Proposed Rule2023-07389
Medicare Program; Proposed Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2024 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Rural Emergency Hospital and Physician-Owned Hospital Requirements; and Provider and Supplier Disclosure of Ownership
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 1, 2023
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); and make other policy-related changes.
Full Text
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[Federal Register Volume 88, Number 83 (Monday, May 1, 2023)]
[Proposed Rules]
[Pages 26658-27309]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-07389]
[[Page 26657]]
Vol. 88
Monday,
No. 83
May 1, 2023
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 411, 412, 419, et al.
Medicare Program; Proposed Hospital Inpatient Prospective Payment
Systems for Acute Care Hospitals and the Long Term Care Hospital
Prospective Payment System and Policy Changes and Fiscal Year 2024
Rates; Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Rural Emergency Hospital and Physician-Owned Hospital Requirements; and
Provider and Supplier Disclosure of Ownership; Proposed Rule
Federal Register / Vol. 88, No. 83 / Monday, May 1, 2023 / Proposed
Rules
[[Page 26658]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 411, 412, 419, 488, 489, and 495
[CMS-1785-P]
RIN 0938-AV08
Medicare Program; Proposed Hospital Inpatient Prospective Payment
Systems for Acute Care Hospitals and the Long-Term Care Hospital
Prospective Payment System and Policy Changes and Fiscal Year 2024
Rates; Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Rural Emergency Hospital and Physician-Owned Hospital Requirements; and
Provider and Supplier Disclosure of Ownership
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); and make other
policy-related changes.
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 9, 2023.
ADDRESSES: In commenting, please refer to file code CMS-1785-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-1785-P, P.O. Box 8013,
Baltimore, MD 21244-8013.
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-1785-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, and Michele Hudson,
(410) 786-4487 or <a href="/cdn-cgi/l/email-protection#2b6f6a686b48465805434358054c445d"><span class="__cf_email__" data-cfemail="1357525053707e603d7b7b603d747c65">[email protected]</span></a>, 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 Inpatient Critical Access Hospital (CAH)
Issues.
Emily Lipkin, and Jim Mildenberger, <a href="/cdn-cgi/l/email-protection#1155505251727c623f7979623f767e67"><span class="__cf_email__" data-cfemail="e7a3a6a4a7848a94c98f8f94c9808891">[email protected]</span></a>, Long-Term Care
Hospital Prospective Payment System and MS-LTC-DRG Relative Weights
Issues.
Adina Hersko, <a href="/cdn-cgi/l/email-protection#c18fa4b695a4a2a981a2acb2efa9a9b2efa6aeb7"><span class="__cf_email__" data-cfemail="440a21331021272c042729376a2c2c376a232b32">[email protected]</span></a>, New Technology Add-On Payments
and New COVID-19 Treatments Add-on Payments Issues.
Mady Hue, <a href="/cdn-cgi/l/email-protection#076a66756e6b72296f726247646a74296f6f7429606871"><span class="__cf_email__" data-cfemail="c8a5a9baa1a4bde6a0bdad88aba5bbe6a0a0bbe6afa7be">[email protected]</span></a>, and Andrea Hazeley,
<a href="/cdn-cgi/l/email-protection#5c3d32382e393d72343d26393039251c3f312f7234342f723b332a"><span class="__cf_email__" data-cfemail="21404f455344400f49405b444d445861424c520f4949520f464e57">[email protected]</span></a>, MS-DRG Classifications Issues.
Siddhartha Mazumdar, <a href="/cdn-cgi/l/email-protection#7f0c161b1b171e0d0b171e51121e050a121b1e0d3f1c120c5117170c"><span class="__cf_email__" data-cfemail="b0c3d9d4d4d8d1c2c4d8d19eddd1cac5ddd4d1c2f0d3ddc39ed8d8c3">[email protected]</span></a>,gov, Rural
Community Hospital Demonstration Program Issues.
Jeris Smith, <a href="/cdn-cgi/l/email-protection#751f10071c065b06181c011d351618065b1d1d065b121a03"><span class="__cf_email__" data-cfemail="056f60776c762b76686c716d456668762b6d6d762b626a73">[email protected]</span></a>, Frontier Community Health
Integration Project (FCHIP) Demonstration Issues.
Lang Le, <a href="/cdn-cgi/l/email-protection#385459565f16545d785b554b1650504b165f574e"><span class="__cf_email__" data-cfemail="066a676861286a6346656b75286e6e7528616970">[email protected]</span></a>, Hospital Readmissions Reduction
Program--Administration Issues.
Ngozi Uzokwe, <a href="/cdn-cgi/l/email-protection#bad4ddd5c0d394cfc0d5d1cddffad9d7c994d2d2c994ddd5cc"><span class="__cf_email__" data-cfemail="442a232b3e2d6a313e2b2f3321042729376a2c2c376a232b32">[email protected]</span></a>, Hospital Readmissions
Reduction Program--Measures Issues.
Jennifer Tate, <a href="/cdn-cgi/l/email-protection#1f757a717176797a6d316b7e6b7a5f7c726c3177776c31787069"><span class="__cf_email__" data-cfemail="fa909f9494939c9f88d48e9b8e9fba999789d4929289d49d958c">[email protected]</span></a>, Hospital-Acquired
Condition Reduction Program--Administration Issues.
Ngozi Uzokwe, <a href="/cdn-cgi/l/email-protection#88e6efe7f2e1a6fdf2e7e3ffedc8ebe5fba6e0e0fba6efe7fe"><span class="__cf_email__" data-cfemail="147a737b6e7d3a616e7b7f6371547779673a7c7c673a737b62">[email protected]</span></a>, Hospital-Acquired Condition
Reduction Program--Measures Issues.
Julia Venanzi, <a href="/cdn-cgi/l/email-protection#f19b849d9890df87949f909f8b98b1929c82df999982df969e87"><span class="__cf_email__" data-cfemail="e48e91888d85ca92818a858a9e8da4878997ca8c8c97ca838b92">[email protected]</span></a>, Hospital Inpatient
Quality Reporting Program and Hospital Value-Based Purchasing Program--
Administration Issues.
Melissa Hager, <a href="/cdn-cgi/l/email-protection#5c313930352f2f3d72343d3b392e1c3f312f7234342f723b332a"><span class="__cf_email__" data-cfemail="412c242d283232206f292026243301222c326f2929326f262e37">[email protected]</span></a> and Ngozi Uzokwe,
<a href="/cdn-cgi/l/email-protection#49272e263320673c3326223e2c092a243a6721213a672e263f"><span class="__cf_email__" data-cfemail="3b555c544152154e4154504c5e7b58564815535348155c544d">[email protected]</span></a>--Hospital Inpatient Quality Reporting Program
and Hospital Value-Based Purchasing Program--Measures Issues Except
Hospital Consumer Assessment of Healthcare Providers and Systems
Issues.
Elizabeth Goldstein, <a href="/cdn-cgi/l/email-protection#0560696c7f646760716d2b626a69617671606c6b456668762b6d6d762b626a73"><span class="__cf_email__" data-cfemail="a5c0c9ccdfc4c7c0d1cd8bc2cac9c1d6d1c0cccbe5c6c8d68bcdcdd68bc2cad3">[email protected]</span></a>, 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#16796477387277617372737f6256757b65387e7e6538717960"><span class="__cf_email__" data-cfemail="cba4b9aae5afaabcaeafaea2bf8ba8a6b8e5a3a3b8e5aca4bd">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting--Administration Issues.
Leah Domino, <a href="/cdn-cgi/l/email-protection#335f56525b1d575c5e5a5d5c73505e401d5b5b401d545c45"><span class="__cf_email__" data-cfemail="cda1a8aca5e3a9a2a0a4a3a28daea0bee3a5a5bee3aaa2bb">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting Program--Measure Issues.
Ariel Cress, <a href="/cdn-cgi/l/email-protection#6504170c00094b0617001616250608164b0d0d164b020a13"><span class="__cf_email__" data-cfemail="70110219151c5e130215030330131d035e1818035e171f06">[email protected]</span></a>, Lorraine Wickiser, Lorraine,
<a href="/cdn-cgi/l/email-protection#e7b08e848c8e948295a7848a94c98f8f94c9808891"><span class="__cf_email__" data-cfemail="e2b58b81898b918790a2818f91cc8a8a91cc858d94">[email protected]</span></a>, Long-Term Care Hospital Quality Reporting
Program--Data Reporting Issues.
Jessica Warren, <a href="/cdn-cgi/l/email-protection#305a5543435953511e47514242555e70535d431e5858431e575f46"><span class="__cf_email__" data-cfemail="38525d4b4b515b59164f594a4a5d56785b554b1650504b165f574e">[email protected]</span></a> and Elizabeth Holland,
<a href="/cdn-cgi/l/email-protection#b7d2dbdecdd6d5d2c3df99dfd8dbdbd6d9d3f7d4dac499dfdfc499d0d8c1"><span class="__cf_email__" data-cfemail="b3d6dfdac9d2d1d6c7db9ddbdcdfdfd2ddd7f3d0dec09ddbdbc09dd4dcc5">[email protected]</span></a>, Medicare Promoting Interoperability
Program.
Jennifer Milby, <a href="/cdn-cgi/l/email-protection#abc1cec5c5c2cdced985c6c2c7c9d2ebc8c6d885c3c3d885ccc4dd"><span class="__cf_email__" data-cfemail="d8b2bdb6b6b1bebdaaf6b5b1b4baa198bbb5abf6b0b0abf6bfb7ae">[email protected]</span></a> and Sara Brice-Payne,
<a href="/cdn-cgi/l/email-protection#b0c3d1c2d19ed2c2d9d3d59dc0d1c9ded5f0d3ddc39ed8d8c39ed7dfc6"><span class="__cf_email__" data-cfemail="097a687b68276b7b606a6c24796870676c496a647a2761617a276e667f">[email protected]</span></a>, Special Requirements for Rural Emergency
Hospitals (REHs).
Lisa O. Wilson, <a href="/cdn-cgi/l/email-protection#d894b1abb9f68fb1b4abb7b6ea98bbb5abf6b0b0abf6bfb7ae"><span class="__cf_email__" data-cfemail="7b3712081a552c1217081415493b18160855131308551c140d">[email protected]</span></a>, Physician-Owned Hospital
Issues.
Frank Whelan, <a href="/cdn-cgi/l/email-protection#6e281c0f00054039060b020f002e0d031d4006061d40090118"><span class="__cf_email__" data-cfemail="16506477787d38417e737a777856757b65387e7e6538717960">[email protected]</span></a>, Disclosure of Ownership.
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 on the CMS Website
The IPPS tables for this fiscal year (FY) 2024 proposed rule are
available on the CMS website at https://
[[Page 26659]]
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
AcuteInpatientPPS/index.html. Click on the link on the left side of the
screen titled ``FY 2024 IPPS Proposed rule Home Page'' or ``Acute
Inpatient--Files for Download.'' The LTCH PPS tables for this FY 2024
proposed rule are available 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-1785-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 2024 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, <a href="/cdn-cgi/l/email-protection#fabebbb9ba999789d4929289d49d958c"><span class="__cf_email__" data-cfemail="db9f9a989bb8b6a8f5b3b3a8f5bcb4ad">[email protected]</span></a>.
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. Use of the Best Available Data in the FY 2024 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 Changes to Specific MS-DRG Classifications
D. Recalibration of the FY 2024 MS-DRG Relative Weights
E. Add-On Payments for New Services and Technologies for FY 2024
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 2024 Unadjusted Wage
Index
E. Occupational Mix Adjustment to the FY 2024 Wage Index
F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2024 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 2024 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 2024 Wage Index
IV. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2024 (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. Supplemental Payment for Indian Health Service (IHS) and
Tribal Hospitals and Puerto Rico Hospitals
E. Uncompensated Care Payments
V. Other Decisions and Changes to the IPPS for Operating System
A. Proposed Changes to MS-DRGs Subject to Postacute Care
Transfer Policy and MS-DRG Special Payments Policies (Sec. 412.4)
B. Proposed Changes in the Inpatient Hospital Update for FY 2024
(Sec. 412.64(d))
C. Sole Community Hospitals--Effective Date of Status in the
Case of a Merger (Sec. 412.92)
D. Rural Referral Centers (RRCs) Proposed Annual Updates (Sec.
412.96)
E. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.
