Proposed Rule2022-08268
Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2023 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Costs Incurred for Qualified and Non-Qualified Deferred Compensation Plans; and Changes to Hospital and Critical Access Hospital Conditions of Participation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 10, 2022
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule would: Revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital- related costs of acute care hospitals; make changes relating to Medicare graduate medical education (GME) for teaching hospitals; update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs). In additon it would establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare Promoting Interoperability Program; provide estimated and newly established performance standards for the Hospital Value- Based Purchasing (VBP) Program; and propose updated policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, PPS-Exempt Cancer Hospital Reporting (PCHQR) Program, and the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). It would also revise the hospital and critical access hospital (CAH) conditions of participation (CoPs) for infection prevention and control and antibiotic stewardship programs; and codify and clarify policies related to the costs incurred for qualified and non-qualified deferred compensation plans. Lastly, this proposed rule would provide updates on the Rural Community Hospital Demonstration Program and the Frontier Community Health Integration Project.
Full Text
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[Federal Register Volume 87, Number 90 (Tuesday, May 10, 2022)]
[Proposed Rules]
[Pages 28108-28746]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-08268]
[[Page 28107]]
Vol. 87
Tuesday,
No. 90
May 10, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 413, 482, et al.
Medicare Program; Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2023 Rates;
Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Costs Incurred for Qualified and Non-Qualified Deferred Compensation
Plans; and Changes to Hospital and Critical Access Hospital Conditions
of Participation; Proposed Rule
Federal Register / Vol. 87, No. 90 / Tuesday, May 10, 2022 / Proposed
Rules
[[Page 28108]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 413, 482, 485, and 495
[CMS-1771-P]
RIN 0938-AU84
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2023 Rates;
Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Costs Incurred for Qualified and Non-Qualified Deferred Compensation
Plans; and Changes to Hospital and Critical Access Hospital Conditions
of Participation
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would: Revise the Medicare hospital
inpatient prospective payment systems (IPPS) for operating and capital-
related costs of acute care hospitals; make changes relating to
Medicare graduate medical education (GME) for teaching hospitals;
update the payment policies and the annual payment rates for the
Medicare prospective payment system (PPS) for inpatient hospital
services provided by long-term care hospitals (LTCHs). In additon it
would establish new requirements and revise existing requirements for
eligible hospitals and critical access hospitals (CAHs) participating
in the Medicare Promoting Interoperability Program; provide estimated
and newly established performance standards for the Hospital Value-
Based Purchasing (VBP) Program; and propose updated policies for the
Hospital Readmissions Reduction Program, Hospital Inpatient Quality
Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired
Condition (HAC) Reduction Program, PPS-Exempt Cancer Hospital Reporting
(PCHQR) Program, and the Long-Term Care Hospital Quality Reporting
Program (LTCH QRP). It would also revise the hospital and critical
access hospital (CAH) conditions of participation (CoPs) for infection
prevention and control and antibiotic stewardship programs; and codify
and clarify policies related to the costs incurred for qualified and
non-qualified deferred compensation plans. Lastly, this proposed rule
would provide updates on the Rural Community Hospital Demonstration
Program and the Frontier Community Health Integration Project.
DATES: To be assured consideration, comments must be received at one of
the addresses provided in the ADDRESSES section, no later than 5 p.m.
EDT on June 17, 2022.
ADDRESSES: In commenting, please refer to file code CMS-1771-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions under the ``submit a comment'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1771-P, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1771-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Donald Thompson, (410) 786-4487, and
Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRG
Relative Weights, Wage Index, Hospital Geographic Reclassifications,
Graduate Medical Education, Capital Prospective Payment, Excluded
Hospitals, Medicare Disproportionate Share Hospital (DSH) Payment
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.
Allison Pompey, (410) 786-2348, New Technology Add-On Payments and
New COVID-19 Treatments Add-on Payments Issues.
Mady Hue, <a href="/cdn-cgi/l/email-protection#fd909c8f949188d3958898bd9e908ed395958ed39a928b"><span class="__cf_email__" data-cfemail="c5a8a4b7aca9b0ebadb0a085a6a8b6ebadadb6eba2aab3">[email protected]</span></a>, and Andrea Hazeley,
<a href="/cdn-cgi/l/email-protection#e2838c86908783cc8a8398878e879ba2818f91cc8a8a91cc858d94"><span class="__cf_email__" data-cfemail="6a0b040e180f0b44020b100f060f132a09071944020219440d051c">[email protected]</span></a>, MS-DRG Classifications Issues.
Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital
Demonstration Program Issues.
Jeris Smith, <a href="/cdn-cgi/l/email-protection#dbb1bea9b2a8f5a8b6b2afb39bb8b6a8f5b3b3a8f5bcb4ad"><span class="__cf_email__" data-cfemail="7f151a0d160c510c12160b173f1c120c5117170c51181009">[email protected]</span></a>, Frontier Community Health
Integration Project Demonstration Issues.
Sophia Chan, <a href="/cdn-cgi/l/email-protection#5a29352a32333b7439323b341a39372974323229743d352c"><span class="__cf_email__" data-cfemail="13607c637b7a723d707b727d53707e603d7b7b603d747c65">[email protected]</span></a>, Hospital Readmissions
Reduction Program--Administration Issues.
Jennifer Robinson, <a href="/cdn-cgi/l/email-protection#84eee1eaeaede2e1f6aaf6ebe6edeaf7ebeac4e7e9f7aaececf7aae3ebf2"><span class="__cf_email__" data-cfemail="cea4aba0a0a7a8abbce0bca1aca7a0bda1a08eada3bde0a6a6bde0a9a1b8">[email protected]</span></a>, Hospital
Readmissions Reduction Program--Measures Issues.
Jennifer Tate, <a href="/cdn-cgi/l/email-protection#a5cfc0cbcbccc3c0d78bd1c4d1c0e5c6c8d68bcdcdd68bc2cad3"><span class="__cf_email__" data-cfemail="167c7378787f707364386277627356757b65387e7e6538717960">[email protected]</span></a>, Hospital-Acquired
Condition Reduction Program--Administration Issues.
Yuling Li, <a href="/cdn-cgi/l/email-protection#dda4a8b1b4b3baf3b1b49dbeb0aef3b5b5aef3bab2ab"><span class="__cf_email__" data-cfemail="49303c2520272e672520092a243a6721213a672e263f">[email protected]</span></a>, Hospital-Acquired Condition
Reduction Program--Measures Issues.
Julia Venanzi, <a href="/cdn-cgi/l/email-protection#f49e81989d95da82919a959a8e9db4979987da9c9c87da939b82"><span class="__cf_email__" data-cfemail="3b514e57525a154d5e555a5541527b58564815535348155c544d">[email protected]</span></a>, Hospital Inpatient
Quality Reporting and Hospital Value-Based Purchasing Programs--
Administration Issues.
Melissa Hager, <a href="/cdn-cgi/l/email-protection#e9848c85809a9a88c781888e8c9ba98a849ac781819ac78e869f"><span class="__cf_email__" data-cfemail="19747c75706a6a783771787e7c6b597a746a3771716a377e766f">[email protected]</span></a>, 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.
Ora Dawedeit, <a href="/cdn-cgi/l/email-protection#610e13004f050016040504081521020c124f0909124f060e17"><span class="__cf_email__" data-cfemail="d1bea3b0ffb5b0a6b4b5b4b8a591b2bca2ffb9b9a2ffb6bea7">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting--Administration Issues.
Leah Domino, <a href="/cdn-cgi/l/email-protection#89e5ece8e1a7ede6e4e0e7e6c9eae4faa7e1e1faa7eee6ff"><span class="__cf_email__" data-cfemail="0f636a6e67216b60626661604f6c627c2167677c21686079">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting Program--Measure Issues.
Christy Hughes, <a href="/cdn-cgi/l/email-protection#5c3f342e352f28257234293b34392f1c3f312f7234342f723b332a"><span class="__cf_email__" data-cfemail="96f5fee4ffe5e2efb8fee3f1fef3e5d6f5fbe5b8fefee5b8f1f9e0">[email protected]</span></a>, Long-Term Care Hospital
Quality Reporting Program--Data Reporting Issues.
Elizabeth Holland, <a href="/cdn-cgi/l/email-protection#51343d382b30333425397f393e3d3d303f3511323c227f3939227f363e27"><span class="__cf_email__" data-cfemail="41242d283b20232435296f292e2d2d202f2501222c326f2929326f262e37">[email protected]</span></a>, Medicare
Promoting Interoperability Program.
CAPT Scott Cooper, USPHS, (410) 786-9465, and Dawn Linn,
<a href="/cdn-cgi/l/email-protection#147075637a3a787d7a7a547779673a7c7c673a737b62"><span class="__cf_email__" data-cfemail="234742544d0d4f4a4d4d63404e500d4b4b500d444c55">[email protected]</span></a>, Conditions of Participation Pandemic Reporting
Requirements for Hospitals and Critical Access Hospitals.
[[Page 28109]]
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>. Follow the search instructions on that website to
view public comments.
Tables Available Through the Internet on the CMS Website
The IPPS tables for this fiscal year (FY) 2023 proposed rule are
available through the internet on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index</a>.html. Click on the link on the left side of the
screen titled ``FY 2023 IPPS Proposed rule Home Page'' or ``Acute
Inpatient--Files for Download.'' The LTCH PPS tables for this FY 2023
proposed rule are available through the internet on the CMS website at
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html</a> under the list item for Regulation
Number CMS-1771-P. For further details on the contents of the tables
referenced in this proposed rule, we refer readers to section VI. of
the Addendum to this FY 2023 IPPS/LTCH PPS proposed rule.
Readers who experience any problems accessing any of the tables
that are posted on the CMS websites, as previously identified, should
contact Michael Treitel at (410) 786-4552.
Table of Contents
I. Executive Summary and Background
A. Executive Summary
B. Background Summary
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
D. Summary of the Provisions of This Proposed Rule
E. Advancing Health Information Exchange
F. Proposed Use of FY 2021 Data and Proposed Methodology
Modifications for the FY 2023 IPPS and LTCH PPS Ratesetting
II. Proposed Changes to Medicare Severity Diagnosis-Related Group
(MS-DRG) Classifications and Relative Weights
A. Background
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
C. Proposed FY 2023 MS-DRG Documentation and Coding Adjustment
D. Proposed Changes to Specific MS-DRG Classifications
E. Recalibration of the FY 2023 MS-DRG Relative Weights
F. Add-On Payments for New Services and Technologies for FY 2023
III. Proposed Changes to the Hospital Wage Index for Acute Care
Hospitals
A. Background
B. Worksheet S-3 Wage Data for the Proposed FY 2022 Wage Index
C. Verification of Worksheet S-3 Wage Data
D. Method for Computing the Proposed FY 2022 Unadjusted Wage
Index
E. Proposed Occupational Mix Adjustment to the FY 2023 Wage
Index
F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2023 Occupational Mix Adjusted Wage
Index
G. Application of the Rural Floor, Application of the State
Frontier Floor, and Continuation of the Low Wage Index Hospital
Policy, and Proposed Budget Neutrality Adjustment
H. Proposed FY 2023 Wage Index Tables
I. Proposed Revisions to the Wage Index Based on Hospital
Redesignations and Reclassifications
J. Proposed Out-Migration Adjustment Based on Commuting Patterns
of Hospital Employees
K. Reclassification From Urban to Rural Under Section
1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
L. Process for Requests for Wage Index Data Corrections
M. Proposed Labor-Related Share for the FY 2023 Wage Index
IV. Proposed Payment Adjustment for Medicare Disproportionate Share
Hospitals (DSHs) for FY 2023 (Sec. 412.106)
A. General Discussion
B. Eligibility for Empirically Justified Medicare DSH Payments
and Uncompensated Care Payments
C. Empirically Justified Medicare DSH Payments
D. Uncompensated Care Payments
E. Proposed Supplemental Payment for Indian Health Service and
Tribal Hospitals and Puerto Rico Hospitals for FY 2023 and
Subsequent Fiscal Years
F. Counting Days Associated With Section 1115 Demonstrations in
the Medicaid Fraction
V. Other Decisions and Changes to the IPPS for Operating Costs
A. Proposed Changes in the Inpatient Hospital Updates for FY
2022 (Sec. 412.64(d))
B. Rural Referral Centers (RRCs)--Proposed Annual Updates to
Case-Mix Index (CMI) and Discharge Criteria (Sec. 412.96)
C. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.
412.101)
D. Proposed Changes in the Medicare-Dependent, Small Rural
Hospital (MDH) Program (Sec. 412.108)
E. Proposed Indirect Medical Education (IME) Payment Adjustment
Factor (Sec. 412.105)
F. Proposed Payment for Indirect and Direct Graduate Medical
Education Costs (Sec. Sec. 412.105 and 413.75 Through 413.83)
G. Proposed Payment Adjustment for Certain Clinical Trial and
Expanded Access Use Immunotherapy Cases (Sec. Sec. 412.85 and
412.312)
H. Hospital Readmissions Reduction Program: Proposed Updates and
Changes (Sec. Sec. 412.150 Through 412.154)
I. Hospital Value-Based Purchasing (VBP) Program: Proposed
Policy Changes
J. Hospital-Acquired Conditions (HAC) Reduction Program:
Proposed Updates and Changes (Sec. 412.170)
K. Rural Community Hospital Demonstration Program
VI. Proposed Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
C. Proposed Annual Update for FY 2023
VII. Proposed Changes for Hospitals Excluded From the IPPS
A. Proposed Rate-of-Increase in Payments to Excluded Hospitals
for FY 2023
B. Critical Access Hospitals (CAHs)
VIII. Proposed Changes to the Long-Term Care Hospital Prospective
Payment System (LTCH PPS) for FY 2023
A. Background of the LTCH PPS
B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
LTC-DRG) Classifications and Relative Weights for FY 2023
C. Proposed Changes to the LTCH PPS Payment Rates and Other
Proposed Changes to the LTCH PPS for FY 2023
IX. Quality Data Reporting Requirements for Specific Providers and
Suppliers
A. Assessment of the Impact of Climate Change and Health Equity
B. Overarching Principles for Measuring Healthcare Quality
Disparities Across CMS Quality Programs--Request for Information
C. Continuing to Advance to Digital Quality Measurement and the
Use of Fast Healthcare Interoperability Resources (FHIR) in Hospital
Quality Programs--Request for Information
D. Advancing the Trusted Exchange Framework and Common
Agreement-Request for Information
E. Hospital Inpatient Quality Reporting (IQR) Program
F. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
G. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
H. Proposed Changes to the Medicare Promoting Interoperability
Program
X. Changes for Hospitals and Other Providers and Suppliers
A. Codification of the Costs Incurred for Qualified and Non-
Qualified Deferred Compensation Plans
B. Condition of Participation (CoP) Requirements for Hospitals
and CAHs To Report Data Elements To Address Any Future Pandemics and
Epidemics as Determined by the Secretary
C. Request for Public Comments on IPPS Payment Adjustment for
N95 Respirators That Are Wholly Domestically Made
XI. MedPAC Recommendations
XII. Other Required Information
A. Publicly Available Files
B. Collection of Information Requirements
C. Response to Comments
Addendum--Schedule of Standardized Amounts, Update Factors, and
Rate-of-
[[Page 28110]]
Increase Percentages Effective With Cost Reporting Periods Beginning
on or After October 1, 2022 and Payment Rates for LTCHs Effective
for Discharges Occurring on or After October 1, 2022
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2023 IPPS/LTCH PPS proposed rule would make payment and
policy changes under the Medicare inpatient prospective payment systems
(IPPS) for operating and capital-related costs of acute care hospitals
as well as for certain hospitals and hospital units excluded from the
IPPS. In addition, it would make payment and policy changes for
inpatient hospital services provided by long-term care hospitals
(LTCHs) under the long-term care hospital prospective payment system
(LTCH PPS). This proposed rule also would make policy changes to
programs associated with Medicare IPPS hospitals, IPPS-excluded
hospitals, and LTCHs. In this FY 2023 proposed rule, we are proposing
to implement a permanent policy to cap wage index decreases as well as
continuing policies to address wage index disparities impacting low
wage index hospitals. We also are proposing to make changes relating to
Medicare graduate medical education (GME) for teaching hospitals and
new technology add-on payments.
We are proposing to establish new requirements and revise existing
requirements for eligible hospitals and CAHs participating in the
Medicare Promoting Interoperability Program.
We are proposing updated policies for the Hospital Readmissions
Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program,
Hospital Value-Based Purchasing (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. We are also requesting feedback across
programs on health impacts due to climate change and on overarching
principles in measuring healthcare quality disparities in hospital
quality programs and value-based purchasing programs. We are also
seeking feedback on advancing the Trusted Exchange Framework and Common
Agreement (TEFCA). Additionally, due to the impact of the COVID-19 PHE
on measure data used in our value-based purchasing programs, we are
proposing to suppress several measures in the Hospital VBP Program and
HAC Reduction Program. In addition to these measure suppressions for
the Hospital VBP Program, we are proposing to implement a special
scoring methodology for FY 2023 that results in each hospital receiving
a value-based incentive payment amount that matches their 2 percent
reduction to the base operating DRG payment amount. Similarly, we are
also proposing to suppress all six measures in the HAC Reduction
Program for the FY 2023 program year. If finalized as proposed, for the
FY 2023 program year, hospitals participating in the HAC Reduction
Program will not be given a measure score, a Total HAC score, nor will
hospitals receive a payment penalty. We are also providing estimated
and newly established performance standards for the Hospital VBP
Program. For the Hospital Readmissions Reduction Program, we are
proposing to resume the use of the one affected measure under the
proposed measure suppression policy for the FY 2024 applicable period
following suppression of this measure for the FY 2023 applicable
period, and incorporating measure updates to the six condition/
procedure measures addressed by the Hospital Readmission Reduction
Program to account for patient history of COVID-19.
