes, Rheumatoid Arthritis, Cancer, etc.) to describe treatments that stimulate an immune response within patients. A commenter stated that the National Cancer Institute differentiates immunotherapy for cancer patients into several types (for example, Immune checkpoint inhibitors, T-cell transfer therapy, Monoclonal antibodies, etc.). This commenter stated their belief that CMS is not intending to refer to a broad array of immunotherapy and suggested that more precise language in the descriptor of Pre-MDC MS-DRG 018 may be beneficial. Some commenters recommended that CMS consider using terminology such as “Immune Effector Cells” in place of “Other Immunotherapies” with respect to the description of the MS-DRG. Other commenters suggested that CMS consider revising the title for Pre-MDC MS-DRG 018 to “Autologous T-cell Immunotherapies”. Another commenter stated they recognized the intent of the proposed change and commended the effort by CMS to ensure that future cellular and CAR T-cell therapies are rapidly assigned to a MS-DRG to allow for proper payment, however, similar to other commenters, this commenter requested clarification as to whether the proposed revision to the title of Pre-MDC MS-DRG 18 is intended to incorporate solely cellular and CAR T-cell therapies, or whether the goal is to include all cancer immunotherapeutic agents since the term “immunotherapy” is broad and future novel cancer immunotherapeutic agents may have different resource utilization.

A commenter acknowledged that CMS is faced with a challenging landscape in incorporating the administration of new gene and cell therapies into the IPPS and recognized that CMS' proposed assignment of procedure codes describing the administration of tumor-infiltrating lymphocyte (TIL) therapies to MS-DRG 018 is to the most similar MS-DRG that covers similar clinical characteristics and comorbidities. However, whether for TIL therapies or other products in the pipeline, the commenter recommended that CMS consider the following factors when determining a permanent payment mechanism:

  • Patient diagnosis and product indication (solid vs. blood cancers)
  • Cell collection methodologies (tissue biopsy, pheresis, etc.)
  • Product administration methodologies
  • Patient clinical care regimes and durations
  • Product safety and toxicity profiles that impact inpatient care and follow-up

According to the commenter, society experts state there are distinct and important differences in these factors between TIL therapies and CAR T-cell therapies that may support reconsideration of the MS-DRG assignment after a product is approved by the FDA and is used to treat Medicare beneficiaries. The commenter recommended further consideration of the appropriateness and patient access implications, based on these factors, before grouping the two types of therapies together on a long-term basis. This commenter also suggested that if CMS finalized a change to the title of MS-DRG 018 to include TIL therapies upon their initial approval, as proposed, that the title of the MS-DRG more clearly reflect the specialized products assigned to it.

A few commenters urged CMS to finalize the proposal while continuing to work with stakeholders on ways to improve the predictability and stability of hospital payment for these complex, novel cell therapies that provide options for patients who so desperately need them. Other commenters stated that if the proposed revision to the title for Pre-MDC MS-DRG 018 is finalized, that CMS should continue to monitor and assess the appropriateness of therapies assigned to MS-DRG 018, if they continue to be aligned on resource use, and whether additional refinements or MS-DRGs may be warranted in the future. The commenters also suggested that CMS consider and detail a process for creating new Pre-MDC MS-DRGs that reflect utilization and clinical similarity consistent with the current overall IPPS infrastructure while maintaining important resource and clinical differences to maintain relative weight stability.

Other commenters opposed or expressed strong concerns with the proposal to assign the procedure codes describing non-CAR T-cell and other immunotherapies to Pre-MDC MS-DRG 018 and to revise the title of the MS-DRG. These commenters stated that assigning therapies that are clinically distinct from CAR T-cell therapies and may vary in resource use has the potential to distort future rate setting and will disrupt the Agency's measured multi-year approach in establishing a MS-DRG dedicated to CAR T-cell therapy. According to the commenters, expanding the MS-DRG to other immunotherapies one year after it has been implemented holds the risk of creating additional payment uncertainty around CAR T-cell therapies. The commenters urged CMS to maintain Pre-MDC MS-DRG 018 specifically for autologous CAR T-cell therapies only, as a long-term solution for reliable and predictable payments that will enable hospitals to provide access to CAR T-cell therapies for Medicare beneficiaries.

Some commenters recommended that CMS publicly propose MS-DRG mappings in advance of making a final assignment decision and provide an opportunity for stakeholders to submit comments with respect to proposed mappings. Other commenters stated the new technology add-on payment process should be independent of the process for obtaining a MS-DRG assignment for a new code.

A few commenters provided specific information relating to the process that is involved for patients undergoing treatment with CAR T-cell therapy. The commenters outlined the stage of leukapheresis where T-cells are separated and removed from the blood and the remaining blood is returned to the body, followed by the T-cells being sent to a manufacturing facility where they are genetically engineered and grown in a laboratory until millions of T-cells are produced. These commenters did not agree with the assignment of procedure codes describing non-CAR T-cell therapies and other Start Printed Page 44802immunotherapies to Pre-MDC MS-DRG 018 stating the treatment processes are distinctly different and that some products have yet to be approved by the FDA.

A commenter who specifically opposed the modification of Pre-MDC MS-DRG 018 for FY 2022 stated that there are not any non-CAR T-cell therapy FDA approved products that are anticipated in the near term. This commenter further stated that CMS' proposal to include “other immunotherapies” in the description for Pre-MDC MS-DRG 018 is overly broad and risks inclusion of therapeutics which are not well aligned with CAR T-cell cases being mapped to this MS-DRG. According to the commenter, CMS has not provided sufficient detail about the rationale and supporting evidence for assignment of non-CAR T-cell products to MS-DRG 018. The commenter also stated that the term “immunotherapy” could describe products that treat a range of conditions, and those products may have different experience with potential complications and expected length of stay than CAR T-cell products as well as different costs for the product itself. This same commenter recommended that CMS provide evidence of clinical consistency and resource use alignment in future rulemaking when proposing therapies that may map to Pre-MDC MS-DRG-018 and allow for public comments. Another commenter expressed concern that the proposed change to encompass “other immunotherapies” in Pre-MDC MS-DRG 018 could set a precedent for creating “generic” MS-DRGs for gene therapies, which, according to the commenter, could hamper timely beneficiary access to needed treatment. This commenter urged CMS to limit Pre-MDC MS-DRG 018 to all types of CAR T-cell therapies and to consider creating new MS-DRGs for therapies, such as gene therapies, outside the CAR T-cell space.

Response: We thank the commenters for their support of our proposal to assign the listed procedure codes describing CAR T-cell, non-CAR T-cell and other immunotherapies to Pre-MDC MS-DRG 018 and to modify the title for Pre-MDC MS-DRG 018 to reflect this assignment. As previously noted, we used our established process to examine the MS-DRG assignment for the predecessor codes to determine the most appropriate MS-DRG assignment. Specifically, we reviewed the predecessor code and MS-DRG assignment most closely associated with the new procedure code, and in the absence of claims data, we considered 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 have noted in prior rulemaking that this process does not automatically result in the new procedure code being assigned to the same MS-DRG or to have the same designation (O.R. versus Non-O.R.) as the predecessor code. As stated in the preamble of the proposed rule and discussed in this final rule, we proposed to classify the new procedure codes as Non-O.R. procedures affecting Pre-MDC MS-DRG 018, as shown in Table 6B.—New Procedure Codes that was associated with the proposed rule and available via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​, providing the opportunity for public comment on the MDC, MS-DRG assignment and designation.

The predecessor code and associated MS-DRG assignment (if applicable) for the listed codes are as follows:

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As shown in the table, all the procedure codes have a predecessor code that was previously assigned to Pre-MDC MS-DRG 018 with the Start Printed Page 44805exception of four procedure codes (XW033G7, XW033L7, XW043G7, and XW043L7) that have a predecessor code that was designated Non-O.R. and did not impact any MS-DRG assignment. Two of the four codes describe the introduction (administration) of an allogeneic CAR T-cell therapy and are intended to capture any allogeneic CAR T-cell products that may become available and do not yet have a unique procedure code. The other two codes specifically describe the product lifileucel. We believe that at this time, as the field of cellular and gene immunotherapies is continuing to evolve very rapidly, that it is appropriate to initially classify the procedure codes describing allogeneic CAR T-cell therapy and lifileucel to Pre-MDC MS-DRG 018 because there are clinical similarities with respect to the administration of these products, the complexity of the conditions in which they are treating, and resource utilization that are consistent with other CAR T-cell products currently assigned to the MS-DRG. As a commenter specifically noted in its support to assign the procedure codes describing the introduction of lifileucel (XW033L7 and XW043L7) to Pre-MDC MS-DRG 018, both lifileucel (a tumor-infiltrating lymphocyte or TIL therapy) and CAR T-cell therapies require collection of a patient's lymphocyte cells which are a key component of a complicated manufacturing process to produce a patient-specific therapeutic dose, both are primarily administered in the inpatient setting due to risk of significant but treatable adverse events and the resources are anticipated to be comparable with respect to the intensity of patient care that includes the treatment phase, monitoring, management of any adverse events, and length of stay. While for TIL therapy the source of the lymphocyte is the patient's tumor and is obtained through surgical resection, and for CAR T-cell therapy the source of the lymphocyte is the patient's blood, obtained through apheresis, both therapies require a patient's lymphocytes. We also appreciate another commenter's recognition of the challenges involved with incorporating the administration of new gene and cellular therapies into the IPPS and the view that assignment of procedure codes describing the administration of tumor-infiltrating lymphocyte (TIL) therapies to Pre-MDC MS-DRG 018 is to the most similar MS-DRG that reflects similar clinical characteristics and comorbidities. With respect to allogeneic CAR T-cell therapies, it is understood that these therapies are not derived from a patient's own cells and therefore are not “autologous”, however, the resources and complexity in the care and clinical management of these patients may be considered comparable when taking into account diagnosis, prognosis, and treatment difficulty (for example, frequent adjustments in dosing regimens in efforts to prevent rejection of the new cells and susceptibility to infection). We note that the definition of a MS-DRG will not be so specific that every patient is identical, rather, the level of variation is known and predictable. Thus, while the precise resource intensity of a patient cannot be predicted, the average pattern of resource intensity of a group of patients in a MS-DRG can be accurately predicted.

We also appreciate the commenter's feedback on factors to consider for products that are in the pipeline with respect to MS-DRG assignment as a permanent payment mechanism. We agree that there may be distinctions to account for as we continue to gain more experience in the utilization of these therapies and have additional claims data to analyze.

We acknowledge the commenters' concerns that the term “Other Immunotherapies” that was proposed for the title of Pre-MDC MS-DRG 018 may be considered broad. While, as several commenters stated in their comments, cellular therapies and gene therapies are an evolving field, the term “Other Immunotherapies” is intended to encompass the group of therapies that are currently available and being utilized today (for which codes have been created for reporting in response to industry requests or are being considered for implementation), and to enable appropriate MS-DRG assignment for any future therapies that may also fit into this category and are not specifically identified as a CAR T-cell product, that may become available (for example receive marketing authorization or a newly established procedure code in the ICD-10-PCS classification) during FY 2022. We appreciate the suggestions to consider alternative terminology for the title (description) of Pre-MDC MS-DRG 018 and look forward to continuing to work with stakeholders on this issue in the future. At this time, for FY 2022, we believe it is premature to finalize any of the suggested title revisions by commenters to Pre-MDC MS-DRG 018 that may not fully reflect the various types of therapies and products described by the different procedure codes that are currently assigned or may be considered for assignment there in FY 2022. We also note that any proposed changes to modify the logic for case assignment and/or the title to Pre-MDC MS-DRG 018 would be considered in future rulemaking. We further note that the process of code creation and proposed assignment to the most appropriate MS-DRG exists independently, regardless of whether there is an associated application for a new technology add-on payment for a product or technology submitted for consideration in a given fiscal year. Specifically, requests for a new code(s) or updates to existing codes are addressed through the ICD-10 Coordination and Maintenance Committee meetings where code proposals are presented and the public is provided the opportunity to comment. All codes finalized after the September meeting must be reviewed and are subsequently proposed for assignment under the ICD-10 MS-DRGs through notice and comment rulemaking. Codes that are finalized after the March meeting are also reviewed and subject to our established process of initially reviewing the predecessor codes MS-DRG assignment and designation, while considering other relevant factors as previously described. The codes that are finalized after the March meeting are specifically identified with a footnote in Tables 6A.—New Diagnosis Codes and Table 6B.—New Procedure Codes that are made publicly available in association with the final rule via the internet on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS. The public may provide feedback on these finalized assignments which are then taken into consideration for the following fiscal year. We refer the reader to section II.D.16 of the preamble of this final rule for additional information regarding the ICD-10 Coordination and Maintenance Committee meeting process. Lastly, we note that while some of the commenters opposed the revision to the title and assignment of the new ICD-10-PCS procedure codes to Pre-MDC MS-DRG 018, these commenters did not provide any alternative MS-DRGs for CMS to consider.

In response to concerns involving payment uncertainty, we disagree that modifying Pre-MDC MS-DRG 018 to include other immunotherapies one year after it has been implemented carries a risk of creating additional payment uncertainty around CAR T-cell therapies and volatility in the relative weight for Pre-MDC MS-DRG 018. As stated in section II.E.2.b. of the preamble of the proposed rule and this Start Printed Page 44806final rule, we proposed and are finalizing to maintain the methodology for the relative weight calculation for Pre-MDC MS-DRG 018. We refer the reader to section II.E.2.b. of the preamble of this final rule for the detailed discussion. Since the new procedure codes describing CAR T-cell, non-CAR T-cell or other immunotherapies are effective with discharges on and after October 1, 2021 and based on our understanding that the administration of these therapies continues to be in clinical trials, any claims reporting these new procedure codes containing diagnosis code Z00.6 or having standardized drug charges of less than $373,000 would be excluded from the calculation of the relative weight for Pre-MDC MS-DRG 018. During this timeframe, as additional claims data is made available, we will be better positioned to further evaluate if changes to the current methodology or other modifications to the procedure code assignments and MS-DRG are warranted.

We appreciate the unique process that is involved with the development and production of CAR T-cell therapies, however, under the IPPS, when evaluating appropriate MS-DRG assignment for technologies (for example devices) that are utilized in the performance of a procedure we do not take into consideration how a specific device is manufactured compared to how other similar devices are manufactured. Rather, we analyze and consider the procedure(s) for which the technology is utilized for or in, and the resources involved in the performance of the procedure. As discussed, based on the information to date, we believe that the initial assignment of the listed procedure codes is appropriate. Based on the nature of some comments, it appears commenters were suggesting that CMS apply the criteria that is utilized for the new technology add-on application process when suggesting what factors CMS should consider for MS-DRG assignment of CAR T-cell, non-CAR T-cell, and other immunotherapies. We note that the new technology add-on application criteria is separate and distinct from the code request process and subsequent MS-DRG assignment process.

In response to the commenter who stated there are not any non-CAR T-cell therapy FDA approved products that are anticipated in the near term, we wish to clarify that the proposed and final assignment of a procedure code to a MS-DRG is not dependent upon a products FDA approval. Similarly, the creation of a code to describe a technology that is utilized in the performance of a procedure or service does not require FDA approval of the technology.

With respect to the commenters' recommendation for CMS to continue to assess the appropriateness of the therapies being proposed or finalized to group to Pre-MDC MS-DRG 018, we note that, as discussed in the preamble of the proposed rule and this final rule we use our established process to examine 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 propose to classify new procedure codes as shown Table 6B.—New Procedure Codes in association with the proposed rule each year. The procedure codes describing CAR T-cell, non-CAR T-cell or other immunotherapies are effective with discharges on and after October 1, 2021 as shown in Table 6B.—New Procedure Codes associated with this final rule and available via the internet on the CMS website at: https://www.cms.gov/​medicare/​medicare-fee-for-service-payment/​acuteinpatientpps. In connection with the creation of new procedure codes (and diagnosis codes), the MS-DRGs are reviewed and recalibrated on an annual basis to specifically identify changes in utilization and resources, and to allow the opportunity for public comment on proposed changes under the IPPS.

In response to the comment that the term “immunotherapy” could describe products that treat a range of conditions, we note that for FY 2022 we are addressing an immediate need to account for any upcoming therapies that may be made available that are not specifically classified as a CAR T-cell therapy to enable appropriate payment and predictability. We note that the ICD-10-CM diagnosis codes identify specific conditions and are available for tracking indications and other purposes. We also note that because MS-DRG 018 is a Pre-MDC, the logic for case assignment is dependent on the procedure codes that are specifically assigned to the logic of the MS-DRG. Therefore, if a particular type of immunotherapy is not specifically described by one of the procedure codes that are listed in the definition (logic) for Pre-MDC MS-DRG 018, then the logic for case assignment to this MS-DRG would not be satisfied and another MS-DRG would be appropriately assigned based on the GROUPER logic (the definition of the MS-DRG).

After consideration of the public comments received, for FY 2022, we are finalizing our proposal to assign the listed procedure codes describing CAR T-cell, non-CAR T-cell and other immunotherapies to Pre-MDC MS-DRG 018 and to modify the title 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.