412.101)
F. Temporary Legislative Extension of Medicare-Dependent, Rural
Hospital Program
G. Proposed Payments for Indirect and Direct Graduate Medical
Education Costs (Sec. Sec. 412.105 and 413.75 Through 413.83)
H. Reasonable Cost Payment for Nursing and Allied Health
Education Programs (Sec. Sec. 413.85 and 413.87)
I. Proposed Payment Adjustment for Certain Clinical Trial and
Expanded Access Use Immunotherapy Cases (Sec. Sec. 412.85 and
412.312)
J. Hospital Readmissions Reduction Program (Sec. Sec. 412.150
through 412.154)
K. Hospital Value-Based Purchasing (VBP) Program: Proposed
Policy Changes (Sec. Sec. 412.160 Through 412.167)
L. Hospital-Acquired Condition (HAC) Reduction Program
M. 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 2024
D. Treatment of Rural Reclassifications for Capital DSH Payments
VII. Proposed Changes for Hospitals Excluded From the IPPS
A. Proposed Rate-of-Increase in Payments to Excluded Hospitals
for FY 2024
B. Critical Access Hospitals (CAHs)
VIII. Proposed Changes to the Long-Term Care Hospital Prospective
Payment System (LTCH PPS) for FY 2024
A. Background of the LTCH PPS
B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
LTC-DRG) Classifications and Relative Weights for FY 2024
C. Changes to the LTCH PPS Payment Rates and Other Proposed
Changes to the LTCH PPS for FY 2024
IX. Proposed Quality Data Reporting Requirements for Specific
Providers and Suppliers
A. Overview
B. Crosscutting Quality Program Proposal to Adopt the Up-to-Date
COVID-19 Vaccination Among Healthcare Personnel Measure
C. Proposed Changes to the Hospital Inpatient Quality Reporting
(IQR) Program
D. Proposed Changes to the PPS-Exempt Cancer Hospital Quality
Reporting (PCHQR) Program
E. Proposed Changes to the Long-Term Care Hospital Quality
Reporting Program (LTCH QRP)
F. Proposed Changes to the Medicare Promoting Interoperability
Program
X. Other Provisions Included in This Proposed Rule
A. Rural Emergency Hospitals (REHs)
B. Physician Self-Referral and Physician-Owned Hospitals
C. Proposed Technical Corrections to 42 CFR 411.353 and 411.357
D. Safety Net RFI
E. Disclosures of Ownership and Additional Disclosable Parties
Information
XI. MedPAC Recommendations and Publicly Available Files
A. MedPAC Recommendations
B. Publicly Available Files
XII. Collection of Information Requirements
A. Statutory Requirements for Solicitation of Comments
B. Collection of Information Requirements
Addendum--Schedule of Standardized Amounts, Update Factors, and
Rate-of-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. Summary and Background
II. Proposed Changes to Prospective Payment Rates for Hospital
Inpatient Operating Costs for Acute Care Hospitals for FY 2024
A. Calculation of the Proposed Adjusted Standardized Amount
B. Adjustments for Area Wage Levels and Cost-of-Living
C. Calculation of the Proposed Prospective Payment Rates
III. Proposed Changes to Payment Rates for Acute Care Hospital
Inpatient Capital-Related Costs for FY 2024
A. Determination of the Proposed Federal Hospital Inpatient
Capital-Related Prospective Payment Rate Update for FY 2024
B. Calculation of the Inpatient Capital-Related Prospective
Payments for FY 2024
C. Capital Input Price Index
IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-
of-Increase Percentages for FY 2024
V. Proposed Changes to the Payment Rates for the LTCH PPS for FY
2024
[[Page 26660]]
A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2024
B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS
for FY 2024
C. Proposed Cost-of-Living Adjustment (COLA) for LTCHs Located
in Alaska and Hawaii
D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO)
Cases
E. Proposed Update to the IPPS Comparable Amounts to Reflect the
Statutory Changes to the IPPS DSH Payment Adjustment Methodology
F. Computing the Proposed Adjusted LTCH PPS Federal Prospective
Payments for FY 2024
VI. Tables Referenced in This Proposed Rule Generally Available
Through the Internet on the CMS Website
Appendix A--Economic Analyses
I. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Objectives of the IPPS and the LTCH PPS
D. Limitations of Our Analysis
E. Hospitals Included in and Excluded From the IPPS
F. Quantitative Effects of the Policy Changes Under the IPPS for
Operating Costs
G. Effects of Other Policy Changes
H. Effects on Hospitals and Hospital Units Excluded From the
IPPS
I. Effects of Proposed Changes in the Capital IPPS
J. Effects of Proposed Payment Rate Changes and Policy Changes
Under the LTCH PPS
K. Effects of the Proposed Adoption of the Up-to-Date COVID-19
Vaccination Among Healthcare Personnel Measure Across Quality
Programs
L. Effects of Requirements for the Hospital Inpatient Quality
Reporting (IQR) Program
M. Effects of Requirements for the PPS-Exempt Cancer Hospital
Quality Reporting (PCHQR) Program
N. Effects of Proposed Requirements for the Long-Term Care
Hospital Quality Reporting Program (LTCH QRP)
O. Effects of Proposed Requirements Regarding the Promoting
Interoperability Program
P. Alternatives Considered
Q. Overall Conclusion
R. Regulatory Review Costs
II. Accounting Statements and Tables
A. Acute Care Hospitals
B. LTCHs
III. Regulatory Flexibility Act (RFA) Analysis
IV. Impact on Small Rural Hospitals
V. Unfunded Mandate Reform Act Analysis
VI. Executive Order 13132
VII. Executive Order 13175
VIII. Executive Order 12866
Appendix B: Recommendation of Update Factors for Operating Cost
Rates of Payment for Inpatient Hospital Services
I. Background
II. Inpatient Hospital Update for FY 2024
A. Proposed FY 2024 Inpatient Hospital Update
B. Proposed Update for SCHs for FY 2024
C. Proposed FY 2024 Puerto Rico Hospital Update
D. Proposed Update for Hospitals Excluded From the IPPS for FY
2024
E. Proposed Update for LTCHs for FY 2024
III. Secretary's Recommendations
IV. MedPAC Recommendation for Assessing Payment Adequacy and
Updating Payments in Traditional Medicare
V. Responses to Comments
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2024 IPPS/LTCH PPS proposed rule would make payment and
policy changes under the Medicare inpatient prospective payment system
(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 would also make policy changes to
programs associated with Medicare IPPS hospitals, IPPS-excluded
hospitals, and LTCHs. In this FY 2024 proposed rule, we are proposing
to continue policies to address wage index disparities impacting low
wage index hospitals. We are also 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.
In the Hospital VBP Program, we are proposing to add one new
measure, substantively modify two existing measures, add technical
changes to the administration of the Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) Survey, and change the
scoring policy to include a health equity scoring adjustment and modify
the Total Performance Score (TPS) maximum to be 110, resulting in
numeric score range of 0 to 110. We are also providing estimated and
newly established performance standards for the FY 2026 through FY 2029
program years for the Hospital VBP Program. In the HAC Reduction
Program, we are proposing to establish a validation reconsideration
process for data validation and to add an additional targeting
criterion for validation. We are not proposing any changes to the
Hospital Readmissions Reduction Program.
In the Hospital IQR Program, we are proposing to add three new
measures, to update three existing measures, and to remove three
measures. We are proposing changes to the validation process.
Additionally, we are seeking public comment on the potential future
adoption of two measures.
In the PPS-Exempt Cancer Hospital Quality Reporting Program (PCHQR)
we are proposing to add four new measures and to modify an existing
measure.
In the LTCH QRP we are proposing new measures, modifying an
existing measure, removing measures and proposing to increase the LTCH
QRP data completion thresholds for LTCH Continuity Assessment Record
and Evaluation (CARE) Data Set (LCDS) items. Additionally, we are we
are seeking information on principles for selecting and prioritizing
LTCH QRP quality measures and concepts under consideration for future
years and provide an update on CMS' continued efforts to close the
health equity gap.
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
2024 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 Balanced Budget Refinement
Act of 1999 (BBRA) (Public Law (Pub. L.) 106-113) and section 307(b)(1)
of the Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L.
106-554) (as codified under section 1886(m)(1) of the
[[Page 26661]]
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> Section 1814(l)(4) of the Act requires downward
adjustments to the applicable percentage increase, beginning with FY
2015, for CAHs that do not successfully demonstrate meaningful use of
certified electronic health record technology (CEHRT) for an EHR
reporting payment for a payment adjustment year.
<bullet> Section 1814(l)(3) of the Act offered incentive payments
under Medicare for critical access hospitals (CAHs) for certain payment
years, if they successfully adopted and demonstrated meaningful use of
CEHRT during an electronic health record (EHR) reporting period.
<bullet> Section 1814(l)(4) of the Act authorized downward payment
adjustments under Medicare, beginning with FY 2015, for CAHs that do
not successfully demonstrate meaningful use of CEHRT for an EHR
reporting payment for a payment adjustment year.
<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. Hospitals paid under the
IPPS with approved GME programs are paid for the indirect costs of
training residents in accordance with section 1886(d)(5)(B) 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 1886(b)(3)(B)(ix) of the Act requires downward
adjustments to the applicable percentage increase, beginning with FY
2015 (and beginning with FY 2022 for subsection (d) Puerto Rico
hospitals), for eligible hospitals that do not successfully demonstrate
meaningful use of CEHRT for an EHR reporting period for a payment
adjustment year.
<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(n) of the Act, which requires the Secretary
to offered incentive payments under Medicare for eligible hospitals for
certain payment years, if they successfully adopted and demonstrated
meaningful use of CEHRT during an electronic health record (EHR)
reporting period.
<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 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 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 an additional 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(kkk) of the Act requires the Secretary to
establish the conditions REHs must meet in order to participate in the
Medicare program and which are considered necessary to ensure the
health and safety of patients receiving services at these entities.
<bullet> Section 1877(i) of the Act, as added by section 6001(a)(3)
of the Patient Protection and Affordable Care Act of 2010 (Affordable
Care Act) (Pub. L. 111-148) and amended by section 1106 of the Health
Care and Education Reconciliation Act of 2010 (HCERA) (Pub. L. 111-
152), which requires the Secretary to establish and implement a process
under which a hospital that is an ``applicable hospital'' or a ``high
Medicaid facility'' may apply for an exception from the prohibition on
expansion of facility capacity.
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
changes in this proposed rule is presented in section
[[Page 26662]]
I.D. of the preamble of this proposed rule.
a. Proposed Modification to the Rural Wage Index Calculation
Methodology
As discussed in section III.G.1 of this proposed rule, CMS has
taken the opportunity to revisit the case law, prior public comments,
and the relevant statutory language with regard to its policies
involving the treatment of hospitals that have reclassified as rural
under section 1886(d)(8)(E) of the Act, as implemented in the
regulations under 42 CFR 412.103. After doing so, CMS now agrees that
the best reading of section 1886(d)(8)(E) is that it instructs CMS to
treat Sec. 412.103 hospitals the same as geographically rural
hospitals. Therefore, we believe it is proper to include these
hospitals in all iterations of the rural wage index calculation
methodology included in section 1886(d) of the Act, including all hold
harmless calculations in that provision. Beginning with FY 2024, we are
proposing to include hospitals with Sec. 412.103 reclassification
along with geographically rural hospitals in all rural wage index
calculations, and to exclude ``dual reclass'' hospitals (hospitals with
simultaneous Sec. 412.103 and Medicare Geographic Classification
Review Board (MGCRB) reclassifications) implicated by the hold harmless
provision at section 1886(d)(8)(C)(ii) of the Act.
b. Proposed Continuation of the Low Wage Index Hospital Policy
To help mitigate growing wage index disparities between high wage
and low 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. As
discussed in section III.G.4. of the preamble of this proposed rule, as
we only have 1 year of relevant data at this time that we could use to
evaluate any potential impacts of this policy, we believe it is
necessary to wait until we have useable data from additional fiscal
years before making any decision to modify or discontinue the policy.
Therefore, for FY 2024, we are proposing to continue the low wage index
hospital policy and the related budget neutrality adjustment.
c. 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
2024. 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. Consistent with the regulation at Sec.
412.106(g)(1)(iii)(C)(11), which was adopted in the FY 2023 IPPS/LTCH
PPS final rule, for FY 2024, we will use the 3 most recent years of
audited data on uncompensated care costs from Worksheet S-10 of the FY
2018, FY 2019, and FY 2020 cost reports to calculate Factor 3 in the
uncompensated care payment methodology for all eligible hospitals.
Beginning with FY 2023, we established a supplemental payment for
IHS and Tribal hospitals and hospitals located in Puerto Rico, to help
prevent undue long-term financial disruption to these hospitals due to
discontinuing use of the low-income insured days proxy in the
uncompensated care payment methodology for these providers.
d. 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 adopt modified versions of: (1)
the Medicare Spending Per Beneficiary (MSPB) Hospital measure beginning
with the FY 2028 program year; and (2) the Hospital-level Risk-
Standardized Complication Rate (RSCR) Following Elective Primary Total
Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) measure
beginning with the FY 2030 program year. We are also proposing to adopt
the Severe Sepsis and Septic Shock: Management Bundle measure in the
Safety Domain beginning with the FY 2026 program year. We are also
proposing to make technical changes to the form and manner of the
administration of the HCAHPS Survey measure under the Hospital VBP
Program beginning with the FY 2027 program year in alignment with the
Hospital IQR Program. Additionally, we are proposing to adopt a health
equity scoring change for rewarding excellent care in underserved
populations beginning with the FY 2026 program year. We are also
proposing to modify the Total Performance Score (TPS) maximum to be
110, such that the TPS numeric score range would be 0 to 110 in order
to afford even top-performing hospitals the opportunity to receive the
additional health equity bonus points under the proposed health equity
scoring change. We are also requesting feedback on potential additional
future changes to the Hospital VBP Program scoring methodology that
would address health equity.
e. Proposed Modification of the COVID-19 Vaccination Coverage Among
Healthcare Personnel (HCP) Measure in the Hospital IQR Program, PCHQR
Program, and LTCH QRP
In this FY 2024 IPPS/LTCH PPS proposed rule, we are proposing to
modify the COVID-19 Vaccination Coverage among Health Care Personnel
(HCP) measure to replace the term ``complete vaccination course'' with
the term ``up to date'' with regard to recommended COVID-19 vaccines
beginning with the Quarter 4 (Q4) calendar year (CY) 2023 reporting
period/FY 2025 payment determination for the Hospital IQR Program, and
the FY 2025 program year for the LTCH QRP and the PCHQR Program.
f. 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 2024 IPPS/LTCH PPS proposed rule, we are proposing
several
[[Page 26663]]
changes to the Hospital IQR Program. We are proposing the adoption of
three new measures: (1) Hospital Harm--Pressure Injury electronic
clinical quality measure (eCQM) beginning with the CY 2025 reporting
period/FY 2027 payment determination; (2) Hospital Harm--Acute Kidney
Injury eCQM beginning with the CY 2025 reporting period/FY 2027 payment
determination; and (3) Excessive Radiation Dose or Inadequate Image
Quality for Diagnostic Computed Tomography (CT) in Adults (Hospital
Level--Inpatient) eCQM beginning with the CY 2025 reporting period/FY
2027 payment determination. We are proposing the modification of three
current measures: (1) Hybrid Hospital-Wide All-Cause Risk Standardized
Mortality (HWM) measure beginning with the FY 2027 payment
determination; (2) Hybrid Hospital-Wide All-Cause Readmission (HWR)
measure beginning with the FY 2027 payment determination; and (3)
COVID-19 Vaccination among Healthcare Personnel (HCP) measure beginning
with the Quarter 4 CY 2023 reporting period/FY 2025 payment
determination. We are proposing the removal of three current measures:
(1) Hospital-level Risk-standardized Complication Rate (RSCR) Following
Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee
Arthroplasty (TKA) measure beginning with the April 1, 2025-March 31,
2028 reporting period/FY 2030 payment determination; (2) Medicare
Spending Per Beneficiary (MSPB)--Hospital measure beginning with the CY
2026 reporting period/FY 2028 payment determination; and (3) Elective
Delivery Prior to 39 Completed Weeks Gestation: Percentage of Babies
Electively Delivered Prior to 39 Completed Weeks Gestation (PC-01)
measure beginning with the CY 2024 reporting period/FY 2026 payment
determination. We are proposing to codify our Measure Removal Factors.
We are requesting comment on the potential future inclusion of
geriatric measures and a potential future public-facing geriatric
hospital designation in the Hospital IQR Program.