Under various statutory authorities, we either discuss continued
program implementation or propose to make changes to the Medicare IPPS,
the LTCH PPS, other related payment methodologies and programs for FY
2023 and subsequent fiscal years, and other policies and provisions
included in this rule. These statutory authorities include, but are not
limited to, the following:
<bullet> 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).
<bullet> 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.
<bullet> Sections 123(a) and (c) of the BBRA (Pub. L. (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.
<bullet> 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.
<bullet> Section 1886(a)(4) of the Act, which specifies that costs
of approved educational activities are excluded from the operating
costs of inpatient hospital services. Hospitals with approved graduate
medical education (GME) programs are paid for the direct costs of GME
in accordance with section 1886(h) of the Act.
<bullet> 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.
<bullet> 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.''
<bullet> 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.
<bullet> 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.
<bullet> 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
[[Page 28111]]
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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> Section 1861(e) of the Act provides the specific statutory
authority for the hospital CoPs; section 1820(e) of the Act provides
similar authority for CAHs. The hospital provision at section
1861(e)(9) of the Act authorizes the Secretary to issue any regulations
he or she deems necessary to protect the health and safety of patients
receiving services in those facilities; the CAH provision at section
1820(e)(3) of the Act authorizes the Secretary to issue such other
criteria as he or she may require.
2. Summary of the Major Provisions
The following is a summary of the major provisions in this proposed
rule. In general, these major provisions are being proposed as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
proposed changes in this proposed rule is presented in section I.D. of
the preamble of this proposed rule.
a. Proposed MS-DRG Documentation and Coding Adjustment
Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub.
L. 112- 240) amended section 7(b)(1)(B) of Public Law 110-90 to require
the Secretary to make a recoupment adjustment to the standardized
amount of Medicare payments to acute care hospitals to account for
changes in MS-DRG documentation and coding that do not reflect real
changes in case-mix, totaling $11 billion over a 4-year period of FYs
2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments
represented the amount of the increase in aggregate payments as a
result of not completing the prospective adjustment authorized under
section 7(b)(1)(A) of Pub. L. 110-90 until FY 2013. Prior to the ATRA,
this amount could not have been recovered under Pub. L. 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 2023, we are proposing to make an adjustment of
+ 0.5 percent to the standardized amount.
b. Proposed Use of FY 2021 Data and Proposed Methodology Modifications
for the FY 2023 IPPS and LTCH PPS Ratesetting
For the IPPS and LTCH PPS ratesetting, our longstanding goal is
always to use the best available data overall. In section I.F. of the
preamble of this proposed rule, we discuss our proposal to return to
our historical practice of using the most recent data available for
purposes of FY 2023 ratesetting, including the FY 2021 MedPAR claims
and FY 2020 cost report data, with certain proposed modifications to
our usual ratesetting methodologies to account for the anticipated
decline in COVID-19 hospitalizations of Medicare beneficiaries at IPPS
hospitals and LTCHs as compared to FY 2021. As discussed in greater
detail in section I.F of the preamble of this proposed rule, we believe
that it is reasonable to assume that some Medicare beneficiaries will
continue to be hospitalized with COVID-19 at IPPS hospitals and LTCHs
in FY 2023. Given this expectation, we believe it is appropriate to use
FY 2021 data, as the most recent available data during the period of
the COVID-19 PHE, for purposes of the FY 2023 IPPS and LTCH PPS
ratesetting. However, as also discussed in greater detail in section
I.F. of the preamble of this proposed rule, we believe it is reasonable
to assume based on the information available at this time that there
will be fewer COVID-19 hospitalizations in FY 2023 than in FY 2021.
Therefore, we are proposing to use the FY 2021 data for purposes of the
FY 2023 IPPS and LTCH PPS ratesetting but with modifications to our
usual ratesetting methodologies to account for the anticipated decline
in COVID-19 hospitalizations of Medicare beneficiaries at IPPS
hospitals and LTCHs as compared to FY 2021. As discussed in section
I.O. of Appendix A of this proposed rule, we are also requesting
comments on, as an alternative to our proposed approach, the use of the
FY 2021 data for purposes of FY 2023 ratesetting without the proposed
modifications to our usual methodologies for the calculation of the FY
2023 MS-DRG and MS-LTC-DRG relative weights or the usual methodologies
used to determine the FY 2023 outlier fixed-loss amount for IPPS cases
and LTCH PPS standard Federal payment rate cases.
c. Proposed Continuation of the Low Wage Index Hospital Policy
To help mitigate wage index disparities between high wage and low
[[Page 28112]]
wage 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 our intention that this policy would be
effective for at least 4 years, beginning in FY 2020, in order to allow
employee compensation increases implemented by these hospitals
sufficient time to be reflected in the wage index calculation. We are
proposing for the low wage index hospital policy to continue for FY
2023, and are also proposing to apply this policy in a budget neutral
manner by applying an adjustment to the standardized amounts.
d. Proposed Permanent Cap on Wage Index Decreases
Consistent with section 1886(d)(3)(E) of the Act, we adjust the
IPPS standardized amounts for area differences in hospital wage levels
by a factor (established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the hospital compared to
the national average hospital wage level and update the wage index
annually based on a survey of wages and wage-related costs of short-
term, acute care hospitals. As described in section III.N. of the
preamble of this proposed rule, we have further considered the comments
we received during the FY 2022 rulemaking recommending a permanent 5
percent cap policy to prevent large year-to-year variations in wage
index values as a means to reduce overall volatility for hospitals.
Under the authority at sections 1886(d)(3)(E) and 1886(d)(5)(I)(i) of
the Act, for FY 2023 and subsequent years, we are proposing to apply a
5-percent cap on any decrease to a hospital's wage index from its wage
index in the prior FY, regardless of the circumstances causing the
decline. That is, we are proposing that a hospital's wage index for FY
2023 would not be less than 95 percent of its final wage index for FY
2022, and that for subsequent years, a hospital's wage index would not
be less than 95 percent of its final wage index for the prior FY. We
are also proposing to apply this proposed wage index cap policy in a
budget neutral manner through a national adjustment to the standardized
amount under our authority in sections 1886(d)(3)(E) and
1886(d)(5)(I)(i) of the Act.
e. Proposed DSH Payment Adjustment and Additional Payment for
Uncompensated Care
Under section 1886(r) of the Act, which was added by section 3133
of the Affordable Care Act, starting in FY 2014, Medicare
disproportionate share hospitals (DSHs) receive 25 percent of the
amount they previously would have received under the statutory formula
for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The
remaining amount, equal to 75 percent of the amount that otherwise
would have been paid as Medicare DSH payments, is paid as additional
payments after the amount is reduced for changes in the percentage of
individuals that are uninsured. Each Medicare DSH will receive an
additional payment based on its share of the total amount of
uncompensated care for all Medicare DSHs for a given time period.
In this proposed rule, we are proposing to update our estimates of
the three factors used to determine uncompensated care payments for FY
2023. We are also proposing to continue to use uninsured estimates
produced by CMS' Office of the Actuary (OACT) as part of the
development of the National Health Expenditure Accounts (NHEA) in
conjunction with more recently available data in the calculation of
Factor 2. For FY 2023, we are proposing to use the two most recent
years of audited data on uncompensated care costs from Worksheet S-10
of the FY 2018 cost reports and the FY 2019 cost reports to calculate
Factor 3 in the uncompensated care payment methodology for all eligible
hospitals. In addition, for FY 2024 and subsequent fiscal years, we are
proposing to use a three-year average of the data on uncompensated care
costs from Worksheet S-10 for the three most recent fiscal years for
which audited data are available. Beginning in FY 2023, we are
proposing to discontinue the use of low-income insured days as a proxy
for uncompensated care to determine Factor 3 for Indian Health Service
(IHS) and Tribal hospitals and hospitals located in Puerto Rico. In
addition, we are proposing certain methodological changes for
calculating Factor 3 for FY 2023 and subsequent fiscal years.
We recognize that our proposal to discontinue the use of the low-
income insured days proxy to calculate uncompensated care payments for
Indian Health Service (IHS) and Tribal hospitals and hospitals located
in Puerto Rico could result in a significant financial disruption for
these hospitals. Accordingly, we are proposing to use our exceptions
and adjustments authority under section 1886(d)(5)(I) to establish a
new supplemental payment for IHS and Tribal hospitals and hospitals
located in Puerto Rico, beginning in FY 2023.
Additionally, we are proposing to revise our regulation governing
the calculation of the Medicaid fraction of the DSH calculation. Under
this proposal, we would revise our regulation to explicitly reflect our
interpretation of the language ``regarded as'' ``eligible for medical
assistance under a State plan approved under title XIX'' in section
1886(d)(5)(F)(vi) of the Act to mean patients who receive health
insurance authorized by a section 1115 demonstration or patients who
pay for all or substantially all of the cost of such health insurance
with premium assistance authorized by a section 1115 demonstration,
where state expenditures to provide the health insurance or premium
assistance may be matched with funds from Title XIX. Moreover, of the
groups we ``regard as'' Medicaid eligible, we propose to include in the
Medicaid fraction only the days of those patients who obtain health
insurance directly or with premium assistance that provides essential
health benefits (EHB) as set forth in 42 CFR part 440, subpart C, for
an Alternative Benefit Plan (ABP), and for patients obtaining premium
assistance, only the days of those patients for which the premium
assistance is equal to or greater than 90 percent of the cost of the
health insurance, provided the patient is not also entitled to Medicare
Part A.
f. Proposed Changes to GME Payments Based on Milton S. Hershey Medical
Center, et al. v. Becerra Litigation
On May 17, 2021, the U.S. District Court for the District of
Columbia ruled against CMS's method of calculating direct GME payments
to teaching hospitals when those hospitals' weighted full-time
equivalent (FTE) counts exceed their direct GME FTE cap. In Milton S.
Hershey Medical Center, et al. v. Becerra, the court ordered CMS to
recalculate reimbursement owed, holding that CMS's regulation
impermissibly modified the statutory weighting factors. The plaintiffs
in these consolidated cases alleged that as far back as 2005, the
proportional reduction that CMS applied to the weighted FTE count when
the weighted FTE count exceeded the FTE cap conflicted with the
Medicare statute, and it was an arbitrary and capricious exercise of
agency discretion under the Administrative Procedure Act. The court
held that the
[[Page 28113]]
proportional reduction methodology impermissibly modified the weighting
factors statutorily assigned to residents and fellows. The court
granted the motion for summary judgment to plaintiffs' motions, denied
defendant's, and remanded to the Agency so that it could recalculate
plaintiffs' reimbursement payments consistent with the court's opinion.
After reviewing the statutory language regarding the direct GME FTE
cap and the court's opinion, we have decided to propose a modified
policy to be applied prospectively for all teaching hospitals, as well
as retroactively to the providers and cost years in Hershey and certain
other providers as described in greater detail in section V.F.2. of the
preamble of this proposed rule. The proposed modified policy would
address situations for applying the FTE cap when a hospital's weighted
FTE count is greater than its FTE cap, but would not reduce the
weighting factor of residents that are beyond their initial residency
period to an amount less than 0.5. Specifically, effective for cost
reporting periods beginning on or after October 1, 2022, we are
proposing that the hospital's unweighted number of FTE residents
exceeds the FTE cap, and the number of weighted FTE residents also
exceeds that FTE cap, the respective primary care and obstetrics and
gynecology weighted FTE counts and other weighted FTE counts are
adjusted to make the total weighted FTE count equal the FTE cap. If the
number of weighted FTE residents does not exceed that FTE cap, then the
allowable weighted FTE count for direct GME payment is the actual
weighted FTE count.
g. Reduction of Hospital Payments for Excess Readmissions
We are proposing to make changes to policies for the Hospital
Readmissions Reduction Program, which was established under section
1886(q) of the Act, as amended by section 15002 of the 21st Century
Cures Act. The Hospital Readmissions Reduction Program requires a
reduction to a hospital's base operating DRG payment to account for
excess readmissions of selected applicable conditions. For FY 2017 and
subsequent years, the reduction is based on a hospital's risk-adjusted
readmission rate during a 3-year period for acute myocardial infarction
(AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary
disease (COPD), elective primary total hip arthroplasty/total knee
arthroplasty (THA/TKA), and coronary artery bypass graft (CABG)
surgery. In this FY 2023 IPPS/LTCH PPS proposed rule, we are discussing
the following policies: (1) Proposal to resume use of the Hospital 30-
Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following
Pneumonia Hospitalization measure (NQF #0506) for the FY 2024 program
year; (2) modification of the Hospital 30-Day, All-Cause, Risk-
Standardized Readmission Rate (RSRR) following Pneumonia
Hospitalization measure (NQF #0506) to exclude COVID-19 diagnosed
patients from the measure denominator, beginning with the Hospital
Specific Reports (HSRs) for the FY 2023 program year; and (3)
modification of all six condition/procedure specific measures to
include a covariate adjustment for patient history of COVID-19 within
one year prior to the index admission beginning with the FY 2023
program year. We are also seeking comment on updating the to
incorporate provider performance for socially at-risk populations.
h. Hospital Value-Based Purchasing (VBP) Program
Section 1886(o) of the Act requires the Secretary to establish a
Hospital VBP Program under which value-based incentive payments are
made in a fiscal year to hospitals based on their performance on
measures established for a performance period for such fiscal year. In
this proposed rule, we are proposing to: (1) Suppress the Hospital
Consumer Assessment of Healthcare Providers and Systems (HCAHPS) and
five Hospital Acquired Infection (HAI) measures, for the FY 2023
Program year; and (2) update the baseline periods for certain measures
for the FY 2025 program year. We are also proposing to revise the
scoring and payment methodology for the FY 2023 program year such that
hospitals will not receive Total Performance Scores (TPSs). Instead, we
are proposing to award each hospital a payment incentive multiplier
that results in a value-based incentive payment that is equal to the
amount withheld for the fiscal year (2 percent). We note that we are
also announcing technical updates to the measures in the Clinical
Outcomes Domain.
i. Hospital-Acquired Condition (HAC) Reduction Program
We are proposing changes to the HAC Reduction program, which was
established under Section 1886(p) of the Act, to provide an incentive
to hospitals to reduce the incidence of hospital-acquired conditions.
We refer readers to the FY 2022 IPPS/LTCH PPS final rule for further
details on our measure suppression policy (86 FR 45301 through 45304).
In this FY 2023 IPPS/LTCH PPS proposed rule, we are proposing to: (1)
Suppress the CMS PSI 90 measure and the five CDC NHSN HAI measures from
the calculation of measure scores and the Total HAC Score, thereby not
penalizing any hospital under the HAC Reduction Program FY 2023 program
year; (2) publicly and confidentially report CDC NHSN HAI measure
results but not calculate or report measure results for the CMS PSI 90
measure for the HAC Reduction Program FY 2023 program year; (3)
suppress CY 2021 CDC NHSN HAI measures data from the FY 2024 HAC
Reduction Program Year; (4) update the measure specification to the
minimum volume threshold for the CMS PSI 90 measure beginning with the
FY 2023 program year; (5) update the measure specifications to risk-
adjust for COVID-19 diagnosis in the CMS PSI 90 measure beginning with
the FY 2024 HAC Reduction Program Year; (6) request information from
stakeholders on the potential adoption of two digital National
Healthcare Safety Network (NHSN) measures: The NHSN Healthcare-
associated Clostridioides difficile Infection Outcome measure and NHSN
Hospital-Onset Bacteremia & Fungemia Outcome measure; (7) request
information on overarching principles for measuring healthcare quality
disparities across CMS Quality Programs; (8) update the NHSN CDC HAI
data submission requirements for newly opened hospitals beginning in
the FY 2024 HAC Reduction Program Year; and (9) clarify the removal of
the no mapped location policy beginning with the FY 2023 program year.
j. Hospital Inpatient Quality Reporting (IQR) Program
Under section 1886(b)(3)(B)(viii) of the Act, subsection (d)
hospitals are required to report data on measures selected by the
Secretary for a fiscal year in order to receive the full annual
percentage increase.