When additional claims data becomes available for the CAR T-cell, non-CAR T-cell therapies and other immunotherapies for which new procedure codes have been created and are effective October 1, 2021 or that may be created and become effective during FY 2022, we can evaluate that data to determine if further modifications to Pre-MDC MS-DRG 018 are warranted. We plan to continue engaging with stakeholders on additional options for consideration in this field of cellular and gene therapies, such as the creation of new and distinct MS-DRGs and to determine if the creation of a new MDC (Major Diagnostic Category) may be warranted to which unique MS-DRGs could be established and the appropriate corresponding procedure codes could be proposed for assignment.

3. MDC 03 (Diseases and Disorders of Ear, Nose, Mouth 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/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index/​. As discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25095 through 25098), 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 rule, we discuss each of these separate, but related requests.Start Printed Page 44807

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.

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25096 through 25097), we stated that we reviewed this request and noted 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 noted 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 referred 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 noted 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, we noted 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, Mouth and Throat), given the stated rationale for the request.

We stated in the proposed rule that, upon our review, we believed 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 stated we believe that the codes are appropriate for assignment in MDC 03 and noted that the three procedure codes were previously assigned to MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Start Printed Page 44808Throat 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.”

In the proposed rule, we noted that 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 stated 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 agreed 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 referred the reader to section II.D.10. of the preamble of the 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 proposed 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 final rule for further discussion regarding the designation of these codes as Extensive O.R. procedures versus Non-extensive O.R. procedures and our finalized reassignment of these codes from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989 for FY 2022.

Comment: Commenters supported the proposed reassignment of the three procedure codes describing excision of subcutaneous tissue of chest, back, or abdomen from MS-DRGs 140, 141, and 142 to MS-DRGs 143, 144, and 145.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to reassign procedure codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ describing excision of subcutaneous tissue of chest, back, or abdomen from MS-DRGs 140, 141, and 142 to MS-DRGs 143, 144, and 145 for FY 2022.

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

As discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25097 through 25098) and noted 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 associated with the FY 2021 IPPS/LTCH PPS final rule. In this section of this 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 the FY 2022 IPPS/LTCH PPS proposed rule and this final 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.

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We reviewed this request and similar to the discussion in the prior section for the separate but related request, we noted 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 stated we continue to believe that the 82 procedure 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 noted 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 noted 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 proposed to maintain the current structure for MS-DRGs 143, 144, and 145 for FY 2022.

Comment: A few commenters recommended that CMS reconsider the list of 82 procedure codes 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) that were displayed in Table 6P.1d associated with the proposed rule when reported with a principal diagnosis from MDC 03.

The commenters acknowledged 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, however, the commenters stated it is unclear what clinical scenarios would result in certain procedure codes listed being assigned with a diagnosis in MDC 03. The commenters provided the following list of 38 procedure codes as examples of procedures that would not be expected to be performed with a diagnosis from MDC 03.

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Another commenter requested transparency for the logic and data for the exclusion of the 82 procedure codes and suggested that CMS may not have any data for these procedures within MS-DRGs 143, 144, and 145 that were created in FY 2021.

Response: We appreciate the commenters' feedback and acknowledge that the listed procedure codes would not appear to be clinically indicated specifically for diagnoses in MDC 03. The commenter is correct that it is too soon to have data available for the listed procedure codes under MS-DRGs 143, 144, and 145 that were created effective FY 2021. However, in our analysis of the FY 2018 MedPAR data that was studied in our initial review of MDC 03 in consideration of potential restructuring, for MS-DRG 133 (currently MS-DRG 144), we identified one case reporting procedure code 0DJ04ZZ (Inspection of upper intestinal tract, percutaneous endoscopic approach) with an average length of stay of 14 days and average costs of $5,728 and one case reporting procedure code 0FB00ZX (Excision of liver, open approach, diagnostic) with an average length of stay of 17 days and average costs of $32,642. We continued to believe that these procedures, in addition and/or including the 38 procedure codes listed that are now the subject of commenters' concerns, appropriate to maintain in the logic for case assignment to the “other” surgical MS-DRGs in MDC 03. However, as a result of the ongoing concerns expressed by commenters specifically regarding the assignment of the 38 listed procedure codes and the suggestion that CMS should reconsider the current MS-DRG assignment, we determined it may be helpful to provide the comparable translations under ICD-9-CM for commenters to better understand how these 38 procedures were initially grouped to the ICD-10 MS-DRGs as a result of replication during the conversion from ICD-9 to ICD-10 based MS-DRGs. We refer the reader to Table Start Printed Page 448116P.1m for findings from our analysis of the 38 listed procedure codes, which indicates how these procedures were classified under ICD-10-PCS based on the comparable translations under ICD-9-CM resulting in the current MS-DRG assignment. We note that we were unable to fully evaluate the 82 procedure codes and believe it may be advantageous to evaluate further when claims data becomes available under the restructured MS-DRGs (143, 144, and 145) that were effective with discharges beginning FY 2021.

In response to the commenter who requested transparency for the logic, we note that the GROUPER logic for all the MS-DRGs is made publicly available in the ICD-10 MS-DRG Definitions Manual via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​MS-DRG-Classifications-and-Software.

After consideration of the public comments we received, we are finalizing to maintain the assignment of the listed 82 procedure codes to MS-DRGs 143, 144, and 145 for FY 2022. We will continue to review the appropriateness of procedure code assignment to these MS-DRGs in connection with our broader comprehensive procedure code analysis.

As noted in the proposed rule, 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 the proposed rule and this final rule for further discussion of this request, as well as the finalized 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

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25098), we discussed a request we received 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 discussed 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 stated in the FY 2022 IPPS/LTCH PPS proposed rule that we reviewed this request and believed 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. We noted that 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 proposed to maintain the structure of MS-DRGs 190, 191, and 192 for FY 2022.

Comment: Commenters agreed with our proposal to maintain the structure of MS-DRGs 190, 191, and 192.

Response: We thank the commenters for their support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the structure of MS-DRGs 190, 191, and 192 for FY 2022.Start Printed Page 44812

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 rule, we discuss our review of the procedures and restructuring 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 referred 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.

We stated in the proposed rule that 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 proposed 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 the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS).

Comment: Commenters agreed with the proposed reassignment of the listed procedure codes as shown in Table 6P.2b associated with the proposed rule describing LITT of various body parts to the proposed more clinically appropriate MDCs and MS-DRGs. However, a commenter suggested that CMS consider reassignment of code D0Y6KZZ to MS-DRGs 28, 29, and 30 (Spinal Procedures with MCC, with CC or Spinal Neurostimulators and without CC/CC, respectively) rather than MS-DRGs 40, 41, and 42 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC, with CC and without CC/MCC, respectively) as being more clinically and anatomically homogenous.

Response: We thank the commenters for their support. In response to the commenter who suggested that CMS consider reassignment of code D0Y6KZZ to MS-DRGs 28, 29, and 30 rather than MS-DRGs 40, 41, and 42 we note that our clinical advisors continue to believe this is an appropriate Start Printed Page 44813assignment to MS-DRGs 40, 41, and 42 because the resources involved in the performance of a LITT procedure of the spinal cord (code D0Y6KZZ) clinically align more appropriately with the resources involved in the performance of stereotactic radiosurgery of spinal cord procedures currently assigned to MS-DRGs 40, 41, and 42 (procedure codes D026DZZ, D026HZZ, and D026JZZ).

We also note that, as discussed in section II.D.10. of the preamble of the proposed rule and this final rule, we identified additional procedure codes describing LITT of various body parts, in addition to the 17 procedure codes listed earlier in this section. The 14 additional procedure codes are:

As these codes also describe laser interstitial thermal therapy (LITT) of various body parts, we conducted further review of the MDC and MS-DRG assignments of these 14 procedure codes consistent with our initial review of the 17 procedure codes, and determined that clinically inappropriate assignments also exist or that the current MS-DRG assignment is not in alignment with the resources that are utilized in the performance of the LITT procedure. For example, we examined procedure codes D0Y0KZZ and D0Y1KZZ describing LITT of brain and brain stem, respectively, that are currently assigned to the “craniotomy” MS-DRGs 23, 24, 25 26, and 27 in MDC 01 (Diseases and Disorders of the Central Nervous System). The technique to perform the LITT procedure on these structures is considered minimally invasive and does not involve a craniotomy, therefore, continued assignment to the craniotomy MS-DRGs is not clinically appropriate. While we agree that these procedures are appropriately assigned to MDC 01, similar to our review for procedure code D0Y6KZZ describing LITT of spinal cord, we believe it is more appropriate for the procedures described by codes D0Y0KZZ and D0Y1KZZ to be reassigned to MS-DRGs 40, 41, and 42. We then examined procedure codes DBY0KZZ, DBY1KZZ, DBY2KZZ, DBY5KZZ, DBY6KZZ, DBY7KZZ, and DBY8KZZ describing LITT of respiratory structures including the trachea, bronchus, lung, pleura, mediastinum, chest wall, and diaphragm, respectively, that are currently assigned to the “major chest procedures” MS-DRGs 163, 164, and 165. While we agree that these procedures are appropriately assigned to MDC 04, we do not believe LITT of these respiratory structures utilize the same resources or require the same level of complexity as the other procedures currently defined in the GROUPER logic as “major chest procedures” since, as noted previously, LITT is considered a minimally invasive procedure and there are no large incisions with extensive muscle dissection. For these reasons, we believe it is more appropriate for the procedure codes describing LITT of respiratory structures to be reassigned to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively).

After consideration of the public comments we received and based on the analysis described previously, we are finalizing our proposal, with modification, to reassign the 31 listed procedure codes as shown in Table 6P.2b associated with this final rule describing LITT of various body parts to the more clinically appropriate MDCs and MS-DRGs for FY 2022.

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 stated in the proposed rule that 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 the proposed rule and this final rule for further discussion regarding reassignment of these procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with Start Printed Page 44814MCC, 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 endoscopic 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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We stated that 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 proposed to remove procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ from the logic in MDC 04 for FY 2022.

Comment: Commenters agreed with the proposal to remove procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ from the logic in MDC 04.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to remove procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ describing repair of the esophagus from the logic in MDC 04 for FY 2022.

As discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25102), 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 stated 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 further stated 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 the proposed rule and this final rule for further discussion regarding reassignment of 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 the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) 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 the proposed rule and this final 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 Start Printed Page 44817was 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).

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.

We stated in the FY 2022 IPPS/LTCH PPS proposed rule that 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 noted 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 noted 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 referred 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 noted in the proposed rule 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 stated that 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 stated that 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 Start Printed Page 44820assigned 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 proposed 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. We stated that 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 agreed that these procedures clinically align with the other procedures that are currently assigned to MS-DRGs 163, 164, and 165. We referred the reader to Table 6P.2c associated with the proposed rule for the list of procedure codes we proposed for reassignment from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04.

Comment: Commenters supported the proposed reassignment of the listed 26 procedure codes from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to reassign 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), as listed in Table 6P.2c associated with this final rule, from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04 for FY 2022.

As discussed in the proposed rule, 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

As discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25106 through 25115), 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 currently assigned to MS-DRG 215 (Other Heart Assist System Implant). We referred 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 Start Printed Page 44821up 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 the 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.

As discussed in the proposed rule, 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 noted that the requestor suggested that the cases reporting a procedure code describing the 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).

We stated in the FY 2022 IPPS/LTCH PPS proposed rule that 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 Start Printed Page 44822insertion 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.

In the proposed rule, we indicated that 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 indicated that 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).

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:

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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. We noted that the data analysis shows that for 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, 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 stated that 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).

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We indicated in the proposed rule that 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:

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 Start Printed Page 4482502HA4RJ 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). We noted 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).

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:

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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 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 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).

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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.

We indicated in the proposed rule that 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 stated 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, we indicated our clinical advisors supported reassigning ICD-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.

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

Comment: Commenters supported the proposal to reassign ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ from MDC 05 in MS-DRG 215. These commenters stated they appreciated CMS' attention, careful review and efforts to create more long-term stability for heart assist devices, a life-saving technology. Some commenters stated CMS' actions will create a more clinically balanced structure for hospital payments for patients needing short-term external heart assist device support. Commenters stated that this reassignment will better reflect hospital resource utilization creating a more clinically homogenous coherent structure for acute patients that require intraoperative support of a short-term external heart assist device. A commenter stated this reassignment would also result in a relative weight for MS-DRG 215 that more accurately reflects the resource utilization of the procedures within that MS-DRG, as well as stabilizing the relative weight for MS-DRG 215, which has fluctuated over the last few years. Another commenter acknowledged intraoperative cases require fewer hospital resources during their admission than all other cases in MS-DRG 215 and stated removing ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ describing intraoperative use from MS-DRG 215 maintains appropriate payment for longer term circulatory support, such as cardiogenic shock patients, who require more intensive resource use.

Response: We thank the commenters for their support.

Comment: Other commenters opposed CMS' proposal to reassign the short-term heart assist device 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. Some commenters urged CMS to reconsider the proposal regarding short-term external heart assist devices and leave procedure codes 02HA0RJ, 02HA3RJ, and 02HA4RJ in MS-DRG 215 where they are currently assigned. These commenters noted patients requiring intraoperative short-term external heart assist devices tend to be more severely ill and stated the proposal does not fully consider the complexity of care required for these patients and the associated resource utilization, in terms of the need for additional length of stay and monitoring. A commenter stated short-term external heart assist systems, require high resources consumption evidenced by critical care management, expensive drugs and tests; and specialized clinical staff such as: Physicians, nursing, perfusionists, etc. Another commenter stated they believe there may be hospital-specific differences with some facilities performing the diagnostic cardiac catheterizations as outpatient services prior to the inpatient admission for the other cardiothoracic procedures. A commenter expressed concern about the impact this change would have related to the increased use of the external heart assist devices and resources required to insert the device, including the cost of the device. This commenter stated an estimated 50% of the cases at their facility involving a short-term heart assist device would fall into a CC or NonCC category under the proposed MS-DRG change in spite of the fact the patients who require this device are at higher risk, which would mean that approximately 50% of their Medicare payment would be allocated to the cost Start Printed Page 44830of the device itself. This commenter stated that an even greater negative financial impact may be recognized as there has been an increase in the use of Impella® devices due to higher incidence of advanced ischemic cardiomyopathy because of the COVID-19 pandemic and delays in treatment.

Another commenter requested that CMS consider re-evaluation once the MedPAR data are normalized from the pandemic to consider structure revisions for these MS-DRGs. This commenter noted that there is a proposed relative weight reduction from 11.1579 to 10.5614 for MS- DRG 215 even though CMS proposed to move the intraoperative short-term heart assist devices from this MS-DRG. This commenter stated this reduction does not seem appropriate especially if the proposed MS-DRG changes are finalized.

Response: We thank the commenters for their feedback. Our clinical advisors have reviewed these concerns regarding the proposed reassignment and continue to state the resulting MS-DRG assignments, as proposed, would be more clinically homogeneous, coherent and better reflect hospital resource use because 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 acknowledge that while the need to have a short term heart assist device inserted can reflect on the severity of illness of the patient being treated, 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 require longer heart pump support and ICU stays are different from those patients who require intraoperative support only where the device is removed at the conclusion of the procedure. As additional claims data become available, we will continue to analyze the clinical nature of each of the procedures describing the insertion of short-term heart assist devices and their MS-DRG assignments to further improve the overall accuracy of the IPPS payments in future rulemaking.

Comment: While indicating their support of CMS' proposal, some commenters urged CMS to refrain from moving cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device into MS-DRG 219, 220, and 221. These commenters stated the cases should be assigned to MS-DRGs 216, 217 and 218 only, based on the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC). A few commenters stated that CMS should refrain from moving cases into MS-DRG 219, 220, or 221 because the claim volume of cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing a cardiac catherization is under five hundred and intracardiac heart assist devices, such as Impella® devices require the use of diagnostic catheters, fluoroscopy, and hemodynamic monitoring during use, all resulting in higher costs. Considering the types of procedures that utilize short term circulatory support and the techniques used by these circulatory support devices, these commenters stated cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device are comparable to those mapping to MS-DRG 216, 217 and 218, even when a cardiac catherization procedure is not performed. Other commenters asserted there are known coding and documentation issues seen with this complex therapy, without providing examples of these issues, and stated that reassigning ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ to MS-DRGs 219, 220, and 221, described as “without cardiac catheterization” may lead to coding errors since the vast majority of these procedures necessitate a cardiac catheterization.

Response: We note that the requestor originally suggested that the cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device be moved to MS-DRGs 216, 217 and 218 but because these MS-DRGs are defined by the performance of cardiac catheterization, we specifically 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). We do not believe it would be appropriate to assign all cases to the “with cardiac catheterization” MS-DRGs because the claims data would not reflect the additional resources associated with the performance of a cardiac catheterization in cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device.