We are proposing two changes to current policies related to data
submission, reporting, and validation: (1) Modification of the Hospital
Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey
Measure beginning with the CY 2025 reporting period/FY 2027 payment
determination; and (2) Modification of the targeting criteria for
hospital validation for extraordinary circumstances exceptions (ECEs)
beginning with the FY 2027 payment determination.
g. 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 2024 IPPS/LTCH PPS proposed rule, we are proposing to
adopt four new measures for the PCHQR Program: (i) three health equity-
focused measures: the Facility Commitment to Health Equity measure, the
Screening for Social Drivers of Health measure, and the Screen Positive
Rate for Social Drivers of Health measure; and (ii) a patient
preference-focused measure, the Documentation of Goals of Care
Discussions Among Cancer Patients measure. We are proposing to adopt a
modified version of the COVID-19 Vaccination Coverage among Health Care
Personnel (HCP) measure beginning with the FY 2025 program year. We are
also proposing to publicly report the Surgical Treatment Complications
for Localized Prostate Cancer (PCH-37) measure beginning with data from
the FY 2025 program year, and modified data submission and reporting
requirements for the HCAHPS survey measure beginning with the FY 2027
program year.
h. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
We are proposing several proposed changes to the LTCH QRP.
Specifically, we are: (1) proposing to adopt a modified version of the
COVID-19 Vaccination Coverage among Healthcare Personnel measure
beginning with the FY 2025 LTCH QRP; (2) proposing to adopt the
Discharge Function Score measure beginning with the FY 2025 LTCH QRP;
(3) proposing to remove the Percent of LTCH Patients with an Admission
and Discharge Functional Assessment and a Care Plan That Addresses
Function measure beginning with the FY 2025 LTCH QRP; (4) proposing to
remove the Application of Percent of LTCH Patients with an Admission
and Discharge Functional Assessment and a Care Plan That Addresses
Function measure beginning with the FY 2025 LTCH QRP; (5) proposing to
adopt the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to
Date measure beginning with the FY 2026 LTCH QRP; (6) proposing to
increase the LTCH QRP data completion thresholds for the LTCH
Continuity Assessment Record and Evaluation (CARE) Data Set (LCDS)
beginning with the FY 2026 LTCH QRP; and (7) proposing to begin public
reporting of the Transfer of Health (TOH) Information to the Patient-
Post-Acute Care (PAC) and TOH Information to the Provider-PAC measures
beginning with the FY 2025 LTCH QRP.
i. Medicare Promoting Interoperability Program
In this proposed rule, we are proposing several changes to the
Medicare Promoting Interoperability Program. Specifically, we are
proposing to: (1) amend the definition of ``EHR reporting period for a
payment adjustment year'' at 42 CFR 495.4 for eligible hospitals and
CAHs participating in the Medicare Promoting Interoperability Program,
to define the electronic health record (EHR) reporting period in CY
2025 as a minimum of any continuous 180-day period within CY 2025; (2)
update the definition of ``EHR reporting period for a payment
adjustment year'' at Sec. 495.4 for eligible hospitals such that,
beginning in CY 2025, those hospitals that have not successfully
demonstrated meaningful use in a prior year will not be required to
attest to meaningful use by October 1st of the year prior to the
payment adjustment year; (3) modify our requirements for the Safety
Assurance Factors for EHR Resilience (SAFER) Guides measure beginning
with the EHR reporting period in CY 2024, to require eligible hospitals
and CAHs to attest ``yes'' to having conducted an annual self-
assessment of all nine SAFER Guides at any point during the calendar
year in which the EHR reporting period occurs; (4) modify the way we
refer to the calculation considerations related to unique patients or
actions for Medicare Promoting Interoperability Program objectives and
measures for which there is no numerator and denominator; and (5) adopt
three new eCQMs beginning with the CY 2025 reporting period for
eligible hospitals and CAHs to select as one of their three self-
selected eCQMs: the Hospital Harm--Pressure Injury eCQM, the Hospital
Harm--Acute Kidney Injury eCQM, and the Excessive Radiation Dose or
Inadequate Image Quality for Diagnostic Computed Tomography (CT) in
Adults (Hospital Level--Inpatient) eCQM.
j. Hospital Readmissions Reduction Program
We are not proposing any changes to the Hospital Readmissions
Reduction Program. We note that all previously
[[Page 26664]]
finalized policies under this program will continue to apply and refer
readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR 49081 through
49094) for information on these policies.
k. Hospital-Acquired Condition Reduction Program
Section 1886(p) of the Act establishes the HAC Reduction Program
under which payments to applicable hospitals are adjusted to provide an
incentive to reduce hospital-acquired conditions. In this proposed
rule, we are proposing to establish a validation reconsideration
process for hospitals who fail data validation beginning with the FY
2025 program year, affecting calendar year 2022 discharges. We are also
proposing modification of the validation targeting criteria for
extraordinary circumstances exceptions (ECEs) beginning with the FY
2027 program year, affecting calendar year 2024 discharges. We are also
requesting feedback on potential future measures to adopt in the HAC
Reduction Program that would address patient safety and health equity.
l. Safety Net Hospitals--Request for Information
As discussed in section X.D. of the preamble of this proposed rule,
under the Biden-Harris Administration, CMS has made advancing health
equity the first pillar in its Strategic Plan. Among the goals of CMS's
health equity pillar is to evaluate policies to determine how CMS can
support safety-net providers, including acute care hospitals. Safety-
net hospitals play a crucial role in the advancement of health equity
by making essential services available to the uninsured, underinsured,
and other populations that face barriers to accessing healthcare.
Because they serve many low-income and uninsured patients, safety-net
hospitals may experience greater financial challenges compared to other
hospitals, and these challenges have been exacerbated by the impacts of
the COVID-19 pandemic. As MedPAC noted in its June 2022 Report to
Congress, the limited resources of many safety-net hospitals may make
it difficult for them to compete with other hospitals for labor and
technology, and in some cases may even lead to hospital closure.
We are interested in public feedback on the challenges faced by
safety-net hospitals, and potential approaches to help safety-net
hospitals meet those challenges. In section X.C. of the preamble of
this proposed rule, we discuss the Safety-Net Index (SNI), which was
developed by MedPAC as a potential measure of the degree to which a
hospital functions as a safety-net hospital. In addition, we discuss a
potential alternative to the SNI, in which safety-net hospitals would
be identified using area-level indices. We seek public feedback and
comment on whether either of these two approaches would serve as an
appropriate basis for identifying safety-net hospitals for Medicare
purposes.
m. Proposed Changes to the Severity Level Designation for Z Codes
Describing Homelessness
As discussed in section II.C. of the preamble of this proposed
rule, we are proposing to change the severity level designation for
social determinants of health (SDOH) diagnosis codes describing
homelessness from non-complication or comorbidity (NonCC) to
complication or comorbidity (CC) for FY 2024. Consistent with our
annual updates to account for changes in resource consumption,
treatment patterns, and the clinical characteristics of patients, CMS
is recognizing homelessness as an indicator of increased resource
utilization in the acute inpatient hospital setting.
Consistent with the Administration's goal of advancing health
equity for all, including members of historically underserved and
under-resourced communities, as described in the President's January
20, 2021 Executive Order 13985 on ``Advancing Racial Equity and Support
for Underserved Communities Through the Federal Government,'' \1\ we
also continue to be interested in receiving feedback on how we might
otherwise foster the documentation and reporting of the diagnosis codes
describing social and economic circumstances to more accurately reflect
each health care encounter and improve the reliability and validity of
the coded data including in support of efforts to advance health
equity.
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\1\ Available at 86 FR 7009 (January 25, 2021) (<a href="https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government">https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government</a>).
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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 26665]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.000
[[Page 26666]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.001
BILLING CODE 4120-01-C
[[Page 26667]]
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 an 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, beginning in FY 2023 for IHS and Tribal hospitals and
hospitals located in Puerto Rico, the 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 2024. For discharges occurring on
or after October 1, 2007, but before October 1, 2024, an MDH receives
the higher of the Federal rate or the Federal rate plus 75 percent of
the amount by which the Federal rate is exceeded by the highest of its
FY 1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major
source of care for Medicare beneficiaries in their areas. Section
1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is
located in a rural area (or, as amended by the Bipartisan Budget Act of
2018, a hospital located in a State with no rural area that meets
certain statutory criteria), has not more than 100 beds, is not an SCH,
and has a high percentage of Medicare discharges (not less than 60
percent of its inpatient days or discharges in its cost reporting year
beginning in FY 1987 or in two of its three most recently settled
Medicare cost reporting years).
Section 1886(g) of the Act requires the Secretary to pay for the
capital-related costs of inpatient hospital services in accordance with
a prospective payment system established by the Secretary. The basic
methodology for determining capital prospective payments is set forth
in our regulations at 42 CFR 412.308 and 412.312. Under the capital
IPPS, payments are adjusted by the same DRG for the case as they are
under the operating IPPS. Capital IPPS payments are also adjusted for
IME and DSH, similar to the adjustments made under the operating IPPS.
In addition, hospitals may receive outlier payments for those cases
that have unusually high costs.
The existing regulations governing payments to hospitals under the
IPPS are located in 42 CFR part 412, subparts A through M.
2. Hospitals and Hospital Units Excluded From the IPPS
Under section 1886(d)(1)(B) of the Act, as amended, certain
hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Inpatient rehabilitation facility (IRF)
hospitals and units; long-term care hospitals (LTCHs); psychiatric
hospitals and units; children's hospitals; cancer hospitals; extended
neoplastic disease care hospitals, and hospitals located outside the 50
States, the District of Columbia, and Puerto Rico (that is, hospitals
located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands,
and American Samoa). Religious nonmedical health care institutions
(RNHCIs) are also excluded from the IPPS. Various sections of the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), the Medicare,
Medicaid and SCHIP [State Children's Health Insurance Program] Balanced
Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs
for IRF hospitals and units, LTCHs, and
[[Page 26668]]
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. Section
1886(d)(5)(B) of the Act provides that prospective payment hospitals
that have residents in an approved GME program receive an additional
payment for each Medicare discharge to reflect the higher patient care
costs of teaching hospitals relative to non-teaching hospitals. The
additional payment is based on the indirect medical education (IME)
adjustment factor, which is calculated using a hospital's ratio of
residents to beds and a multiplier, which is set by Congress. Section
1886(d)(5)(B)(ii)(XII) of the Act provides that, for discharges
occurring during FY 2008 and fiscal years thereafter, the IME formula
multiplier is 1.35. The regulations regarding the indirect medical
education (IME) adjustment are located at 42 CFR 412.105.
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
1. The Consolidated Appropriations Act, 2023 (CAA 2023; Pub. L. 117-
328)
Section 4101 of the CAA 2023 extended through FY 2024 the modified
definition of a low-volume hospital and the methodology for calculating
the payment adjustment for low-volume hospitals in effect for FYs 2019
through 2022. Specifically, under section 1886(d)(12)(C)(i) of the Act,
as amended, for FYs 2019 through 2024, a subsection (d) hospital
qualifies as a low-volume hospital if it is more than 15 road miles
from another subsection (d) hospital and has less than 3,800 total
discharges during the fiscal year. Under section 1886(d)(12)(D) of the
Act, as amended, for discharges occurring in FYs 2019 through 2024, the
Secretary determines the applicable percentage increase using a
continuous, linear sliding scale ranging from an additional 25 percent
payment adjustment for low-volume hospitals with 500 or fewer
discharges to a zero percent additional payment for low-volume
hospitals with more than 3,800 discharges in the fiscal year.
Section 4102 of the CAA 2023 amended sections 1886(d)(5)(G)(i) and
1886(d)(5)(G)(ii)(II) of the Act to provide for an extension of the MDH
program through FY 2024.
Section 4143 of the CAA 2023 amended section 1886(l)(2)(B) of the
Act to specify that for portions of cost reporting periods occurring in
each of calendar years (CYs) 2010 through 2019, the $60 million payment
limit specified in that subparagraph is not to apply to the total
amount of additional payments for nursing and allied health education
to be distributed to hospitals that, as of December 29, 2022, were
operating a school of nursing, a school of allied health, or a school
of nursing and allied health. In addition, section 4143 of the CAA 2023
provides that in addition to not applying the $60 million limit for
each of years 2010 through 2019, the Secretary shall not reduce direct
GME payments by such additional payment amounts for such nursing and
allied health education for portions of cost reporting periods
occurring in the year.
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 2024 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 2024.
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 2024.
<bullet> Proposed recalibration of the MS-DRG relative weights.
<bullet> A discussion of the proposed FY 2024 status of new
technologies approved for add-on payments for FY 2023, a presentation
of our evaluation and analysis of the FY 2024 applicants for add-on
payments for high-cost new medical services and technologies (including
public input, as directed by
[[Page 26669]]
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 2024 new technology applicants under the
alternative pathways for certain medical devices and certain
antimicrobial products.
<bullet> Proposed modifications to the new technology add-on
payment application eligibility requirements for technologies that are
not already Food and Drug Administration (FDA) market authorized to
require such applicants to have a complete and active FDA market
authorization request at the time of new technology add-on payment
application submission, to provide documentation of FDA acceptance or
filing, and to move the FDA marketing authorization deadline from July
1 to May 1, beginning with applications for FY 2025 (as discussed in
section II.E.8. of the preamble of this proposed rule).
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble of this proposed rule, we propose
revisions to the wage index for acute care hospitals and the annual
update of the wage data. Specific issues addressed include, but are not
limited to, the following:
<bullet> The proposed FY 2024 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 2024 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 labor-related share for the proposed FY 2024 wage
index.
3. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2024
In section IV. of the preamble of this proposed rule, we discuss
the following:
<bullet> Proposed calculation of Factor 1 and Factor 2 of the
uncompensated care payment methodology.
<bullet> Proposed methodological approach for determining the
additional payments for uncompensated care for FY 2024, which is the
same overall approach as was for FY 2023.
4. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of this proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
<bullet> Proposed inpatient hospital update for FY 2024.
<bullet> Proposed change related to the effective date of sole
community hospital (SCH) classification in cases that involve a merger.
<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 2024.
<bullet> Discussion of statutory extension of the MDH program
through FY 2024.
<bullet> Proposed requirements for payment adjustments to hospitals
under the HAC Reduction Program for FY 2024.
<bullet> Proposed changes to the regulations for GME payments when
training occurs in REHs.
<bullet> Discussion of and proposed changes relating to the
implementation of the Rural Community Hospital Demonstration Program in
FY 2024.
<bullet> Proposed nursing and allied health education program
Medicare Advantage (MA) add-on rates and direct GME MA percent
reductions for CY 2022.
<bullet> Proposal to implement section 4143 of the CAA 2023 which
waives the $60 million limit on annual nursing and allied health
education program MA payments.
<bullet> Proposed update to the payment adjustment for certain
clinical trial and expanded access use immunotherapy cases.