In this FY 2023 IPPS/LTCH PPS proposed rule, we are proposing
several changes to the Hospital IQR Program. We are proposing the
adoption of 10 new measures: (1) Hospital Commitment to Health Equity
beginning with the CY 2023 reporting period/FY 2025 payment
determination; (2) Screening for Social Drivers of Health beginning
with voluntary reporting for the CY 2023 reporting period and mandatory
reporting beginning with the CY 2024 reporting period/FY 2026 payment
determination; (3) Screen Positive Rate for Social Drivers of Health
beginning with voluntary reporting for the CY 2023 reporting period and
mandatory reporting beginning with the CY 2024 reporting
[[Page 28114]]
period/FY 2026 payment determination; (4) Cesarean Birth electronic
clinical quality measure (eCQM) with inclusion in the measure set
beginning with the CY 2023 reporting period/FY 2025 payment
determination, and mandatory reporting beginning with the CY 2024
reporting period/FY 2026 payment determination; (5) Severe Obstetric
Complications eCQM with inclusion in the measure set beginning with the
CY 2023 reporting period/FY 2025 payment determination, and mandatory
reporting beginning with the CY 2024 reporting period/FY 2026 payment
determination; (6) Hospital-Harm--Opioid-Related Adverse Events eCQM
(NQF #3501e) beginning with the CY 2024 reporting period/FY 2026
payment determination; (7) Global Malnutrition Composite Score eCQM
(NQF #3592e) beginning with the CY 2024 reporting period/FY 2026
payment determination; (8) Hospital-Level, Risk Standardized Patient-
Reported Outcomes Performance Measure Following Elective Primary Total
Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #3559)
beginning with two voluntary periods, followed by mandatory reporting
for the reporting period which runs from July 1, 2025 through June 30,
2026, impacting the FY 2028 payment determination; (9) Medicare
Spending Per Beneficiary (MSPB) Hospital (NQF #2158) beginning with the
FY 2024 payment determination; and (10) Hospital-Level Risk-
Standardized Complication Rate (RSCR) Following Elective Primary THA/
TKA (NQF #1550) beginning with the FY 2024 payment determination. We
are proposing refinements to two current measures beginning with the FY
2024 payment determination: (1) Hospital[hyphen]Level,
Risk[hyphen]Standardized Payment Associated with an Episode-of-Care for
Primary Elective THA/TKA; and (2) Excess Days in Acute Care (EDAC)
After Hospitalization for Acute Myocardial Infarction (AMI) (NQF
#2881). We are also requesting comment on the potential future
development and inclusion of two National Healthcare Safety Network
(NHSN) measures: (1) Healthcare-Associated Clostridioides difficile
Infection Outcome; and (2) Hospital-Onset Bacteremia & Fungemia
Outcome.
We are proposing changes to current policies related to eCQMs and
hybrid measures: (1) A proposal to modify the eCQM reporting and
submission requirements to increase the number of eCQMs to be reported
beginning with the CY 2024 reporting period/FY 2026 payment
determination; (2) a proposal to remove the zero denominator
declarations and case threshold exemption policies for hybrid measures
beginning with the FY 2026 payment determination; (3) a proposal for
the data submission and reporting requirements for patient-reported
outcome-based performance measures (PRO-PMs) beginning with the FY 2026
payment determination; and (4) a proposal to modify the eCQM validation
policy to increase the requirement from 75 percent to 100 percent of
requested medical records, beginning with the FY 2025 payment
determination.
With respect to public reporting, we are proposing to establish a
hospital designation related to maternity care to be publicly-reported
on a public-facing website beginning in Fall 2023, and are also seeking
comments on other potential associated activities regarding this
designation. Additionally, we are seeking comments on ongoing ways we
can advance digital quality measurement and use of Fast Healthcare
Interoperability Resources (FHIR).
k. PPS-Exempt Cancer Hospital Quality Reporting Program
Section 1866(k)(1) of the Act requires, for purposes of FY 2014 and
each subsequent fiscal year, that a hospital described in section
1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH)
submit data in accordance with section 1866(k)(2) of the Act with
respect to such fiscal year. There is no financial impact to PCH
Medicare payment if a PCH does not participate.
In this FY 2023 IPPS/LTCH PPS proposed rule, we are proposing to
adopt a patient safety exception into the measure removal policy. We
are also proposing to begin public display of the 30-Day Unplanned
Readmissions for Cancer Patients measure (NQF #3188) (PCH-36), the
Proportion of Patients Who Died from Cancer Receiving Chemotherapy in
the Last 14 Days of Life measure (NQF #0210) (PCH-32), the Proportion
of Patients Who Died from Cancer Not Admitted to Hospice measure (NQF
#0215) (PCH-34), the Proportion of Patients Who Died from Cancer
Admitted to the ICU in the Last 30 Days of Life measure (NQF #0213)
(PCH-33), and the Proportion of Patients Who Died from Cancer Admitted
to Hospice for Less Than Three Days measure (NQF #0216) (PCH-35). In
addition, along with the Hospital IQR and HAC Reduction Programs, we
are requesting comment on the potential adoption of two digital
National Healthcare Safety Network (NHSN) measures: The NHSN
Healthcare-associated Clostridioides difficile Infection Outcome
measure and NHSN Hospital-Onset Bacteremia and Fungemia Outcome
measure.
l. Medicare Promoting Interoperability Program
For CY 2023, we are proposing several changes to the Medicare
Promoting Interoperability Program. Specifically, we are proposing: (1)
To require and modify the Electronic Prescribing Objective's Query of
Prescription Drug Monitoring Program (PDMP) measure while maintaining
the associated points at 10 points beginning with the EHR reporting
period in CY 2023; (2) to expand the Query of PDMP measure to include
Schedule II, III, and IV drugs beginning with the CY 2023 EHR reporting
period; (3) to add a new Health Information Exchange (HIE) Objective
option, the Enabling Exchange under the Trusted Exchange Framework and
Common Agreement (TEFCA) measure (requiring a yes/no response), as an
optional alternative to fulfill the objective, beginning with the CY
2023 EHR reporting period; (4) to modify the Public Health and Clinical
Data Exchange Objective by adding an Antibiotic Use and Antibiotic
Resistance (AUR) measure in addition to the current four required
measures (Syndromic Surveillance Reporting, Immunization Registry
Reporting, Electronic Case Reporting, and Electronic Reportable
Laboratory Result Reporting beginning in the CY 2023 EHR reporting
period; (5) to consolidate the current options from three to two levels
of active engagement for the Public Health and Clinical Data Exchange
Objective and to require the reporting of active engagement for the
measures under the objective beginning with the CY 2023 EHR reporting
period; (6) to modify the scoring methodology for the Medicare
Promoting Interoperability Program beginning in CY 2023; (7) to
institute public reporting of certain Medicare Promoting
Interoperability Program data beginning with the CY 2023 EHR reporting
period; (8) to remove regulation text for the objectives and measures
in the Medicare Promoting Interoperability Program from paragraph (e)
under 42 CFR 495.24 and add new paragraph (f) beginning in CY 2023; and
(9) to adopt two new eCQMs in the Medicare Promoting Interoperability
Program's eCQM measure set beginning with the CY 2023 reporting period,
two new eCQMs in the Medicare Promoting Interoperability Program's eCQM
measure set beginning with the CY 2024 reporting period, and modify the
eCQM data reporting and submission requirements to increase the number
of eCQMs required to be reported and the total number of eCQMs
[[Page 28115]]
to be reported beginning with the CY 2024 reporting period, which is in
alignment with the eCQM updates proposed for the Hospital IQR Program.
m. Condition of Participation (CoP) Requirements for Hospitals and CAHs
To Report Data Elements To Address Any Future Pandemics and Epidemics
as Determined by the Secretary
In this proposed rule, we would revise the hospital and CAH
infection prevention and control CoP requirements to continue COVID-19
reporting requirements commencing either upon the conclusion of the
current COVID-19 PHE declaration or the effective date of this proposed
rule, whichever is later, and lasting until April 30, 2024 (unless the
Secretary determines an earlier end date). We also propose additional
requirements to address future PHEs related to epidemics and pandemics.
Specifically, when the Secretary has declared a PHE, we propose to
require hospitals and CAHs to report specific data elements to the
CDC's National Health Safety Network (NHSN), or other CDC-supported
surveillance systems, as determined by the Secretary. The proposed
requirements of this section would apply to local, state, and national
PHEs as declared by the Secretary. Additionally, we are proposing that
the hospital (or CAH) provide the information specified on a daily
basis, unless the Secretary specifies a lesser frequency contingent
upon the state of the PHE and ongoing risks.
n. Comment Solicitation on IPPS and Outpatient Prospective Payment
System (OPPS) Payment Adjustments for Wholly Domestically Made National
Institute for Occupational Safety and Health (NIOSH)-Approved Surgical
N95 Respirators
As discussed in section X.C. of the preamble of this proposed rule,
the Biden-Harris Administration has made it a priority to ensure
America is prepared to continue to respond to COVID-19, and to combat
future pandemics. A significant action to improve hospital preparedness
and readiness for future threats might be to provide payment
adjustments to hospitals to recognize the additional resource costs
they incur to acquire NIOSH-approved surgical N95 respirators that are
wholly domestically made. These surgical respirators, which faced
severe shortage at the onset of the COVID-19 pandemic, are essential
for the protection of beneficiaries and hospital personnel that
interface with patients. The Department of Health and Human Services
(HHS) recognizes that procurement of surgical N95 respirators that are
wholly domestically made, while critical to pandemic preparedness and
protecting health care workers and patients, can result in additional
resource costs for hospitals.
We are interested in feedback and comments on the appropriateness
of payment adjustments that would account for these additional resource
costs. We believe such a payment adjustment could help achieve a
strategic policy goal, namely, sustaining a level of supply resilience
for surgical N95 respirators that is critical to protect the health and
safety of personnel and patients in a public health emergency. We are
considering such payment adjustments to apply to 2023 and potentially
subsequent years. We realize there may be different ways a payment
adjustment to recognize the additional resource costs hospitals incur
when purchasing wholly domestically made NIOSH-approved surgical N95
respirators could be implemented and seek comment on two potential
frameworks and alternative approaches.
3. Summary of Costs and Benefits
The following table provides a summary of the costs, savings, and
benefits associated with the major provisions described in section
I.A.3. of the preamble of this proposed rule.
BILLING CODE 4120-01-P
[[Page 28116]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.000
[[Page 28117]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.001
[[Page 28118]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.002
BILLING CODE 4120-01-C
[[Page 28119]]
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 and, as we are proposing beginning in FY 2023 for IHS and
Tribal hospitals and hospitals located in Puerto Rico, the proposed new
supplemental payment.
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). As section 50205 of the Bipartisan
Budget Act extended the MDH program through FY 2022 only, for FY 2023,
beginning on October 1, 2022, the MDH program will no longer be in
effect absent a change in law. Because the MDH program is not
authorized by statute beyond September 30, 2022, beginning October 1,
2022, all hospitals that previously qualified for MDH status under
section 1886(d)(5)(G) of the Act will no longer have MDH status and
will be paid based on the IPPS Federal rate.
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
[[Page 28120]]
institutions (RNHCIs) are also excluded from the IPPS. Various sections
of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), the
Medicare, Medicaid and SCHIP [State Children's Health Insurance
Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-
113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the
implementation of PPSs for IRF hospitals and units, LTCHs, and
psychiatric hospitals and units (referred to as inpatient psychiatric
facilities (IPFs)). (We note that the annual updates to the LTCH PPS
are included along with the IPPS annual update in this document.
Updates to the IRF PPS and IPF PPS are issued as separate documents.)
Children's hospitals, cancer hospitals, hospitals located outside the
50 States, the District of Columbia, and Puerto Rico (that is,
hospitals located in the U.S. Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa), and RNHCIs continue to be paid
solely under a reasonable cost-based system, subject to a rate-of-
increase ceiling on inpatient operating costs. Similarly, extended
neoplastic disease care hospitals are paid on a reasonable cost basis,
subject to a rate-of-increase ceiling on inpatient operating costs.
The existing regulations governing payments to excluded hospitals
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
The Medicare prospective payment system (PPS) for LTCHs applies to
hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective
for cost reporting periods beginning on or after October 1, 2002. The
LTCH PPS was established under the authority of sections 123 of the
BBRA and section 307(b) of the BIPA (as codified under section
1886(m)(1) of the Act). Section 1206(a) of the Pathway for SGR Reform
Act of 2013 (Pub. L. 113-67) established the site neutral payment rate
under the LTCH PPS, which made the LTCH PPS a dual rate payment system
beginning in FY 2016. Under this statute, effective for LTCH's cost
reporting periods beginning in FY 2016 cost reporting period, LTCHs are
generally paid for discharges at the site neutral payment rate unless
the discharge meets the patient criteria for payment at the LTCH PPS
standard Federal payment rate. The existing regulations governing
payment under the LTCH PPS are located in 42 CFR part 412, subpart O.
Beginning October 1, 2009, we issue the annual updates to the LTCH PPS
in the same documents that update the IPPS.
4. Critical Access Hospitals (CAHs)
Under sections 1814(l), 1820, and 1834(g) of the Act, payments made
to critical access hospitals (CAHs) (that is, rural hospitals or
facilities that meet certain statutory requirements) for inpatient and
outpatient services are generally based on 101 percent of reasonable
cost. Reasonable cost is determined under the provisions of section
1861(v) of the Act and existing regulations under 42 CFR part 413.
5. Payments for Graduate Medical Education (GME)
Under section 1886(a)(4) of the Act, costs of approved educational
activities are excluded from the operating costs of inpatient hospital
services. Hospitals with approved graduate medical education (GME)
programs are paid for the direct costs of GME in accordance with
section 1886(h) of the Act. The amount of payment for direct GME costs
for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year. The existing regulations governing payments to the various
types of hospitals are located in 42 CFR part 413.
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
1. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
114-10)
Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive
adjustment to the standardized amount of Medicare payments to acute
care hospitals for FYs 2018 through 2023. These adjustments follow the
recoupment adjustment to the standardized amounts under section 1886(d)
of the Act based upon the Secretary's estimates for discharges
occurring from FYs 2014 through 2017 to fully offset $11 billion, in
accordance with section 631 of the ATRA. The FY 2018 adjustment was
subsequently adjusted to 0.4588 percent by section 15005 of the 21st
Century Cures Act.
D. Summary of the Provisions of This Proposed Rule
In this proposed rule, we set forth proposed payment and policy
changes to the Medicare IPPS for FY 2023 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 2023.
The following is a general summary of the changes that we are
proposing to make in this proposed rule.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
In section II. of the preamble of this proposed rule, we include
the following:
<bullet> Proposed changes to MS-DRG classifications based on our
yearly review for FY 2023.
<bullet> Proposed adjustment to the standardized amounts under
section 1886(d) of the Act for FY 2023 in accordance with the
amendments made to section 7(b)(1)(B) of Public Law 110-90 by section
414 of the MACRA.
<bullet> Proposed recalibration of the MS-DRG relative weights,
including a proposed 10 percent cap on decreases in an MS-DRG relative
weight from one fiscal year to the next.
<bullet> A discussion of the proposed FY 2023 status of new
technologies approved for add-on payments for FY 2022, a presentation
of our evaluation and analysis of the FY 2023 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 2023 new technology
applicants under the alternative pathways for certain medical devices
and certain antimicrobial products.
<bullet> A proposal to use National Drug Codes (NDCs) to identify
cases involving use of therapeutic agents approved for new technology
add-on payments.
<bullet> A proposal to publicly post online future applications for
new technology add-on payments. Specifically, beginning with the FY
2024 application cycle, we are proposing to post online the completed
application forms and certain related materials and updated application
information submitted subsequent to the initial application submission
for new technology add-on payments, with the exception of certain cost
and volume information and certain additional materials (as discussed
more fully in section II.F.9. of this proposed rule), no later than the
issuance of the proposed rule.
[[Page 28121]]
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble of this proposed rule we are
proposing to make revisions to the wage index for acute care hospitals
and the annual update of the wage data. Specific issues addressed
include, but were not limited to, the following:
<bullet> The proposed FY 2023 wage index update using wage data
from cost reporting periods beginning in FY 2019.
<bullet> Calculation, analysis, and implementation of the proposed
occupational mix adjustment to the wage index for acute care hospitals
for FY 2023 based on the 2019 Occupational Mix Survey.
<bullet> Proposed application of the rural, imputed and frontier
State floors, and continuation of the low wage index hospital policy.
<bullet> 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.
<bullet> Proposed adjustment to the wage index for acute care
hospitals for FY 2023 based on commuting patterns of hospital employees
who reside in a county and work in a different area with a higher wage
index.
<bullet> Proposed permanent cap on annual wage index decreases.
<bullet> Proposed labor-related share for the proposed FY 2023 wage
index.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of this proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
<bullet> Proposed inpatient hospital update for FY 2023.
<bullet> Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status.
<bullet> Proposed payment adjustment for low-volume hospitals for
FY 2023 and subsequent years.
<bullet> The statutorily required IME adjustment factor for FY
2023.
<bullet> Proposed changes to the methodologies for determining
Medicare DSH payments and the additional payments for uncompensated
care.
<bullet> Proposed new supplemental payment for IHS/Tribal and
Puerto Rico hospitals.
<bullet> Proposed revisions to the regulations regarding the
counting of days associated with section 1115 demonstrations in the
Medicaid fraction.
<bullet> Discussion of statutory expiration of the MDH program at
the end of FY 2022.
<bullet> Proposed requirements for payment adjustments under the
Hospital Readmissions Reduction Program for FY 2023.
<bullet> 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.
<bullet> Proposed requirements for payment adjustments to hospitals
under the HAC Reduction Program for FY 2023.
<bullet> Discussion of and proposed changes relating to the
implementation of the Rural Community Hospital Demonstration Program in
FY 2023.
<bullet> Proposed GME payment change in response to Milton S.
Hershey Medical Center et al v. Becerra litigation.
<bullet> Proposed nursing and allied health education program
Medicare Advantage (MA) add-on rates and direct GME MA percent
reductions for CYs 2020 and 2021.
<bullet> Proposal to allow Medicare GME affiliation agreements
within certain rural track full-time equivalent limitations.
<bullet> Proposed payment adjustment for certain clinical trial and
expanded access use immunotherapy cases.
4. Proposed FY 2023 Policy Governing the IPPS for Capital-Related Costs
In section VI. of the preamble to this proposed rule, we discuss
the proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2023.
5. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VII. of the preamble of this proposed rule, we discuss--
<bullet> Proposed changes to payments to certain excluded hospitals
for FY 2023.
<bullet> Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
6. Proposed Changes to the LTCH PPS
In section VIII. of the preamble of this proposed rule, we set
forth proposed changes to the LTCH PPS Federal payment rates, factors,
and other payment rate policies under the LTCH PPS for FY 2023.
7. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
In section IX. of the preamble of this proposed rule, we address
the following:
<bullet> Proposed requirements for the Hospital Inpatient Quality
Reporting (IQR) Program.
<bullet> Proposed changes to the requirements for the quality
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
<bullet> For the Long Term Care Hospital Quality Reporting Program
(LTCH QRP), we are requesting information on CMS' overarching
principles for measuring healthcare disparities across CMS Quality
Programs, including the LTCH QRP. We are also requesting information on
the potential adoption of one future National Healthcare Safety Network
(NHSN) digital quality measure (dQM) for the LTCH QRP, as well as
quality measure concepts under consideration for future years.
<bullet> Proposed changes to requirements pertaining to eligible
hospitals and CAHs participating in the Medicare Promoting
Interoperability Program.
8. Other Proposals and Comment Solicitations Included in This Proposed
Rule
Section X. of the preamble to this proposed rule includes the
following:
<bullet> Proposals to codify policies related to the costs incurred
for qualified and non-qualified deferred compensation plans.
<bullet> Proposed changes pertaining to the CoPs at 42 CFR part 482
for hospitals, and at 42 CFR part 485, subpart F, for CAHs.
<bullet> Solicitation of comments on the appropriateness of payment
adjustments that would account for the additional resource costs for
hospitals for the procurement of wholly domestically made NIOSH-
approved surgical N95 respirators.
9. Other Provisions of This Proposed Rule
Section XI. of the preamble to this proposed rule includes our
discussion of the MedPAC Recommendations.
Section XII. of the preamble to this proposed rule includes the
following:
<bullet> A descriptive listing of the public use files associated
with the proposed rule.
<bullet> The collection of information requirements for entities
based on our proposals.
<bullet> Information regarding our responses to public comments.
[[Page 28122]]
10. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum to this proposed rule, we
set forth proposed changes to the amounts and factors for determining
the proposed FY 2023 prospective payment rates for operating costs and
capital-related costs for acute care hospitals. We proposed to
establish the threshold amounts for outlier cases. In addition, in
section IV. of the Addendum to this proposed rule, we address the
proposed update factors for determining the rate-of-increase limits for
cost reporting periods beginning in FY 2023 for certain hospitals
excluded from the IPPS.
11. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum to the proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2023 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
2023. 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.
12. Impact Analysis
In Appendix A of the proposed rule, we set forth an analysis of the
impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs and other entities.
13. Recommendation of Update Factors for Operating Cost Rates of
Payment for Hospital Inpatient Services
In Appendix B of the proposed rule, as required by sections
1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the
appropriate percentage changes for FY 2023 for the following:
<bullet> 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).
<bullet> Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by certain hospitals
excluded from the IPPS.
<bullet> The LTCH PPS standard Federal payment rate and the site
neutral payment rate for hospital inpatient services provided for LTCH
PPS discharges.
14. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, MedPAC is required to submit a
report to Congress, no later than March 15 of each year, in which
MedPAC reviews and makes recommendations on Medicare payment policies.
MedPAC's March 2022 recommendations concerning hospital inpatient
payment policies address the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We address these recommendations in Appendix B of this proposed rule.
For further information relating specifically to the MedPAC March 2022
report or to obtain a copy of the report, contact MedPAC at (202) 220-
3700 or visit MedPAC's website at <a href="https://www.medpac.gov">https://www.medpac.gov</a>.
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 digital 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) to facilitate collaboration with industry
stakeholders to develop Health Level Seven International[supreg] (HL7)
Fast Healthcare Interoperability Resources[supreg] (FHIR) standards.
These standards could support the exchange and reuse of patient
assessment data derived from the post-acute care (PAC) setting
assessment tools, such as Minimum Data Set (MDS), Inpatient
Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI), Long
Term Care Hospital (LTCH) Continuity Assessment Record and Evaluation
(CARE) Data Set (LCDS), Outcome and Assessment Information Set (OASIS),
and other sources.<SUP>1 2</SUP> The PACIO Project has focused on HL7
FHIR implementation guides for functional status, cognitive status and
new use cases on advance directives, re-assessment timepoints, and
Speech, Language, Swallowing Cognitive communications and Hearing
(SPLASCH).\3\ We encourage PAC provider and health internet technology
(IT) vendor participation as the efforts advance. The CMS Data Element
Library (DEL) continues to be updated and serves as a 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).\4\ The DEL furthers CMS' goal of data standardization and
interoperability. Standards in the DEL can be referenced on the CMS
website (<a href="https://del.cms.gov/DELWeb/pubHome">https://del.cms.gov/DELWeb/pubHome</a>) and in the ONC
Interoperability Standards Advisory (ISA). The 2022 ISA is available at
<a href="https://www.healthit.gov/isa/sites/isa/files/inline-files/2022-ISA-Reference-Edition.pdf">https://www.healthit.gov/isa/sites/isa/files/inline-files/2022-ISA-Reference-Edition.pdf</a>.
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\1\ HL7 FHIR Release 4. Available at: <a href="https://www.hl7.org/fhir/">https://www.hl7.org/fhir/</a>.
\2\ HL7 FHIR. PACIO Functional Status Implementation Guide.
Available at: <a href="https://paciowg.github.io/functional-status-ig/">https://paciowg.github.io/functional-status-ig/</a>.
\3\ PACIO Project. Available at: <a href="http://pacioproject.org/about/">http://pacioproject.org/about/</a>.
\4\ CMS Data Element Library Fact Sheet. Available at: <a href="https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet">https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet</a>.
\5\ Public Law 114-255, sections 4001 through 4008. Available
at: <a href="https://www.govinfo.gov/content/pkg/PLAW-114publ255/html/PLAW-114publ255.htm">https://www.govinfo.gov/content/pkg/PLAW-114publ255/html/PLAW-114publ255.htm</a>.
\6\ The Trusted Exchange Framework (TEF): Principles for Trusted
Exchange (Jan. 2022). Available at: <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf</a>.
\7\ Common Agreement for Nationwide Health Information
Interoperability Version 1 (Jan. 2022). Available at: <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
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The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted
December 13, 2016) required HHS and ONC to take steps further
interoperability for providers in settings across the care
continuum.\5\ Specifically, section 4003(b) of the Cures Act required
ONC to take steps to advance interoperability through the development
of a trusted exchange framework and common agreement aimed at
establishing a universal floor of interoperability across the country.
On January 18, 2022, ONC announced a significant milestone by releasing
the Trusted Exchange Framework \6\ and Common Agreement Version 1.\7\
The Trusted Exchange Frameworkis a set of non-binding principles for
health information exchange, and the Common Agreement is a contract
that advances those principles. The Common Agreement and the
incorporated by reference Qualified Health Information Network
Technical Framework Version 1 establish the technical infrastructure
model and governing approach for different health information networks
and their users to securely share clinical
[[Page 28123]]
information with each other, all under commonly agreed to terms. The
technical and policy architecture of how exchange occurs under the
Trusted Exchange Framework and the Common Agreement follows a network-
of-networks structure, which allows for connections at different levels
and is inclusive of many different types of entities at those different
levels, such as health information networks, healthcare practices,
hospitals, public health agencies, and Individual Access Services (IAS)
Providers.\8\ For more information, we refer readers to <a href="https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement">https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement</a>.
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\8\ The Common Agreement defines Individual Access Services
(IAS) as ``with respect to the Exchange Purposes definition, the
services provided utilizing the Connectivity Services, to the extent
consistent with Applicable Law, to an Individual with whom the QHIN,
Participant, or Subparticipant has a Direct Relationship to satisfy
that Individual's ability to access, inspect, or obtain a copy of
that Individual's Required Information that is then maintained by or
for any QHIN, Participant, or Subparticipant.'' The Common Agreement
defines ``IAS Provider'' as: ``Each QHIN, Participant, and
Subparticipant that offers Individual Access Services.'' See Common
Agreement for Nationwide Health Information Interoperability Version
1, at 7 (Jan. 2022), <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
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We invite providers to learn more about these important
developments and how they are likely to affect hospitals.
F. Proposed Use of FY 2021 Data and Proposed Methodology Modifications
for the FY 2023 IPPS and LTCH PPS Ratesetting
We primarily use two data sources in the IPPS and LTCH PPS
ratesetting: Claims data and cost report data. The claims data source
is the MedPAR file, which includes fully coded diagnostic and procedure
data for all Medicare inpatient hospital bills for discharges in a
fiscal year. The cost report data source is the Medicare hospital cost
report data files from the most recent quarterly Healthcare Cost Report
Information System (HCRIS) release. Our goal is always to use the best
available data overall for ratesetting. Ordinarily, the best available
MedPAR data is 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. Ordinarily, the best available
cost report data is based on the cost reports beginning 3 fiscal years
prior to the fiscal year that is the subject of the rulemaking.
However, in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44789 through
44793), we finalized our proposal to use FY 2019 data for the FY 2022
ratesetting for circumstances where the FY 2020 data (the most recently
available data at the time of rulemaking) was significantly impacted by
the COVID-19 PHE.
As we discussed in the FY 2022 IPPS/LTCH PPS final rule, the FY
2020 MedPAR claims file and the FY 2019 HCRIS dataset both contained
data that was significantly impacted by the COVID-19 PHE, primarily in
that the utilization of services at IPPS hospitals and LTCHs was
generally markedly different for certain types of services in FY 2020
than would have been expected in the absence of the PHE. However, the
most recent vaccination and hospitalization data from the CDC at the
time of development of that rule supported our belief at the time that
the risk of COVID-19 in FY 2022 would be significantly lower than the
risk of COVID-19 in FY 2020 and there would be fewer COVID-19
hospitalizations for Medicare beneficiaries in FY 2022 than there were
in FY 2020. Therefore, we finalized our proposal to use FY 2019 data
for the FY 2022 ratesetting for circumstances where the FY 2020 data
was significantly impacted by the COVID-19 PHE, based on the belief
that FY 2019 data from before the COVID-19 PHE would be a better
overall approximation of the FY 2022 inpatient experience at both IPPS
hospitals and LTCHs. For example, we used the FY 2019 MedPAR claims
data for purposes where we ordinarily would have used the FY 2020
MedPAR claims data. We also used cost report data from the FY 2018
HCRIS file for purposes where we ordinarily would have used the FY 2019
HCRIS file (since the FY 2019 cost report data from HCRIS contained
many cost reports ending in FY 2020 based on each hospital's cost
reporting period).
Similar to our analysis of the FY 2020 MedPAR claims file and the
FY 2019 HCRIS dataset for the FY 2022 IPPS/LTCH PPS rulemaking, the FY
2021 MedPAR claims file and the FY 2020 HCRIS dataset also both contain
data that was significantly impacted by the virus that causes COVID-19,
primarily in that the utilization of services at IPPS hospitals and
LTCHs was again generally markedly different for certain types of
services in FY 2021 than would have been expected in the absence of the
virus that causes COVID-19. Specifically, the share of admissions at
IPPS hospitals and LTCHs for MS-DRGs and MS-LTC-DRGs associated with
the treatment of COVID-19 continued to remain significantly higher than
levels prior to the COVID-19 PHE. For example, in FY 2019, the share of
IPPS cases and LTCH PPS standard Federal payment rate cases grouped to
MS-DRG and MS-LTC-DRG 177 (Respiratory infections and inflammations
with MCC) was approximately 1 percent and 2 percent, respectively. In
comparison, in FY 2021, the share of IPPS cases and LTCH PPS standard
Federal payment rate cases grouped to MS-DRG 177 was approximately 6
percent and 8 percent, respectively. However, as we discuss further in
this section, in light of the expected continued impact on
hospitalizations of the virus that causes COVID-19, we believe it is
appropriate to use the FY 2021 data reflecting this impact for this FY
2023 IPPS/LTCH PPS rulemaking, with some proposed modifications to our
usual ratesetting methodologies to account for the anticipated decline
in COVID-19 hospitalizations of Medicare beneficiaries at IPPS
hospitals and LTCHs as compared to FY 2021.
The CDC graph below illustrates new inpatient hospital admissions
of patients with confirmed COVID-19 from August 1, 2020 through
February 15, 2022. (<a href="https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/02182022/images/hospitalizations_02182022.jpg?_=35767">https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/02182022/images/hospitalizations_02182022.jpg?_=35767</a>,
accessed February 22, 2022)
[[Page 28124]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.003
The low point of the graph (late June 2021) approximately coincides
with the time of the development of the FY 2022 IPPS/LTCH PPS final
rule and generally supports, in conjunction with the other factors
discussed in that rulemaking (including the most recent vaccination
data from the CDC), our assumption in the final rule that the FY 2022
time period would be more similar to the time period prior to the PHE.
However, as can be seen in the graph, the virus that causes COVID-19
has continued to significantly impact hospitalizations for the time
period subsequent to the development of the FY 2022 IPPS/LTCH PPS final
rule. As the CDC has noted, the most recent increase in
hospitalizations has been primarily associated with the Omicron variant
of the virus.\9\ The CDC has stated that new variants will continue to
emerge. Viruses constantly change through mutation and sometimes these
mutations result in a new variant of the virus. The CDC and other
public health organizations monitor all variants of the virus that
causes COVID-19 in the United States and globally. Scientists monitor
all variants but may classify certain ones as variants being monitored,
variants of interest, variants of concern and variants of high
consequence. Some variants spread more easily and quickly than other
variants, which may lead to more cases of COVID-19. Even if a variant
causes less severe disease in general, an increase in the overall
number of cases could cause an increase in hospitalizations. (see
<a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html</a>,
accessed February 25, 2022)
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\9\ <a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/omicron-variant.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/omicron-variant.html</a>.
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Given the effects of the virus that causes COVID-19 in the Medicare
FY 2020 data, the Medicare FY 2021 data, and the CDC hospitalization
data, coupled with the expectation for future variants, we believe that
it is reasonable to assume that some Medicare beneficiaries will
continue to be hospitalized with COVID-19 at IPPS hospitals and LTCHs
in FY 2023. Accordingly, we believe it is appropriate to use FY 2021
data, specifically the FY 2021 MedPAR claims file and the FY 2020 HCRIS
dataset (which contains data from many cost reports ending in FY 2021
based on each hospital's cost reporting period) as the most recent
available data during the period of the COVID-19 PHE, for purposes of
the FY 2023 IPPS and LTCH PPS ratesetting. However, we also believe it
is reasonable to assume based on the information available at this time
that there will be fewer COVID-19 hospitalizations in FY 2023 than in
FY 2021 given the more recent trends in the CDC hospitalization data
since the Omicron variant peak in January, 2022. Accordingly, because
we anticipate Medicare inpatient hospitalizations for COVID-19 will
continue in FY 2023 but at a lower level, we are proposing to use FY
2021 data for purposes of the FY 2023 IPPS and LTCH PPS ratesetting but
with modifications to our usual ratesetting methodologies to account
for the anticipated decline in COVID-19 hospitalizations of Medicare
beneficiaries at IPPS hospitals and LTCHs as compared to FY 2021.
First, we are proposing to modify the calculation of the FY 2023
MS-DRG and MS-LTC-DRG relative weights. We observed that COVID-19 cases
were impacting the relative weights as calculated using the FY 2021
MedPAR data for a few COVID-19-related MS-DRGs and MS-LTC-DRGs. As an
example, for MS-DRG and MS-LTC-DRG 870 (Septicemia or Severe Sepsis
with MV >96 hours), the MS-DRG and MS-LTC-DRG relative weights
calculated using the FY 2021 MedPAR data are approximately 9 and 3
percent higher, respectively, compared to their relative weights if
calculated excluding COVID-19 cases. Because this MS-DRG contains a mix
of COVID-19 cases and non-COVID-19 cases with different average costs,
the relative weight for this MS-DRG is dependent on that mix of cases.
As noted previously, we believe it is reasonable to assume that there
will be fewer COVID-19 hospitalizations among Medicare beneficiaries in
FY 2023 than there were in FY 2021; however it is not possible to know
precisely how COVID-19 hospitalizations in FY 2023 will compare to FY
2021. We believe that averaging the relative weights as calculated with
and without the COVID-19 cases reflected in the FY 2021 MedPAR data
would reflect a reasonable estimation of the case mix for FY 2023 based
on the information available at this time, and more accurately estimate
the relative resource use for the cases treated in FY 2023. Therefore,
we are proposing to calculate the relative weights for FY 2023 by first
calculating two sets of weights, one including and one excluding COVID-
19 claims, and then averaging the two sets of relative weights to
determine the proposed FY 2023 relative weight values. We believe this
proposed modification to our relative weight setting methodology would
appropriately reduce, but not remove entirely, the effect of COVID-19
cases on the relative weight calculations, consistent with our
expectation that Medicare inpatient hospitalizations for COVID-19 will
continue in FY 2023 at a lower level as compared to FY 2021,
[[Page 28125]]
and provide a more accurate estimate of relative resource use for FY
2023 than if we were to calculate the proposed relative weights using
all applicable cases in the FY 2021 data. The proposal for modifying
the methodology for determining the FY 2023 IPPS MS-DRG relative
weights is discussed in greater detail in section II.E. of the preamble
of this proposed rule. The proposal for modifying the methodology for
determining the FY 2023 LTCH PPS MS-LTC-DRG relative weights is
discussed in greater detail in section VIII.B. of the preamble of this
proposed rule.