As presented in the proposed rule and in this final rule, the data analysis performed show in both in the FY 2019 MedPAR file and the FY 2020 MedPAR file, the average length of stay is shorter and the average costs are lower in cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without the performance of a cardiac catheterization when compared to cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device with the performance of a cardiac catheterization when analyzed for the presence or absence of a secondary diagnosis designated as a complication or comorbidity (CC) or a major complication or comorbidity (MCC).

Our clinical advisors believe that continued monitoring of the data and further analysis is needed prior to proposing any additional modifications to the MS-DRG assignment of cases reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing the performance of a cardiac catheterization. Our clinical advisors believe maintaining the distinction between the performance of or lack of a cardiac catherization procedure is important in these subsets of cases as we continue to examine the volume and length of stay as well as considering a variety of factors pertaining to resource consumption and clinical characteristics that might account for differences in resource use before determining if additional modifications to the assignment of these procedure codes are warranted.

In response to the suggestion that we refrain from moving cases into MS-DRG 219, 220, or 221 because claim volume of cases reporting a procedure code describing the intraoperative insertion of a short-term external heart assist device without a procedure code describing a cardiac catherization is low, we do not believe moving this subset of cases into an incoherent grouping simply because the case volume is low is in keeping with our goal to maintain clinically coherent groups that also more accurately stratify Medicare patients with varying levels of severity.

Similarly, in response to the comments asserting that there are known coding and documentation issues seen with this complex therapy and that reassigning ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ to MS-DRGs 219, 220, and 221, described as “without cardiac catheterization” may lead to coding errors since the vast majority of these procedures necessitate Start Printed Page 44831a cardiac catheterization, we again do not believe moving cases into an MS-DRG because of the need for improved provider documentation or any additional coder instruction is in keeping with our goal to maintain clinically coherent groups that also more accurately stratify Medicare patients with varying levels of severity. We acknowledge that accurate coding of external heart assist devices has been the subject of confusion in the past, and we will continue to monitor the claims data for these procedures. As one of the four Cooperating Parties, we also will continue to collaborate with the American Hospital Association to provide guidance for coding external heart assist devices through the Coding Clinic for ICD-10-CM/PCS publication and to review the ICD-10-PCS guidelines to determine where further clarifications may be made.

Therefore, after consideration of the public comments we received, and for reasons stated previously, we are finalizing our proposal 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, without modification, effective October 1, 2021.

b. Type II Myocardial Infarction

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25115 through 25116), we discussed a request we received 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.

As discussed in the proposed rule, to begin our analysis, we reviewed the GROUPER logic. We noted that 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 also noted 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).

We indicated in the proposed rule that our clinical advisors reviewed this issue and did 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.” We indicated our clinical advisors believed 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 stated the diagnosis of myocardial infarction describes myocardial cell death due to inadequate oxygen supply to the myocardium for a prolonged period, regardless of the subtype. Our clinical advisors further stated, 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 did not propose to reassign diagnosis code I21.A1 from MS-DRGs 280 through 285.

As discussed in the proposed rule, during our review of this issue we also 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 referred 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, we indicated our clinical advisors recommended 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 proposed 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 the proposed rule and this final 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 Start Printed Page 44832diagnoses (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 noted in the proposed rule 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 proposed 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 an MCC in these MS-DRGs.

In summary, for FY 2022, we proposed to maintain the current structure of MS-DRGs 280 through 285. We proposed 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.

Comment: A commenter agreed with CMS' proposed 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 (Cardiac Defibrillator Implant with Cardiac Catheterization with AMI, HF or Shock with and without MCC, respectively) when reported with qualifying procedures. This commenter stated they agreed that coding rules stipulate that diagnosis code I21.A1 must be reported as a secondary diagnosis.

Response: We appreciate the commenters' support.

Comment: Other commenters expressed concern with CMS' proposal. A commenter stated that they believed it is inappropriate to include cases with diagnosis code I21.A1 in the MS-DRGs that describe an acute myocardial infarction (MS-DRGs 280 through 285). The commenter expressed concern that if cases reporting diagnosis code I21.A1 are assigned to the MS-DRGs that describe an acute myocardial infarction, this would disrupt the resource accuracy of these MS-DRGs. They stated from a clinical perspective, the pattern of care for patients with type 2 MI may vary considerably compared to the treatment of patients with other types of myocardial infarctions, namely Type 1 STEMI and Type 1 NSTEMI. This commenter however, agreed with the proposal to modify the GROUPER logic to allow cases reporting diagnosis code I21.A1 as a secondary diagnosis to group to MS-DRGs 222 and 223 when reported with qualifying procedures and stated this portion of the proposal aligns with the intended use of type 2 MI and creates clinical consistency in MS-DRGs. The commenter also stated while it is inappropriate for diagnosis code I21.A1 to be classified as the diagnosis driving MS-DRG assignment, type 2 MI should be classified as a major complication or comorbidity (MCC) because patients with type 2 MI face an increased mortality risk. Another commenter stated the proposed rule did not provide rationale as to why code I21.A1 would not act as an MCC under the proposal to revise the GROUPER logic to allow cases reporting diagnosis code I21.A1 as a secondary diagnosis to group to MS-DRGs 222 and 223 when reported with qualifying procedures. This commenter requested that data analysis be provided on the instances when this code would not act as an MCC.

Response: We appreciate the commenters' feedback. We note to that the GROUPER logic assignment for each diagnosis code as a principal diagnosis is for grouping purposes only. As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41217) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58519), because the diagnoses are codes listed under the heading of “Principal Diagnosis” in the ICD-10 MS-DRG Definitions Manual, it may appear to indicate that these codes are to be reported as a principal diagnosis for assignment to these MS-DRGs. However, the Definitions Manual display of the GROUPER logic assignment for each diagnosis code does not correspond to coding guidelines for reporting the principal diagnosis. The MS-DRG logic must specifically require a condition to group based on whether it is reported as a principal diagnosis or a secondary diagnosis, and consider any procedures that are reported, in addition to consideration of the patient's age, sex and discharge status in order to affect the MS-DRG assignment. In other words, cases will group according to the GROUPER logic, regardless of any coding guidelines or coverage policies. It is the Medicare Code Editor (MCE) and other payer-specific edits that identify inconsistencies in the coding guidelines or coverage policies. These data integrity edits address issues such as data validity, coding rules, and coverage policies. Since the inception of the IPPS, the data editing function has been a separate and independent step in the process of determining a DRG assignment. The separation of the MS-DRG grouping and data editing functions allows the MS-DRG GROUPER to remain stable even though coding rules and coverage policies may change during the fiscal year.

In response to the commenter that stated that if type 2 MI cases are assigned to the MS-DRGs that describe an acute myocardial infarction, this would disrupt the resource accuracy of these MS-DRGs, while at the same time agreeing with the proposal 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, we are unclear of the commenters' rationale for these conflicting statements. Specifically, because MS-DRGs 222 and 223 also describe an acute myocardial infarction, it is unclear why the commenter indicates a type 2 MI should only be considered an MI in this instance.

In response to the commenter that stated that CMS did not provide rationale as to why code I21.A1 would not act as an MCC under the proposal to revise the GROUPER logic in MS-DRGs 222 and 223 and in response to their request that data analysis be provided on the instances when this code would not act as an MCC, as we indicated in the proposed rule, 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. It is not a question of data analysis. Although I21.A1 is designated as an MCC when reported as a secondary diagnosis, if code I21.A1, as a secondary diagnosis, is being used in the definition of the logic for assignment to MS-DRGs 222 and 223, it cannot act as an MCC in these MS-DRGs. Therefore, outside of MS-DRGs 222, 223, 280, 281, 282, 283, 284 and 285, diagnosis code I21.A1 will continue to act as an MCC when reported as a secondary diagnosis in Version 39.

After consideration of the public comments we received, we are finalizing our proposal to maintain the current structure of MS-DRGs 280 through 285, without modification, for Start Printed Page 44833FY 2022. We are also finalizing our proposal, without modification, 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, effective October 1, 2021.

c. Viral Cardiomyopathy

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25116 through 25117), we discussed three separate but related requests that we received 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 procedures such as cardiac catheterization or coronary angioplasty are performed for a principal diagnosis of viral cardiomyopathy.

In the proposed rule, we indicated that to begin our analysis, we reviewed the GROUPER logic. We noted that 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. We indicated 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.

We indicated our clinical advisors agreed that the diagnosis of viral cardiomyopathy is clinically related to the other diagnoses in ICD-10-CM subcategory B33.2. We stated that they believed 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 proposed 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). We stated in the proposed rule that, 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.

Comment: Commenters agreed with CMS' proposal to reassign ICD-10-CM diagnosis code B33.24 (Viral cardiomyopathy) 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). Commenters stated this change will improve clinical coherence since viral cardiomyopathy is closely related to the other viral heart diseases in subcategory B33.2 that are already assigned to MDC 05.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal 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), without modification, effective October 1, 2021.

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.

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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 the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25117 through 25118), we discussed a request we received to again review the MS-DRG assignment of cases involving LAAC procedures with an open approach in response to this final policy. The requestor disagreed with CMS' 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.

We indicated in the proposed rule that our clinical advisors reviewed this request and continued to support the reassignment of ICD-10-PCS procedure codes 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 stated 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. We noted that our clinical advisors continued 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 proposed 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.

Comment: A commenter expressed concern and requested that CMS reconsider its proposal to continue the assignment of the open LAAC procedure codes to MS-DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures with and without MCC, respectively) and instead assign these procedures to MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively). This commenter acknowledged in response to the FY 2021 proposed rule, they supported CMS' proposal to reassign the open approach left atrial appendage procedure codes from MS-DRGs 250 and 251 to MS-DRGS 273 and 274 at that time. However, the commenter stated that because CMS did not provide a detailed analysis of the claims data for the average length of stay and average costs related to the cases reporting procedure codes describing the open occlusion of left atrial appendage in the FY 2022 proposed rule, it reviewed the data analysis as presented in the FY 2021 IPPS/LTCH PPS rule and compared it to the data analysis in Section II.D.5.d of the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25118 through 25121) which was presented as part of the discussion of a two-part request to review the MS-DRG assignments for cases involving surgical ablation procedures for atrial fibrillation. The commenter stated based on their own analysis, it appeared the average length of stay and average costs of open occlusion of left atrial appendage procedures would be more clinically aligned with MS-DRGs 228 and 229.

Response: We appreciate the commenter's feedback. We note that the analysis discussed in FY 2021 rulemaking was based on the examination of claims data from the September 2019 update of the FY 2019 MedPAR file, while discussions in Section II. D. of the FY 2022 proposed rule are based on the examination of claims data from the March 2020 update of the FY 2019 MedPAR file, as well as the September 2020 update of the FY 2020 MedPAR file.

We display in the following tables claims analysis using claims data from the March 2020 update of the FY 2019 MedPAR file, as well as the September 2020 update of the FY 2020 MedPAR file. We examined claims data from the March 2020 update of the FY 2019 MedPAR file for all cases in MS-DRGs 273 and 274 and compared the results to cases with a procedure code describing an open LAAC procedure.

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In MS-DRG 273, we found a total of 7,557 cases with an average length of stay of 6.1 days and average costs of $28,356. Of those 7,557 cases, there were 29 cases reporting a LAAC procedure with an open approach, with an average length of stay of 7.6 days and average costs of $52,365. In MS-DRG 274, we found a total of 26,595 cases with an average length of stay of 2 days and average costs of $24,295. Of those 26,595 cases, there were 89 cases reporting a LAAC procedure with an open approach, with an average length of stay of 3.5 days and average costs of $25,185. The analysis shows that the cases reporting a LAAC procedure with an open approach in MS-DRGs 273 and 274 have higher average costs compared to all cases in MS-DRGs 273 and 274 ($52,365 versus $28,356 and $25,185 versus $24,295, respectively).

We also examined claims data from the September 2020 update of the FY 2020 MedPAR file for all cases in MS-DRGs 273 and 274 and compared the results to cases with a procedure code describing an open LAAC procedure.

In MS-DRG 273, we found a total of 6,542 cases with an average length of stay of 6.1 days and average costs of $30,671. Of those 6,542 cases, there were 19 cases reporting a LAAC procedure with an open approach, with an average length of stay of 8.3 days and average costs of $47,421. In MS-DRG 274, we found a total of 23,125 cases with an average length of stay of 1.9 days and average costs of $25,880. Of those 23,125 cases, there were 55 cases reporting a LAAC procedure with an open approach, with an average length of stay of 3.1 days and average costs of $20,995. The analysis shows that the cases reporting a LAAC procedure with an open approach in MS-DRG 273 have higher average costs compared to all cases in MS-DRG 273 ($47,421 versus $30,671) while the cases reporting a LAAC procedure with an open approach in MS-DRG 274 have lower average costs compared to all cases in MS-DRG 274 ($20,995 versus $25,880).

While we recognize the average costs of the small number of cases reporting LAAC procedures with an open approach generally have average costs greater than the average costs of the cases in MS-DRGs 273 and 274 overall, our clinical advisors continue to support the reassignment of the open occlusion of left atrial appendage procedures, which was finalized in FY 2021 rulemaking. The MS-DRG system is a system of averages, and it is expected that across the diagnostic related groups that within certain groups, some cases may demonstrate higher than average costs, while other cases may demonstrate lower than average costs.

Our clinical advisors reviewed this issue and stated they do not believe that assigning procedure codes describing an open LAAC procedure to MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC, respectively) will improve clinical coherence, as this surgical class is not as precisely defined from a clinical perspective. MS-DRGs 228 and 229 are an example of the surgical MS-DRGs that are found within each MDC that include `other' procedures intended to encompass procedures that, while not directly related to the MDC, can and do occur with principal diagnoses in that MDC with sufficient frequency.

Our clinical advisors note that, as stated in the ICD-10 MS-DRG Definitions Manual, “In each MDC there is usually a medical and a surgical class referred to as “other medical diseases” and “other surgical procedures,” respectively. The “other” medical and surgical classes are not as precisely Start Printed Page 44836defined from a clinical perspective. The other classes would include diagnoses or procedures which were infrequently encountered or not well defined clinically”. The ICD-10 MS-DRG Definitions Manual also states “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.”

Our clinical advisors continue to state that when performed as standalone procedures, open LAAC procedures share similar factors such as complexity and resource utilization with all other LAAC procedures. Moreover, our clinical advisors continue to support the FY 2021 reassignment of the open occlusion of left atrial appendage procedures because it allows all LAAC procedures to be grouped together under the same MS-DRGs and improves clinical coherence. After consideration of the public comments we received, and for the reasons stated previously, we are finalizing our proposal 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, without modification, for FY 2022.

e. Surgical Ablation

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25118 through 25121), we discussed a two-part request we received 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 day, 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.

As discussed in the proposed rule, 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 their 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 response to 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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We stated in the proposed rule that 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). We would like to correct the statement in the proposed rule that, in 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. We list in the following table the open concomitant surgical ablation procedure code combinations and their corresponding MS-DRG assignments in the ICD-10 MS-DRGs Definitions Manual Version 38.1.

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.

As noted in the proposed rule, 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. We noted that 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 indicated we believed 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 proposed 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. We indicated in the proposed rule, that, 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.

Comment: Many commenters agreed with our proposal 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. Some commenters stated the re-sequencing of the CABG MS-DRGs is long overdue. A commenter specifically stated they agreed with CMS' reasoning to revise the surgical hierarchy rather than to create new DRGs and stated from a clinical and payment standpoint, moving CABG MS-DRGs 231-236 above Other Cardiothoracic Procedure MS-DRGs 228-229 aligns the procedures better with their technical complexity and their costs.

Response: We thank the commenters for their support.

Comment: While supporting our proposal, other commenters stated that this proposal does not address the issue of the increased resources required to treat patients with AF that are also a candidate for an open surgical ablation procedure at the same time of their CABG procedure. Some commenters stated that CMS' proposal to revise the surgical hierarchy for CABG procedures does not advance patient access nor allow patients the opportunity to receive these procedures during the Start Printed Page 44838CABG surgical procedure. Another commenter stated that the proposed revision to the surgical hierarchy fails to address the increased costs of cases associated with open concomitant surgical ablation for AF performed during open mitral valve procedures, which are assigned to MS-DRGs 216 through 221. Another commenter stated while they agree that surgical ablation procedures are not as resource intensive as CABG procedures, CMS' proposal does not give consideration to the increased costs the surgical ablation procedure adds to the CABG procedure.

A commenter stated that CMS did not describe its methodology in detail regarding its analysis of the costs associated with performance of open surgical ablation for AF performed concomitantly during open-heart procedures, preventing meaningful public comments. This commenter stated that concomitant surgical ablation does not represent an “incidental cost” to a hospital that can be remedied just through changes in the existing surgical hierarchy.

Commenters expressed concern that given the added costs of performing as many as three procedures at the same time, hospitals may more likely schedule the patient for separate procedures even though guidelines of the Society for Thoracic Surgeons and the Heart Rhythm Society recommend performing surgical ablation for AF at the time of open-heart procedures. A commenter stated that facilities receive only one MS-DRG payment when procedures are performed concomitantly and are therefore burdened with absorbing the additional expenses of other services provided, further stating that data have shown that mortality is significantly reduced in the first year following concomitant treatment.