4. Proposed FY 2024 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 2024. In addition, we discuss a
proposed change to how hospitals with a rural reclassification are
treated for capital DSH payments.
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
the following:
<bullet> Proposed changes to payments to certain excluded hospitals
for FY 2024.
<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 2024.
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> Proposal to adopt a modified version of the COVID-19
Vaccination Among Healthcare Personnel Measure in the Hospital IQR
Program, PCHQR Program, and LTCH QRP
<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> Proposed changes to the requirements for the Long-Term
Care Hospital Quality Reporting Program (LTCH QRP), and a request for
information on principles for selecting and prioritizing LTCH QRP
quality measures and concepts under consideration for future years. We
also provide an update on health equity.
<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 the Proposed
Rule
Section X. of the preamble to this proposed rule includes the
following:
<bullet> Proposals to establish requirements for additional
information that an eligible facility would be required to submit when
applying for enrollment as an REH.
<bullet> Proposed changes pertaining to the process for hospitals
requesting an exception from the prohibition against facility expansion
and program integrity restrictions on approved facility expansion.
<bullet> Solicitation of comments on potential approaches to
address the challenges faced by safety-net hospitals, including an
appropriate mechanism for identifying safety-net hospitals for Medicare
policy purposes.
<bullet> Proposals to apply certain definitions included in the
Disclosures
[[Page 26670]]
of Ownership and Additional Disclosable Parties Information for Skilled
Nursing Facilities proposed rule published in the February 15, 2023
Federal Register (88 FR 9820) to all provider types that complete the
Form CMS-855-A enrollment application.
9. Other Provisions of the Proposed Rule
Section XI.A. of the preamble of this proposed rule includes our
discussion of the MedPAC Recommendations.
Section XI.B. of the preamble to this proposed rule includes a
descriptive listing of the public use files associated with this
proposed rule.
Section XII. of the preamble to this proposed rule includes the
collection of information requirements for entities based on our
proposals.
Section XIII. of the preamble to this proposed rule includes
information regarding our responses to public comments.
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 2024 prospective payment rates for operating costs and
capital-related costs for acute care hospitals. We are proposing to
establish the threshold amounts for outlier cases. In addition, in
section IV. of the Addendum to this proposed rule, we address the
proposed update factors for determining the rate-of-increase limits for
cost reporting periods beginning in FY 2024 for certain hospitals
excluded from the IPPS.
11. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum to this proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2024 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
2024. 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 this 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 this 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 2024 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 2023 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 2023
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. Use of the Best Available Data for the FY 2024 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 Medicare Provider Analysis and Review (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, due to the
impact of the COVID-19 public health emergency (PHE) on our ordinary
ratesetting data, we finalized modifications to our usual ratesetting
procedures in the FY 2022 and FY 2023 IPPS/LTCH PPS final rules.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44789 through
44793), we discussed that the FY 2020 MedPAR claims file and the FY
2019 HCRIS dataset (the most recently available data at the time of
rulemaking) 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. We stated that the most recent vaccination and hospitalization
data from the Centers for Disease Control and Prevention (CDC)
available 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.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48795 through
48798), we discussed that the FY 2021 MedPAR claims file and the FY
2020 HCRIS dataset (the most recently available data at the time of
rulemaking) both contain data that was significantly impacted by the
COVID-19 PHE, 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. Based on review of the most
recent hospitalization data and information available from the CDC at
the time of development of that rule, we stated our belief that it was
reasonable to assume
[[Page 26671]]
that some Medicare beneficiaries would continue to be hospitalized with
COVID-19 at IPPS hospitals and LTCHs in FY 2023. However, we also
stated our belief that it would be reasonable to assume based on the
information available at the time that there would be fewer COVID-19
hospitalizations in FY 2023 than in FY 2021. Accordingly, because we
anticipated Medicare inpatient hospitalizations for COVID-19 would
continue in FY 2023 but at a lower level, we finalized our proposal to
use FY 2021 data for purposes of the FY 2023 IPPS and LTCH PPS
ratesetting but with several 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.
For this FY 2024 IPPS/LTCH PPS rulemaking, we have analyzed the FY
2022 MedPAR claims file and the FY 2021 HCRIS dataset, which are the
most recently available data for FY 2024 ratesetting. We observed that
certain shifts in inpatient utilization and costs that occurred in FY
2020 continued to persist in FY 2022. Specifically, the share of
admissions at IPPS hospitals and LTCHs for MS-DRGs and MS-LTC-DRGs that
are associated with the treatment of COVID-19 continued to remain at
levels higher than those observed in the pre-pandemic data.
For example, in FY 2019, the share of IPPS cases grouped to MS-DRG
177 (Respiratory Infections and Inflammations with major complication
or comorbidity (MCC)) was approximately 1 percent, while in FY 2022 the
share of IPPS cases grouped to MS-DRG 177 was approximately 4 percent.
Similarly, in FY 2019, the share of LTCH PPS standard Federal payment
rate cases grouped to MS-LTC-DRG 207 (Respiratory System Diagnosis with
Ventilator Support >96 Hours) was approximately 18 percent, while in FY
2022 the share of LTCH PPS standard Federal payment rate cases grouped
to MS-LTC-DRG 207 was approximately 22 percent.
We have continued to monitor the latest COVID-19 related data and
information released by the CDC. The CDC graph below illustrates new
inpatient hospital admissions of patients with confirmed COVID-19 from
August 1, 2020 through January 20, 2023. (<a href="https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/01202023/images/hospitalizations.PNG?_=24630">https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/01202023/images/hospitalizations.PNG?_=24630</a>, accessed January 20, 2023)
[GRAPHIC] [TIFF OMITTED] TP01MY23.002
As seen in the graph, in the United States, patients continue to be
hospitalized with the virus that causes COVID-19. 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. 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.\2\ Based
on the information available at this time, we believe there will
continue to be COVID-19 cases treated at IPPS hospitals and LTCHs in FY
2024, such that it is appropriate to use the FY 2022 data, as the most
recent available data, for purposes of the FY 2024 IPPS and LTCH PPS
ratesetting. However, based on the information available at this time,
we do not believe there is a reasonable basis for us to assume that
there will be a meaningful difference in the number of COVID-19 cases
treated at IPPS hospitals and LTCHs in FY 2024 relative to FY 2022,
such that modifications to our usual ratesetting methodologies would be
warranted.
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\2\ <a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html</a>, accessed January 20, 2023.
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As such, we believe that FY 2022 data, as the most recent available
data, is the best available data for approximating the inpatient
experience at IPPS hospitals and LTCHs in FY 2024. Therefore, we are
proposing to use the FY 2022 MedPAR claims file and the FY 2021 HCRIS
dataset (which contains data from many cost reports ending in FY 2022
based on each hospital's cost reporting period) for purposes of the FY
2024 IPPS and LTCH PPS ratesetting. For the reasons discussed, we are
not proposing any modifications to our usual ratesetting methodologies
to account for the impact of COVID-19 on the ratesetting data.
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
[[Page 26672]]
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/rate year (RY) 2010 LTCH PPS final rule
(74 FR 43764 through 43766) and the FYs 2011 through 2023 IPPS/LTCH PPS
final rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77
FR 53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through
56872; 82 FR 38010 through 38085; 83 FR 41158 through 41258; 84 FR
42058 through 42165; 85 FR 58445 through 58596; 86 FR 44795 through
44961; and 87 FR 48800 through 48891, respectively).
For discussion regarding our previously finalized policies
(including our historical adjustments to the payment rates) relating to
the effect of changes in documentation and coding that do not reflect
real changes in case mix, we refer readers to the FY 2023 IPPS/LTCH PPS
final rule (87 FR 48799 through 48800).
C. Proposed Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for Proposed FY
2024 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 2024 MS-DRG Updates
As discussed in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR
28127) and final rule (87 FR 48800 through 48801), beginning with FY
2024 MS-DRG classification change requests, we changed 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. We also described the new process for submitting requested
changes to the MS-DRGs via a new electronic application intake system,
Medicare Electronic Application Request Information System\TM\
(MEARIS\TM\), accessed at <a href="https://mearis.cms.gov">https://mearis.cms.gov</a>. We stated that
beginning with FY 2024 MS-DRG classification change requests, CMS will
only accept requests submitted via MEARIS\TM\ and will no longer
consider requests sent via email. Additionally, we noted 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> with 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'', also at the bottom of the MEARIS\TM\ site.
We note that the burden associated with this information collection
requirement is the time and effort required to collect and submit the
data in the request for MS-DRG classification changes to CMS. The
aforementioned burden is subject to the Paperwork Reduction Act (PRA)
of 1995 and approved under Office of Management and Budget (OMB)
control number 0938-1431 and has an expiration date of 09/30/2025.
As noted previously, interested parties had to submit MS-DRG
classification change requests for FY 2024 by October 20, 2022. 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 2025 by October 20, 2023 via MEARIS\TM\ at: <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
As we did for the FY 2023 IPPS/LTCH PPS proposed rule, for this FY
2024 IPPS/LTCH PPS proposed rule we are providing a test version of the
ICD-10 MS-DRG GROUPER Software, Version 41, 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 2024. Therefore, it includes the new
diagnosis and procedure codes that are effective for FY 2024 as
reflected in Table 6A.--New Diagnosis Codes--FY 2024 and Table 6B.--New
Procedure Codes--FY 2024 associated with this proposed rule and does
not include the diagnosis codes that are invalid beginning in FY 2024
as reflected in Table 6C.--Invalid Diagnosis Codes--FY 2024 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 2024, and therefore, there is no Table 6D--Invalid Procedure
Codes--FY 2024 associated with this proposed rule. These tables are not
published in the Addendum to this proposed rule, but are available 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 2024 are not reflected in the test software, we
are making available a supplemental file in Table 6P.1a that includes
the mapped Version 41 FY 2024 ICD-10-CM codes and the deleted Version
40.1 FY 2023 ICD-10-CM codes that should be used for testing purposes
with users' available claims data. Therefore, users will have access to
the
[[Page 26673]]
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 41.
The test version of the ICD-10 MS-DRG GROUPER Software, Version 41,
the draft version of the ICD-10 MS-DRG Definitions Manual, Version 41,
and the supplemental mapping files in Table 6P.1a of the FY 2023 and FY
2024 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 2024. 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 clinical
appropriateness. In other cases, we are proposing to maintain the
existing MS-DRG classifications based on our analysis of claims data
and clinical appropriateness. For this FY 2024 IPPS/LTCH PPS proposed
rule, our initial MS-DRG analysis was based on ICD-10 claims data from
the September 2022 update of the FY 2022 MedPAR file, which contains
hospital bills received from October 1, 2021, through September 30,
2022. In our discussion of the proposed MS-DRG reclassification
changes, we refer to these claims data as the ``September 2022 update
of the FY 2022 MedPAR file.'' Separately, where otherwise indicated,
additional analysis was based on ICD-10 claims data from the December
2022 update of the FY 2022 MedPAR file, which contains hospital bills
received by CMS through December 31, 2022, for discharges occurring
from October 1, 2021 through September 30, 2022. In our discussion of
the proposed MS-DRG reclassification changes, we refer to these claims
data as the ``December 2022 update of the FY 2022 MedPAR file.''
Specifically, as discussed further in this section, we used the
additional claims data available in the December 2022 update of the FY
2022 MedPAR file to assess the application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split, as
well as to simulate restructuring of any proposed MS-DRGs, to assess
the case counts and other criteria for determining whether a proposed
new base MS-DRG would satisfy the criteria to create subgroups.
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 clinical factors to determine whether patients are clinically
distinct or similar to other patients represented in the MS-DRG. In
evaluating resource costs, we consider both the absolute and percentage
differences in average costs between the cases we select for review and
the remainder of cases in the MS-DRG. We also consider variation in
costs within these groups; that is, whether observed average
differences are consistent across patients or attributable to cases
that are extreme in terms of costs or length of stay, or both. Further,
we consider the number of patients who will have a given set of
characteristics and generally prefer not to create a new MS-DRG unless
it would include a substantial number of cases.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
our proposal to expand our existing criteria to create a new
complication or comorbidity (CC) or major complication or comorbidity
(MCC) subgroup within a base MS-DRG. Specifically, we finalized the
expansion of the criteria to include the NonCC subgroup for a three-way
severity level split. We stated we believed that applying these
criteria to the NonCC subgroup would better reflect resource
stratification as well as promote stability in the relative weights by
avoiding low volume counts for the NonCC level MS-DRGs. We noted that
in our analysis of MS-DRG classification requests for FY 2021 that were
received by November 1, 2019, as well as any additional analyses that
were conducted in connection with those requests, we applied these
criteria to each of the MCC, CC, and NonCC subgroups. We also noted
that the application of the NonCC subgroup criteria going forward may
result in modifications to certain MS-DRGs that are currently split
into three severity levels and result in MS-DRGs that are split into
two severity levels. We stated that any proposed modifications to the
MS-DRGs would be addressed in future rulemaking consistent with our
annual process and reflected in Table 5--Proposed List of Medicare
Severity Diagnosis Related Groups (MS-DRGs), Relative Weighting
Factors, and Geometric and Arithmetic Mean Length of Stay for the
applicable fiscal year.
In 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. Interested parties
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 the FY 2023 IPPS/LTCH PPS final rule (87 FR 48803), we also
finalized a delay in application of the NonCC subgroup criteria to
existing MS-DRGs with a three-way severity level split in light of the
ongoing PHE and until such time additional analyses can be performed to
assess impacts, as discussed in response to public comments in the FY
2022 and FY 2023 IPPS/LTCH PPS final rules.
In our analysis of the MS-DRG classification requests for FY 2024
that we received by October 20, 2022, 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.
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[[Page 26674]]
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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 2024 IPPS/LTCH PPS proposed rule, our
initial MS-DRG analysis was generally based on ICD-10 claims data from
the September 2022 update of the FY 2022 MedPAR file, with the
additional claims data available in the December 2022 update of the FY
2022 MedPAR file used to assess the case counts and other criteria for
determining whether a proposed new base MS-DRG would satisfy the
criteria to create subgroups. However, in our evaluation of requests to
split an existing base MS-DRG into severity levels, as noted in prior
rulemaking (80 FR 49368), we typically analyze the most recent two
years of data. This analysis includes 2 years of MedPAR claims data to
compare the data results from 1 year to the next to avoid making
determinations about whether additional severity levels are warranted
based on an isolated year's data fluctuation and also, to validate that
the established severity levels within a base MS-DRG are supported. The
first step in our process of evaluating if the creation of a new CC
subgroup within a base MS-DRG is warranted is to determine if all the
criteria is satisfied for a three-way split. In applying the criteria
for a three-way split, a base MS-DRG is initially subdivided into the
three subgroups: MCC, CC, and NonCC. Each subgroup is then analyzed in
relation to the other two subgroups using the volume (Criteria 1 and
2), average cost (Criteria 3 and 4), and reduction in variance
(Criteria 5). If the criteria fail, the next step is to determine if
the criteria are satisfied for a two-way split. In applying the
criteria for a two-way split, a base MS-DRG is initially subdivided
into two subgroups: ``with MCC'' and ``without MCC'' (1_23) or ``with
CC/MCC'' and ``without CC/MCC'' (12_3). Each subgroup is then analyzed
in relation to the other using the volume (Criteria 1 and 2), average
cost (Criteria 3 and 4), and reduction in variance (Criteria 5). 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.