We also are proposing to modify our methodologies for determining
the FY 2023 outlier fixed-loss amount for IPPS cases and LTCH PPS
standard Federal payment rate cases. The methodologies for determining
both of these outlier fixed-loss amounts include calculating and
applying a charge inflation factor to increase charges from the claim
year to the rulemaking year, as well as calculating and applying CCR
adjustment factors to adjust CCRs used to make payments in the current
year to the rulemaking year. The charge inflation factors calculated
using the two most recently available years of MedPAR claims data (FY
2020 and FY 2021) that would ordinarily be used for this FY 2023
proposed rule to inflate the charges on the FY 2021 MedPAR claims were
abnormally high as compared to recent historical levels prior to the
PHE (for example, for the IPPS, approximately 10 percent based on the
FY 2020 and FY 2021 MedPAR claims data as compared to approximately 6
percent based on the FY 2018 and FY 2019 MedPAR claims data).
Furthermore, the IPPS operating and capital CCR adjustment factors
calculated based on the percentage changes in the CCRs from the
December 2020 update of the PSF to the December 2021 update of the PSF
that would ordinarily be used for this FY 2023 proposed rule to adjust
the CCRs from the December 2021 update of the PSF were also abnormally
high as compared to recent historical levels prior to the PHE (for
example, for the IPPS operating CCR adjustment factor, a factor of
approximately 1.03 based on the December 2020 and December 2021 updates
to the PSF as compared to a factor of approximately 0.97 based on the
March 2019 and March 2020 updates to the PSF). We believe these
abnormally high charge inflation and CCR adjustment factors as compared
to historical levels were partially due to the high number of COVID-19
cases with higher charges that were treated in IPPS hospitals and LTCHs
in FY 2021. As we previously stated, we believe there will be fewer
COVID-19 cases in FY 2023 than in FY 2021. Therefore, we do not believe
it is reasonable to assume charges and CCRs will continue to increase
at these abnormally high rates. Consequently, when determining the FY
2023 outlier fixed-loss amounts for IPPS cases and LTCH PPS standard
Federal payment rate cases, we are proposing to inflate the charges on
the FY 2021 MedPAR claims using charge inflation factors computed by
comparing the average covered charge per case in the March 2019 MedPAR
file of FY 2018 to the average covered charge per case in the March
2020 MedPAR file of FY 2019, which is the last 1-year period prior to
the COVID-19 PHE. We also are proposing to adjust the CCRs from the
December 2021 update of the PSF by comparing the percentage change in
the national average case-weighted CCR from the March 2019 update of
the PSF to the national average case-weighted CCR from the March 2020
update of the PSF, which is the last 1-year period prior to the COVID-
19 PHE. We believe using the charge inflation factors and CCR
adjustment factors derived from data prior to the COVID-19 PHE would
provide a more reasonable approximation of the increase in costs that
will occur from FY 2021 to FY 2023 because we do not believe the charge
inflation that has occurred during the PHE will continue as the number
of higher cost COVID-19 cases declines. The proposal for modifying the
methodology for determining the FY 2023 outlier fixed-loss amounts for
IPPS cases is discussed in greater detail in section II.A.4. of the
addendum to this proposed rule. The proposal for modifying the
methodology for determining the FY 2023 outlier fixed-loss amounts for
LTCH PPS standard Federal payment rate cases is discussed in greater
detail in section V.D.3. of the addendum to this proposed rule.
As discussed in section I.O. of Appendix A of this proposed rule,
we are also requesting comments on, as an alternative to our proposed
approach, the use of the FY 2021 data for purposes of FY 2023
ratesetting without these proposed modifications to our usual
methodologies for the calculation of the FY 2023 MS-DRG and MS-LTC-DRG
relative weights or the usual methodologies used to determine the FY
2023 outlier fixed-loss amount for IPPS cases and LTCH PPS standard
Federal payment rate cases. We note that the FY 2023 outlier fixed-loss
amount would be significantly higher under this alternative approach.
In order to illustrate the effect of our proposed modifications on the
relative weights and fixed loss amount, we are making available
supplemental information, including the relative weights and fixed loss
amount calculated without the proposed modifications to our usual
methodologies, as described in section I.O. of Appendix A of this
proposed rule. We refer the reader to section I.O. of Appendix A of
this proposed rule for a discussion of the files that we are making
available with regard to our alternative approach.
II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
DRG) Classifications and Relative Weights
A. Background
Section 1886(d) of the Act specifies that the Secretary shall
establish a classification system (referred to as diagnosis-related
groups (DRGs)) for inpatient discharges and adjust payments under the
IPPS based on appropriate weighting factors assigned to each DRG.
Therefore, under the IPPS, Medicare pays for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment for a specific case multiplies an individual
hospital's payment rate per case by the weight of the DRG to which the
case is assigned. Each DRG weight represents the average resources
required to care for cases in that particular DRG, relative to the
average resources used to treat cases in all DRGs.
Section 1886(d)(4)(C) of the Act requires that the Secretary adjust
the DRG classifications and relative weights at least annually to
account for changes in resource consumption. These adjustments are made
to reflect changes in treatment patterns, technology, and any other
factors that may change the relative use of hospital resources.
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
For information on the adoption of the MS-DRGs in FY 2008, we refer
readers to the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189).
For general information about the MS-DRG system, including yearly
reviews and changes to the MS-DRGs, we refer readers to the previous
discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR
43764 through 43766) and the FYs 2011 through 2022 IPPS/LTCH PPS final
rules (75 FR 50053 through 50055; 76
[[Page 28126]]
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, 85 FR 58445 through
58596, 86 FR 44795 through 44961, respectively).
C. Proposed FY 2023 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, 2021, and 2022 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), FY 2021 IPPS/LTCH PPS final rule (85 FR 58444 and
58445), and the FY 2022 IPPS/LTCH PPS final rule (86 FR 44794 and
44795), 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, FY 2021, and FY 2022,
respectively. We indicated the FY 2018, FY 2019, FY 2020, FY 2021, and
FY 2022 adjustments were permanent adjustments to payment rates. We
also stated that we plan to propose a future adjustment required under
section 414 of the MACRA for FY 2023 in future rulemaking.
3. Proposed Adjustment for FY 2023
Consistent with the requirements of section 414 of the MACRA, we
are proposing to implement a 0.5 percentage point positive adjustment
to the standardized amount for FY 2023. This would constitute a
permanent adjustment to payment rates. This proposed 0.5 percentage
point positive adjustment is the final adjustment prescribed by section
414 of the MACRA. Along with the 0.4588 percentage point positive
adjustment for FY 2018, and the 0.5 percentage point positive
adjustments for FY 2019, FY 2020, FY 2021, and FY 2022, this final
proposed adjustment will result in combined positive adjustment of
2.9588 percentage points (or the sum of the adjustments for FYs 2018
through 2023) to the standardized amount.
[[Page 28127]]
D. Proposed Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for Proposed FY
2023 MS-DRG Updates
a. Conversion of MS-DRGs to the International Classification of
Diseases, 10th Revision (ICD-10)
As of October 1, 2015, providers use the International
Classification of Diseases, 10th Revision (ICD-10) coding system to
report diagnoses and procedures for Medicare hospital inpatient
services under the MS-DRG system instead of the ICD-9-CM coding system,
which was used through September 30, 2015. The ICD-10 coding system
includes the International Classification of Diseases, 10th Revision,
Clinical Modification (ICD-10-CM) for diagnosis coding and the
International Classification of Diseases, 10th Revision, Procedure
Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as
well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and
Reporting. For a detailed discussion of the conversion of the MS-DRGs
to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81
FR 56787 through 56789).
b. Basis for Proposed FY 2023 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 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. In the FY 2022 IPPS/LTCH PPS
proposed rule, we stated that while we continue to believe that a
change in the deadline from November 1 to October 20 would provide
hospitals sufficient time to assess potential impacts and inform future
MS-DRG recommendations, we were maintaining the deadline of November 1
for FY 2023 MS-DRG classification change requests. As discussed in the
FY 2022 IPPS/LTCH PPS final rule (86 FR 44795), we received public
comments expressing support for a future change to the deadline for
requesting updates to the MS-DRG classifications from November 1 to
October 20, and we noted in response that we may consider any changes
to the deadline or frequency for submissions of requests for MS-DRG
classification changes for future fiscal years. Beginning with FY 2024
MS-DRG classification change requests, we are changing the deadline to
request changes to the MS-DRGs to October 20th of each year to allow
for additional time for the review and consideration of any proposed
updates. As previously discussed, we continue to believe such a change
would allow hospitals sufficient time to assess potential impacts and
inform future MS-DRG recommendations, while also providing CMS the
additional time needed for evaluation of the requested changes,
analysis of claims data, and consideration of any proposed updates.
We are also changing the process for submitting requested updates
to the MS-DRG classifications, beginning with the FY 2024 MS-DRG
classification change requests. CMS is in the process of implementing a
new electronic application intake system, Medicare Electronic
Application Request Information System<SUP>TM</SUP> (MEARIS\TM\), that
will be available for users to begin gaining familiarity with a new
approach and process to submit new technology add-on payment
applications, requests for ICD-10-PCS procedure codes, and other
requests. To simplify and streamline the process for submission of
standardized applications and requests that inform payment policy under
the IPPS, we will also be using this new system for submission of MS-
DRG classification change requests. We believe that submission of MS-
DRG reclassification requests through MEARIS\TM\ will not only help CMS
to track such requests, but it will also create efficiencies for
requestors when compared to the previous submission process.
Accordingly, beginning with the FY 2024 MS-DRG classification
change requests, CMS will only accept such requests submitted via
MEARIS\TM\, and will no longer consider any such requests that are sent
via email. We anticipate that, beginning April 5, 2022, MEARIS\TM\ will
be available for users to begin gaining familiarity with this new
approach for submitting MS-DRG classification change requests.
MEARIS\TM\, including the mechanism for submitting MS-DRG
classification change requests, can be accessed at <a href="https://mearis.cms.gov">https://mearis.cms.gov</a>. We encourage users to register and begin using this
system to provide feedback on their experience with this initial
version. We note that within MEARIS\TM\, we have built in several
resources to support users, including a ``Resources'' section
(available at <a href="https://mearis.cms.gov/public/resources">https://mearis.cms.gov/public/resources</a>) and technical
support available under ``Useful Links'' at the bottom of the
MEARIS\TM\ site. Questions regarding the MEARIS\TM\ system can be
submitted to CMS using the form available under ``Contact'' at <a href="https://mearis.cms.gov/public/resources">https://mearis.cms.gov/public/resources</a>?app=msdrg.
We also note that, as discussed in section II.D.17. of the preamble
of this proposed rule, effective January 5, 2022, MEARIS\TM\ was made
available for users to begin gaining familiarity with a new approach
and process to submit ICD-10-PCS procedure code requests.
As noted previously, interested parties had to submit MS-DRG
classification change requests for FY 2023 by November 1, 2021. As we
have discussed in prior rulemaking, 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 submit any comments and
suggestions for FY 2024 by October 20, 2022 via the new electronic
intake system, Medicare Electronic Application Request Information
System<SUP>TM</SUP> (MEARIS<SUP>TM</SUP>) at <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
As we did for the FY 2022 IPPS/LTCH PPS proposed rule, for this FY
2023 IPPS/LTCH PPS proposed rule we are providing a test version of the
ICD-10
[[Page 28128]]
MS-DRG GROUPER Software, Version 40, so that the public can better
analyze and understand the impact of the proposals included in this
proposed rule. We note that this test software reflects the proposed
GROUPER logic for FY 2023. Therefore, it includes the new diagnosis and
procedure codes that are effective for FY 2023 as reflected in Table
6A.--New Diagnosis Codes--FY 2023 and Table 6B.--New Procedure Codes--
FY 2023 associated with this proposed rule and does not include the
diagnosis codes that are invalid beginning in FY 2023 as reflected in
Table 6C.--Invalid Diagnosis Codes--FY 2023 associated with this
proposed rule. We note that at the time of the development of this
proposed rule there were no procedure codes designated as invalid for
FY 2023, and therefore, there is no Table 6D--Invalid Procedure Codes--
FY 2023 associated with this proposed rule. These tables are not
published in the Addendum to this proposed rule, but are available via
the internet on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index</a>.html as
described in section VI. of the Addendum to this proposed rule. Because
the diagnosis codes no longer valid for FY 2023 are not reflected in
the test software, we are making available a supplemental file in Table
6P.1a that includes the mapped Version 40 FY 2023 ICD-10-CM codes and
the deleted Version 39.1 FY 2022 ICD-10-CM codes that should be used
for testing purposes with users' available claims data. Therefore,
users will have access to the test software allowing them to build case
examples that reflect the proposals included in this proposed rule. In
addition, users will be able to view the draft version of the ICD-10
MS-DRG Definitions Manual, Version 40.
The test version of the ICD-10 MS-DRG GROUPER Software, Version 40,
the draft version of the ICD-10 MS-DRG Definitions Manual, Version 40,
and the supplemental mapping files in Table 6P.1a of the FY 2022 and FY
2023 ICD-10-CM diagnosis codes are available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a>.
Following are the changes that we are proposing to the MS-DRGs for
FY 2023. We are inviting public comments on each of the MS-DRG
classification proposed changes, as well as our proposals to maintain
certain existing MS-DRG classifications discussed in this proposed
rule. In some cases, we are proposing changes to the MS-DRG
classifications based on our analysis of claims data and consultation
with our clinical advisors. In other cases, we are proposing to
maintain the existing MS-DRG classifications based on our analysis of
claims data and consultation with our clinical advisors. As discussed
in section I.F. of the preamble of this proposed rule, we are proposing
to use the FY 2021 MedPAR data for purposes of this FY 2023 IPPS
rulemaking, with certain proposed modifications to the relative weight
and outlier methodologies. For this FY 2023 IPPS/LTCH PPS proposed
rule, our MS-DRG analysis was based on ICD-10 claims data from the
September 2021 update of the FY 2021 MedPAR file, which contains
hospital bills received from October 1, 2020 through September 30,
2021, for discharges occurring through September 30, 2021. In our
discussion of the proposed MS-DRG reclassification changes, we refer to
these claims data as the ``September 2021 update of the FY 2021 MedPAR
file.''
As explained in previous rulemaking (76 FR 51487), in deciding
whether to propose to make further modifications to the MS-DRGs for
particular circumstances brought to our attention, we consider whether
the resource consumption and clinical characteristics of the patients
with a given set of conditions are significantly different than the
remaining patients represented in the MS-DRG. We evaluate patient care
costs using average costs and lengths of stay and rely on the judgment
of our clinical advisors to determine whether patients are clinically
distinct or similar to other patients represented in the MS-DRG. In
evaluating resource costs, we consider both the absolute and percentage
differences in average costs between the cases we select for review and
the remainder of cases in the MS-DRG. We also consider variation in
costs within these groups; that is, whether observed average
differences are consistent across patients or attributable to cases
that are extreme in terms of costs or length of stay, or both. Further,
we consider the number of patients who will have a given set of
characteristics and generally prefer not to create a new MS-DRG unless
it would include a substantial number of cases.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
our proposal to expand our existing criteria to create a new
complication or comorbidity (CC) or major complication or comorbidity
(MCC) subgroup within a base MS-DRG. Specifically, we finalized the
expansion of the criteria to include the NonCC subgroup for a three-way
severity level split. We stated our belief 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 the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798), we finalized
a delay in applying this technical criterion to existing MS-DRGs until
FY 2023 or future rulemaking, in light of the PHE. Commenters
recommended that a complete analysis of the MS-DRG changes to be
proposed for future rulemaking 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, payment rates, and hospital
case mix to allow meaningful comment prior to implementation.
In our analysis of the MS-DRG classification requests for FY 2023
that we received by November 1, 2021, 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.
[[Page 28129]]
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In general, once the decision has been made to propose to make
further modifications to the MS-DRGs as described previously, such as
creating a new base MS-DRG, or in our evaluation of a specific MS-DRG
classification request to split (or subdivide) an existing base MS-DRG
into severity levels, all five criteria must be met for the base MS-DRG
to be split (or subdivided) by a CC subgroup. We note that in our
analysis of requests to create a new MS-DRG, we typically evaluate the
most recent year of MedPAR claims data available. For example, we
stated earlier that for this FY 2023 IPPS/LTCH PPS proposed rule, our
MS-DRG analysis was based on ICD-10 claims data from the September 2021
update of the FY 2021 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 2 years of data. This analysis includes 2 years of MedPAR claims
data to compare the data results from 1 year to the next to avoid
making determinations about whether additional severity levels are
warranted based on an isolated year's data fluctuation and also, to
validate that the established severity levels within a base MS-DRG are
supported. The first step in our process of evaluating if the creation
of a new CC subgroup within a base MS-DRG is warranted is to determine
if all the criteria are satisfied for a three-way split. If the
criteria fail, the next step is to determine if the criteria are
satisfied for a two-way split. If the criteria for both of the two-way
splits fail, then a split (or CC subgroup) would generally not be
warranted for that base MS-DRG. If the three-way split fails on any one
of the five criteria and all five criteria for both two-way splits
(1_23 and 12_3) are met, we would apply the two-way split with the
highest R2 value. We note that if the request to split (or subdivide)
an existing base MS-DRG into severity levels specifies the request is
for either one of the two-way splits (1_23 or 12_3), in response to the
specific request, we will evaluate the criteria for both of the two-way
splits, however we do not also evaluate the criteria for a three-way
split.