Many commenters urged CMS to either (1) create new MS-DRGs for these open concomitant procedures as originally requested, or (2) assign these procedures to MS-DRGs that consider the added procedure and device costs required. Another commenter requested that CMS create a supplemental payment mechanism that could be modeled based on the respective costs of the individual procedures determined by claims data and then adjusted for efficiencies of a single operative session to facilitate incremental payment when two major procedures are performed during the same hospital admission.

Response: We appreciate the commenters' feedback.

As discussed in section II.D.15. of the preamble of the proposed rule and this final rule, in our proposal to revise the surgical hierarchy for the MS-DRGs in MDC 05, MS-DRGs 216-221 (Cardiac Valve and Other Major Cardiothoracic Procedures) will continue to be sequenced above MS-DRGs 231-236 (Coronary Bypass) and MS-DRGs 228 and 229. Of note, in the absence of other procedure codes on the claim, we agree with the commenter that the only procedure code combination describing open concomitant surgical ablations affected by our proposal to revise the surgical hierarchy for the MS-DRGs in MDC 05 is “Open CABG + Open Ablation”. Under this proposal, the six other combinations describing open concomitant surgical ablations will continue to be assigned to MS-DRGs 216 through 221.

In response to the comment that CMS did not describe its methodology in detail regarding its analysis of the costs associated with performance of open surgical ablation, as we discussed insection II.D.15. of the preamble of the proposed rule, we reviewed the surgical hierarchy within MDC 05 consistent with our annual process; specifically, 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) to determine average resource consumption for the surgical class.

With regard to the comments stating that the proposed revision to the surgical hierarchy fails to address the increased costs of cases associated with open concomitant surgical ablation, we examined the data analysis of cases reporting procedure code combinations describing open concomitant surgical ablations in 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 combinations describing open concomitant surgical ablations. First, we refer the reader to Table 6P.1n associated with this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) for the list of ICD-10-PCS procedure codes reflecting mitral valve repair or replacement (MVR), aortic valve repair or replacement (AVR), and coronary artery bypass grafting (CABG) procedures that we examined in our analysis of this issue. We also refer the reader to Table 6P.1o associated with this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) for data analysis findings of cases reporting procedure code combinations describing open concomitant surgical ablations currently assigned to MS-DRGs 216, 217, 218, 219, 220 and 221 from the March 2020 update of the FY 2019 MedPAR file and from the September 2020 update of the FY 2020 MedPAR file. We note that if a procedure code combination that is currently assigned to MS-DRGs 216, 217, 218, 219, 220 and 221 is not displayed, it is because there were no cases found reporting that combination in the assigned MS-DRG.

As shown in Table 6P.1o associated with this final 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, while the average lengths of stay and average costs of cases reporting procedure code combinations describing open concomitant surgical ablations are higher than all cases in their respective MS-DRG, we found there is variation in the volume, length of stay, and average costs of the cases. In the analysis of claims data from the March 2020 update of the FY 2019 MedPAR file, during our review of MS-DRG 216, we found 1,145 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 17.6 days to 24.3 days and average costs ranging from $77,868 to $125,120 for these cases. For MS-DRG 217, we found 295 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 10 days to 13 days and average costs ranging from $45,526 to $52,859 for these cases. For MS-DRG 218, we found 7 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 7 days to 11 days and average costs ranging from $28,614 to $68,725 for these cases. For MS-DRG 219, we found 2,673 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 11.6 days to 13.3 days and average costs ranging from $65,846 to $83,281 for these cases. For MS-DRG 220, we found 1,890 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 7.3 days to 10.2 days and average costs ranging from $44,568 to $64,726 for these cases. For MS-DRG 221, we found 110 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 5.6 days to 6.8 days and average costs Start Printed Page 44839ranging from $44,826 to $73,629 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; while the average lengths of stay and average costs of cases reporting procedure code combinations describing open concomitant surgical ablations are higher than all the cases in their respective MS-DRG, we found there is variation in the volume, length of stay, and average costs of the cases. In the analysis of claims data from the September 2020 update of the FY 2020 MedPAR file, during our review of MS-DRG 216, we found 931 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 16.1 days to 20.5 days and average costs ranging from $79,732 to $108,552 for these cases. For MS-DRG 217, we found 207 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 9.2 days to 12 days and average costs ranging from $46,588 to $70,840 for these cases. For MS-DRG 218, we found 1 case reporting procedure code combinations describing open concomitant surgical ablations with a length of stay of 8 days and costs of $17,611. For MS-DRG 219, we found 1,998 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 11.6 days to 14.6 days and average costs ranging from $68,175 to $104,560 for these cases. For MS-DRG 220, we found 1,318 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 7.5 days to 8.0 days and average costs ranging from $48,200 to $61,444 for these cases. For MS-DRG 221, we found 60 cases reporting procedure code combinations describing open concomitant surgical ablations with the average length of stay ranging from 5.1 days to 8.6 days and average costs ranging from $49,910 to $65,501 for these cases.

In response to comments that urged CMS to create new MS-DRGs for these open concomitant procedures as originally requested, based on these data, our clinical advisors believe additional time is needed given the complexity of these code combinations and corresponding data before exploring a proposal to create new MS-DRGs for this subset of patients. For example, cases reporting a CABG and a procedure code describing an open surgical ablation without procedure codes describing an AVR or an MVR were found in MS-DRGs 216 through 221 meaning another cardiac valve or other major cardiothoracic procedure was reported, which could be contributing to the increased costs of these cases. Secondly, MS-DRGs 216, 217 and 218 are defined by the performance of cardiac catheterization, meaning a cardiac catherization procedure was reported, which could be also contributing to the increased costs of these cases. Lastly, the cases reporting an open concomitant surgical ablation code combination are predominately found in the higher (CC or MCC) severity level MS-DRGs of their current base MS-DRG assignment. Therefore, our clinical advisors believe that additional time is needed to allow for further analysis of the claims data to determine to what extent the patient's co-morbid conditions are also contributing to higher costs and to identify other contributing factors that might exist with respect to the increased length of stay and costs of these cases in these MS-DRGs. Our clinical advisors also believe that future data findings may demonstrate additional variance in resource utilization for this patient population.

We also note, as discussed in Section D.1.b of the proposed rule and this final rule, using the March 2020 update of the FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR file, we 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 MS-DRGs 216, 217, 218 as well as approximately 31 other MS-DRGs would be subject to change based on the three-way severity level split criterion finalized in FY 2021. We refer the reader to Table 6P.1c associated with the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS) 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 have been proposed for creation under this policy if the NonCC subgroup criteria were applied.

As discussed previously, we are finalizing the delay of the application of the NonCC subgroup criteria to existing MS-DRGs with a three-way severity level split until FY 2023 or later, and are finalizing our proposal 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 for FY 2022. Noting that currently the total number of cases in MS-DRG 218 is below 500, and that we may consider consolidating these MS-DRGs into two severity levels based on the application of the NonCC subgroup criteria in future rule-making, as well as for the reasons stated previously, we believe additional time is needed to review the clinical nature of cases reporting an open concomitant surgical ablation code combination before creating new MS-DRGs for the subset of cases with procedure codes that describe open concomitant surgical ablation procedures that are currently assigned to MS-DRGs 216 through 221 at this time.

In response to comment that the proposed hierarchy change will not address the increased resources required to treat patients with AF that are a candidate for an open surgical ablation procedure at the same time of their CABG procedure, we analyzed the March 2020 update of the FY 2019 MedPAR file for cases reporting the procedure code combination “Open CABG + Open Ablation” of the seven potential procedure combinations that would comprise an “open concomitant surgical ablation” procedure, as this is the only concomitant procedure code combination potentially affected by the proposed hierarchy change (in the absence of other procedure codes that could affect MS-DRG assignment on the claim).

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As shown in the table, the data analysis performed indicates that the 1,010 cases in MS-DRG 228 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 228 (12.8 days versus 10.7 days) and higher average costs when compared to all the cases in MS-DRG 228 ($56,331 versus $45,772). The 1,041 cases in MS-DRG 229 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation also have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 229 (8.2 days versus 5.3 days) and higher average costs when compared to all the cases in MS-DRG 229 ($38,643 versus $29,454). As expected, there were zero cases found with procedure codes describing one of the other six “open concomitant surgical ablation” procedure code combinations as described by the requestor since GROUPER logic would assign MS-DRGs 216 through 221 for the other combinations.

We then examined the redistribution of cases that is anticipated to occur as a result of the proposal to move MS-DRGs 231 through 236 (Coronary Bypass) above MS-DRGs 228 and 229 in the surgical hierarchy of MDC 05 for Version 39 of the ICD-10 MS-DRGs, by processing the claims data from the March 2020 update of the FY 2019 MedPAR file through the ICD-10 MS-DRG GROUPER Version 38 and then processing the same claims data through the ICD-10 MS-DRG GROUPER Version 39 for comparison. The number of cases from this comparison that result in different MS-DRG assignments is the number of the cases that are anticipated to potentially shift or be redistributed. Our findings are shown in the following table.

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We found a number of cases that are anticipated to potentially shift or be redistributed into MS-DRGs 231 through 236. The largest number of cases moving out of MS-DRG 228 are moving into MS-DRG 235, which means these cases reported a procedure code for CABG and a cardiothoracic procedure, such as a surgical ablation, without procedure codes reporting a PTCA or cardiac catherization. The largest number of cases moving out of MS-DRG 229 are moving into MS-DRG 236, which again means these cases reported a procedure code for CABG and a cardiothoracic procedure, such as a surgical ablation, without procedure codes reporting a PTCA or cardiac catherization.

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 231, 232, 233, 234, 235 and 236. Our findings are shown in the following table.

In reviewing the data analysis performed, the 1,010 cases in MS-DRG 228 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 235 (12.8 days versus 9.8 days) and higher average costs when compared to all the cases in MS-DRG 235 ($56,331 versus $42,133). The 1,041 cases in MS-DRG 229 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation also have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 236 (8.2 days versus 6.4 days) and higher average costs when compared to all the cases in MS-DRG 236 ($38,643 versus $29,565). The average length of stay and average costs of cases reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation in MS-DRG 228 as well as a secondary diagnosis of MCC are closer aligned to costs of cases in MS-DRGs 233 (Coronary Bypass with Cardiac Catheterization with MCC) (12.8 days versus 12.7 days and $56,331 versus $54,170 respectively). The average length of stay and average costs of cases reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation in MS-DRG 229 without secondary diagnosis of MCC are closer aligned to costs of cases in MS-DRGs Start Printed Page 44842234 (Coronary Bypass with Cardiac Catheterization without MCC) (8.2 days versus 8.7 days and $38,643 versus $38,058 respectively).

Next, we analyzed the September 2020 update of the FY 2020 MedPAR file for cases reporting a procedure code describing a CABG procedure with a procedure code describing an open ablation.

As shown in the table, the data analysis performed indicates that the 836 cases in MS-DRG 228 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 228 (12.8 days versus 10.2 days) and higher average costs when compared to all the cases in MS-DRG 228 ($60,327 versus $46,508). The 824 cases in MS-DRG 229 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation also have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 229 (7.9 days versus 4.9 days) and higher average costs when compared to all the cases in MS-DRG 229 ($39,392 versus $29,885). As expected, there were zero cases found with procedure codes describing one of the other six “open concomitant ablation” procedure code combinations as described by the requestor since GROUPER logic would assign MS-DRGs 216 through 221 for the other combinations.

As we did with the March 2020 update of the FY 2019 MedPAR file, we then examined the redistribution of cases that is anticipated to occur by processing the claims data, this time from the September 2020 update of the FY 2020 MedPAR file through the ICD-10 MS-DRG GROUPER Version 38 and then processed the same claims data through the ICD-10 MS-DRG GROUPER Version 39 for comparison. Our findings are shown in the table.

Start Printed Page 44843

Similarly, we found a number of cases that are anticipated to potentially shift or be redistributed into MS-DRGs 231 through 236. The largest number of cases moving out of MS-DRG 228 are moving into MS-DRG 235, which means these cases reported a procedure code for CABG and a cardiothoracic procedure, such as a surgical ablation, without procedure codes reporting a PTCA or cardiac catherization. The largest number of cases moving out of MS-DRG 229 are moving into MS-DRG 236, which again means these cases reported a procedure code for CABG and a cardiothoracic procedure, such as a surgical ablation, without procedure codes reporting a PTCA or cardiac catherization.

We also 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 231, 232, 233, 234, 235 and 236. Our findings are shown in the following table.

In reviewing the data analysis performed, the 836 cases in MS-DRG 228 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 235 (12.8 days versus 9.7 days) and higher average costs when compared to all the cases in MS-DRG 235 ($60,327 versus $44,106). The 824 cases in MS-DRG 229 reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation also have an average length of stay that is longer than the average length of stay for all the cases in MS-DRG 236 (7.9 days versus 6.4 days) and higher average costs when compared to all the cases in MS-DRG 236 ($39,392 Start Printed Page 44844versus $31,170). The average length of stay and average costs of cases reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation in MS-DRG 228 as well as a secondary diagnosis of MCC are closer aligned to costs of cases in MS-DRGs 233 (Coronary Bypass with Cardiac Catheterization with MCC) (12.8 days versus 12.5 days and $60,327 versus $56,388 respectively). The average length of stay and average costs of cases reporting a procedure code that describes a CABG procedure as well as a procedure code describing an open ablation in MS-DRG 229 without secondary diagnosis of MCC are closer aligned to costs of cases in MS-DRGs 234 (Coronary Bypass with Cardiac Catheterization without MCC) (7.9 days versus 8.5 days and $39,392 versus $39,406 respectively).

In response to comments that urged CMS to assign these procedures to MS-DRGs that consider the added procedure and device costs required, our clinical advisors reviewed these data and continue to state that 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. They also state that the proposed revision to the surgical hierarchy leads to a grouping that is more coherent and better accounts for the resources expended to address the more complex procedures from other cases redistributed during the hierarchy change. However, in cases where an open ablation is performed in combination with a coronary bypass procedure but without a PTCA or cardiac catherization procedure also being performed, to better address the concerns expressed in the public comments, our clinical advisors support the assignment of these cases to MS-DRGs 233 and 234 as an enhancement to better reflect the clinical severity and resource use involved in these cases. Our clinical advisors also support changing the titles of MS-DRGs 233 and 234 to “Coronary Bypass with Cardiac Catheterization or Open Ablation with and without MCC, respectively” to better reflect the assigned procedures.

Therefore, after consideration of the public comments we received, and for the reasons discussed, we are finalizing our proposal 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, effective October 1, 2021. We refer the reader to section II.D.15. of the preamble of this final rule for the discussion of the surgical hierarchy and the complete list of our proposed modifications to the surgical hierarchy in MDC 05 as well as our finalization of that proposal. In addition, after consideration of the public comments we received and for the reasons discussed, we are also finalizing the assignment of cases with a procedure code describing coronary bypass and a procedure code describing open ablation to MS-DRGs 233 and 234 and changing the titles of these MS-DRGs to “Coronary Bypass with Cardiac Catheterization or Open Ablation with and without MCC, respectively”.

As discussed earlier in the proposed rule and 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.

The requestor performed their own analysis and stated that they 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 Start Printed Page 44845229. 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).

In response to this request, 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 5.3 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 following table.

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.

Start Printed Page 44846

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 following 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.

As noted in the proposed rule, 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. We indicated that our clinical advisors reviewed this issue and did not recommend changing the assignment of procedure codes describing percutaneous endoscopic surgical ablation. Therefore, for the reasons indicated, we proposed to maintain the current structure of MS-DRGs 219 and 220.

Comment: Commenters disagreed with our proposal to maintain the current structure of MS-DRGs 219 and 220 and noted that payment for MS-DRGs 228 and 229 has been trending downward over the last 5 years. Some commenters stated that CMS did not provide transparency to the details of its analysis to support why standalone hybrid surgical ablation procedures should not be moved from MS-DRGs 228 and 229. Another commenter stated CMS' proposed decline in payment rates makes it impossible for their facility to continue to provide these needed procedures to patients suffering from atrial fibrillation. Another commenter stated the proposed relative weight does not accurately reflect the costs of these device intensive procedures and that there has been no transparency into the cause for these significant declines. Other commenters asserted that hospitals will be forced to postpone or “trim back” on providing patients access to more complex, resource intensive procedures such as these, to better align their costs with what they asserted were Medicare's inadequate payment levels. Other commenters requested that CMS use its statutory authority to not reduce the relative weight and payment for MS-DRGs 228 and 229, which contain stand-alone surgical ablation procedures for AF.