As previously noted, to validate whether the established severity
levels within a base MS-DRG are supported, we typically analyze the
most recent two years of MedPAR claims data. For this FY 2024 IPPS/LTCH
PPS proposed rule, using the December 2022 update of the FY 2022 MedPAR
file and the March 2022 update of the FY 2021 MedPAR file, we also
analyzed how applying the
[[Page 26675]]
NonCC subgroup criteria to all MS-DRGs currently split into three
severity levels would potentially affect the MS-DRG structure in
connection with the proposed FY 2024 MS-DRG classification changes.
While, as previously noted, our MS-DRG analysis for this FY 2024 IPPS/
LTCH PPS proposed rule was otherwise based on ICD-10 claims data from
the September 2022 update of the FY 2022 MedPAR file, we utilized the
additional claims data available from the December 2022 update of the
FY 2022 MedPAR file for purposes of assessing the application of the
NonCC subgroup criteria to these existing MS-DRGs as well as to
determine whether a proposed new base MS-DRG satisfies the criteria to
create subgroups. Findings from our analysis indicated that
approximately 45 base 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
potential deletion of 135 MS-DRGs (45 MS-DRGs x 3 severity levels =
135) and the potential creation of 86 new MS-DRGs. We refer the reader
to Table 6P.10--Potential MS-DRG Changes with Application of the NonCC
Subgroup Criteria and Detailed Data Analysis- FY 2024 associated with
this proposed rule and available 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>
for detailed information, including the criteria to create subgroups in
Table 6P.10a (as also set forth in the preceding table) and the list of
the 135 MS-DRGs that would potentially be subject to deletion and the
list of the 86 MS-DRGs that would potentially be created in Table
6P.10b. We note that we also identified an additional 12 obstetric MS-
DRGs (4 base MS-DRGs x 3 severity levels=12) that would be subject to
change based on the application of the three-way severity level split
criterion, as reflected in our data analysis in Table 6P.10c associated
with this proposed rule. However, in response to prior public comments
expressing concern about the historical low volume of the obstetric
related MS-DRGs being subject to application of the NonCC subgroup
criteria and consistent with our discussion in prior rulemaking
regarding this population in our Medicare claims data and the
development of these MS-DRGs (83 FR 41210), we believe it may be
appropriate to exclude these MS-DRGs from application of the NonCC
subgroup criteria. The list of 12 obstetric MS-DRGs is shown in the
following table.
[GRAPHIC] [TIFF OMITTED] TP01MY23.004
BILLING CODE 4120-01-C
We also refer the reader to Table 6P.10d for the data analysis of
all 49 base MS-DRGs that would be subject to change based on the
application of the three-way severity level split criterion and to
Table 6P.10e for the corresponding data dictionary that describes the
meaning of the data elements and assists with interpretation of the
data related to our analysis with application of the NonCC subgroup
criteria. We note, in our analysis of the claims data and as reflected
in Table 6P.10d, we identified four base MS-DRGs currently subdivided
with a three-way severity level split (4 base MS-DRGs x 3 severity
levels = 12 MS-DRGs) that result in the potential creation of a single,
base MS-DRG when grouped under the proposed V41 GROUPER software with
application of the NonCC subgroup criteria. As shown in Table 6P.10d,
the four current base MS-DRGs (excluding the 4 obstetric related base
DRGs) are base MS-DRGs 283, 296, 411 and 799. In addition to not
satisfying the criterion that there be at least 500 cases in the NonCC
subgroup for a three-way severity level split, these four base MS-DRGs
also failed one or more of the other criteria to create subgroups. For
example, our review of base MS-DRGs 283 and 296 showed they failed the
criterion that there be at least 5% or more of the patient cases in the
NonCC subgroup. For base MS-DRG 411, we found the criterion that there
be at least 500 cases in each subgroup for a three-way severity level
split, as well as in each subgroup for both of the two-way severity
level splits, was not met. Lastly, for base MS-DRG 799, we found less
than 500 cases in at least two of three subgroups for a three-way
severity level split, as well as for at least one of the two subgroups
for a two-way severity level split, and the R2 value was less than 3.0
for the two-way severity level split.
We also refer the reader to Table 6P.10f for the alternate cost
weight analysis with application of the NonCC subgroup criteria that
includes transfer-adjusted cases from the December 2022 update of the
FY 2022 MedPAR file under the proposed V41 ICD-10 MS-
[[Page 26676]]
DRG GROUPER Software, the MS-DRG relative weights calculated under the
proposed V41 ICD-10 MS-DRG GROUPER Software, the alternate MS-DRG
relative weights calculated with application of the NonCC subgroup
criteria using an alternate version of the ICD-10 MS-DRG GROUPER
Software, Version 41.A (discussed in more detail in this section of
this proposed rule), and the change in MS-DRG relative weights between
those calculated under the proposed V41 GROUPER Software and those
calculated under the alternate V41.A GROUPER Software. We note that to
facilitate the structural comparison between the proposed V41 GROUPER
and the alternate V41.A GROUPER, the relative weights calculated using
the proposed V41 GROUPER Software (column F) do not reflect application
of the 10-percent cap. We further note that changes in the status for
transfer adjusted cases are reflected for the relative weights
calculated using the proposed V41 GROUPER Software only and are not
reflected for the alternate MS-DRG weights with application of the
NonCC subgroup criteria. We note, as shown in Table 6P.10f, that we
found five MS-DRGs for which there appears to be a greater than
negative 10% change between the relative weight calculated under the
proposed V41 GROUPER Software and the calculated alternate relative
weight under the V41.A GROUPER Software with application of the NonCC
subgroup criteria. As shown in Table 6P.10f, the five MS-DRGs are
existing MS-DRG 021 (potential new MS-DRG 105), existing MS-DRG 411
(potential new MS-DRG 426), existing MS-DRG 573 (potential new MS-DRG
529), existing MS-DRG 574 (potential new MS-DRG 530), and existing MS-
DRG 799 (potential new MS-DRG 649). Of the five existing MS-DRGs, two
of the MS-DRGs are those for which a new single, base MS-DRG would
potentially be created from the current three-way split, as previously
described: MS-DRG 411 (potential new MS-DRG 426) and MS-DRG 799
(potential new MS-DRG 649). The findings are consistent with what we
would expect given the low volume of cases in the NonCC subgroups
compared to the volume of cases in the CC subgroups for these MS-DRGs.
As noted in prior rulemaking, any potential MS-DRG updates to be
considered for a future proposal in connection with application of the
NonCC subgroup criteria would also involve a redistribution of cases,
which would impact the relative weights, and, thus, the payment rates
proposed for particular types of cases. As such, and in response to
prior public comments requesting that further analysis of the
application of the NonCC subgroup criteria be made available, in
addition to Table 6P.10f, we are making available additional files
reflecting application of the NonCC subgroup criteria in connection
with the proposed FY 2024 MS-DRG changes, using the December 2022
update of the FY 2022 MedPAR file. These additional files include an
alternate Table 5--Alternate List of Medicare Severity Diagnosis
Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and
Arithmetic Mean Length of Stay, an alternate Length of Stay (LOS)
Statistics file, an alternate Case Mix Index (CMI) file, and an
alternate After Outliers Removed and Before Outliers Removed (AOR_BOR)
file. The files are available in association with this proposed rule 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>.
For this FY 2024 IPPS/LTCH PPS proposed rule we are also providing
an alternate test version of the ICD-10 MS-DRG GROUPER Software,
Version 41.A, so that the public can better analyze and understand the
impact on the proposals included in this proposed rule if the NonCC
subgroup criteria were to be applied to existing MS-DRGs with a three-
way severity level split. We note that this alternate test software
reflects the proposed GROUPER logic for FY 2024 as modified by the
application of the NonCC subgroup criteria. Therefore, it includes the
new diagnosis and procedure codes that are effective for FY 2024 as
reflected in Table 6A.--New Diagnosis Codes--FY 2024 and Table 6B.--New
Procedure Codes--FY 2024 associated with this proposed rule and does
not include the diagnosis codes that are invalid beginning in FY 2024
as reflected in Table 6C.--Invalid Diagnosis Codes--FY 2024 associated
with this proposed rule. As previously noted, at the time of the
development of this proposed rule there were no procedure codes
designated as invalid for FY 2024, and therefore, there is no Table 6D-
Invalid Procedure Codes--FY 2024 associated with this proposed rule.
These tables are not published in the Addendum to this proposed rule,
but are available 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 2024 are not reflected in
the alternate test software, we are making available a supplemental
file in Table 6P.1a that includes the mapped Version 41 FY 2024 ICD-10-
CM codes and the deleted Version 40.1 FY 2023 ICD-10-CM codes that
should be used for testing purposes with users' available claims data.
Therefore, users will have access to the alternate test software
allowing them to build case examples that reflect the proposals
included in this proposed rule with application of the NonCC subgroup
criteria. Because the potential MS-DRG changes with application of the
NonCC subgroup criteria are available in Table 6P.10b associated with
this proposed rule, an alternate version of the ICD-10 MS-DRG
Definitions Manual was not developed.
The alternate test version of the ICD-10 MS-DRG GROUPER Software,
Version 41.A, and the supplemental mapping files in Table 6P.1a of the
FY 2023 and FY 2024 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>.
After delaying the application of the NonCC subgroup criteria for
two years, and in response to prior public comments, we are making
available these additional analyses reflecting application of the
criteria in connection with the proposed FY 2024 MS-DRG changes for
public review and comment, to inform application of the NonCC subgroup
criteria for FY 2025 rulemaking.
We are proposing to continue to delay application of the NonCC
subgroup criteria to existing MS-DRGs with a three-way severity level
split for FY 2024. We are interested in hearing feedback regarding the
experience of large urban hospitals, rural hospitals, and other
hospital types and will take commenters' feedback into consideration
for our development of the FY 2025 proposed rule.
2. Major Diagnostic Category (MDC) 01: (Diseases and Disorders of the
Nervous System): Epilepsy With Neurostimulator
The Responsive Neurostimulator (RNS[reg]) System is a cranially
implanted neurostimulator and is a treatment option for persons
diagnosed with medically intractable epilepsy, a brain disorder
characterized by persistent seizure activity which despite maximal
medical treatment, remains sufficiently debilitating. Cases involving
the use of the RNS[reg] System are identified by the reporting of an
ICD-10-PCS code combination capturing a neurostimulator generator
inserted into the skull with the insertion of a
[[Page 26677]]
neurostimulator lead into the brain and the cases are assigned to MS-
DRG 023 (Craniotomy with Major Device Implant or Acute Complex CNS
Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with
Neurostimulator) when reported with a principal diagnosis of epilepsy.
We refer the reader to the ICD-10 MS-DRG Definitions Manual Version
40.1, which is available 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-DRG 023.
As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015
through 38019), we finalized our proposal to reassign all cases with a
principal diagnosis of epilepsy and one of the following ICD-10-PCS
code combinations capturing cases with a neurostimulator generator
inserted into the skull with the insertion of a neurostimulator lead
into the brain (including cases involving the use of the RNS[reg]
neurostimulator) to MS-DRG 023 even if there is no MCC reported:
<bullet> 0NH00NZ (Insertion of neurostimulator generator into
skull, open approach), in combination with 00H00MZ (Insertion of
neurostimulator lead into brain, open approach);
<bullet> 0NH00NZ (Insertion of neurostimulator generator into
skull, open approach), in combination with 00H03MZ (Insertion of
neurostimulator lead into brain, percutaneous approach); and
<bullet> 0NH00NZ (Insertion of neurostimulator generator into
skull, open approach), in combination with 00H04MZ (Insertion of
neurostimulator lead into brain, percutaneous endoscopic approach).
We also finalized our proposed change to the title of MS-DRG 023
from ``Craniotomy with Major Device Implant or Acute Complex Central
Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemo
Implant'' to ``Craniotomy with Major Device Implant or Acute Complex
Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or
Chemotherapy Implant or Epilepsy with Neurostimulator'' to reflect the
modifications to the MS-DRG structure.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58459 through
58462), we discussed a request to reassign cases describing the
insertion of a neurostimulator generator into the skull in combination
with the insertion of a neurostimulator lead into the brain from MS-DRG
023 to MS-DRG 021 (Intracranial Vascular Procedures with Principal
Diagnosis Hemorrhage with CC) or to reassign these cases to another MS-
DRG for more appropriate payment. We stated that while the results of
our claims analysis indicated that the average costs of cases reporting
a neurostimulator generator inserted into the skull with the insertion
of a neurostimulator lead into the brain (including cases involving the
use of the RNS[reg] neurostimulator), and a principal diagnosis of
epilepsy are higher compared to the average costs for all cases in
their assigned MS-DRG, we could not ascertain from the claims data the
resource use specifically attributable to the procedure during a
hospital stay. We stated that we believed that further analysis of
cases reporting a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[reg] neurostimulator), and a
principal diagnosis of epilepsy was needed prior to proposing any
further reassignment of these cases to ensure clinical coherence
between these cases and the other cases with which they may potentially
be grouped and therefore did not propose to reassign cases describing a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[reg] neurostimulator) from MS-DRG 023 to MS-DRG 021. We
also did not propose to reassign Responsive Neurostimulator (RNS[reg])
System cases to another MS-DRG. We stated we expected that, in future
years, we would have additional data that could be used to evaluate the
potential reassignment of cases reporting a neurostimulator generator
inserted into the skull with the insertion of a neurostimulator lead
into the brain (including cases involving the use of the RNS[reg]
neurostimulator), and a principal diagnosis of epilepsy.