For this FY 2023 IPPS/LTCH PPS proposed rule, using the September
2021 update of the FY 2021 MedPAR file, we also analyzed how applying
the NonCC subgroup criteria to all MS-DRGs currently split into three
severity levels would affect the MS-DRG structure beginning in FY 2023.
Findings from our analysis indicated that approximately 41 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 123 MS-DRGs (41 MS-DRGs
x 3 severity levels = 123) and the creation of 75 new MS-DRGs. These
updates would also involve a redistribution of cases, which would
impact the relative weights, and, thus, the payment rates proposed for
particular types of cases. We refer the reader to Table 6P.1b for the
list of the 123 MS-DRGs that would be subject to deletion and the list
of the 75 new MS-DRGs that would be proposed for creation for FY 2023
under this policy if the NonCC subgroup criteria were applied.
In light of the ongoing public health emergency (PHE), we continue
to have concerns about the impact of implementing this volume of MS-DRG
changes at this time, and believe it may be appropriate to continue to
delay application of the NonCC subgroup criteria to existing MS-DRGs to
maintain more stability in the current MS-DRG structure and until such
time additional analyses can be performed to assess impacts, as
discussed in response to comments in the FY 2022 IPPS/LTCH PPS final
rule. Therefore, we are proposing not to apply the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2023, and to instead maintain the current structure of the 41 MS-
DRGs that currently have a three-way severity level split (total of 123
MS-DRGs) that would otherwise be subject to these criteria. We intend
to address the application of the NonCC subgroup criteria to existing
MS-DRGs with a three-way severity level split in future rulemaking.
2. Pre-MDC: MS-DRG 018 Chimeric Antigen Receptor (CAR) T-Cell and Other
Immunotherapies
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798 through
44806), we finalized our proposal to assign procedure codes describing
CAR T-cell, non-CAR T-cell, and other immunotherapies to Pre-MDC MS-DRG
[[Page 28130]]
018 and to revise the title for Pre-MDC MS-DRG 018 to ``Chimeric
Antigen Receptor (CAR) T-cell and Other Immunotherapies'' to reflect
this assignment. In that discussion, we noted that a few commenters
recommended we continue to work with stakeholders on ways to improve
the predictability and stability of hospital payments for these
complex, novel cell therapies and that we 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.
We also noted 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, held annually in the
spring and fall, where code proposals are presented and the public is
provided the opportunity to comment. All codes finalized from the fall
meeting are subsequently proposed for assignment under the ICD-10 MS-
DRGs through rulemaking. We refer the reader to section II.D.17 of the
preamble of this proposed rule for additional information regarding the
ICD-10 Coordination and Maintenance Committee meeting process.
There were no requests or proposals for new procedure codes to
describe the administration of a CAR T-cell or another type of gene or
cellular therapy discussed at the September 14-15, 2021 ICD-10
Coordination and Maintenance Committee meeting. For the March 8-9, 2022
ICD-10 Coordination and Maintenance Committee meeting, there were
topics included on the agenda and in the related meeting materials that
included proposals for new procedure codes to describe the
administration of a CAR T-cell or another type of gene or cellular
therapy product. The agenda and related meeting materials for these
specific topics are available via the internet on the CMS website at
<a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a>.
As stated in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44805) and
noted previously, 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. We also clarified that the assignment of a procedure
code to a MS-DRG is not dependent upon a product's Food and Drug
Administration (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.
Because the diagnosis and procedure code proposals that are
presented at the March meeting for an October 1 implementation
(upcoming FY) are not finalized in time to include in Table 6A.--New
Diagnosis Codes and Table 6B.--New Procedure Codes in association with
the proposed rule, as noted in prior rulemaking, we use our established
process to examine the MS-DRG assignment for the predecessor codes to
determine the most appropriate MS-DRG assignment. Specifically, we
review the predecessor code and MS-DRG assignment most closely
associated with the new 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 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.
In response to commenters' recommendation that we continue to
assess the appropriateness of the therapies assigned to Pre-MDC MS-DRG
018, we are providing the results of our data analysis using the
September 2021 update of the FY 2021 MedPAR file for cases reporting
the administration of a CAR T-cell or other immunotherapy in Pre-MDC
MS-DRG 018 and the number of cases reporting a secondary diagnosis of
Z00.6 (Encounter for examination for normal comparison and control in
clinical research program). We note that if a procedure code that is
assigned to the logic for Pre-MDC MS-DRG 018 is not listed it is
because there were no cases found. We also note there were no cases
reporting diagnosis code Z00.6 as a principal diagnosis. Our findings
are shown in the following table.
[[Page 28131]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.005
The data show that there is a wide range in the volume of cases (4
cases versus 435 cases), average length of stay (11.3 days versus 20.3
days), and average costs ($157,950 versus $310,561) reporting the
administration of CAR T-cell therapies in MS-DRG 018. This is to be
expected since these therapies continue to evolve and the ICD-10-PCS
coding to identify and describe these therapies also continues to be
refined through the ICD-10 Coordination and Maintenance Committee
meeting process. As additional claims data becomes available for these
therapies, we will continue to evaluate to determine if further
modifications to Pre-MDC MS-DRG 018 are warranted.
In response to our statement in the FY 2022 IPPS/LTCH PPS final
rule that we plan to continue engaging with stakeholders on additional
options for consideration in this field of cellular and gene therapies,
we received additional feedback and suggestions, including
recommendations for Town Hall meetings/listening sessions to discuss
the interconnectedness of these issues; exploration of what was
described as a different set and kind of MS-DRGs that would reward
providers for controlling patient care costs, without consideration of
product costs outside of their control; and evaluation of the creation
and assignment of multiple MS-DRGs for cell and gene therapy cases: One
to cover patient care costs, the other to cover product costs across
therapeutic product categories.
We appreciate this additional feedback and will continue to
consider these issues and suggestions in connection with future
rulemaking. We also intend to continue engaging with stakeholders by
sharing updates from our analysis of claims data as we examine and
explore potential refinements for these therapies under the IPPS.
a. Laser Interstitial Thermal Therapy (LITT)
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44812 through
44814), we finalized the reassignment of 31 ICD-10-PCS procedure codes
describing laser interstitial thermal therapy (LITT) of various body
parts to more clinically appropriate MS-DRGs, as shown in Table 6P.2b
associated with the FY 2022 IPPS/LTCH PPS final rule and available via
the internet on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS</a>, including the
reassignment of procedure codes D0Y0KZZ (Laser interstitial thermal
therapy of brain) and D0Y1KZZ (Laser interstitial thermal therapy of
brain stem), which were reassigned from MS-DRG 023 (Craniotomy with
Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC
or Chemotherapy Implant or Epilepsy with Neurostimulator), MS-DRG 024
(Craniotomy with Major Device Implant or Acute Complex CNS Principal
Diagnosis without MCC), and MS-DRGs 025, 026, and 027 (Craniotomy and
Endovascular Intracranial Procedures with MCC, with CC, and without CC/
MCC, respectively) to MS-DRGs 040, 041, and 042 (Peripheral, Cranial
Nerve and Other Nervous System Procedures with MCC, with CC and without
CC/MCC, respectively).
We also finalized the redesignation of these two LITT procedures
(codes D0Y0KZZ and D0Y1KZZ) and the reassignment from extensive O.R.
procedures in MS-DRGs 981, 982 and 983 (Extensive O.R. Procedure
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) to non-extensive O.R procedures in MS-DRGs 987, 989, and
989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with
MCC, with CC, and without CC/MCC, respectively) (86 FR 44889).
For FY 2023, we received two requests from the manufacturers of the
LITT technology (Medtronic and Monteris[supreg] Medical) to reverse the
MS-DRG reassignment for the ICD-10 procedure codes that identify LITT
of the brain and brain stem (codes D0Y0KZZ and D0Y1KZZ) from the MS-
DRGs for peripheral, cranial nerve and other nervous system procedures
(MS-DRGs 040, 041, and 042) back to the MS-DRGs for craniotomy and
endovascular procedures (MS-DRGs 023, 024, 025, 026, and 027). The
first
[[Page 28132]]
requestor acknowledged that the technique utilized in the performance
of LITT procedures for the brain and brain stem are minimally invasive
and do not involve a craniotomy however, the requestor also stated the
procedures assigned to MS-DRGs 025, 026, and 027 are not exclusive to
craniotomies. The requestor further stated that these LITT procedures
involve a twist drill or burr hole and are similar to other non-
craniotomy procedures in MS-DRGs 025, 026, and 027 including
radioactive elements and neurostimulator leads that involve inserting
these devices into the brain.
In its review of the other procedures assigned to MS-DRGs 040, 041,
and 042, the requestor stated that there are distinct clinical
differences between the invasiveness of LITT that involves
instrumentation being placed deeply within the brain tissue and the
non-invasiveness of stereotactic radiosurgery that does not involve
entering the brain with instrumentation. The requestor also indicated
LITT utilizes a different modality via direct thermal ablation compared
to stereotactic radiosurgery that utilizes externally-generated
ionizing radiation.
The requestor performed its own data analysis for LITT procedures
of the brain and brain stem using MedPAR data from FY 2019 through FY
2022 impact files. According to the requestor, its findings demonstrate
that the costs of the cases reporting LITT of the brain or brain stem
are better aligned with MS-DRGs 025, 026, and 027 compared to MS-DRGs
040, 041, and 042.
The second requestor similarly discussed the steps and resources
involved in the performance of LITT procedures for the brain and brain
stem, provided its detailed analysis on the indications for LITT (brain
tumors and epileptic foci), compared LITT to other procedures in MS-
DRGs 025, 026, and 027 and stated that the majority of the procedures
currently assigned to MS-DRGs 040, 041, 042 are not performed for the
treatment of brain cancer or epilepsy. The requestor stated that the
LITT procedure is on the inpatient only list and is only performed on
Medicare beneficiaries in the inpatient hospital setting. The requestor
provided the top 10 principal diagnoses associated with LITT of brain
cases it found based on its analysis, and identified the diagnoses for
which there were less than 10 cases with an asterisk, as reflected in
the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY22.006
The requestor asserted that the statement in the FY 2022 IPPS/LTCH
PPS final rule that the technique to perform the LITT procedure on
brain and brain stem structures is considered minimally invasive and
does not involve a craniotomy, and that therefore, continued assignment
to the craniotomy MS-DRGs is not clinically appropriate,
mischaracterizes both the LITT procedures and universe of services
assigned to MS-DRGs 023 through 027. The requestor acknowledged that
the craniotomy procedures listed in the logic for MS-DRGs 023 through
027 include open procedures but stated the logic also lists less
invasive procedures including percutaneous and percutaneous endoscopic
procedures. The requestor asserted that open procedures are a minority
of the ICD-10-PCS codes assigned to these MS-DRGs.
In addition, the requestor stated that LITT and craniotomy are in
fact very clinically similar; in that both procedures are intended to
remove and destroy the targeted tumor and lesion with a different
surgical tool used (scalpel versus heated ablation probe). According to
the requestor, brain LITT procedures involve insertion of laser probes
into the brain which requires opening both the skull and dura, similar
to a craniotomy. The requestor also stated that craniotomy and LITT
share several procedural characteristics and provided the following
list.
<bullet> Require an operating room;
<bullet> Performed under general anesthesia;
<bullet> Require creation of burr holes and invasive skull
fixation;
<bullet> Require a sterile field, incision, opening of the skull
and dura;
<bullet> Cause tissue to be immediately destroyed or excised;
<bullet> Carry a risk of immediate intracranial bleeding;
<bullet> Require closure of the scalp wound;
<bullet> Risk intracranial infection; and
<bullet> Require a hospital stay of one or more nights.
In contrast, the requestor stated that procedures assigned to MS-
DRGs 040, 041, and 042 are primarily nerve procedures or excision or
detachment procedures performed on parts of the body other than the
head, including the upper and lower extremities. According to the
requestor, none of the procedures in MS-DRGs 040, 041, and 042 require
drilling into the patient's skull, a step which is integral to LITT.
The requestor provided the following top 10 principal
[[Page 28133]]
diagnoses associated with cases it found in MS-DRGs 040, 041, and 042
during its analysis and stated that most of the procedures assigned to
MS-DRGs 040, 041, and 042 are not typically performed in the treatment
of brain cancer or epilepsy.
[GRAPHIC] [TIFF OMITTED] TP10MY22.007
However, the requestor stated an exception is stereotactic
radiosurgery (SRS) procedures performed on the brain and brain stem
that are assigned to MS-DRGs 040, 041, and 042 and are used to treat
brain cancer. According to the requestor, craniotomy, LITT and SRS are
all image-guided procedures used to treat a variety of brain disorders
including tumors and epilepsy, although it stated that is where any
similarity between LITT and SRS ends and where the procedural
similarities between craniotomy and LITT begin.
The requestor stated SRS is a non-invasive procedure that gradually
destroys or inactivates tissues in or around the brain and is typically
performed on an outpatient basis while inpatient SRS treatment is rare.
According to the requestor, SRS does not require an operating room, is
rarely done under general anesthesia (children and highly
claustrophobic individuals being an exception), and does not require
(but can use) rigid skull fixation. In addition, the requestor stated
that because it is non-invasive, there is no need for a sterile field,
incision, opening/closing of the skull, opening/closing of the dura,
suturing/stapling the wound, and produces essentially no risk of
immediate intracranial bleeding or delayed infection. According to the
requestor, LITT is much more invasive than SRS using a head frame and
involves and requires the same surgical skill and hospital resources as
craniotomies.
Following the submission of the two FY 2023 MS-DRG classification
change requests for LITT, these same two requestors (the manufacturers
of the LITT technology) submitted a joint code proposal requesting an
overall change to how LITT is classified within the ICD-10-PCS
classification and for consideration as an agenda topic to be discussed
at the March 8-9, 2022 ICD-10 Coordination and Maintenance Committee
meeting. The proposal was presented and discussed at the March 8-9,
2022 ICD-10 Coordination and Maintenance Committee meeting. We refer
the reader to the CMS website at <a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a> for additional detailed information
regarding the request, including a recording of the discussion and the
related meeting materials. Public comments in response to the code
proposal were due by April 8, 2022.
Because the diagnosis and procedure code proposals that are
presented at the March ICD-10-CM Coordination and Maintenance Committee
meeting for an October 1 implementation (upcoming FY) are not finalized
in time to include in Table 6A.--New Diagnosis Codes and Table 6B.--New
Procedure Codes in association with the proposed rule, as we have noted
in prior rulemaking and discuss further in this section, we use our
established process to examine the MS-DRG assignment for the
predecessor codes to determine the most appropriate MS-DRG assignment.
Specifically, we review the predecessor code and MS-DRG assignment most
closely associated with the new 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 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. Under this
established process, the MS-DRG assignment for the upcoming fiscal year
for any new diagnosis or procedure codes finalized after the March
meeting would be reflected in Table 6A.--New Diagnosis Codes and Table
6B.--New Procedure Codes associated with the final rule for that fiscal
year. However, in light of the unique circumstances relating to these
procedures, for which there is a pending proposal to reclassify LITT
within ICD-10-PCS and for new procedure codes discussed at the March
meeting, as well as an MS-DRG reclassification request to reassign the
existing codes describing these procedures, we address in this section
first, the code proposal discussed at the March meeting and the
possible MS-DRG assignments for any new codes that may be approved, and
then secondly, the requested reassignment of the existing codes, in the
event the new codes are not approved.
To summarize, as discussed at the March meeting, the code proposal
is to reclassify LITT procedures from the Radiation Therapy section of
ICD-10-PCS (Section D) to the Medical and Surgical section of ICD-10-
PCS. Specifically, the proposal is to reclassify LITT procedures to the
root operation Destruction. In ICD-10-PCS, the root operation
Destruction is defined as physical eradication of all or a portion
[[Page 28134]]
of a body part by the direct use of energy, force, or a destructive
agent. According to the requestors, LITT is misclassified to section
D--Radiation Therapy in ICD-10-PCS possibly because of terminology that
was used for predicate devices, whose indications included the phrase
``interstitial irradiation or thermal therapy'' in describing LITT's
method of action. The requestors stated LITT is thermal therapy,
destroying soft tissue using heat generated by a laser probe at the
target site and that the LITT procedure does not use ionizing
radiation, which is what the term ``radiation'' commonly refers to in
the general medical sense. The requestors also stated that by itself,
radiation is a broad term and provided an example that the spectrum of
electromagnetic radiation technically encompasses low energy non-
ionizing radio waves, microwaves, and infrared to high energy ionizing
X-rays and gamma rays while ionizing radiation creates ions in the
cells it passes through by removing electrons, a process which kills or
alters the cells over time.
The requestors further stated that only certain medical uses of
radiation are classified to section D--Radiation Therapy. For instance,
section D--Radiation Therapy categorizes treatments using ionizing
radiation, including beam radiation, brachytherapy, and stereotactic
radiosurgery. All of these deliver concentrated ionizing radiation to
eradicate abnormal cells, most commonly neoplasms. Other treatments
classified to section D--Radiation Therapy, such as hyperthermia, are
used as adjuncts to ionizing radiation. The requestors asserted that
while LITT eradicates abnormal cells, it does so with heat, not
ionizing radiation and rather than a radiation therapy procedure, LITT
is a surgical procedure. According to the requestors, LITT would be
more appropriately classified as an ablation procedure with the root
operation Destruction.