Response: We appreciate the commenters' feedback. We note that we did not propose a change to the GROUPER logic of MS-DRGs 228 and 229. Our clinical advisors did not recommend changing the assignment of procedure codes describing percutaneous endoscopic surgical ablation, currently assigned to MS-DRGs 228 and 229, to MS-DRGs 219 and 220. Therefore, we proposed to maintain the current structure of MS-DRGs 219 and 220. This proposal by extension also maintains the current structure of MS-DRGs 228 and 229. With regard to the comments about the implications for payment in MS-DRGs 228 and 229, we note that the goals of assigning or re-assigning procedure codes to MS-DRGs are to better clinically represent the resources involved in caring for these patients and enhance the overall accuracy of the system. In response to the comment that CMS did not provide transparency to Start Printed Page 44847the details of its analysis in the proposed rule, we provided our claims analysis for the cases with a procedure code describing a standalone percutaneous endoscopic surgical ablation procedure as well as a discussion of that analysis and the basis for our proposal. It is unclear from the comments what additional details the commenters are referencing.

In response to the comment that hospitals will be forced to postpone or “trim back” on providing patients access to these procedures in order to better align their costs with Medicare payment levels, as we have stated in prior rulemaking, it is not appropriate for facilities to deny treatment to beneficiaries needing a specific type of therapy or treatment that potentially involves increased costs.

As we have indicated in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38103), the FY 2019 IPPS/LTCH PPS final rule (83 FR 41273), the FY 2020 IPPS/LTCH PPS final rule (84 FR 42167) and the FY 2021 IPPS/LTCH final rule (85 FR 58598), we do not believe it is normally appropriate to address relative weight fluctuations that appear to be driven by changes in the underlying data even if we have addressed relative weight fluctuations in specific circumstances such as when a relative weight would have declined by more than 20 percent in one year, or in instances where we did not have sufficient MedPAR data to set accurate and stable cost relative weights for low volume MS-DRGs. We do however acknowledge the trending reduction in relative weights for MS-DRGs 228 and 229 in our ratesetting as reflected in the following chart.

We believe this weight change over time to be appropriately driven by the underlying data in the 5 years since CMS began using the ICD-10 data in calculating the relative weights. We note that there are 809 ICD-10-PCS codes assigned to the GROUPER logic of MS-DRGs 228 and 229 in the ICD-10 MS-DRGs Definitions Manual Version 38.1, of which the procedure codes describing standalone ablation represent a small percentage.

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”. The ICD-10 MS-DRG Definitions Manual also states “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.” MS-DRGs 228 and 229 are an example of the surgical MS-DRGs that are found within each MDC that include “other” procedures intended to encompass procedures that, while not directly related to the MDC, can and do occur with principal diagnoses in that MDC with sufficient frequency.

As displayed in the proposed rule, when 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, the 99 cases in MS-DRG 228 reporting a procedure code that describes percutaneous endoscopic surgical ablation represent only 2% of the 4,436 total cases in MS-DRG 228. The 497 cases in MS-DRG 229 reporting a procedure code that describes percutaneous endoscopic surgical ablation represent only 9% of the 5,250 total cases in MS-DRG 229.

Similarly, when we 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, the 84 cases in MS-DRG 228 reporting a procedure code that describes percutaneous endoscopic surgical ablation represent only 2% of the 4,419 total cases in MS-DRG 228. The 393 cases in MS-DRG 229 reporting a procedure code that describes percutaneous endoscopic surgical ablation represent only 8% of the 4,732 total cases in MS-DRG 229.

We also note that each year, we calculate the relative weights by dividing the average cost for cases within each MS-DRG by the average cost for cases across all MS-DRGs. It is to be expected that when MS-DRGs are restructured, such as when procedure codes are reassigned or the hierarchy within an MDC is revised, resulting in Start Printed Page 44848a different case-mix within the MS-DRGs, the relative weights of the MS-DRGs will change as a result. Over the past five years, there have been changes to the structure of MS-DRGS 228 and 229. Specifically, in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56809 through 56813), we finalized our proposal to collapse MS-DRGs 228, 229, and 230 from three severity levels to two severity levels by deleting MS-DRG 230 and revised the structure of MS- DRG 229. We also finalized our proposal to reassign ICD-9-CM procedure code 35.97 and the cases reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) from MS-DRGs 273 and 274 to MS-DRG 228 and revised the titles of MS-DRG 228 and 229. In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42080 through 56813) we finalized our proposal to modify the structure of MS-DRGs 266 and 267 by reassigning ICD-10-PCS procedure code 02UG3JZ describing a transcatheter mitral valve repair with implant procedure from MS-DRGs 228 and 229 to MS-DRGs 266 and 267 and revised the titles of MS- DRG 266 and 267. Finally, as discussed in the FY 2022 IPPS/LTCHPPS proposed rule, and earlier in this section, we proposed 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 for FY 2022. Therefore, the data appear to reflect that the difference in the relative weights reflected in Table 5 -List of Medicare Severity Diagnosis Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay associated with final rule for the applicable fiscal year can be attributed to the fact that the finalization of these proposals resulted in a different case-mix within the MS-DRGs which is then being reflected in the relative weights. We refer the reader to section II.E. of the preamble of this FY 2022 IPPS/LTCH PPS final rule for a complete discussion of the relative weight calculations.

Comment: A few commenters noted that hybrid standalone percutaneous endoscopic surgical ablation includes both a minimally invasive surgical ablation performed by a surgeon and catheter ablation performed by an electrophysiologist in the same hospital visit, and stated that the downward payment trend for the MS-DRGs 228 and 229 has resulted in hospitals being undercompensated for the costs of furnishing standalone hybrid percutaneous endoscopic surgical ablation procedures for AF. These commenters proposed two possible remedies to this underpayment, that CMS either (1) maintain the relative weights of MS-DRGs 228 and 229 for a year and then reassess the data, or (2) assign cases reporting procedure codes describing standalone percutaneous endoscopic surgical ablation from MS-DRGs 228 and 229 to the higher (MCC) severity level MS-DRG of its current base MS-DRG assignment, which is MS-DRG 228 (Other Cardiothoracic Procedures with MCC), to prevent underpayment for these procedures.

Response: We appreciate the commenter's suggestions. In response to the request that CMS maintain the relative weights of MS-DRGs 228 and 229 for a year, as stated in response to similar comments expressed by other commenters, we believe the weight change in these MS-DRGs over time to be appropriately driven by the underlying data. In response to the request that CMS assign cases reporting procedure codes describing standalone percutaneous endoscopic surgical ablation from MS-DRGs 228 and 229 to the higher (MCC) severity level MS-DRG of its current base MS-DRG assignment, we examined the claims analysis as presented in the proposed rule and earlier in this section. Using the March 2020 update of the FY 2019 MedPAR file, the 497 cases in MS-DRG 229 reporting a procedure code that describes percutaneous endoscopic surgical ablation without a secondary diagnosis designated as an MCC have an average length of stay that is shorter than the average length of stay for all the cases in MS-DRG 228 (3.7 days versus 10.7 days) and lower average costs when compared to all the cases in MS-DRG 228 ($35,516 versus $45,772). Similarly, using the September 2020 update of the FY 2020 MedPAR file, the 393 cases in MS-DRG 229 reporting a procedure code that describes percutaneous endoscopic surgical ablation without a secondary diagnosis designated as an MCC have an average length of stay that is shorter than the average length of stay for all the cases in MS-DRG 228 (3.4 days versus 10.2 days) and lower average costs when compared to all the cases in MS-DRG 228 ($34,237 versus $46,508). Our clinical advisors reviewed this analysis and do not support reassignment of cases reporting a procedure code that describes percutaneous endoscopic surgical ablation without a secondary diagnosis designated as an MCC from MS-DRG 229 to MS-DRG 228 based on this claims data analysis. Our advisors stated it would not be appropriate to reassign these cases into the higher severity level MS-DRG in the absence of an MCC and noted that the cases would not be clinically coherent with regard to resource utilization as reflected in the differences in average costs and average lengths of stay. As additional claims data becomes available, we will continue to analyze the clinical nature of procedure codes that describe percutaneous endoscopic surgical ablation and their MS-DRG assignments to further improve the overall accuracy of the IPPS payments in future rulemaking.

Therefore, after consideration of the public comments we received, and for the reasons stated earlier, we are finalizing our proposal to maintain the current structure of MS-DRGs 219 and 220 for FY 2022.

f. Drug-Eluting Stents

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25121 through 25122), we discussed a request we received 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 clinical 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 Start Printed Page 44849declined 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.

In the proposed rule, based on a review of the procedure codes that are currently assigned to MS-DRGs 246, 247, 248 and 249, we indicated that our clinical advisors agreed that further refinement of these MS-DRGs may be warranted. However, we noted that 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, we indicated that our clinical advisors recommended 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 the proposed rule and this final rule. Therefore, we indicated we believed it would be more appropriate to consider this request further during our comprehensive procedure code review in future rulemaking.

Comment: We received a comment expressing concern that the existence of a payment differential between drug-eluting and bare-metal stents continues to prevent access for patients who are not able to obtain the clinical benefits of modern coated stents due to hospital margin concerns. The commenter stated that multiple clinical studies have consistently proven that the clinical safety and effectiveness of their cardiovascular coated stent is more similar to drug-eluting coronary stents when compared to bare-metal-stents. This commenter urged CMS to take timely action in refining the MS-DRGs to remedy the patient access issue, respectfully requested that CMS complete its analysis in time for the FY 2023 IPPS proposed rule, and also requested that CMS confirm the timing in this FY 2022 IPPS final rule.

Response: We appreciate the commenter's comments. We note that the distinction between drug eluting and non-drug-eluting stents has long existed in the classification. In the FY 2003 IPPS/LTCH PPS final rule (67 FR 50003 through 50005), we created two new temporary CMS DRGs to reflect cases involving the insertion of a drug-eluting coronary artery stent as signified by the presence of code ICD-9-CM procedure code 36.07 (Insertion of drug-eluting coronary artery stent): CMS DRG 526 (Percutaneous Cardiovascular Procedure With Drug- Eluting Stent With AMI); and CMS DRG 527 (Percutaneous Cardiovascular Procedure With Drug-Eluting Stent Without AMI) to parallel existing CMS DRGs 516 (Percutaneous Cardiovascular Procedure with Acute Myocardial Infarction (AMI)) and 517(Percutaneous Cardiovascular Procedure with Coronary Artery Stent without AMI). Although the FDA had not yet approved the technology for use, at the time public presentation of the results from clinical trials found virtually no in-stent restenosis in patients treated with the drug-eluting stent. Therefore, we stated temporary CMS DRGs 526 and 527 CMS DRGs were created effective for discharges occurring on or after April 1, 2003 in recognition of the potentially significant impact this technology may conceivably have on the treatment of coronary artery blockages, the predictions of its rapid, widespread use, and that the higher costs of this technology could create undue financial hardships for hospitals due to the high volume of stent cases. The FDA ultimately approved drug-eluting stents for use in April 2003.

In the FY 2006 IPPS/LTCH PPS (70 FR 47292 through 47295), we deleted CMS DRGs 516, 517, 526, and 527 and created four new CMS DRGs in their places. We stated that rather than divide the CMS DRG pairs based on whether the patient had an acute myocardial (AMI), we split each pair of CMS DRGs based on the presence or absence of a major cardiovascular condition to identify subgroups of significantly more severe patients who use greater hospital resources more accurately than was possible under the previous CMS DRGs. The new CMS DRG titles were: CMS DRG 555 (Percutaneous Cardiovascular Procedure with Major Cardiovascular Diagnosis); CMS DRG 556 (Percutaneous Cardiovascular Procedure with Non- Drug-Eluting Stent without Major Cardiovascular Diagnosis); CMS DRG 557 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with Major Cardiovascular Diagnosis) (formerly CMS DRG 526); and CMS DRG 558 (Percutaneous Cardiovascular Procedure with Drug- Eluting Stent without Major Cardiovascular Diagnosis). In the FY 2008 IPPS/LTCH PPS final rule we adopted the MS-DRGs and in that rule (72 FR 47259 through 47260) we stated we found that PTCAs with four or more vessels or four or more stents were more comparable in average charges to the higher weighted DRG in the group and made changes to the GROUPER logic. Claims containing ICD-9-CM procedure code 00.66 for PTCA, and code 36.07 (Insertion of drug-eluting coronary artery stent(s)), and code 00.43 (Procedure on four or more vessels) or code 00.48 (Insertion of four or more vascular stents) were assigned to MS-DRG 246 (formerly 557). In addition, claims containing ICD-9-CM procedure code 00.66 for PTCA, and code 36.06 (Insertion of non-drug eluting coronary artery stent(s)), and code 00.43 or code 00.48 were assigned to MS-DRG 248 (formerly 555). We also made conforming changes to the MS-DRG titles as follows: MS-DRG 246 was titled “Percutaneous Cardiovascular Procedures with Drug-Eluting Stent(s) with MCC or 4 or more Vessels/Stents”. MS-DRG 248 was titled “Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent(s) with MCC or 4 or more Vessels/Stents”. The title for MS-DRGs 247 (formerly 558) and 249 (formerly 556) remained unchanged. In FY 2018 IPPS/LTCH PPS Final rule (82 FR 38024) we finalized our proposal to revise the title of MS- DRG 246 to “Percutaneous Cardiovascular Procedures with Drug- Eluting Stent with MCC or 4+ Arteries or Stents” and the title of MS-DRG 248 to “Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents” to better reflect the ICD-10-PCS terminology of “arteries” versus “vessels” as used in the procedure code titles within the classification.

We also again note the distinction between drug-eluting and non-drug eluting intraluminal devices is found elsewhere in the ICD-10-PCS procedure code classification. This distinction is not limited to procedures describing coronary interventions. A more extensive analysis is needed to assess the potential impacts across the MS-DRGs to avoid unintended consequences or missed opportunities in most appropriately capturing the resource utilization and clinical coherence for this subset of procedures.Start Printed Page 44850

In response to the commenter's concern that the existence of a payment differential between drug-eluting and bare-metal stents continues to prevent access for patients, as we have stated in prior rulemaking, it is not appropriate for facilities to deny treatment to beneficiaries needing a specific type of therapy or treatment that potentially involves increased costs. In response to the commenter's request that CMS complete its analysis of the classification in time for the FY 2023 IPPS proposed rule, we note that the comprehensive procedure code review will be a multi-year project. As indicated in section II.D.11. of the preamble of the proposed rule and this final rule, we will provide more detail on this analysis and the methodology for conducting this review in future rulemaking.

After consideration of the public comments we received, and for the reasons discussed, we are not making changes in this final rule to the MS-DRG assignments of claims involving the insertion of coronary stents in percutaneous coronary interventions, and we will further consider this issue in future rulemaking.

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

a. Knee Joint Procedures

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25122), we discussed a request we received 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' review and consideration.

Start Printed Page 44851

In the proposed rule, we noted that 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.

We also noted that 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. We stated that adding these procedure codes will improve clinical coherence and ensure more appropriate MS-DRG assignment for these cases.

Therefore, for FY 2022, we proposed 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.

Comment: Several commenters supported the proposal 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 to MS-DRGs 628, 629, and 630 in MDC 10. A few commenters also recommended that CMS conduct further review to determine whether additional combinations may be currently excluded from the logic for these MS-DRGs.

Another commenter who supported our proposal stated they found the following 11 additional combinations that appeared to be missing from the logic for MS-DRGs 628, 629, and 630 in MDC 10.

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This commenter also noted the difficulty in analyzing the logic list as some code combinations display the Removal code first and other Start Printed Page 44853combinations display the Replacement code first.

Response: We appreciate the commenters' support. We thank the commenters for their feedback and agree with the commenter's findings of the 11 additional code combinations inadvertently missing from the logic for MS-DRGs 628, 629, and 630 in MDC 10. We performed further analysis to determine if other combinations may be inadvertently missing and did not find any.

In response to the commenter's feedback regarding the format in which the Removal and Replacement codes are displayed in the logic, we note that we are working with our contractor, 3M HIS, to evaluate modifications to the logic list in these MS-DRGs that are defined by such combinations and reflected in the ICD-10 MS-DRG Definitions Manual to refine how the logic list may be better displayed.

After consideration of the public comments received, we are finalizing our proposal 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 and are adding the 11 additional code combinations listed that were provided by the commenter to the logic for MS-DRGs 628, 629, and 630 in MDC 10 for FY 2022.

b. Pelvic Trauma With Internal Fixation

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25123), we discussed a request we received 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 cross walked 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 fractures 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.

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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 noted in the proposed rule that 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 noted in the proposed rule 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 the proposed rule and this final 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 the proposed rule and this final 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.

We also noted that 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.

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. We stated that 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 the proposed rule we noted that 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 the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS).

We also noted that 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.

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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.

As indicated in the proposed rule, 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 the proposed rule and this final rule (which is available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS).

We stated we believe further analyses of these internal fixation for pelvic trauma cases in the claims data is warranted. We noted 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 the 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.

As noted in the proposed rule, we referred 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. We stated that additional time is needed for data analysis given the volume of these code combinations and corresponding data. We also stated we 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. We noted that our clinical advisors also believe that future data findings may demonstrate additional variance in resource utilization for this patient population. We further noted 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 stated 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 proposed 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.