For this FY 2024 IPPS/LTCH PPS proposed rule, we received a similar
request to reassign cases describing the insertion of a neurostimulator
generator into the skull in combination with the insertion of a
neurostimulator lead into the brain from MS-DRG 023 to MS-DRG 021 or
reassign all cases currently assigned to MS-DRG 023 that involve a
craniectomy or a craniotomy with the insertion of device implant and
create a new MS-DRG for these cases. The requestor acknowledged both
the refinements made to MS-DRG 023 effective for FY 2018 and the
discussion in FY 2021 rulemaking, but stated that cases describing the
insertion of a neurostimulator generator into the skull in combination
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[reg] neurostimulator) are negatively
impacted from a payment perspective in their current MS-DRG assignment
due to the large number of cases, with a wide range of principal
diagnoses, procedures, and procedure approaches, also assigned to MS-
DRG 023 and MS-DRG 024 (Craniotomy with Major Device Implant or Acute
Complex CNS Principal Diagnosis without MCC) and therefore continue to
be underpaid. The requestor performed its own analysis of Medicare
claims data and stated that it found that the average costs of cases
describing the insertion of the RNS[reg] neurostimulator were
significantly higher than the average costs of all cases in their
current assignment to MS-DRG 023, and as a result, cases describing the
insertion of the RNS[reg] neurostimulator are not being adequately
reimbursed.
The requestor suggested the following two options for MS-DRG
assignment updates: (1) reassign cases describing the insertion of a
neurostimulator generator into the skull in combination with the
insertion of a neurostimulator lead into the brain (including cases
involving the use of the RNS[reg] neurostimulator) from MS-DRG 023 to
MS-DRG 021 with a change in title to ``Intracranial Vascular Procedures
with PDX Hemorrhage with CC or Craniectomy with Neurostimulator;'' or
(2) extract all cases from MS-DRG 023 involving a craniectomy/
craniotomy with device implant and create a new MS-DRG for these cases.
The requestor acknowledged that the relatively low volume of cases
that only involve the insertion of a neurostimulator generator into the
skull in combination with the insertion of a neurostimulator lead into
the brain in the claims data is likely not sufficient to warrant the
creation of a new MS-DRG. The requestor further stated given the
limited options within the existing MS-DRG structure that fit from both
a cost and clinical cohesiveness perspective, they believe that MS-DRG
021 is the most logical fit in terms of average costs and clinical
coherence for reassignment of RNS[reg] System cases even though,
according to the requestor, the insertion of a neurostimulator
generator into the skull in combination with the insertion of a
neurostimulator lead into the brain is technically more complex and
involves a higher level of training, extreme precision and
sophisticated technology than performing a craniectomy for hemorrhage.
As another option, the requestor identified procedures involving a
craniectomy or craniotomy by searching for ICD-10-PCS codes that
describe the
[[Page 26678]]
root operations ``Destruction'', ``Division'', ``Drainage'',
``Excision'', Extirpation'', or ``Insertion'' performed related to the
brain or specific brain anatomy (for example, cerebral ventricle,
cerebellum) with an ``Open Approach'' in the claims data. The requestor
also said they identified claims involving a device implant by
searching for ICD-10-PCS codes that describe the root operation
``Insertion'' and stated that they found that the claims they
identified had average costs comparable to the average costs of
RNS[reg] cases and therefore creating a new MS-DRG for all cases
involving a craniectomy/craniotomy with device implant was a reasonable
alternative option.
To begin our analysis, we identified the ICD-10-CM diagnosis codes
that describe a diagnosis of epilepsy. We refer the reader to Table
6P.2a associated with this proposed rule (and available at: https://
www.cms.gov/medicare/medicare-fee-for-service-payment/
acuteinpatientpps) for the list of the ICD-10-CM codes that we
identified.
We then examined the claims data from the September 2022 update of
the FY 2022 MedPAR file for all cases in MS-DRG 023 and compared the
results to cases reporting a neurostimulator generator inserted into
the skull with the insertion of a neurostimulator lead into the brain
(including cases involving the use of the RNS[reg] neurostimulator)
that had a principal diagnosis of epilepsy in MS-DRG 023. The following
table shows our findings:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP01MY23.005
As shown in the table, for MS-DRG 023, we identified a total of
11,602 cases, with an average length of stay of 10.4 days and average
costs of $47,321. Of those 11,602 cases in MS-DRG 023, there were 57
cases describing a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[reg] neurostimulator) that had a
principal diagnosis of epilepsy. We note that the 57 cases describing a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[reg] neurostimulator) and a principal diagnosis of
epilepsy have an average length of stay of 3.1 days and average costs
of $58,676, as compared to the average length of stay of 10.4 days and
average costs of $47,321 for all cases in MS-DRG 023. While these
neurostimulator cases have average costs that are $11,355 higher than
the average costs of all cases in MS-DRG 023, there were only a total
of 57 cases. We reviewed these data, and agreed with the requestor that
the number of cases continues to be too small to warrant the creation
of a new MS-DRG for these cases, for the reasons discussed in the FY
2018 IPPS/LTCH PPS final rule (82 FR 38015 through 38019) and the FY
2021 IPPS/LTCH PPS final rule (85 FR 58459 through 58462).
We examined the reassignment of cases describing a neurostimulator
generator inserted into the skull with the insertion of a
neurostimulator lead into the brain (including cases involving the use
of the RNS[reg] neurostimulator) to MS-DRGs 020, 021, and 022
(Intracranial Vascular Procedures with PDX Hemorrhage with MCC, with
CC, and without CC/MCC, respectively). While the request was to
reassign these cases to MS-DRG 021, MS-DRG 021 is specifically
differentiated according to the presence of a secondary diagnosis with
a severity level designation of a complication or comorbidity (CC).
Cases with a neurostimulator generator inserted into the skull with the
insertion of a neurostimulator lead into the brain (including cases
involving the use of the RNS[reg] neurostimulator) do not always
involve the presence of a secondary diagnosis with a severity level
designation of a complication or comorbidity (CC), and therefore we
reviewed data for all three MS-DRGs. The following table shows our
findings:
[GRAPHIC] [TIFF OMITTED] TP01MY23.006
As shown in the table, for MS-DRG 020, there were a total of 2,016
cases with an average length of stay of 13.9 days and average costs of
$72,776. For MS-DRG 021, there were a total of 548 cases with an
average length of stay of 9.1 days and average costs of $53,973. For
MS-DRG 022, there were a total of 270 cases with an average length of
stay of 3.9 days and average costs of $31,248.
Because all cases describing a neurostimulator generator inserted
into the skull with the insertion of a neurostimulator lead into the
brain (including cases involving the use of the RNS[reg]
neurostimulator) with a principal diagnosis of epilepsy are assigned
MS-DRG 023 even if there is no MCC reported and there is a three-way
split within MS-DRGs 020, 021, and 022, we also analyzed the cases
reporting a neurostimulator generator inserted into the skull with the
insertion of a neurostimulator lead into the brain
[[Page 26679]]
(including cases involving the use of the RNS[reg] neurostimulator)
with a principal diagnosis of epilepsy for the presence or absence of a
secondary diagnosis designated as a complication or comorbidity (CC) or
a major complication or comorbidity (MCC). The following table shows
our findings:
[GRAPHIC] [TIFF OMITTED] TP01MY23.007
This data analysis shows that, similar to our findings as
summarized in the FY 2018 and FY 2021 IPPS/LTCH PPS final rules, on
average, the cases in MS-DRG 023 describing a neurostimulator generator
inserted into the skull with the insertion of a neurostimulator lead
into the brain (including cases involving the use of the RNS[reg]
neurostimulator) and a principal diagnosis of epilepsy have average
costs that are relatively more similar to the average costs of cases in
MS-DRG 021 ($58,676 compared to $53,973), while the average length of
stay is shorter (3.1 days compared to 9.1 days). However, when
distributed based on the presence or absence of a secondary diagnosis
designated as a complication or comorbidity (CC) or a major
complication or comorbidity (MCC), the 57 cases in MS-DRG 023 reporting
a principal diagnosis of epilepsy with a neurostimulator generator
inserted into the skull and insertion of a neurostimulator lead into
brain have higher average costs and shorter lengths of stay than the
cases in the FY 2022 MedPAR file for MS-DRGs 021 and 022 while having
lower average costs and shorter lengths of stay than the cases in MS-
DRG 020. We reviewed the clinical issues and the claims data, and
continue to not support reassigning the cases describing a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[reg] neurostimulator) and a principal diagnosis of
epilepsy from MS-DRG 023 to MS-DRGs 020, 021 or 022. As also discussed
in the FY 2018 and FY 2021 IPPS/LTCH PPS final rules, the cases in MS-
DRGs 020, 021 and 022 have a principal diagnosis of a hemorrhage. The
RNS[reg] neurostimulator generators are not used to treat patients with
diagnosis of a hemorrhage. We continue to believe that it is
inappropriate to reassign cases representing a principal diagnosis of
epilepsy to a MS-DRG that contains cases that represent the treatment
of intracranial hemorrhage, as discussed in the FY 2018 IPPS/LTCH PPS
final rule (82 FR 38015 through 38019) and the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58459 through 58462). The differences in average
length of stay and average costs based on the more recent data continue
to support this recommendation.
We note, as discussed in section II.C.1.b of this proposed rule,
using the December 2022 update of the FY 2022 MedPAR file, we analyzed
how applying the NonCC subgroup criteria to all MS-DRGs currently split
into three severity levels would affect the MS-DRG structure beginning
in FY 2024. Findings from our analysis indicated that MS-DRGs 020, 021,
and 022 as well as approximately 44 other base MS-DRGs would
potentially be subject to change based on the three-way severity level
split criterion finalized in FY 2021. We refer the reader to Table
6P.10b associated with this proposed rule (which is available 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>) for the list of the 135 MS-DRGs that would
be subject to deletion and the list of the 86 new MS-DRGs that would
potentially be created if the NonCC subgroup criteria were applied.
We then explored alternative options, as was requested. We do not
agree that searching for ICD-10-PCS codes that describe the root
operations ``Destruction'', ``Division'', ``Drainage'', ``Excision'',
Extirpation'', or ``Insertion'' performed related to the brain or
specific brain anatomy as suggested by the requestor is a reasonable
approach to find cases comparable to cases involving the use of the
RNS[reg] System as these root operations all describe procedures
performed for distinct and differing objectives. Instead, to review for
similar utilization of resources, we further analyzed the data to
identify those cases currently reporting a procedure code combination
representing neurostimulator generator and lead code combinations that
are captured under the list referred to as ``Major Device Implant'' in
the GROUPER logic for MS-DRGs 023 and 024 since the ICD-10-PCS code
combinations that capture the use of the RNS[reg] neurostimulator
generator and leads that would determine an assignment of a case to MS-
DRGs 023 are also found on the ``Major Device Implant'' list. The
neurostimulator generators on this list are inserted into the skull, as
well as into the subcutaneous areas of the chest, back, or abdomen. The
leads are all inserted into
[[Page 26680]]
the brain. The following table shows our findings:
[GRAPHIC] [TIFF OMITTED] TP01MY23.008
We note that the 90 Major Device Implant list cases involving a
neurostimulator generator (including cases involving the use of the
RNS[reg] neurostimulator and a principal diagnosis of epilepsy) have an
average length of stay of 7.3 days and average costs of $59,733 as
compared to all 11,602 cases in MS-DRG 023, which have an average
length of stay of 10.4 days and average costs of $47,321. In MS-DRG
024, we note that the 395 Major Device Implant list cases involving a
neurostimulator generator have an average length of stay of 1.6 days
and average costs of $36,147 as compared to all 4,378 cases in MS-DRG
024, which have an average length of stay of 5.2 days and average costs
of $32,613. While these neurostimulator cases have average costs that
are higher than the average costs of all cases in their respective MS-
DRGs, it is difficult to detect patterns of complexity and resource
intensity. Moreover, we are unable to identify another MS-DRG in MDC 01
that would be a more appropriate MS-DRG assignment for these cases
based on the indication for and complexity of the procedure.
We note while our data findings demonstrate the average costs are
higher for the 57 cases with a principal diagnosis of epilepsy with
neurostimulator generator inserted into the skull and insertion of a
neurostimulator lead into brain when compared to all cases in MS-DRG
023, these cases represent a small percentage of the total number of
cases reported in this MS-DRG. While we appreciate the requestors'
concerns regarding the differential in average costs for cases
describing the insertion of a neurostimulator generator into the skull
in combination with the insertion of a neurostimulator lead into the
brain when compared to all cases in their
[[Page 26681]]
assigned MS-DRG, we believe additional time is needed to evaluate these
cases as part of our ongoing examination of the case logic for MS-DRGs
023 through 027. As discussed in the FY 2023 IPPS/LTCH PPS final rule
(87 FR 48808 through 48820), 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.
As part of this evaluation, we have begun to analyze the ICD-10
coded claims data from the September 2022 update of the FY 2022 MedPAR
file to determine if the patients' diagnoses, the objective of the
procedure performed, the specific anatomical site where the procedure
is performed or the surgical approach used (for example, open,
percutaneous, percutaneous endoscopic, among others) demonstrates a
greater severity of illness and/or increased treatment difficulty as we
consider restructuring MS-DRGs 023 through 027, including how to better
align the clinical indications with the performance of specific
intracranial procedures. We refer the reader to Tables 6P.2b through
6P.2f associated with this proposed rule (which is available 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>) for data analysis findings of cases assigned
to MS-DRGs 023 through 027 as we continue to look for patterns of
complexity and resource intensity.
In summary, we believe that further analysis of cases reporting a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[reg] neurostimulator) and a principal diagnosis of
epilepsy is needed in connection with our analysis of the claims data
for MS-DRGs 023 through 027 prior to proposing any further reassignment
of these cases, to ensure clinical coherence between these cases and
the other cases with which they may potentially be grouped. Therefore,
we are not proposing to reassign cases describing a neurostimulator
generator inserted into the skull with the insertion of a
neurostimulator lead into the brain (including cases involving the use
of the RNS[reg] neurostimulator) from MS-DRG 023 to MS-DRG 021. We are
also not proposing to create a new MS-DRG for cases involving a
craniectomy/craniotomy with device implant at this time.
As we continue this analysis of the claims data with respect to MS-
DRGs 023 through 027, we continue to seek 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 40.1, which is available 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,
2023, 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.C.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>.
3. MDC 02 (Diseases and Disorders of the Eye): Retinal Artery Occlusion
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48830 through
48835), we discussed a request we received to reassign cases reporting
diagnosis codes describing central retinal artery occlusion, and the
closely allied condition, branch retinal artery occlusion, from MS-DRG
123 (Neurological Eye Disorders) in MDC 02 (Diseases and Disorders of
the Eye) to MS-DRGs 061, 062, and 063 (Ischemic Stroke Precerebral
Occlusion or Transient Ischemia with Thrombolytic Agent with MCC, with
CC, and without CC/MCC, respectively) in MDC 01 (Diseases and Disorders
of the Nervous System).