The original request for a new code(s) to describe the LITT
technology was initially discussed at the September 24-25, 2008 ICD-9-
CM Coordination and Maintenance Committee meeting. At that time, the
requestor sought an April 1, 2009 implementation date. Public comments
opposed an April 1, 2009 implementation date, therefore, effective
October 1, 2009 (FY 2010), ICD-9-CM procedure codes were created to
identify procedures performed utilizing the LITT technology. The
following table lists the ICD-9-CM procedure codes describing LITT and
their respective MDC and MS-DRG assignments under the ICD-9 based MS-
DRGs. We refer the reader to the ICD-9 and ICD-10 MS-DRG Definitions
Manual Files V33 (available via the internet on the CMS website at
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download</a>-Items/FY2016-
Final-Rule-Correction-Notice-Files (in the Downloads section) for
complete documentation of the GROUPER logic for ICD-9.
[GRAPHIC] [TIFF OMITTED] TP10MY22.008
The requestors maintain that although LITT was used to treat a
variety of anatomic sites when it was first introduced, its current
primary use is intracranial, specifically to treat brain tumors and
epileptic foci. However, the requestors stated it is also used to treat
radiation necrosis, an inflammatory response from prior treatment with
ionizing radiation.
Currently, in the U.S. there are only two LITT systems in use,
Visualase<SUP>TM</SUP> MRI-Guided Laser Ablation (Medtronic) and the
Neuroblate[supreg] System (Monteris[supreg] Medical). The requestors
also stated that over the last six years, the Indications for Use (IFU)
for one of the two U.S. approved LITT technologies (Neuroblate[supreg])
has been updated to reflect the system's current use in the brain and
to align with the intended neurosurgical patient population. The
requestor indicated applications in the spine are also anticipated in
the future within the central nervous system.
As previously noted, the deadline for receipt of public comments
for the proposed reclassification of LITT procedures that was presented
at the March 8-9, 2022 ICD-10 Coordination and Maintenance Committee
meeting along with the corresponding proposal for new procedure codes
was April 8, 2022, and the final code decisions on these proposals are
not yet available for inclusion in Table 6B.--New Procedure Codes
associated with this FY 2023 IPPS/LTCH PPS proposed rule. However, as
discussed in prior rulemaking (86 FR 44805), codes that are finalized
after the March meeting are reviewed and subject to our established
process of initially reviewing the predecessor codes MS-DRG assignment
and designation, while considering
[[Page 28135]]
other relevant factors (for example, severity of illness, treatment
difficulty, complexity of service and the resources utilized in the
diagnosis and/or treatment of the condition) 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
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS</a>. The public may provide feedback on these finalized
assignments, which is then taken into consideration for the following
fiscal year.
Accordingly, as previously discussed, the MS-DRG assignment for any
new procedure codes describing LITT, if finalized following the March
meeting, would be reflected in Table 6B.--New Procedure Codes
associated with the final rule for FY 2023. However, in light of the
unique circumstances with respect to these procedures, for which there
is both a proposal for reclassifying LITT from the Radiation Therapy
section of the procedure code classification to the Medical/Surgical
section with new ICD-10-PCS procedure code(s) and a separate MS-DRG
reclassification request on the existing procedure codes, we are
providing the opportunity for public comment on possible MS-DRG
assignments for the requested new procedure codes describing LITT that
may apply based on the application of our established process and
analysis, in the event the new codes are finalized for FY 2023. We note
that while we discuss the potential MS-DRG assignments for new
procedure codes describing LITT, stakeholders may use current coding
information to consider the potential MS-DRG assignments for any other
procedure codes that may be finalized after the March meeting and
submit public comments for consideration. Specifically, in the ICD-10
Coordination and Maintenance Committee meeting materials (available via
the internet on the CMS website at <a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a>), for each procedure code proposal we
provide the current coding that is applicable within the classification
and that should be reported in the absence of a more unique code, or
until such time a new code is created and becomes effective. The
procedure code(s) listed in current coding are generally, but not
always, the same code(s) that are considered as the predecessor code(s)
for purposes of MS-DRG assignment. As previously noted, our process for
determining the MS-DRG assignment for a new procedure code does not
automatically result in the new procedure code being assigned to the
same MS-DRG or having the same designation (O.R. versus Non-O.R.) as
the predecessor code. However, this current coding information can be
used in conjunction with the GROUPER logic, as set forth in the ICD-10
MS-DRG Definitions Manual and publicly available via the internet on
our CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a>
to review the MS-DRG assignment of the current code(s) and examine the
potential MS-DRG assignment of the proposed code(s), to assist in
formulating any public comments for submission to CMS for
consideration.
We note that, unlike the typical code request for a new or revised
procedure code that involves a new technology or a new approach to
performing an existing procedure, the circumstances for this particular
request are distinct in that the code request would reclassify LITT
within the ICD-10-PCS classification from section D--Radiation Therapy
to the root operation Destruction in the Medical and Surgical section
of ICD-10-PCS. Therefore, in light of the unique considerations with
respect to the requested reclassification of the LITT procedures in
connection with the pending code proposal, we believe it is appropriate
to utilize the assignments and designations of the procedure codes
describing Destruction of the respective anatomic body site as
predecessor codes rather than the current codes describing LITT from
the Radiation Therapy section of ICD-10-PCS in considering potential
MS-DRG assignment for the requested new LITT procedure codes.
As previously discussed, under our established process for
determining the MS-DRG assignment for newly approved procedure codes,
we examine the MS-DRG assignment for the predecessor codes to determine
the most appropriate MS-DRG assignment for the new codes. Specifically,
we review the predecessor code and MS-DRG assignment most closely
associated with the new 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. As we have noted in prior rulemaking,
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.
Applying this established review process to the proposed codes for
the LITT procedures, we believe that, based on the predecessor codes,
and as previously noted, the potential assignments and designations
would align with the assignments and designations of the procedure
codes describing Destruction of the respective anatomic body site. For
example, as discussed earlier in this section of this proposed rule,
the code request involved reclassifying LITT procedures from section
D--Radiation Therapy to the root operation Destruction in the Medical
and Surgical section of ICD-10-PCS. The root operation Destruction is
appropriate to identify and report procedures, such as ablation, that
are performed on various body parts. The code request also involved
creating what is referred to as a qualifier value, to uniquely describe
LITT as the modality. The qualifier value is the seventh character or
digit, in a valid ICD-10-PCS procedure code.
The following ICD-10-PCS table illustrates an example of the
proposed procedure codes for LITT of the brain and brain stem, and
cervical, thoracic, and lumbar spinal cord body parts, including the
qualifier value that was presented and discussed at the March 8-9, 2022
ICD-10 Coordination and Maintenance Committee meeting.
[[Page 28136]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.009
We note that the code proposal presented only provided the body
part value 0 Brain, for reporting any LITT procedures performed on the
brain, as well as, the brain stem, consistent with the current
available body part option in Table 005, Destruction of Central Nervous
System and Cranial Nerves, where the predecessor code is located. The
predecessor code(s) and associated MS-DRG assignments for the proposed
new procedure code(s) describing LITT of the brain and spinal cord
under MDC 01 are identified as follows.
[GRAPHIC] [TIFF OMITTED] TP10MY22.010
As shown in the table, the procedure codes describing destruction
of brain with an open, percutaneous or percutaneous endoscopic approach
are assigned to MS-DRGs 023 through 027 (craniotomy and endovascular
procedures) and the procedure codes describing destruction of cervical,
thoracic or lumbar spinal cord with an open, percutaneous or
percutaneous endoscopic approach are assigned to MS-DRG 028 (Spinal
Procedures with MCC), MS-DRG 029 (Spinal Procedures with CC or Spinal
Neurostimulators), and MS-DRG 030 (Spinal Procedures without CC/MCC).
We refer the reader to Table 6P.2a associated with this proposed
rule (and available via the internet at https://www.cms.gov/medicare/
medicare-fee-for-service-payment/acuteinpatientpps) to review the
potential MDCs, MS-DRGs, and O.R. versus Non-O.R. designations
identified based on this analysis of the proposed new procedure codes
describing LITT as presented and discussed at the meeting. We note that
Table 6P.2a also includes the predecessor codes that we utilized to
inform this analysis. If finalized, the new procedure codes would be
included in the FY 2023 code update files that are made available in
late May/early June via the internet on the CMS website at <a href="https://www.cms.gov/medicare/coding/icd10">https://www.cms.gov/medicare/coding/icd10</a>. Additionally, if finalized, the new
procedure codes describing LITT would be displayed in Table 6B.--New
Procedure Codes, and the existing codes describing LITT would be
deleted and reflected in Table 6D.--Invalid Procedure Codes, in
association with the FY 2023 IPPS/LTCH PPS final rule. We refer the
reader to section II.D.14. for further information regarding the files.
As previously discussed, we also received requests to reassign the
existing ICD-10 procedure codes that identify LITT of the brain and
brain stem (codes D0Y0KZZ and D0Y1KZZ). In the event there is not
support for the proposed reclassification of LITT procedures and the
corresponding new procedure codes as presented at the March 8-9, 2022
ICD-10 Coordination and Maintenance Committee meeting, we are also
providing the results of our analysis of these existing codes and our
proposed MS-DRG assignments for FY 2023, if those existing codes are
retained.
We examined claims data from the September 2021 update of the FY
2021 MedPAR file for MS-DRGs 023, 024, 025, 026, and 027, in addition
to MS-DRGs 040, 041, and 042 for cases reporting LITT of the brain
(code D0Y0KZZ) or brain stem (code D0Y1KZZ). We note that if a
procedure code is not listed it is because there were no cases found
reporting that procedure code. Our findings are shown in the following
tables.
[[Page 28137]]
[GRAPHIC] [TIFF OMITTED] TP10MY22.011
[GRAPHIC] [TIFF OMITTED] TP10MY22.012
As shown, we found a total of 123 cases reporting LITT of the brain
across MS-DRGs 023, 025, 026, and 027. There were no cases found in MS-
DRG 024. The cases reporting LITT of the brain grouped to these MS-DRGs
because another O.R. procedure that is assigned to the respective MS-
DRG was also reported. We refer the reader to Table 6P.2b for the list
of the other O.R. procedures we identified that were also reported with
LITT of the brain.
For MS-DRGs 040, 041, and 042, we found a total of 54 cases
reporting LITT of the brain and 2 cases reporting LITT of the brain
stem. While the average costs of the cases reporting LITT of the brain
were higher compared to all the cases in their respective MS-DRGs, the
average length of stay was shorter. For example, the data demonstrates
a shorter average length of stay (8.1 days versus 9.9 days) and higher
average costs ($40,458 versus $30,212) for the 14 cases reporting LITT
of brain in MS-DRG 040 compared to all the cases in MS-DRG 040. There
were no cases found to report LITT of brain stem in MS-DRG 040. For MS-
DRG 041, we found 16 cases reporting LITT of brain with an average
length of stay of 3.4 days and average costs of $23,278 and 1 case
reporting LITT of brain stem with an average length of stay of 1 day
and average costs of $10,222. The average length of stay for all the
cases in MS-DRG 041 is 5 days with average costs of $19,090. The data
demonstrates a shorter average length of stay (3.4 days and 1 day,
respectively, versus 5 days) for the 16 cases reporting LITT of brain
and the 1 case reporting LITT of brain stem. The data also demonstrates
higher average costs ($23,278 versus $19,090) for the 16 cases
reporting LITT of brain, and lower average costs for the 1 case
reporting LITT of brain stem ($10,222 versus $19,090), as compared to
the average costs of all cases in MS-DRG 041. For MS-DRG 042, we found
24 cases reporting LITT of brain with an average length of stay of 1.7
days and average costs of $22,426 and 1 case reporting LITT of brain
stem with an average length of stay of 2 days and average costs of
$32,668. The average length of stay for all the cases in MS-DRG 042 is
2.9 days with average costs of $15,451. The data demonstrates a shorter
average length of stay (1.7 days
[[Page 28138]]
and 2 days, respectively, versus 2.9 days) for the 24 cases reporting
LITT of brain and the 1 case reporting LITT of brain stem. The data
also demonstrate higher average costs ($22,426 and $32,668,
respectively versus $15,451) for the 24 cases reporting LITT of brain
and the 1 case reporting LITT of brain stem, compared to all the cases
in MS-DRG 042.
Based on the findings from our analysis, we considered whether
other factors, such as the reporting of secondary MCC and CC diagnoses,
may have contributed to the higher average costs for these cases.
Specifically, we conducted additional analyses of the claims data from
the September 2021 update of the FY 2021 MedPAR file to determine what
secondary MCC diagnoses were also reported for the 14 cases reporting
LITT of brain in MS-DRG 040 and what secondary CC diagnoses were
reported for the 17 cases (16 for LITT of brain and 1 for LITT of brain
stem) in MS-DRG 041. Our findings are shown in the following tables.
[GRAPHIC] [TIFF OMITTED] TP10MY22.013
[GRAPHIC] [TIFF OMITTED] TP10MY22.014
[[Page 28139]]
We note that we did not find any other O.R. procedures reported on
the claims in addition to the procedures for LITT of brain or brain
stem for MS-DRGs 040, 041 and 042.
The data shows that at least one of the listed secondary MCC
diagnoses was reported with each claim for LITT of brain identified in
MS-DRG 040 and the average length of stay for these cases ranged from 9
days to 48 days and the average costs of these cases ranged from
$41,486 to $80,745. We note that this data reflects the frequency with
which each of the listed diagnoses was reported on a claim with LITT of
brain. Therefore, multiple MCCs from this list of diagnoses may have
been reported on a single claim. In addition, while the logic for case
assignment to MS-DRG 040 requires at least one secondary MCC diagnosis,
we conducted additional detailed analyses for MS-DRG 040, as shown in
Table 6P.2f, to determine whether there were also secondary CC
diagnoses reported in conjunction with one or more of the listed MCC
diagnoses that may be contributing to the higher average costs for
cases reporting LITT of brain in MS-DRG 040 in comparison to all the
cases in MS-DRG 040. We found that 6 of the 14 cases reporting at least
one or more secondary MCC diagnosis also reported one or more secondary
CC diagnosis, which would appear to support that the severity of
illness for these patients, as identified by the secondary MCC and CC
diagnoses, may be more directly related to the higher average costs for
these patients than the LITT procedure itself.
Similarly, the data for MS-DRG 041 show the frequency with which
each of the listed secondary CC diagnoses was reported with LITT of
brain or brain stem. Results from the analysis for the 17 cases (16 for
LITT of brain and 1 for LITT of brain stem) show the average length of
stay for these cases ranged from 1 day to 29 days and the average costs
ranged from $9,101 to $57,999. These data analysis findings for MS-DRG
041 also appear to support our belief that the severity of illness for
these patients, as identified by the listed secondary CC diagnoses, may
be more directly related to the higher average costs for these patients
than the LITT procedure itself.
As stated previously, we did not find any other O.R. procedures
reported on the claims in addition to the procedures for LITT of brain
or brain stem for MS-DRGs 040, 041 and 042. Since the logic for case
assignment to MS-DRG 042 is not based on the reporting requirement of
any CC or MCC diagnoses, we conducted a detailed analysis of the claims
data to determine what other factors may be contributing to the higher
average costs and shorter average length of stay for these cases in
comparison to all the cases in MS-DRG 042. We refer the reader to Table
6P.2g associated with this proposed rule for the findings from our
analysis. As shown in the data, the majority of the cases (15 of 25)
had a principal diagnosis of epilepsy, 8 cases had a principal
diagnosis related to malignant neoplasm of the brain or brain
structures, 1 case had a principal diagnosis of hemangioma of
intracranial structures and 1 case had a principal diagnosis of
unspecified convulsions. The data also demonstrate that 16 of the 25
cases reported in MS-DRG 042 include patients who were under the age of
65, with ages ranging from 32 years old to 64 years old. We note that
patients diagnosed with epilepsy are eligible for coverage since it is
a condition that qualifies under certain criteria. It is not entirely
clear if the age of these patients had any impact on the average length
of stay since the average length of stay of the 24 cases reporting LITT
of brain was 1.7 days and the 1 case reporting LITT of brain stem was 2
days.
As stated previously, the logic for case assignment to MS-DRG 042
is not dependent on the reporting of any CC or MCC diagnoses, however,
based on the diagnoses reflected in the claims data for MS-DRG 042, it
is possible that conditions such as obesity and chronic conditions
requiring the long-term use of certain therapeutic agents may be
contributing factors to the consumption of resources, separately from
the LITT procedure. We found 17 of the 25 cases reporting LITT of brain
or brain stem to also report one or both of these conditions.
We also reviewed the number of cases of LITT of the brain or brain
stem procedures reported in the data since the transition to ICD-10.
Specifically, we examined the claims data for cases reporting LITT of
brain or brain stem as a standalone procedure or with another procedure
in the FY 2016 through FY 2021 MedPAR data files across all MS-DRGs.
The findings from our analysis are shown in table 6P.2e associated with
this proposed rule.
The data demonstrates that since the implementation of ICD-10, a
shift in the reporting of LITT of brain and brain stem procedures has
occurred. For example, the FY 2016, FY 2017 and FY 2018 MedPAR data
reflect that the number of cases for which LITT of brain or brain stem
procedures were reported as a standalone procedure is higher in
comparison to the number of cases reported with another procedure.