Comment: Some commenters agreed with CMS that additional analysis would be beneficial for the reasons discussed in the proposed rule. A commenter also suggested that as part of the additional analysis, CMS should also analyze cases involving trauma activations. According to the commenter, the most common reason for treatment of Medicare patients by a trauma center is falls with a high rate of associated fractures, especially hip fractures. This commenter stated that in Start Printed Page 44858addition to trauma programs' readiness, activation and coordinated care, designated and verified programs are required to engage in injury prevention. The commenter further stated their belief that since falls are the single largest traumatic event for Medicare beneficiaries and trauma centers, CMS should engage in policies designed to prevent falls and mitigate the incidence of hip and extremity fractures which are a major source of disability for seniors. The commenter provided examples such as making beneficiary data available on ED visits and hospital admissions for falls sorted by geographic location and the treating hospital and including the source of admission for these beneficiaries. The commenter stated that with appropriate incentives, hospitals could direct injury prevention efforts in collaboration with community organizations, nursing facilities and senior centers to assist with proven fall prevention interventions such as installing safety equipment (for example, grab bars and railings), introducing exercise programs and promoting safe routines for activities of daily living. The commenter also stated that other approaches could involve providing payment for prevention activities targeted at patients who present with a first or recurrent fall in an attempt to avoid a future, more severe injury that could result in a debilitating hip and/or extremity fracture. This commenter expressed interest in collaborating further with CMS and other stakeholders on these initiatives.

Response: We appreciate the commenters' support. We also thank the commenter for their recommendation to examine trauma activation in connection with the additional analysis planned for pelvic fracture repair cases and for the various options presented for injury prevention strategies. We look forward to further engagement with stakeholders on this topic.

Comment: Other commenters suggested that CMS reconsider the 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 for FY 2022. According to a commenter, as new technologies are made available intended to surgically treat many pelvic fracture patients who previously may have been treated medically in the inpatient setting, hospitals may bear a disproportionate share of these costs until the MS-DRGs are calibrated. This commenter stated that providing a reassignment now would help mitigate the financial strain for hospitals supporting these procedure types, and would benefit the Medicare program in its potential to reduce outlier payments. The commenter maintained that CMS could initially limit the reassignment to specific DRGs, or to specific combinations of procedure and diagnosis codes at this time, and review the data in a future rulemaking period.

Another commenter conducted its own analysis and indicated its findings support reassignment for FY 2022. Alternatively, this commenter also stated they looked forward to updating CMS with additional data to support future reassignment options.

Response: We appreciate the commenters' feedback and the additional analysis conducted. It is not clear from the commenter's analysis which specific code combinations generated the results provided. As we noted in the proposed rule, among other factors, there are specific codes and code combinations requiring further review as we identified additional codes that the requestor did not include in their initial submission. We will continue to work with stakeholders as we evaluate the data for these cases and consider future modifications to the structure of the MS-DRGs.

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

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25128 through 25138), we discussed a request we received 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 payment 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 Start Printed Page 44859hemodynamic 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.

In the proposed rule, we noted that the following ICD-10-PCS procedure code identifies the performance of CRRT.

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. We indicated that our clinical advisors agreed 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 in response to this request, 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 Start Printed Page 44861reporting 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 noted 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.

We indicated in the proposed rule that, 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 were unable to ascertain from the claims data the resource use specifically attributable to CRRT during a hospital stay. We noted that 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 reflect, 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 Start Printed Page 44863be 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.

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 noted 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 are shown in the following table:

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The claims data in this table also reflect 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.

As indicated in the proposed rule, 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 44867reporting 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 4486904, 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.

We indicated in the proposed rule that 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, we stated 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 further indicated that we believed 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, we indicated in the proposed rule that 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 indicated we believed 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 did not propose to create new MS-DRGs for cases reporting the use of continuous renal replacement therapy.

Comment: A commenter supported CMS' proposal and stated they agreed that new MS-DRGs should not be created for continuous renal replacement therapy without regard to principal diagnosis. Another commenter stated that CMS should group cases reporting the use of continuous renal replacement therapy along with ICD-10-CM diagnosis codes N17.8 (Other acute kidney failure) or N17.9 (Acute kidney failure, unspecified) to the highest (MCC) severity level MS-DRG of its current base MS-DRG assignment. The commenter noted that both N17.8 and N17.9 (Acute kidney failure, unspecified) are designated as a “CC” when reported as a secondary diagnosis. This commenter also stated that while CRRT is not a new technology, given its increased costs, CRRT should be considered for a permanent “add-on” payment that compensates hospitals for the higher costs of caring for these patients.

Response: We appreciate the commenters' support. With regard to the commenter's statement that cases reporting the use of continuous renal replacement therapy along with ICD-10-CM diagnosis codes N17.8 (Other acute kidney failure) or N17.9 (Acute kidney failure, unspecified) should be grouped to the highest (MCC) severity level MS-DRG of its current base MS-DRG assignment, we consider this comment to be outside the scope of the proposal discussed. We may consider additional claims data analysis for these procedures in future rulemaking. After consideration of the public comments we received, we are finalizing our proposal to not create new MS-DRGs for cases reporting the use of continuous renal replacement therapy for FY 2022.

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.

In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25138 through 25146), we discussed a request we received 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®.

We noted in the proposed rule that the following ICD-10-PCS procedure codes identify the intravenous administration of ANDEXXA®.

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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. We indicated that our clinical advisors agreed 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 ANDEXXA® is reported for different clinical scenarios in response to this request, 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 of $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.

As discussed in the proposed rule, 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 noted 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 noted 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®. Start Printed Page 44878The 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 FY 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 noted 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 indicated in the proposed rule that we believe it is premature to consider a proposal for cases involving ANDEXXA® therapy for FY 2022. We noted that 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. We also noted the claims data also reflects a wide variance with regard to the frequency and average costs for these cases reporting the use of ANDEXXA®. Moreover, we indicated 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. As discussed in the proposed rule, 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, we indicated 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 indicated that we recognized that 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. We noted that 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 noted 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.

In the proposed rule, we acknowledged 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, we indicated 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 noted that we were 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 the proposed rule and this final 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, as well as our finalization of that proposal.

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

Comment: Commenters expressed appreciation for the consideration CMS provided. These commenters acknowledged that ANDEXXA® presents a unique challenge because MS-DRGs are a classification system for grouping diagnoses and procedures with similar clinical characteristics and utilization of resources. Another commenter agreed that the underlying cause of life-threatening or uncontrolled bleeding can vary and stated that cases involving the use of ANDEXXA® (coagulation factor Xa (recombinant), inactivated-zhzo) do not fit neatly within another MS-DRG. These commenters also agreed that options and mechanisms through which to address low volume high-cost drugs should be explored outside of the MS-DRG classification.

Response: We appreciate the commenters' support, and intend to continue to consider these issues. For the reasons summarized earlier, and after consideration of the public comments we received, we are not making any MS-DRG changes for cases involving the intravenous administration of ANDEXXA® for FY 2022.

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 become available to determine if further modifications to the severity level are warranted.

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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-DRGs 814, 815, and 816. We noted that the GROUPER logic for MS-DRGs 814, 815, and 816 will include a principal diagnosis of T80.89XA with a secondary diagnosis of any CRS code as shown.

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 the proposed rule and this final 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 Start Printed Page 44880cellular 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 T80.89XA with a secondary diagnosis of any CRS code. However, with the finalization of new diagnosis code T80.82-, diagnosis code T80.89XA would no longer be reported and these cases would instead report new diagnosis code T80.82XA, effective with discharges on and after October 1, 2021. As shown in Table 6A associated with the proposed rule, we proposed 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. We stated that 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 T80.89XA with a secondary diagnosis code of any CRS code would no longer be appropriate or necessary.

Therefore, we proposed to revise the structure of MS-DRGs 814, 815, and 816 by removing the logic that includes a principal diagnosis of T80.89XA with a secondary diagnosis of any CRS code from MS-DRGs 814, 815, and 816 effective FY 2022.

Comment: Commenters supported the proposed revision to the structure of MS-DRGs 814, 815, and 816 to remove the logic that includes a principal diagnosis of T80.89XA with a secondary diagnosis of any CRS code from MS-DRGs 814, 815, and 816. Commenters also supported the proposed assignment of new diagnosis code T80.82XA to MS-DRGs 814, 815, and 816 in MDC 16.

Response: We appreciate the commenters' support.

Comment: A commenter requested that CMS explain its rationale for MS-DRG assignment of the listed diagnosis codes describing complication of immune effector cellular therapy (T80.82XA, T80.82XD, and T80.82XS) and the codes describing immune effector cell-associated neurotoxicity syndrome (ICANS), with varying degrees of severity (G92.00, G92.01, G92.02, G92.03, G92.04, and G92.05). Specifically, the commenter questioned why CMS limited assignment to these MS-DRGs and if consideration could be given for the codes to be identified as CCs or MCCs for any MS-DRG.

Response: As discussed in prior rulemaking and in the proposed rule (86 FR 25186), we use our established process which involves examining 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 encourage the commenter to also review the FY 2022 Conversion Table that was made publicly available via the internet on the CDC website at: https://www.cdc.gov/​nchs/​icd/​icd10cm.htm, the V38.1 ICD-10 MS-DRG Definitions Manual that 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, and Table 6A.—New Diagnosis Codes associated with the proposed and final rules (available via the internet on the CMS website at: https://www.cms.gov/​medicare/​acute-inpatient-pps/​fy-2022-ipps-proposed-rule-home-page#Tables) for information regarding MDC, MS-DRG and severity level assignment for these diagnosis codes. As shown in the Conversion Table, the predecessor code for new diagnosis code T80.82XA is diagnosis code T80.89XA; as shown in Appendix B—Diagnosis Code/MDC/MS-DRG Index of the V38.1 ICD-10 MS-DRG Definitions Manual, diagnosis code T80.89XA is assigned to MDC 16 in MS-DRGs 814-816; and as shown in Table 6A.- New Diagnosis Codes, the finalized severity level assignments for the diagnosis codes inquired about are as follows:

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Effective October 1, 2021, when diagnosis code G92.03, G92.04 or G92.05 are reported as a secondary diagnosis, the GROUPER logic would recognize any one of these codes as a CC and the appropriate “with CC” MS-DRG would be assigned.

After consideration of the public comments we received, we are finalizing our proposal 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. We are also finalizing our proposal to revise the structure of MS-DRGs 814, 815, and 816 by removing the logic that includes a principal diagnosis of T80.89XA 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 discussed 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 the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25147 through 25149), we discussed a request we received 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 in response to this final policy. 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 Start Printed Page 44882resources to place inferior vena cava filters across the patient population should be proposed.

As indicated in the proposed rule, 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, consistent with our established process, 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:

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.

As discussed in the proposed rule, in response to the request to exclude ICD-10-PCS code 06H03DZ from a list of qualifying procedures if CMS' analysis did not support creating a three-way split for MS-DRGs 829 and 830, we noted that 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' analysis did not support creating a three-way split for MS-DRGs 829 and 830, we indicated the change in designation from O.R. procedure to non-O.R. procedure was recent, only becoming effective October 1, 2020. We indicated our clinical advisors continued 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. We noted our clinical advisors stated that our FY 2021 final policy resulted in an O.R. designation of 06H03DZ that better reflects the associated technical complexity and hospital resource use of this procedure. We also noted that 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 the proposed rule and this final rule. We indicated we continue to develop our process and methodology, and that we will provide more detail in future rulemaking.Start Printed Page 44883

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

Comment: Commenters expressed support for CMS' proposal to maintain the current structure of MS-DRGs 829 and 830 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other Procedures with and without CC/MCC, respectively) and not create a three-way severity level split.

Response: We thank the commenters for their support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the current structure of MS-DRGs 829 and 830, without modification, for FY 2022.

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

We annually conduct a review of procedures producing assignment to MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-DRGs 987 through 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) on the basis of volume, by procedure, to see if it would be appropriate to move cases reporting these procedure codes out of these MS-DRGs into one of the surgical MS-DRGs for the MDC into which the principal diagnosis falls. The data are arrayed in two ways for comparison purposes. We look at a frequency count of each major operative procedure code. We also compare procedures across MDCs by volume of procedure codes within each MDC. We use this information to determine which procedure codes and diagnosis codes to examine.

We identify those procedures occurring in conjunction with certain principal diagnoses with sufficient frequency to justify adding them to one of the surgical MS-DRGs for the MDC in which the diagnosis falls. We also consider whether it would be more appropriate to move the principal diagnosis codes into the MDC to which the procedure is currently assigned.

In addition to this internal review, we also consider requests that we receive to examine cases found to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989 to determine if it would be appropriate to add procedure codes to one of the surgical MS DRGs for the MDC into which the principal diagnosis falls or to move the principal diagnosis to the surgical MS DRGs to which the procedure codes are assigned.

Based on the results of our review of the claims data from the 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 proposed to move the cases reporting the procedures and/or principal diagnosis codes described in this section of this rule from MS-DRGs 981 through 983 or MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC into which the principal diagnosis or procedure is assigned.

As discussed in section II.D.3.b. of the preamble of the proposed rule and this final 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 noted 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 approach, therefore the three procedure codes identified (0W310ZZ, 0W313ZZ, and 0W314ZZ) warrant assignment to the “craniotomy” MS-DRGs.

We stated in the proposed rule that 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”.

As noted in the proposed rule, 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.

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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.

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.

As noted in the proposed rule, our clinical advisors stated these procedures Start Printed Page 44887describing 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 stated in the proposed rule that we believed 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 proposed 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.

Comment: Commenters agreed with our proposal to add procedure codes 0W310ZZ, 0W313ZZ, and 0W314ZZ to MDC 01 in MS-DRGs 23, 24, 25, 26, and 27.

Response: We thank the commenters for their support.

After consideration of the public comments received, we are finalizing our proposal to add procedure codes 0W310ZZ, 0W313ZZ, and 0W314ZZ describing bleeding in the cranial cavity to MDC 01 in MS-DRGs 23, 24, 25, 26, and 27 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 proposed 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.

As discussed in section II.D.3.a. of the preamble of the proposed rule and this final 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.

As stated in the proposed rule, 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, we stated that 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 proposed 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.

Comment: Commenters supported our proposal to reassign procedure codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to reassign procedure codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ describing excision of subcutaneous tissue from the chest, back, and abdomen, respectively, from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989 for FY 2022.

As discussed in section II.D.4.b. of the preamble of the proposed rule and this final 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.

As noted in the proposed rule, 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 Start Printed Page 44889costs 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 the 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 the proposed rule, we stated that for 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, we stated that 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 proposed 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.

Comment: Commenters agreed with our proposal to reassign the listed procedure codes describing LITT of various body parts from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989.

Response: We thank the commenters for their support.

After consideration of the public comments received, we are finalizing our proposal to reassign the listed procedure codes describing LITT of various body parts from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989, without modification, for FY 2022.

As also discussed in section II.D.4.b. of the preamble of the proposed rule and this final 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. We stated that 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 proposed 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.Start Printed Page 44890

Comment: Commenters supported our proposal to reassign procedure codes 0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989.

Response: We appreciate the commenters' support.

After consideration of the public comments received, we are finalizing our proposal to reassign the procedure codes describing repair of the esophagus via percutaneous approach, natural or artificial opening approach, and natural or artificial opening endoscopic approach, from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989, without modification, for FY 2022.

As discussed in section II.D.11.c.24. of the preamble of the 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 Diagnosis with MCC, with CC, without CC/MCC, respectively).

In the proposed rule we noted that 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, we stated that our clinical advisors believe a non-extensive O.R. designation is suitable for this procedure.

We noted in the proposed rule that 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, we stated in the proposed rule that 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 proposed 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.

Comment: Commenters supported our proposal to reassign procedure code 0T9D0ZZ from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989.

Response: We thank the commenters for their support.

After consideration of the public comments received, we are finalizing our proposal to reassign procedure code 0T9D0ZZ from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989, without modification, 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 final rule, we are Start Printed Page 44891making 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, particularly with the implementation of ICD-10.

We discussed in the FY 2020 IPPS/LTCH PPS proposed rule that as a result of this planned review and potential restructuring, procedures that are currently designated as O.R. procedures may no longer warrant that designation, and conversely, procedures that are currently designated as non-O.R. procedures may warrant an O.R. type of designation. We intend to consider the resources used and how a procedure should affect the MS-DRG assignment. We may also consider the effect of specific surgical approaches to evaluate whether to subdivide specific MS-DRGs based on a specific surgical approach. We plan to utilize our available MedPAR claims data as a basis for this review and the input of our clinical advisors. As part of this comprehensive review of the procedure codes, we also intend to evaluate the MS-DRG assignment of the procedures and the current surgical hierarchy because both of these factor into the process of refining the ICD-10 MS-DRGs to better recognize complexity of service and resource utilization.

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.

We stated in the proposed rule that 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, stated that we will provide more detail on this analysis and the methodology for conducting this review in future rulemaking.

Comment: Several commenters agreed it is appropriate to allow additional time for the claims data to stabilize prior to selecting the timeframe to analyze for the comprehensive procedure code review.