Retinal artery occlusion refers to blockage of the retinal artery
that carries oxygen to the nerve cells in the retina at the back of the
eye, often by an embolus or thrombus. A blockage in the main artery in
the retina is called central retinal artery occlusion (CRAO). A
blockage in a smaller artery is called branch retinal artery occlusion
(BRAO).
Based on the various data analyses we performed to explore the
possible reassignment of cases with a principal diagnosis of CRAO or
BRAO with a procedure code describing the administration of a
thrombolytic agent or a procedure code describing hyperbaric oxygen
therapy, and the clinical analysis discussed, for FY 2023 we did not
propose any MS-DRG changes for cases with a principal diagnosis of CRAO
or BRAO with a procedure code describing the administration of a
thrombolytic agent or a procedure code describing hyperbaric oxygen
therapy.
For this FY 2024 IPPS/LTCH PPS proposed rule, we received a request
to again review the MS-DRG assignment of cases involving CRAO.
According to the requestor, CRAO is a form of acute ischemic stroke
which occurs when a vessel supplying blood to the brain is obstructed
and there is growing recognition of this diagnosis as a vascular
neurological problem. The requestor stated new evidence outlines
treatment of patients with CRAO with acute stroke protocols,
specifically with intravenous thrombolysis (IV tPA) or hyperbaric
oxygen therapy (HBOT), to improve outcomes. The requestor performed an
internal analysis of their claims data and found that the average costs
of cases reporting a procedure code describing the administration of a
thrombolytic agent with a principal diagnosis of CRAO were 2.5 times
higher than the average costs of cases with a principal diagnosis of
CRAO that did not report the administration of a thrombolytic agent.
The requestor further stated the increased utilization of resources of
these cases was isolated to be almost entirely due to the cost of the
tPA itself based on this review of their internal cost level data.
Consequently, the requestor stated the continued assignment of these
conditions to MS-DRG 123 does not properly recognize disease complexity
and understates the resource utilization associated with administering
critical (potentially vision-saving) treatments for these cases.
[[Page 26682]]
The requestor suggested that the following three MS-DRGs be created
to reflect current standard of care for these patients:
<bullet> Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent with MCC;
<bullet> Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent with CC; and
<bullet> Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent without CC/MCC.
In reviewing this issue, it is unclear why the requestor did not
include branch retinal artery occlusion (BRAO) in their request for FY
2024 rulemaking. As discussed in the FY 2023 IPPS/LTCH PPS final rule,
BRAO is a closely allied condition. Therefore, we identified the ICD-
10-CM codes found in the following table that describe CRAO and BRAO.
[GRAPHIC] [TIFF OMITTED] TP01MY23.009
Thrombolytic therapy is identified with the following ICD-10-PCS
procedure codes.
[GRAPHIC] [TIFF OMITTED] TP01MY23.010
Our analysis of this grouping issue again confirmed that, when a
procedure code describing the administration of a thrombolytic agent is
reported with principal diagnosis code describing CRAO or BRAO, these
cases group to medical MS-DRG 123. We refer the reader to the ICD-10
MS-DRG Definitions Manual Version 40.1, which is available 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 123.
To begin our analysis, we examined claims data from the September
2022 update of the FY 2022 MedPAR file for MS-DRG 123 to (1) identify
cases reporting a principal diagnosis code describing CRAO or BRAO
without a procedure code describing the administration of a
thrombolytic agent and (2) identify cases reporting diagnosis codes
describing CRAO or BRAO with a procedure code describing the
administration of a thrombolytic agent. Our findings are shown in the
following table:
[[Page 26683]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.011
As shown in the table, we identified a total of 2,771 cases within
MS-DRG 123 with an average length of stay of 2.5 days and average costs
of $6,720. Of these 2,771 cases, there are 839 cases that reported a
principal diagnosis code describing CRAO or BRAO without a procedure
code describing the administration of a thrombolytic agent with an
average length of stay of 2.2 days and average costs of $5,842. There
are 38 cases that reported a principal diagnosis code describing CRAO
or BRAO with a procedure code describing the administration of a
thrombolytic agent with an average length of stay of 3.3 days and
average costs of $13,302.
The data analysis shows that the 839 cases in MS-DRG 123 reporting
a principal diagnosis code describing CRAO or BRAO without a procedure
code describing the administration of a thrombolytic agent have lower
average costs as compared to all cases in MS-DRG 123 ($5,842 compared
to $6,720), and a shorter average length of stay (2.2 days compared to
2.5 days). For the 38 cases in MS-DRG 123 reporting a principal
diagnosis code describing CRAO or BRAO with a procedure code describing
the administration of a thrombolytic agent, however, the average length
of stay is longer (3.3 days compared to 2.5 days) and the average costs
are higher ($13,302 compared to $6,720) than the average length of stay
and average costs compared to all cases in that MS-DRG.
We reviewed these data, and do not believe that the small subset of
cases reporting a principal diagnosis code describing CRAO or BRAO with
a procedure code describing the administration of a thrombolytic agent
warrants the creation of new MS-DRGs at this time. As stated in prior
rulemaking, the MS-DRGs are a classification system intended to group
together diagnoses and procedures with similar clinical characteristics
and utilization of resources. We generally seek to identify
sufficiently large sets of claims data with a resource/cost similarity
and clinical similarity in developing diagnostic-related groups rather
than smaller subsets. Moreover, in response to the specific request to
create new MS-DRGs subdivided into severity levels for the cases
reporting a principal diagnosis code describing CRAO with a procedure
code describing the administration of a thrombolytic agent, we only
identified a total of 38 cases, so the criterion that there are at
least 500 or more cases in each subgroup cannot be met. Therefore, for
FY 2024, we are not proposing to create new MS-DRGs subdivided into
severity levels for cases reporting a principal diagnosis code
describing CRAO with a procedure code describing the administration of
a thrombolytic agent.
We recognize however, that the average costs of the small number of
cases reporting a principal diagnosis code describing CRAO or BRAO with
a procedure code describing the administration of a thrombolytic agent
are greater when compared to the average costs of all cases in MS-DRG
123. To explore other mechanisms to address this request, we then
reexamined the MS-DRGs within MDC 02 to consider the possibility of
reassigning the cases with a principal diagnosis of CRAO or BRAO that
receive the administration of a thrombolytic agent to other MS-DRGs
within MDC 02. After further consideration, in reviewing the claims
data from the September 2022 update of the FY 2022 MedPAR file and
examining the clinical considerations, we believe that the cases
reporting a principal diagnosis code describing CRAO or BRAO could more
suitably group to MS-DRGs 124 and 125 (Other Disorders of the Eye with
MCC, and without MCC, respectively), which contain diagnoses other than
neurological conditions that affect the eye, noting the vascular
involvement inherent to a diagnosis of CRAO or BRAO. We refer the
reader to the ICD-10 MS-DRG Definitions Manual Version 40.1, which is
available 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
124 and 125.
To determine how the resources for this subset of cases compared to
cases in MS-DRGs 124 and 125 as a whole, we examined the average costs
and length of stay for cases in MS-DRGs 124 and 125. Our findings are
shown in this table.
[[Page 26684]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.012
For this subset of cases, the average costs of the 38 cases
reporting a principal diagnosis code describing CRAO or BRAO with a
procedure code describing the administration of a thrombolytic agent
are slightly higher ($13,302 compared to $11,922) and the average
length of stay is shorter (3.3 days compared to 5.4 days) than for all
cases in MS-DRGs 124. The 839 cases reporting a principal diagnosis
code describing CRAO or BRAO without a procedure code describing the
administration of a thrombolytic agent have lower average costs ($5,842
compared to $7,425) and a shorter average length of stay (2.2 compared
to 3.3 days) than for cases in MS-DRG 125.
Our analysis demonstrates that while the volume of cases is small,
the average costs for the cases reporting a principal diagnosis code
describing CRAO or BRAO with a procedure code describing the
administration of a thrombolytic agent currently grouping to MS-DRG 123
are more aligned with the average costs for the cases currently
grouping to MS-DRG 124. We reviewed these data and support the addition
of the eight diagnosis codes listed previously to the GROUPER logic
list for MS-DRGs 124 and 125. While the cases reporting a principal
diagnosis code describing CRAO or BRAO without a procedure code
describing the administration of a thrombolytic agent have lower costs
and a shorter average length of stay than for cases in MS-DRG 125, we
believe reassigning these diagnosis codes to MS-DRGs 124 and 125 will
better account for the subset of patients who are treated with a
thrombolytic agent, and will more appropriately reflect the resources
involved in evaluating and treating these patients. We also support the
assignment of the cases reporting procedure codes describing the
administration of a thrombolytic agent to the higher (MCC) severity
level MS-DRG 124 as an enhancement to better reflect the clinical
severity and resource use involved in these cases.
Therefore, we are proposing to reassign ICD-10-CM diagnosis codes
H34.10, H34.11, H34.12, H34.13, H34.231, H34.232, H34.233, and H34.239
from MDC 02 MS-DRG 123 to MS-DRGs 124 and 125, effective October 1,
2023 for FY 2024. We are also proposing to add the procedure codes
describing the administration of a thrombolytic agent listed previously
to MS-DRG 124. We note that the procedure codes describing the
administration of a thrombolytic agent are not designated as operating
room procedures for purposes of MS-DRG assignment (``non-O.R.
procedures''), therefore, as part of the logic for MS-DRG 124, we are
also proposing to designate these codes as non-O.R. procedures
affecting the MS-DRG. Lastly, for consistency, we are also proposing to
change the titles of MS-DRGs 124 and 125 from ``Other Disorders of the
Eye, with and without MCC, respectively'' to ``Other Disorders of the
Eye with MCC or Thrombolytic Agent, and without MCC, respectively'' to
better reflect the assigned procedures.
4. MDC 04 (Diseases and Disorders of the Respiratory System)
a. Ultrasound Accelerated Thrombolysis for Pulmonary Embolism
We received a request to reassign cases reporting ultrasound
accelerated thrombolysis (USAT) with the administration of
thrombolytic(s) for the treatment of pulmonary embolism (PE) from MS-
DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with
MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 163, 164,
and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC,
respectively).
A pulmonary embolism is an obstruction of pulmonary vasculature
most commonly caused by a venous thrombus, and less commonly by fat or
tumor tissue or air bubbles or both. Risk factors for a pulmonary
embolism include prolonged immobilization from any cause, obesity,
cancer, fractured hip or leg, use of certain medications such as oral
contraceptives, presence of certain medical conditions such as heart
failure, sickle cell anemia, or certain congenital heart defects.
Common symptoms of pulmonary embolism include shortness of breath with
or without chest pain, tachycardia, hemoptysis, low grade fever,
pleural effusion, and depending on the etiology of the embolus, might
include lower extremity pain or swelling, syncope, jugular venous
distention. Alternatively, a pulmonary embolus could be asymptomatic.
Thrombolysis is a type of treatment where the infusion of
thrombolytics (fibrinolytic or ``clot-busting'' drugs) is used to
dissolve blood clots that form in the arteries or veins with the goal
of improving blood flow and preventing long-term damage to tissues and
organs. When a clot forms in the arteries of the lungs it is known as a
pulmonary embolism. In addition, clots in the veins of the legs causing
deep venous thrombosis (DVT) may also result in pulmonary embolism if a
piece of the clot breaks off and travels to an artery in the lungs.
Conventional catheter-directed thrombolysis (CDT) procedures generally
rely on a multi-sidehole catheter placed adjacent to the thrombus
through which thrombolytics are delivered directly to the thrombus,
however, the EKOS<SUP>TM</SUP> EkoSonic[reg] Endovascular System
(EKOS<SUP>TM</SUP> System) employs ultrasound to assist in
thrombolysis. The ultrasound does not itself dissolve the thrombus, but
pulses of ultrasonic energy temporarily make the fibrin in the thrombus
more porous and increase fluid flow within the thrombus. High
frequency, low-intensity ultrasonic waves create a pressure gradient
that drives the thrombolytic into the thrombus and keeps it in close
proximity to the binding sites. USAT is also referred to as ultrasound-
assisted thrombolysis or ultrasound-enhanced thrombolysis.
According to the requestor (the manufacturer of the
EKOS<SUP>TM</SUP> device), USAT with the administration of
thrombolytic(s) for the treatment of PE performed using the
EKOS<SUP>TM</SUP> device utilizes more resources in comparison to other
procedures that are currently assigned to MS-DRGs 166, 167, and 168 and
is not clinically coherent with the other procedures assigned to those
MS-DRGs. The requestor stated that the cases reporting USAT with the
administration of thrombolytic(s) for PE are more comparable with and
more clinically aligned with the procedures assigned to MS-DRGs 163,
164, and 165. The requestor stated they performed an analysis of cases
reporting USAT for PE with the following ICD-10-PCS procedure codes.
[[Page 26685]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.013
We note that the requestor did not include a list of diagnosis
codes describing PE or a list of procedure codes describing the
administration of thrombolytic(s) in connection with its analysis.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58561 through
58579), we summarized and responded to public comments expressing
concern with the proposed MS-DRG assignments for the newly created
procedure codes describing USAT of several anatomic sites that were
effective with discharges on and after October 1, 2020 (FY 2021).
Similar to the current request for FY 2024, for FY 2021, the commenters
recommended that USAT procedures performed with the EKOS<SUP>TM</SUP>
device for the treatment of pulmonary embolism be assigned to MS-DRGs
163, 164, and 165 instead of MS-DRGs 166, 167, and 168. We refer the
reader to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58561 through
58579), available 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>, for the detailed
discussion.
We analyzed claims data from the September 2022 update of the FY
2022 MedPAR file for MS-DRGs 166, 167, and 168 for all cases reporting
a principal diagnosis of PE and USAT procedure with and without the
administration of thrombolytic(s). We identified claims reporting an
USAT procedure, the administration of thrombolytic(s), and a diagnosis
of PE with the listed codes shown in the following tables.
[GRAPHIC] [TIFF OMITTED] TP01MY23.014
[[Page 26686]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.015
[GRAPHIC] [TIFF OMITTED] TP01MY23.016
We note that the listed procedure codes describing USAT identified
for our claims analysis differ from the procedure codes identified by
the requestor for its analysis. Clinically, we did not agree that
thrombolysis of non-pulmonary anatomic sites (for example, subclavian
artery, axillary artery, etc.) would be performed for the treatment of
a PE. We also note that the procedure codes describing thrombolysis of
non-pulmonary anatomic sites provided by the requestor are assigned to
MDC 05 (Diseases and Disorders of the Circulatory System) and not to
MDC 4 (Diseases and Disorders of the Respiratory System) where MS-DRGs
163, 164, 165, 166, 167, and 168 are assigned. The findings from our
analysis are shown in the following table.