Conversely, the FY 2019, FY 2020, and FY 2021 MedPAR data reflect that
the number of cases for which LITT of brain or brain stem procedures
were reported as a standalone procedure is lower in comparison to the
number of cases reported with another procedure. The data also reflect
that the average length of stay is shorter and the average costs are
lower for cases reporting LITT of brain or brain stem as a standalone
procedure in comparison to the average length of stay and average costs
for cases reported with another procedure across the FY 2016 through FY
2021 MedPAR data files. Lastly, the data demonstrate that overall, the
number of cases for which LITT of brain or brain stem procedures was
performed had remained fairly stable at over 100 cases with increases
in the FY 2017, FY 2020 and FY 2021 MedPAR data files of 156, 154 and
185 cases, respectively.
We also analyzed claims data from the September 2021 update of the
FY 2021 MedPAR file for cases reporting LITT of other anatomic sites
across all MS-DRGs. Although the requestors indicated that LITT is
primarily performed on intracranial lesions, as shown in Table 6P.2c
associated with this proposed rule, we identified a small number of
cases reporting LITT of the lung, rectum, liver, breast, and prostate,
for a total of 29 cases where LITT was performed on other body parts/
anatomic sites.
For example, we found a total of 5 cases reporting LITT of lung
across 5 different MS-DRGs. Of these 5 cases, 2 cases had a longer
average length of stay and higher average costs in comparison to all
the cases in their respective MS-DRG. Specifically, for MS-DRG 163
(Major Chest Procedures with MCC), we found 1 case reporting LITT of
lung with an average length of stay of 17 days and average costs of
$41,467. The average length of stay for all cases in MS-DRG 163 is 10.7
days with average costs of $38,367. The data demonstrates a difference
of 6.3 days (17-10.7=6.3) for the average length of stay and a
difference of $3,100 in average costs ($41,467-$38,367=$3,100) for the
1 case reporting LITT of lung in MS-DRG 163 compared to all the cases
in MS-DRG 163. For MS-DRG 167 (Other Respiratory System O.R. Procedures
with CC), we found 1 case reporting LITT of lung with an average length
of stay of 7 days and average costs of $22,975. The average length of
stay for all cases in MS-DRG 167 is 4.6 days with average costs of
$15,397. The data demonstrates a difference of 2.4 days (7-4.6=2.4) for
the average length of stay and a difference of $7,578 in average costs
($22,975-$15,397=$7,578) for the 1
[[Page 28140]]
case reporting LITT of lung in MS-DRG 167 compared to all the cases in
MS-DRG 167. The data for the remaining 3 cases reporting LITT of lung
demonstrated a shorter average length of stay and lower average costs
in comparison to all the cases in their respective MS-DRGs.
We found 1 case reporting LITT of rectum in MS-DRG 357 (Other
Digestive System O.R. Procedures with CC) with a shorter average length
of stay (4 days versus 5.6 days) and lower average costs ($3,069 versus
$18,065) as compared to all the cases in MS-DRG 357. We also found 1
case reporting LITT of liver in MS-DRG 405 (Pancreas Liver and Shunt
Procedures with MCC) with a longer average length of stay (20 days
versus 12.3 days) and higher average costs ($49,0695 versus $43,771) as
compared to all the cases in MS-DRG 405.We also found 1 case reporting
LITT of right breast in MS-DRG 580 (Other Skin Subcutaneous Tissue and
Breast Procedures with CC) with a longer average length of stay (19
days versus 5.4 days) and higher average costs ($32,064 versus $13,767)
as compared to all the cases in MS-DRG 580.
Lastly, we found 21 cases reporting LITT of prostate across 14 MS-
DRGs. Of those 21 cases, 6 cases had a longer average length of stay or
higher average costs, or both, in comparison to the average length of
stay and average costs of all the cases in their respective MS-DRG. For
example, in MS-DRG 650 (Kidney Transplant with Hemodialysis with MCC)
we found 1 case reporting LITT of prostate with an average length of
stay of 36 days and average costs of $67,238. The average length of
stay for all cases in MS-DRG 650 is 8.1 days with average costs of
$38,139. The data demonstrates a difference of 27.9 days (36-8.1=27.9)
for the average length of stay and a difference of $29,099 in average
costs ($67,238-$38,139= $29,099) for the 1 case reporting LITT of
prostate in MS-DRG 650 compared to all the cases in MS-DRG 650. We also
found 1 case reporting LITT of prostate in MS-DRG 659 (Kidney and
Ureter Procedures for Non-Neoplasm with MCC) with an average length of
stay of 26 days. The average length of stay for all cases in MS-DRG 659
is 7.8 days, demonstrating a difference of 18.2 days (26-7.8=18.2). We
found 1 case reporting LITT of prostate in MS-DRG 712 (Testes
Procedures without CC/MCC) with average costs of $15,669. The average
costs for all cases in MS-DRG 712 is $10,482, demonstrating a
difference of $5,187 ($15,669-$10,482=$5,187). We found 1 case
reporting LITT of prostate in MS-DRG 987 with an average length of stay
of 23 days and average costs of $35,465. The average length of stay for
all cases in MS-DRG 987 is 10.9 days with average costs of $26,657. The
data demonstrates a difference of 12.1 days (23-10.9=12.1) for the
average length of stay and a difference of $8,808 in average costs
($35,465-$26,657= $8,808) for the 1 case reporting LITT of prostate in
MS-DRG 987 compared to all the cases in MS-DRG 987. Lastly, we found 2
cases reporting LITT of prostate in MS-DRG 988 (Non-Extensive O.R.
Procedures Unrelated to Principal Diagnosis with CC) with average costs
of $17,126. The average costs for all cases in MS-DRG 988 is $13,670,
demonstrating a difference of $3,456 ($17,126-$13,670= $3,456) for the
2 cases reporting LITT of prostate in MS-DRG 988.
We refer the reader to Table 6P.2c for the detailed findings from
our analysis. We note that if the procedure code describing LITT of a
specific anatomic site is not listed it is because there were no cases
found.
We note that for the 10 cases previously described, for which LITT
of a different anatomic site from the brain or brain stem was reported
and had a longer average length of stay or higher average costs, or
both, in comparison to the average length of stay and average costs of
all the cases in their respective MS-DRG, that with the exception of
MS-DRG 712, all the other MS-DRGs include a ``with MCC'' or ``with CC''
designation, or were reported in a surgical MS-DRG. We believe that
these other factors may have contributed to the longer average length
of stay and higher average costs for these cases, therefore we
conducted additional analyses of the claims data to determine what
diagnoses or procedures were also reported. We refer the reader to
Table 6P.2d associated with this proposed rule for the findings from
our detailed analysis of these 10 cases.
As shown in Table 6P.2d, the data demonstrate that a number of MCC
and/or CC secondary diagnoses were reported for each of the 10 cases
and that the surgical procedures that were reported in addition to the
LITT procedure seem to have contributed to the longer average length of
stay and higher average costs for those cases when compared to the
average length of stay and average costs for all the cases in their
respective MS-DRG. For example, in case number 1 there are 2 diagnoses
that are designated as MCC conditions and 5 diagnoses that that are
designated as CC conditions with procedure codes describing a kidney
transplant, hemodialysis, and insertion of a ureteral stent that were
reported along with LITT of prostate. For case number 3 there are 4
diagnoses that are designated as MCC conditions and 6 diagnoses that
are designated as CC conditions with procedure codes describing
bronchoscopic treatment of a bronchial tumor with and without stents,
as well as the use of mechanical ventilation. Overall, the data appear
to indicate that the performance of the LITT procedure was not the
underlying reason for, or main driver of, the increase in resource
utilization for those cases.
As noted, the requestors indicated that LITT is primarily being
performed on intracranial lesions. However, as summarized, we
identified a limited number of cases reporting LITT procedures for
other anatomic sites. We are interested in comments regarding the use
of and experience with LITT for these other anatomic sites.
Based on our analysis of the FY 2021 MedPAR claims data for cases
reporting LITT of brain or brain stem (codes D0Y0KZZ and D0Y1KZZ) in
MS-DRGs 040, 041, and 042, we agree with the requestors that the
average costs of these cases are higher as compared to the average
costs of all cases assigned to MS-DRGs 040, 041, and 042. For the
reasons summarized, we also believe that other factors, including the
reporting of secondary MCC and CC diagnoses, may be contributing to the
higher average costs for these cases. As discussed in the FY 2022 IPPS/
LTCH PPS final rule (86 FR 44813), we examined procedure codes D0Y0KZZ
and D0Y1KZZ describing LITT of brain and brain stem, respectively, and
stated that 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. Our clinical advisors continue to
maintain that LITT is a minimally invasive procedure, requiring only a
tiny incision for purposes of a burr hole and that patients are often
only kept overnight (as reflected in the detailed claims data).
However, we also recognize that craniotomy and LITT share common
procedural characteristics including use of an operating room, carry
risk of immediate intracranial bleeding or infection, and cause tissue
to be immediately destroyed or excised. While the data do not
demonstrate that the LITT procedure is the underlying reason for the
higher average costs and consumption of resources for the small number
of cases reporting LITT of brain (54 cases) or brain stem (2 cases)
that we found in MS-DRGs 040, 041, and 042,
[[Page 28141]]
the data do demonstrate that the patients receiving this treatment
therapy have brain tumors or epilepsy combined with multiple
comorbidities or chronic conditions necessitating long-term use of
medications, or both, and we note the indications for LITT (brain
tumors and epileptic foci) are better aligned with MS-DRGs 025, 026,
and 027 as compared to MS-DRGs 040, 041, and 042.
As we discuss further in this section, we intend to more fully
evaluate the logic for the procedures specifically involving a
craniotomy, as well as the overall structure of MS-DRGs 023 through
027, and we believe that reassignment of cases reporting LITT of brain
or brain stem to MS-DRGs 025, 026, and 027 would be an appropriate
first step in connection with these efforts. For example, while we
recognize the distinctions between open craniotomy procedures and
minimally invasive percutaneous intracranial procedures, we also
recognize that the current logic for MS-DRGs 025 through 027 also
includes other endovascular intracranial procedures performed using
percutaneous or percutaneous endoscopic approaches, and we believe that
further review of the clinical coherence of the procedures assigned to
these MS-DRGs may be warranted. Our clinical advisors note that while
the typical patient treated with LITT usually has a single small scalp
incision through which a hole approximately the diameter of a straw is
drilled, with no extensive surgical exposure, that LITT can still be
employed for another subset of more complex patients, including
patients with primary brain malignancies and those with larger
metastatic lesions or multiple lesions. For this subset of more complex
patients, a longer post-operative stay with direct medical supervision
may be necessary. As such, we believe reassigning these procedures to
MS-DRGs 025 through 027 for FY 2023 would be appropriate as we consider
restructuring MS-DRGs 023 through 027, including how to better align
the clinical indications with the performance of specific intracranial
procedures. Accordingly, for these reasons, in the event there is not
support for the proposed reclassification of LITT procedures and the
corresponding new procedure codes as presented at the March 8-9, 2022
ICD-10 Coordination and Maintenance Committee meeting, we are proposing
to reassign the existing procedure codes describing LITT of the brain
or brain stem from MS-DRGs 040, 041, and 042 to MS-DRGs 025, 026, and
027 for FY 2023. We are also proposing to maintain the MS-DRG
assignments for the existing procedure codes describing LITT of other
anatomic sites as finalized and displayed in Table 6P.2b in association
with the FY 2022 IPPS/LTCH PPS final rule, for FY 2023. We note that we
did not receive any comments or requests to reconsider those finalized
MS-DRG assignments for FY 2023.
As noted, in connection with our analysis of cases reporting LITT
procedures performed on the brain or brain stem in MDC 01, we have
started to examine the logic for case assignment to MS-DRGs 023 through
027 to determine where further refinements could potentially be made to
better account for differences in the technical complexity and resource
utilization among the procedures that are currently assigned to those
MS-DRGs. Specifically, we are in the process of evaluating procedures
that are performed using an open craniotomy (where it is necessary to
surgically remove a portion of the skull) versus a percutaneous burr
hole (where a hole approximately the size of a pencil is drilled) to
obtain access to the brain in the performance of a procedure. We are
also reviewing the indications for these procedures, for example,
malignant neoplasms versus epilepsy to consider if there may be merit
in considering restructuring the current MS-DRGs to better recognize
the clinical distinctions of these patient populations in the MS-DRGs.
We believe it is worthwhile to also compare the claims data for
epilepsy patients who are treated with a neurostimulator implant versus
a LITT procedure, as well as the claims data for patients with a
diagnosis of epilepsy or malignant neoplasms who undergo a LITT
procedure. Our analysis also includes reviewing the claims data with
regard to the cases that reflect a procedure that is generally
performed with another O.R. procedure versus a standalone procedure.
As we continue this analysis of the claims data with respect to MS-
DRGs 023 through 027, we are also seeking public comments and feedback
on other factors that should be considered in the potential
restructuring of these MS-DRGs. As previously described, we are
examining procedures by their approach (open versus percutaneous),
clinical indications, and procedures that involve the insertion or
implantation of a device. We recognize the logic for MS-DRGs 023
through 027 has grown more complex over the years and believe there is
opportunity for further refinement. We refer the reader to the ICD-10
MS-DRG Definitions Manual, version 39.1, which is available via the
internet on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a> for complete documentation of the GROUPER logic for MS-DRGs
023 through 027. Feedback and other suggestions may be submitted by
October 20, 2022 and directed to the new electronic intake system,
Medicare Electronic Application Request Information System<SUP>TM</SUP>
(MEARIS<SUP>TM</SUP>), discussed in section II.D.1.b of the preamble of
this proposed rule at <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
b. Vagus Nerve Stimulation
We received a request to review the MS-DRG assignment for cases
that identify patients who receive an implantable vagus nerve
stimulation system for heart failure. The vagus nerve, also called the
X cranial nerve or the 10th cranial nerve, is the longest and most
complex of the cranial nerves. There is one vagus nerve on each side of
the body that runs from the brain through the face and thorax to the
abdomen. According to the requestor, cranial nerve stimulation (CNS),
which includes vagus nerve stimulation, is a well-established therapy
for various indications including epilepsy, treatment resistant
depression (TRD) and obstructive sleep apnea (OSA), and is now being
investigated and studied for use in patients with heart failure.
According to the requestor, heart failure, or the heart's inability
to pump an adequate supply of blood and oxygen to support the other
organs of the body, is an autonomic nervous system dysfunction. The
brain controls the function of the heart through the sympathetic branch
and the parasympathetic branches of the autonomic nervous system. In
heart failure, there is an imbalance in the autonomic nervous system.
The vagus nerve stimulation system for heart failure is comprised of an
implantable pulse generator, an electrical lead, and a programming
computer system. The pulse generator, which is usually implanted just
under the skin of the pectoral region, sends the energy to the vagus
nerve through the lead. The lead is a flexible insulated wire that is
guided under the skin from the chest up to the neck and is implanted
onto the vagus nerve and transmits tiny electrical impulses from the
generator to the nerve. These electrical impulses to the vagus nerve
are intended to activate the parasympathetic branch of the autonomic
nervous system to restore balance.
[[Page 28142]]
The requestor stated that cases reporting a procedure code
describing the insertion of a neurostimulator lead onto the vagus nerve
and a procedure code describing the insertion of a stimulator generator
with a principal diagnosis code describing epilepsy, TRD or OSA are
assigned to surgical MS-DRGs 040, 041 and 042 (Peripheral Cranial Nerve
and Other Nervous System Procedures with MCC, with CC or Peripheral
Neurostimulator, and without CC/MCC, respectively) in MDC 01 (Diseases
and Disorders of the Nervous System). However, when the same codes
describing the insertion of a neurostimulator lead onto the vagus nerve
and the insertion of a stimulator generator are reported with a
principal diagnosis of heart failure, the cases instead are assigned to
surgical MS-DRGs 252, 253 and 254 (Other Vascular Procedures with MCC,
with CC, without MCC respectively) in MDC 05 (Diseases and Disorders of
the Circulatory System).
The requestor stated that the treatment of autonomic nervous system
dysfunction is the underlying therapeutic objective of cranial nerve
stimulation for heart failure, and therefore the diagnosis of heart
failure is more clinically coherent with other diagnoses in MDC 01. As
a result, the requestor, who is developing the VITARIA[supreg] System,
an active implantable neuromodulation system that uses vagus nerve
stimulation to deliver autonomic regulation therapy (ART) for an
indicated use that includes patients who have moderate to severe heart
failure, submitted a request to reassign cases reporting a procedure
code describing the insertion of a neurostimulator lead onto the vagus
nerve and a procedure code describing the insertion of a stimulator
generator with a principal diagnosis code describing heart failure,
from MS-DRGs 252, 253 and 254 in MDC 05 to MS-DRGs 040, 041 and 042 in
MDC 01. This requestor also submitted an application for new technology
add-on payment for FY 2023. We refer readers to section II.F.6. of the
preamble of this proposed rule for a discussion regarding the
application for new technology add-on payments for the VITARIA[supreg]
System for FY 2023.
According to the requestor, the following ICD-10-PCS procedure code
pair identifies the insertion of a vagus nerve stimulation system for
heart failure:
[GRAPHIC] [TIFF OMITTED] TP10MY22.015
The requestor performed its own analysis of Medicare claims from
2020 and stated that it
[…truncated; see source link]Indexed from Federal Register on May 10, 2022.
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