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

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

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

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

With respect to some of the comments received in response to our discussion of several requests to change the designation of specific ICD-10-PCS procedure codes from non-O.R. Start Printed Page 44892procedures to O.R. procedures, we wish to clarify that when we state that a current non-O.R. procedure is frequently or generally performed in the outpatient setting, we are indicating that the resources involved in the performance of the procedure are such that, it does not specifically require an inpatient admission and is typically not the underlying reason for the admission, nor a major factor in the consumption of resources for an inpatient admission. While an inpatient provider may elect to perform a specific procedure in the operating room or a procedure room, that does not constitute automatic designation of the procedure as an O.R. procedure under the IPPS. Alternatively, a procedure that is performed at the bedside does not constitute automatic designation of the procedure as a non-O.R. procedure under the IPPS. In addition, when we state that a current non-O.R. procedure is typically performed in conjunction with another O.R. procedure, we are indicating that there is generally another O.R. procedure reported on the claim that is primarily responsible for impacting the utilization of resources for that admission.

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.

In the proposed rule, we noted that 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. procedures in the ICD-10 MS-DRG Version 38.1 Definitions Manual.

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We stated we reviewed these procedures and that our clinical advisors agreed 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. We stated that these procedures do not typically require the resources of an operating room, and are not surgical in nature. Therefore, we proposed 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. We stated in the proposed rule that, under this proposal, these procedures would no longer impact MS-DRG assignment.

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Comment: Commenters supported CMS' proposal to change the designation of the 22 procedure codes describing open drainage of subcutaneous tissue and fascia from O.R. procedures to non-O.R. procedures.

Response: We appreciate the commenters for their support.

Comment: Other commenters opposed CMS' proposal. Commenters stated that these procedures are indeed performed in the operating room under general anesthesia, are surgical in nature, and significantly increase costs. A commenter also stated that ICD-10-PCS codes describing open drainage “with drainage device” are rarely (if ever) assigned because when drains are placed at the conclusion of open drainage procedures, drains are considered integral to the performance of a procedure. Some commenters acknowledged there may be certain circumstances in which these procedures do not require an operating room but note they are not consistently conducive to being performed at bedside, especially when the patient is not able to tolerate the procedure, or when performed in for community hospitals that do not have hybrid O.R.s or special procedure rooms. A commenter stated that a review of the cases at their facility shows that approximately 80% of the procedures describing open drainage of subcutaneous tissue and fascia are performed in an O.R. setting requiring anesthesia, with a much lesser percentage performed at the bedside.

Another commenter noted in the FY 2018 IPPS proposed rule, these same 22 ICD-10-PCS codes were identified and a commenter opposed the proposal to redesignate these codes at that time. In response to the issues raised by this commenter, CMS agreed in the FY 2018 IPPS final rule to maintain the designation of the 22 procedure codes. This commenter stated the rationale to maintain these 22 codes as O.R. procedures has not changed and that there is no safe way to effectively drain an infection involving the subfascial plane without the resources of an O.R.

Response: Our clinical advisors reviewed the commenters' concerns and state that treatment practices have continued to shift since FY 2018 rulemaking. Procedures describing the open drainage of subcutaneous tissue and fascia can now be safely performed in the outpatient setting and when performed during a hospitalization, it is typically in conjunction with another O.R. procedure. In cases where procedures describing open drainage of subcutaneous tissue and fascia are the only procedures performed in an admission, the admission is quite likely due to need for IV antibiotics as opposed to the need for operating room resources in an inpatient setting. Our clinical advisors continue to state that these procedures 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. In response to the comment that ICD-10-PCS codes describing open drainage “with drainage device” are rarely (if ever) assigned, while we agree there are limited scenarios in which the qualifier “with drainage device” is applicable, we note coding is dependent on the documentation in the medical record.

In response to the comments that differentiate when these procedures are performed at bedside versus in hybrid O.R.s versus in special procedure rooms, we note that the designation of procedure as a non-O.R. procedure is Start Printed Page 44895not determined solely by the location in the facility in which the procedure was performed. While the site in which the procedure is performed and the procedural approach are important considerations in the designation of a procedure, other clinical factors such as procedure complexity, resource utilization, and need for anesthesia administration are also relevant to whether a procedure would typically require the resources of an operating room. In that regard, our clinical advisors state procedure codes that describe the open drainage of subcutaneous tissue and fascia do not reflect the technical complexity or resource intensity in comparison to other procedures that are designated as O.R. procedures. As noted by the commenters, while there are circumstances where performing open drainage in the operating room under sedation or general anesthesia may be necessary, open drainage procedures can be performed at the bedside or settings other than an operating room under general anesthesia.

We also note we have identified that the designation of the 22 procedure codes that describe the open drainage of subcutaneous tissue and fascia as O.R. procedures is a result of a replication error in transitioning to ICD-10. This replication error led to ICD-10-PCS procedure codes that describe the open drainage of subcutaneous tissue and fascia being listed as comparable translations for ICD-9-CM code 83.09 (Other incision of soft tissue), which was designated as a non-extensive O.R. procedure under the ICD-9-CM MS-DRGs Version 32. Conversely, this replication error led ICD-10-PCS procedure codes that describe the open drainage of subcutaneous tissue and fascia with a drainage device being listed as comparable translations for ICD-9-CM code 86.04 (Other incision with drainage of skin and subcutaneous tissue) which was designated as a non-O.R. procedure under the ICD-9-CM MS-DRGs Version 32. Designating the 22 procedure codes that describe the open drainage of subcutaneous tissue and fascia as non-O.R. procedures will result in a more accurate replication of the comparable procedure, under the ICD-9-CM MS-DRGs Version 32 which was 86.04, not 83.09 and is more aligned with current shifts in treatment practices.

After consideration of the public comments we received, for the reasons stated, we are finalizing our proposal, without modification, to change the designation of the 22 procedure codes listed in the preceding table from O.R. procedures to non-O.R. procedures, effective October 1, 2021.

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.

We noted in the proposed rule that 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 agreed 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.

We stated in the proposed rule that upon further review and consideration, our clinical advisors agreed 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 proposed 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).

Comment: Commenters agreed with our proposal to designate procedure code XW0Q316 as an O.R. procedure.

Response: After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure code XW0Q316 from a non-O.R. procedure to an O.R. procedure, effective October 1, 2021.

(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.

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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. In the proposed rule, we stated that our clinical advisors reviewed this issue and disagreed 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 stated 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 stated 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ.

Comment: A commenter supported CMS' proposal to maintain the current non-O.R. designation for procedure codes describing open drainage of maxilla or mandible.

Response: We appreciate the commenters' support.

Comment: Another commenter opposed CMS' proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ and stated that the treatment of jaw infections requires open drainage of jaw bones performed in the operating room under anesthesia in conjunction with intravenous antibiotics to prevent sepsis. This commenter stated that procedures that are typically performed in the outpatient surgical setting should be designated as O.R. procedures and that the frequency in which procedures are performed in the inpatient setting should not determine the designation. The commenter asserted that when these procedures are necessitated during inpatient stays, providers should be compensated for operating room resources because the payment of infrequent surgeries as non-O.R. procedures results in significant uncompensated surgical resources for facilities.

Response: Our clinical advisors reviewed the commenters' concerns and continue to support maintaining the current non-O.R. designation for procedure codes describing open drainage of maxilla or mandible and disagree that the procedures describing the open drainage of the maxilla or mandible typically require the resources of an operating room. Our clinical advisors state that if admission is required for the treatment of a jaw infection as the commenter suggested, the admission is quite likely due to need for IV antibiotics as opposed to the need for operating room resources in an inpatient setting.

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

After consideration of the public comments we received, for the reasons stated, we are finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ, without modification, for FY 2022.

(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 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 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. We stated in the proposed rule that our clinical advisors reviewed this issue and Start Printed Page 44897disagreed 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 noted 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 stated that thoracoscopic drainage of the pleural cavities is performed for distinct indications in clinically different scenarios. Our clinical advisors further stated 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 noted 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ.

Comment: A commenter supported CMS' proposal to maintain the current non-O.R. designation for procedure codes describing the thoracoscopic extirpation of matter from the pleural cavities.

Response: We appreciate the commenters' support.

Comment: Another commenter opposed CMS' proposal to maintain the non-O.R. designation of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ. The commenter stated that procedure codes describing the thoracoscopic extirpation of matter from the pleural cavities can indeed be primary surgical procedures in procedures such as when the thoracoscopic evacuation of a traumatic hemothorax is performed during hospitalization, and stated that all thoracoscopic lung procedures should be designated as O.R. procedures because they are performed in the operating room and require general anesthesia with one lung ventilation. This commenter also stated that ICD-10-PCS codes for thoracoscopic drainage of pleural cavities have been appropriately designated as O.R. procedures, and the only difference between root operations “Drainage” and “Extirpation” is strictly the consistency of the substance removed.

Response: Our clinical advisors reviewed the commenters' concerns and continue to support maintaining the current non-O.R. designation for procedure codes of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ because the resources involved in furnishing these procedures does not warrant designation as O.R. procedures. Our clinical advisors continue to state 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. Our clinical advisors also do not agree that unilaterally all thoracoscopic lung procedures should be designated as O.R. procedures.

Our clinical advisors reiterate that thoracoscopic drainage of the pleural cavities and thoracoscopic extirpation of the pleural cavities are performed for distinct indications in clinically different scenarios and disagree with the suggestion that the only difference between the PCS root operations “Drainage” and “Extirpation” is the consistency of the substance removed. Rather, drainage procedures take out, or let out, fluids and/or gases from a body part and are typically performed in the pleural cavity for indications such as congestive heart failure, infection, hemothorax and empyema. Extirpation procedures are not limited to removing blood clots. 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.

In response to the commenter that stated highlighted the thoracoscopic evacuation of a traumatic hemothorax as an example of how these procedures can indeed be primary surgical procedures, we note hemothorax is defined as a collection of blood in the pleural cavity. The thoracoscopic evacuation of a hemothorax would meet the ICD-10-PCS definition of a “Drainage” procedure. The procedure codes describing the drainage of the pleural cavity were not the subject of this request.

After consideration of the public comments we received, for the reasons stated, we are finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ, without modification, for FY 2022.

(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.

In the proposed rule we noted 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.

We also noted that 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 agreed with the requestor that procedure codes 0BBN0ZX and 0BBP0ZX would typically require the resources of an operating room. We stated that our clinical advisors also agreed that procedure codes 0BBN0ZX and 0BBP0ZX would typically require the resources of an operating room. Therefore, we proposed 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 Start Printed Page 44898(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).

Comment: Commenters supported our proposal to designate procedure codes 0BBN0ZX and 0BBP0ZX as O.R. procedures.

Response: After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure codes 0BBN0ZX and 0BBP0ZX from non-O.R. procedures to O.R. procedures, without modification, effective October 1, 2021.

(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 to 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 stated in the proposed rule that we agreed 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 proposed 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 also proposed 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).

Comment: Commenters supported our proposal to designate ICD-10-PCS procedure codes 02WY3DZ, 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ as O.R. procedures. A commenter noted that they agreed that these procedures do typically require the resources of an operating room.

Response: After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure code 02WY3DZ from a non-O.R. procedure to an O.R. procedure, effective October 1, 2021, without modification. We are also finalizing our proposal to change the designation of procedure codes 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ from non-O.R. procedures to O.R. procedure, without modification, effective October 1, 2021.

(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.

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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 final 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). In section II.D.5.d of this final rule we also summarize and respond to the comments regarding our proposal to maintain the assignment of these codes in MS-DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures with and without MCC, respectively) in MDC 05 for the reasons discussed, and discuss our finalization of that proposal.

We stated in the proposed rule that our clinical advisors reviewed this related issue and believed 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. We noted the ICD-10-CM diagnosis codes used to report atrial fibrillation are currently assigned to MDC 05 (Diseases and Disorders of the Circulatory System). We stated our clinical advisors believed 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 further stated 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. We stated when performed with an open approach or percutaneous endoscopic approach, these procedures share similar factors such as complexity, and resource utilization with all other LAAC procedures. Therefore, we proposed 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.

Comment: Commenters supported maintaining the current designation of procedure codes describing left atrial appendage closure as non-O.R. procedures affecting the MS-DRGs to which they are assigned. Another commenter stated although they believe it would be reasonable for these PCS codes to be designated as O.R. procedures in the event they are necessitated during a hospitalization with a principal diagnosis outside of MDC 05, their own data analysis showed when performed, cases reporting LAAC procedures are being assigned to MS-DRGs 273 and 274 or into higher-weighted cardiac MS-DRGs corresponding with other cardiac procedures performed during the same stay.

Response: After consideration of the public comments we received, we are finalizing our proposal 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, without modification, for FY 2022.Start Printed Page 44900

(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. In the proposed rule, we stated our clinical advisors reviewed this issue and disagreed 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 stated the percutaneous endoscopic drainage of joints can be performed using local or regional anesthesia, and general anesthesia is not always required. We stated that 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ.

Comment: A commenter supported CMS' proposal to maintain the non-O.R. designation of procedure codes describing percutaneous endoscopic drainage of shoulder, knee, and hip joints.

Response: We appreciate the commenters' support.

Comment: A commenter opposed CMS' proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ. This commenter stated that an O.R. designation should not be determined based on whether or not a surgery is most often performed as an outpatient or based on the type anesthesia required during the surgery. This commenter also noted that some patients who undergo outpatient surgery require inpatient admission instead of release home. The commenter stated that retention of non-O.R. procedure status for surgeries most often performed as outpatient results in providers not being reimbursed for surgical resources when patients require conversion to inpatient, while those discharged from outpatient surgery are paid a surgical APC. The commenter also included a portion of an operative report from its facility to demonstrate that an arthroscopic drainage procedure was performed under general anesthesia at their facility.

Response: Our clinical advisors reviewed the commenters' concerns and continue to support maintaining the current non-O.R. designation for ICD-10-PCS procedure codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ. In reviewing the operative report included in the comment, our clinical advisors note that using a single isolated case, with only an operative report provided and without other diagnostic information on the patient, does not provide a clear picture of the circumstances of that admission, nor does it inform whether the procedure requires the resources of an operating room more broadly. For any procedure, there may be instances where performing this procedure is best done in the setting of an operative room using general anesthesia. However, when looking more broadly at the procedure being described by the ICD-10-PCS codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ, our clinical advisors state in most instances, the percutaneous endoscopic drainage of joints does not require the resources of an operative room.

With regard to the comments about the implications for reimbursement when cases are converted from outpatient to inpatient, we note that the goals of changing the designation of procedures from non-O.R. to O.R., or vice versa, are to better clinically represent the resources involved in caring for these patients and to enhance the overall accuracy of the system.

Therefore, after consideration of the public comments we received, for the reasons stated, we are finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ, without modification, for FY 2022.

(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, Start Printed Page 44901percutaneous 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. In the proposed rule, we stated that our clinical advisors reviewed this issue and disagreed that procedure codes describing the arthroscopic irrigation of joints should be designated as O.R. procedures. Our clinical advisors noted 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 noted 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 3E1U48X and 3E1U48Z.

Comment: A commenter supported CMS' proposal to maintain the non-O.R. designation of procedure codes describing arthroscopic irrigation of joints.

Response: We appreciate the commenters' support.

Comment: Another commenter opposed CMS' proposal to maintain the non-O.R. designation of ICD-10-PCS procedure codes 3E1U48X and 3E1U48Z. This commenter acknowledged that arthroscopic irrigations may be performed with other definitive procedures such as bone debridement and synovectomy, but stated that some are indeed performed as sole definitive operating room procedures. This commenter stated there are no other PCS codes for irrigational debridement of joints; when minor debridement is performed in conjunction with more significant primary procedures, minor debridement is considered inherent and not separately reportable.

Response: We appreciate the commenters' feedback. We are unclear from the comment why the commenter references the ICD-10-PCS guidelines related to debridement procedures, as this topic relates to the arthroscopic irrigation of joints. Our clinical advisors reviewed the commenters' concerns and continue to 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.

After consideration of the public comments we received, we are finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 3E1U48X and 3E1U48Z, without modification, for FY 2022.

(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.

We stated in the proposed rule that our clinical advisors reviewed the procedures described by these four procedure codes and agreed 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 proposed 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 also proposed 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 Start Printed Page 44902and 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).

Comment: Commenters supported our proposal to designate procedure codes 0SS734Z, 0SS834Z, 0SS934Z and 0SSB34Z as O.R. procedures.

Response: After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure codes 0SS734Z, 0SS834Z, 0SS934Z and 0SSB34Z from non-O.R. procedures to O.R. procedures, without modification, effective October 1, 2021.

(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.

In the proposed rule we stated that 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.

We stated that our clinical advisors reviewed the procedures described by these eight procedure codes and agreed 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 proposed 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).

Comment: Commenters supported our proposal to designate the listed procedure codes as O.R. procedures.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure codes 0RHK08Z, 0RHJ08Z, 0RPK08Z, 0RPJ08Z, 0RPJ48Z, 0RPK48Z, 0RHJ48Z, and 0RHK48Z from non-O.R. procedures to O.R. procedures, without modification, effective October 1, 2021.

(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.

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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 stated in the proposed rule that we agreed 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 proposed 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).

Comment: Commenters supported our proposal to designate ICD-10-PCS procedure codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, and 0WC54ZZ as O.R. procedures. A commenter noted that they agreed that these procedures do typically require the resources of an operating room.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of procedure codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ from non-O.R. procedures to O.R. procedures, without modification, effective October 1, 2021.

(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. We stated in the proposed rule that while we disagreed that drainage procedures are comparable to extirpation procedures, we agreed with the requestor that these 22 ICD-10-PCS procedure codes typically require the resources of an operating room. We noted that our clinical advisors stated 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 proposed 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).

Comment: Commenters supported our proposal to designate 22 ICD-10-PCS procedure codes that describe the open extirpation of matter from the subcutaneous tissue and fascia as O.R. procedures. A commenter noted that they agreed that open incision with direct visualization of subcutaneous tissue and fascia for the evacuation of a substance typically requires the resources of an operating room.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to change the designation of the 22 procedure codes Start Printed Page 44905listed in the preceding table from non-O.R. procedures to O.R. procedures, without modification, effective October 1, 2021.

(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.

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.

In the proposed rule we stated that our clinical advisors reviewed this request and did 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 proposed to maintain the current non-O.R. designation for procedure codes 0JPT0MZ, 0JPT02Z, 0JPT0WZ, 0JWT0MZ, 0JWT0WZ, and 0JWT03Z for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure codes 0JPT0MZ, 0JPT02Z, 0JPT0WZ, 0JWT0MZ, 0JWT0WZ, and 0JWT03Z.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure codes 0JPT0MZ, 0JPT02Z, 0JPT0WZ, 0JWT0MZ, 0JWT0WZ, and 0JWT03Z, effective October 1, 2021.

(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.

We stated in the proposed rule that 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. We stated that in reviewing this request, we also identified the following four related codes:

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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. In the proposal rule, we stated that while we agreed 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 did not agree that these procedures should be designated as O.R. procedures. Our clinical advisors stated 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.

We noted with advancements in procedural techniques, feeding devices are most commonly placed using a percutaneous endoscopic approach. Our clinical advisors further stated feeding devices are usually not placed using an open surgical approach; this approach is generally 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 stated 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 stated 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure code 0DHA0UZ. We also proposed 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. We stated in the proposed rule that, under this proposal, this procedure would no longer impact MS-DRG assignment.

Comment: A commenter supported CMS' proposal and stated they agreed that neither the procedure code describing open insertion of feeding device into stomach nor the procedure code describing open insertion of feeding device into jejunum should be designated as an O.R. procedure.

Response: We appreciate the commenters' support.

Comment: Other commenters opposed CMS' proposal. A commenter stated that ICD-10-PCS procedure codes that describe the open insertion of a feeding device should be designated as O.R. procedures because they require operating room resources with general anesthesia, and involve incision through the abdominal wall and into the peritoneal cavity with direct visualization. The commenter noted that these procedures may be performed as standalone procedures in patients who are unable to have feeding tubes placed by percutaneous or percutaneous endoscopic approaches because of anatomy, prior surgeries, and adhesions. Another commenter stated that open feeding tube insertions are associated with higher resource use, are prone to more complications, have higher mortality rates, and can have extended recovery times and these procedures should have an OR designation to accurately reflect the resource use for the patient.

Response: We appreciate the commenters' feedback and concern. In response to the comment that these procedures may be performed as standalone procedures in patients who are unable to have feeding tubes placed by percutaneous or percutaneous endoscopic approaches, our clinical advisors note there may be instances when performing any procedure is best done in the setting of an operative room using general anesthesia. However, when looking more broadly at the procedures being described, and the manner in which these procedures are most often performed and their associated resource use our clinical advisors believe that the open insertion of a feeding device in the gastrointestinal system do not warrant an O.R. designation. They noted that these procedures, when performed during a hospitalization, are typically in conjunction with another O.R. procedure and maintain that procedures that describe the open insertion of a feeding device into the esophagus, stomach, small intestine, duodenum, jejunum and ileum are all clinically aligned. Accordingly, 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.

After consideration of the public comments we received, for the reasons stated, we are finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure code 0DHA0UZ for FY 2022, without modification. We are also finalizing our proposal to change the designation of ICD-10-PCS procedure code 0DH60UZ from O.R. procedure to non-O.R. procedure, without modification, effective October 1, 2021.

(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.

In the proposed rule, we stated 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. We stated in reviewing this request, we also identified the following four related codes:

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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. We stated in the proposed rule that our clinical advisors reviewed this request and did not agree that unilaterally all laparoscopic procedures should be designated as O.R. procedures. We stated that 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 stated 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. We stated our clinical advisors believed 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0DH64UZ and 0DHA4UZ.

Comment: A commenter supported CMS' proposal and stated they agreed that 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.

Response: We appreciate the commenters' support.

Comment: Other commenters opposed CMS' proposal. A commenter stated that ICD-10-PCS procedure codes that describe the percutaneous endoscopic insertion of a feeding device should be designated as O.R. procedures. This commenter stated that laparoscopic procedures, whether performed inpatient or outpatient, are indeed surgical procedures which require general anesthesia, have increased procedural risks, and require high skill and specialized equipment. The commenter stated that when necessitated during inpatient stays, even if infrequent, providers should be compensated for operating room resources. Another commenter stated that these procedures require the use of an operating room and should be classified in a manner that reflects the resources expended by the facility in the care and treatment of the patient.

Response: We appreciate the commenters' feedback and concern. Our clinical advisors reviewed the commenters' concerns and continue to state the percutaneous endoscopic insertion of a feeding device into the stomach or the jejunum, does not require the resources of an operating room or general anesthesia. Our advisors state these procedures are not surgical in nature, and because treatment practices have shifted are generally performed in the outpatient setting. When performed in the inpatient setting, patients are generally in the hospital for the treatment of another condition as opposed to the need for operating room resources in an inpatient setting. Accordingly, when considering clinical factors such as the site of procedure, the procedure complexity, and resource utilization, when performed in the inpatient setting, they believe the non-O.R. designation of procedure codes describing the percutaneous endoscopic insertion of a feeding device is supported.

Therefore, after consideration of the public comments we received, we are finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0DH64UZ and 0DHA4UZ, without modification, for FY 2022.

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

As discussed in the proposed rule, 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. We stated in the proposed rule that our clinical advisors reviewed this issue and disagreed that procedures describing the endoscopic fragmentation of calculi within the kidney pelvis, ureter, bladder, and bladder neck are typically performed in the operating room. We stated that 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 proposed 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. As indicated in the proposed rule, in response to the second 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. We stated in the proposed rule that 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 further stated 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, we stated 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 proposed to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0TCB8ZZ and 0TCC8ZZ. We also proposed 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. We stated in the proposed rule that, under this proposal, these procedures would no longer impact MS-DRG assignment.

Comment: Commenters supported CMS' proposal. A commenter stated they supported maintaining the non-O.R. designation of procedure codes describing fragmentation in the kidney pelvis, ureter, bladder, and bladder neck via natural or artificial opening endoscopic approach. This commenter supported maintaining the non-O.R. designation of the procedure codes describing endoscopic extirpation of matter from the bladder and bladder neck and removing six procedure codes describing endoscopic extirpation of matter from the kidney, kidney pelvis, and ureter from the O.R. procedure list. This commenter stated they agreed that procedures describing endoscopic extirpation from a urinary body part should all have the same non-O.R. designation.

Response: We appreciate the commenters' support.

Comment: Other commenters opposed CMS' proposal. These commenters stated endoscopic kidney and ureter procedures traverse narrow tubular structures and require the operating room with specialized equipment, positioning, image-guidance, and general anesthesia to obtain the surgical precision and satisfactory pain control that cannot be provided at the bedside. A commenter stated that although providers attempt to manage conditions that might warrant the performance of these procedures in the outpatient setting, some patients fail outpatient preventative measures and require both medical and surgical interventions in an inpatient setting.

Response: We appreciate the commenters' feedback and concern.

Our clinical advisors reviewed the commenters' concerns and state with development of better instrumentation and surgical techniques, many patients now have endoscopic fragmentation procedures and endoscopic extirpation procedures performed in an outpatient setting. In response to the comment that these procedures cannot be provided at the bedside, we wish to clarify the designation of a procedure as a non-O.R. procedure is not limited to procedures that can be performed at the patient's bedside. While the site in which the procedure is performed and the procedural approach are important considerations in the designation of a procedure, there are other clinical factors such as procedure complexity, resource utilization, and need for anesthesia administration that should also be considered. In this regard, our clinical advisors state endoscopic fragmentation procedures and endoscopic extirpation procedures are not surgical in nature, because treatment practices have shifted and they do not generally require the resources of an operating room or general anesthesia in an inpatient setting.

After consideration of the public comments we received, for the reasons stated, we are, without modification, (1) finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and 0TFC8ZZ for FY 2022 and (2) finalizing our proposal to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0TCB8ZZ and 0TCC8ZZ for FY 2022. We are also finalizing our proposal to change the designation of ICD-10-PCS procedure codes 0TC08ZZ, 0TC18ZZ, 0TC38ZZ, 0TC48ZZ, 0TC68ZZ, and 0TC78ZZ from O.R. procedures to non-O.R. procedures, without modification, effective October 1, 2021.

(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 Start Printed Page 44910purposes 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.

We stated in the proposed rule that our clinical advisors reviewed this procedure and did 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 proposed to maintain the current non-O.R. designation for procedure code 0TP98DZ for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure code 0TP98DZ.

Response: We appreciate the commenters' support.

Comment: A commenter did not support our proposal based on the rationale provided. According to the commenter, patients may be admitted with sepsis and/or urinary tract infections associated with ureteral stents and require joint focuses of treatment consisting of removal of a stent(s) and intravenous antibiotics. The commenter stated that patients who require stent removal during hospitalization are those who have chronic diagnoses, altered anatomy, or encrusted stents that prevent removal from being performed elsewhere.

Response: Our clinical advisors maintain that generally, the procedure to remove a ureteral stent endoscopically is not the focus or driver of resources for an inpatient admission. With respect to patients who may be admitted with or acquire an infection during the hospitalization, it is understood that these patients typically consume additional resources, however, our clinical advisors do not believe that the endoscopic removal of a ureteral stent is a contributing factor. For those patients who have a chronic diagnosis, altered anatomy or an encrusted stent requiring stent removal specifically in an inpatient setting, we believe additional analysis may be advantageous to determine if a subset of the claims reporting these conditions warrant any modifications to the GROUPER logic. However, the commenter did not provide a list of the specific ICD-10-CM diagnoses describing these conditions for CMS to consider in its analysis for FY 2022. We intend to work with the commenter and examine this issue for consideration in future rulemaking.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure code 0TP98DZ, effective October 1, 2021.

(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.

In the proposed rule we stated that 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 proposed to maintain the current non-O.R. designation for procedure code 0TJ98ZZ for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure code 0TJ98ZZ.

Response: We appreciate the commenters' support.

Comment: A commenter did not support our proposal to maintain the non-O.R. designation for procedure code 0TJ98ZZ based on the rationale 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. According to the commenter, whether or not a procedure is most often performed as an outpatient should not be the determining factor for designating O.R. status.

Response: Our clinical advisors maintain that typically, this procedure is not the basis for an inpatient admission and as noted earlier in this section, when we state a current non-O.R. procedure is typically performed in conjunction with another O.R. procedure, we are indicating that there is generally another O.R. procedure reported on the claim that is primarily responsible for impacting the utilization of resources for that admission. We wish to clarify that statements indicating a procedure is most often performed as an outpatient or in an outpatient setting are not the single determining factor in our proposals to maintain or modify the designation of a procedure code from O.R. to non-O.R. or vice versa, rather, the proposals set forth in rulemaking are based on a combination of clinical judgment and data, when applicable.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure code 0TJ98ZZ, without modification, effective October 1, 2021.

(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. The six procedure codes are listed in the following table.

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In the proposed rule we noted that under the ICD-10-PCS procedure classification, biopsy procedures are identified by the 7th digit qualifier value “diagnostic” in the code description.

We also noted that 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 proposed to maintain the current non-O.R. designation for procedure codes 0TB08ZX, 0TB18ZX, 0TB38ZX, 0TB48ZX, 0TB68ZX, and 0TB78ZX for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure codes 0TB08ZX, 0TB18ZX, 0TB38ZX, 0TB48ZX, 0TB68ZX, 0TB78ZX.

Response: We appreciate the commenters' support.

Comment: A commenter did not support our proposal. According to the commenter, urinary obstructions and associated urinary tract infections with or without sepsis can necessitate inpatient admissions, and abnormalities on imaging can raise suspicion for malignancy requiring biopsy for diagnosis and treatment. The commenter stated that when these procedures are standalone procedures performed during inpatient hospitalizations, they warrant O.R. procedure status for the same reasons as the procedures describing endoscopic fragmentation or extirpation of the urinary tract described previously.

Response: We appreciate the commenter's feedback. Similar to the reasons discussed for procedures describing the endoscopic fragmentation or extirpation of the urinary tract, our clinical advisors maintained that with the development of better instrumentation and surgical techniques, many patients now have endoscopic procedures involving urinary tract structures performed in an outpatient setting. In addition, they stated that these procedures are not surgical in nature.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure codes 0TB08ZX, 0TB18ZX, 0TB38ZX, 0TB48ZX, 0TB68ZX, and 0TB78ZX, without modification, effective October 1, 2021.

(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.

In the proposed rule we stated that 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 proposed to maintain the current non-O.R. designation for procedure codes 0T767DZ, 0T777DZ, and 0T787DZ for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure codes 0T767DZ, 0T777DZ, and 0T787DZ.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure codes 0T767DZ, 0T777DZ, and 0T787DZ, without modification, effective October 1, 2021.Start Printed Page 44912

(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.

In the proposed rule we stated that 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 room. Therefore, we proposed to maintain the current non-O.R. designation for procedure codes 0T763DZ, 0T773DZ, and 0T783DZ for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure codes 0T763DZ, 0T773DZ, and 0T783DZ.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure codes 0T763DZ, 0T773DZ, and 0T783DZ, without modification, effective October 1, 2021.

(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.

In the proposed rule we stated that 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 proposed to maintain the current non-O.R. designation for procedure code 0T7D8DZ for FY 2022.

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure code 0T7D8DZ.

Response: We appreciate the commenters' support.

Comment: A commenter did not support our proposal to maintain the non-O.R. designation for procedure code 0T7D8DZ based on the rationale that this procedure is primarily performed in the outpatient setting and is generally not the cause for the patient's admission and utilization of resources. According to the commenter, whether or not a procedure is most often performed as an outpatient should not be the determining factor in O.R status. The commenter asserted that in its review of procedures currently assigned to MS-DRGs 671 and 672, the procedure described by procedure code 0T7D8DZ utilizes comparable O.R. resources.

Response: We thank the commenter for their feedback. Our clinical advisors maintain that typically, this procedure is not the basis for an inpatient admission and if performed, it does not increase the consumption of hospital resources to warrant O.R. status. With regard to the list of procedures currently assigned to MS-DRGs 671 and 672 and the assertion that code 0T7D8DZ utilizes comparable O.R. resources, as stated in previous rulemaking, as well as, the preamble of the FY 2022 IPPS/LTCH PPS proposed rule and this final rule, we are in the process of reviewing prior stakeholder feedback on criteria and factors to consider on what constitutes a procedure being designated as O.R versus non-O.R. as a component of our broader comprehensive procedure code review. We are allowing additional time for the claims data to stabilize prior to selecting the timeframe to analyze for this review considering the PHE, and to develop our proposed methodology. Therefore, we will be examining all the procedures currently assigned to MS-DRGs 671 and 672 in connection with that process and discuss if modifications to the designation of code 0T7D8DZ are warranted.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure code 0T7D8DZ, without modification, effective October 1, 2021.

(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.

We noted in the proposed rule that 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 proposed to maintain the current non-O.R. designation for procedure code 0VQ50ZZ for FY 2022.Start Printed Page 44913

Comment: Commenters supported our proposal to maintain the non-O.R. designation for procedure code 0VQ50ZZ.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation for procedure code 0VQ50ZZ, without modification, effective October 1, 2021.

(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.

We stated in the proposed rule that 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. In the proposed rule we stated that 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. In the proposed rule we noted that 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 proposed 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 and noted that 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 the proposed rule and this final rule for further discussion related to procedure code 0T9D0ZZ.

Comment: Commenters supported our proposal to maintain the non-O.R. designation of procedure code 0U9L0ZZ and to change the designation of procedure codes 0U9L0ZX and 0U9LXZX from O.R. to non-O.R.

Response: We appreciate the commenters' support.

After consideration of the public comments we received, we are finalizing our proposal to maintain the non-O.R. designation of procedure code 0U9L0ZZ and t