[[Page 26687]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.017
As shown in the table, we identified a total of 8,318 cases in MS-
DRG 166 with an average length of stay of 11 days and average costs of
$31,910. Of the 8,318 cases, we found 826 cases reporting a principal
diagnosis of PE and USAT with thrombolytic(s) with an average length of
stay of 5.4 days and average costs of $28,912 and 161 cases reporting a
principal diagnosis of PE and USAT without thrombolytic(s) with an
average length of stay of 5.4 days and average costs of $27,897. The
data demonstrates that the cases reporting a principal diagnosis of PE
and USAT with or without thrombolytic(s) have a shorter average length
of stay compared to the average length of stay of all the cases in MS-
DRG 166 (5.4 days and 5.4 days, respectively versus 11 days).
Similarly, the average costs for the cases reporting a principal
diagnosis of PE and USAT with or without thrombolytic(s) are lower than
the average costs of all the cases in MS-DRG 166 ($28,912 and $27,897,
respectively versus $31,910). The data indicate that the cases
reporting a principal diagnosis of PE and USAT with or without
thrombolytic(s) appear to be grouped and paid appropriately, despite
the fact the logic for case assignment to MS-DRG 166 requires the
reporting of at least one or more secondary MCC diagnoses, and it would
not be unreasonable to expect these cases to be more expensive in
comparison to all the cases in MS-DRG 166. As the average costs for
these cases are lower than the average costs of all the cases in MS-DRG
166, the data appear to reflect that the reporting of at least one or
more secondary MCC diagnoses and use of the EKOS<SUP>TM</SUP> device
technology did not impact consumption of resources for these cases in
MS-DRG 166.
For MS-DRG 167, we identified a total of 4,306 cases with an
average length of stay of 4.7 days and average costs of $16,290. Of the
4,306 cases, we found 316 cases reporting a principal diagnosis of PE
and USAT with thrombolytic(s) with an average length of stay of 3.9
days and average costs of $23,240 and 52 cases reporting a principal
diagnosis of PE and USAT without thrombolytic(s) with an average length
of stay of 3.7 days and average costs of $23,608. The data demonstrates
that the cases reporting a principal diagnosis of PE and USAT with or
without thrombolytic(s) have a shorter average length of stay compared
to the average length of stay of all the cases in MS-DRG 167 (3.9 days
and 3.7 days, respectively versus 4.7 days). Conversely, the average
costs for the cases reporting a principal diagnosis of PE and USAT with
or without thrombolytic(s) are higher than the average costs of all the
cases in MS-DRG 167 ($23,240 and $23,608, respectively versus $16,290)
with a corresponding difference in average costs of $6,950 and $7,318,
respectively. The data indicate the cases reporting a principal
diagnosis of PE and USAT with or without thrombolytic(s) appear to
consume more resources in comparison to the other cases in MS-DRG 167,
although it is unclear if the higher resource consumption is a direct
result of the EKOS<SUP>TM</SUP> device technology utilized in the
performance of the thrombolysis procedure, or the fact that these cases
also include the reporting of at least one or more secondary CC
diagnoses, or a combination of both factors.
For MS-DRG 168, we identified a total of 1,441 cases with an
average length of stay of 2.3 days and average costs of $12,379. Of the
1,441 cases, we found 65 cases reporting a principal diagnosis of PE
and USAT with
[[Page 26688]]
thrombolytic(s) with an average length of stay of 2.8 days and average
costs of $20,156 and 15 cases reporting a principal diagnosis of PE and
USAT without thrombolytic(s) with an average length of stay of 2.7 days
and average costs of $20,112. The data demonstrates that the cases
reporting a principal diagnosis of PE and USAT with or without
thrombolytic(s) have a longer average length of stay compared to the
average length of stay of all the cases in MS-DRG 168 (2.8 days and 2.7
days, respectively versus 2.3 days). Additionally, the average costs
for the cases reporting a principal diagnosis of PE and USAT with or
without thrombolytic(s) are higher than the average costs of all the
cases in MS-DRG 168 ($20,156 and $20,112, respectively versus $12,379)
with a corresponding difference in average costs of $7,777 and $7,733,
respectively. Similar to our findings for MS-DRG 167, the data for MS-
DRG 168 indicate the cases reporting a principal diagnosis of PE and
USAT with or without thrombolytic(s) appear to consume more resources
in comparison to the other cases in MS-DRG 168. However, it is unclear
if the higher resource consumption is a direct result of the
EKOS<SUP>TM</SUP> device technology utilized in the performance of the
thrombolysis procedure alone, or if there are other contributing
factors, since cases grouping to MS-DRG 168 do not include the
reporting of at least one or more secondary CC or MCC diagnoses.
Based on our review of the data for MS-DRGs 166, 167, and 168 and
our initial analysis for cases reporting a principal diagnosis of PE
and USAT procedure with and without the administration of
thrombolytic(s), the findings also suggest that the administration of
thrombolytic(s) is not a significant factor in the consumption of
resources for these cases in MS-DRGs 166, 167, and 168 where USAT is
performed in the treatment of a PE. For example, in MS-DRG 166, there
are 826 cases reporting a principal diagnosis of PE and USAT procedure
with the administration of thrombolytic(s) and 161 cases reporting a
principal diagnosis of PE and USAT procedure without the administration
of thrombolytic(s), however, both subsets of cases have an equivalent
average length of stay of 5.4 days and a difference in average costs of
$1,015 ($28,912-$27,897 = $1,015). For MS-DRG 167, there are 316 cases
reporting a principal diagnosis of PE and USAT procedure with the
administration of thrombolytic(s) and 52 cases reporting a principal
diagnosis of PE and USAT procedure without the administration of
thrombolytic(s), however, both subsets of cases have a similar average
length of stay (3.9 days and 3.7 days, respectively) with a difference
in average costs of $368 ($23,608-$23,240 = $368). For MS-DRG 168,
there are 65 cases reporting a principal diagnosis of PE and USAT
procedure with the administration of thrombolytic(s) and 15 cases
reporting a principal diagnosis of PE and USAT procedure without the
administration of thrombolytic(s), however, both subsets of cases have
a similar average length of stay (2.8 days and 2.7 days, respectively)
with a difference in average costs of $44 ($20,156-$20,112 = $44) .
Because the administration of thrombolytic(s) would be expected to
increase resource consumption, the small difference in average costs
between these two sets of cases could also suggest that the
administration of thrombolytic(s) was not consistently reported.
While the request we received was to reassign cases reporting
ultrasound accelerated thrombolysis (USAT) with the administration of
thrombolytic(s) for the treatment of pulmonary embolism (PE) from MS-
DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165, based on our
findings that suggest the administration of thrombolytic(s) is not a
significant factor in the consumption of resources for those cases or
that a code describing the administration of thrombolytic(s) may not
have been consistently reported on a subset of claims that also
reported a code identifying USAT was performed, we then analyzed claims
data from the September 2022 update of the FY 2022 MedPAR file for all
cases in MS-DRGs 163, 164, and 165 and compared it to the cases
reporting a principal diagnosis of PE and USAT procedure with or
without thrombolytic(s) in MS-DRGs 166, 167, and 168. The findings from
our analysis are shown in the following tables.
[GRAPHIC] [TIFF OMITTED] TP01MY23.018
[GRAPHIC] [TIFF OMITTED] TP01MY23.019
[[Page 26689]]
The average costs of the 987 cases reporting a principal diagnosis
of PE and USAT with or without thrombolytic(s) in MS-DRG 166 are
$10,380 less than the average costs of all cases in MS-DRG 163
($39,126-$28,746 = $10,380) and have an average length of stay that is
approximately half the average length of stay of all cases in MS-DRG
163 (5.4 days versus 10.3 days). As stated previously, our analysis of
these cases demonstrate they appear to be grouped and paid
appropriately in MS-DRG 166. The 368 cases reporting a principal
diagnosis of PE and USAT with or without thrombolytic(s) in MS-DRG 167
have a shorter average length of stay (3.9 days versus 4.7 days) in
comparison to all the cases in MS-DRG 164, however, the average costs
of the 368 cases reporting a principal diagnosis of PE and USAT with or
without thrombolytic(s) in MS-DRG 167 are more comparable to the
average costs of all the cases in MS-DRG 164 ($23,292 versus $22,040).
Finally, the 80 cases reporting a principal diagnosis of PE and USAT
with or without thrombolytic(s) in MS-DRG 168 have an average length of
stay that is more comparable to all the cases in the MS-DRG 165 (2.8
days versus 2.7 days), however, the average costs for the 80 cases
continue to be higher in comparison to all the cases in MS-DRG 165
($20,148 versus $16,404).
Upon analysis of the claims data and our review of the request, we
do not agree with reassigning cases reporting an USAT procedure with
the administration of thrombolytic(s) and a principal diagnosis of PE
from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165. As
previously noted, the data do not support that cases reporting USAT
(with or without thrombolytic(s)) for PE utilize similar resources when
compared to other procedures currently assigned to MS-DRGs 163 and 165.
Costs were only comparable with procedures currently assigned to MS-DRG
164. Further, we do not agree that cases reporting USAT (with or
without thrombolytic(s)) are more comparable with and more clinically
aligned with the procedures assigned to MS-DRGs 163, 164, and 165. The
vast majority of procedures in these MS-DRGs describe procedures
performed on the trachea, bronchus or lungs with either an open
approach or a percutaneous endoscopic approach in contrast to the USAT
endovascular (percutaneous) procedure performed on the pulmonary trunk,
arteries or veins. In addition, the majority of procedures in MS-DRGs
163, 164, and 165 are performed on patients who are not clinically
similar to patients who undergo USAT for PE since they describe
procedures such as destruction (ablation) or excision performed for
patients with conditions other than a PE, such as malignant neoplasm,
pneumonia, or pulmonary fibrosis. Lastly, a number of procedures in
these MS-DRGs also involve the use of a permanently implanted device
while the procedures utilizing USAT do not. Therefore, we do not
consider USAT procedures to be major chest procedures, nor do we
believe the cases reporting USAT with (or without thrombolytic(s)) for
PE utilize similar resources when compared to other procedures
currently assigned to MS-DRGs 163, 164, and 165.
As stated previously, the findings from our analysis suggest that
the administration of thrombolytic(s) is not a significant factor in
the consumption of resources for cases in MS-DRGs 166, 167, and 168
reporting an USAT procedure performed for the treatment of a PE or that
a code describing the administration of thrombolytic(s) may not have
been consistently reported on a subset of claims that also reported a
code t identifying USAT was performed, or a combination of both
factors. Based on these findings related to the administration of
thrombolytic(s), we believed it would also be beneficial to examine
cases reporting standard CDT procedures with or without thrombolytic(s)
for the treatment of PE in MS-DRGs 166, 167, and 168, and compare the
findings to the cases reporting USAT with or without thrombolytic(s)
for the treatment of PE.
Therefore, we conducted additional analyses to determine if there
were significant differences in resource utilization for cases
reporting standard CDT with or without thrombolytic(s) versus USAT
procedures with or without thrombolytic(s) in the treatment of PE,
since claims data to compare the two modalities is now available and
studies have reported similar clinical outcomes in reducing PE
regardless of which thrombolysis modality is utilized.<SUP>3 4</SUP>
---------------------------------------------------------------------------
\3\ Rothschild DP, Goldstein JA, Ciacci J, Bowers TR.
Ultrasound-accelerated thrombolysis (USAT) versus standard catheter-
directed thrombolysis (CDT) for treatment of pulmonary embolism: A
retrospective analysis. Vasc Med. 2019 Jun;24(3):234-240.
\4\ Sista A, et al. Is it Time to Sunset Ultrasound-Assisted
Catheter-Directed Thrombolysis for Submassive PE? J Am Coll Cardiol
Intv. 2021 Jun, 14 (12) 1374-1375.
---------------------------------------------------------------------------
We analyzed claims data from the September 2022 update of the FY
2022 MedPAR file for all cases in MS-DRGs 166, 167, and 168 and cases
reporting a standard CDT procedure with or without the administration
of thrombolytic(s) and a principal diagnosis of PE. We utilized the
previously listed procedure codes for the administration of
thrombolytic(s) and the previously listed diagnosis codes for a
principal diagnosis of PE. We identified cases describing standard CDT
procedures performed in the treatment of PE with the following
procedure codes.
[GRAPHIC] [TIFF OMITTED] TP01MY23.020
The findings from our analysis are shown in the following table. We
note that there were no cases found to report a principal diagnosis of
PE and standard CDT with or without thrombolytic(s) in MS-DRGs 168.
[[Page 26690]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.021
The data shows that the 7 cases reporting a principal diagnosis of
PE and standard CDT with or without thrombolytic(s) in MS-DRG 166 have
a shorter average length of stay compared to all cases in MS-DRG 166
(3.3 days versus 11 days) and lower average costs ($18,472 versus
$31,910). For MS-DRG 167, the data shows that the 6 cases reporting a
principal diagnosis of PE and CDT with or without thrombolytic(s) have
a shorter average length of stay compared to all cases in MS-DRG 167
(3.5 days versus 4.7 days), however the average costs are higher
($30,928 versus $16,290).
In summary, based on our review and the claims data analysis for
cases in MS-DRGs 163, 164, and 165, and for MS-DRGs 166, 167, and 168
and cases reporting standard CDT or USAT with or without
thrombolytic(s) and a principal diagnosis of PE, we believe that while
this subset of cases for patients undergoing a thrombolysis (CDT or
USAT) procedure for PE does not clinically align with patients
undergoing surgery for malignancy or treatment for infection and does
not involve the same level of complexity, monitoring or support as
cases grouping to MS-DRGs 163, 164 and 165, the differences in resource
consumption warrant proposed reassignment of these cases. Specifically,
we believe the clinical and data analyses support creating a new base
MS-DRG to distinguish cases reporting a principal diagnosis of PE and
USAT or standard CDT procedure with or without thrombolytic(s) from
other cases currently grouping to MS-DRGs 166, 167, and 168. We believe
a new MS-DRG would reflect more appropriate payment for USAT and
standard CDT procedures in the treatment of PE.
To compare and analyze the impact of our suggested modifications,
we ran a simulation using the most recent claims data from the December
2022 update of the FY 2022 MedPAR file. The following table illustrates
our findings for all 1,534 cases reporting procedure codes describing
an USAT or CDT procedure with a principal diagnosis of PE.
[GRAPHIC] [TIFF OMITTED] TP01MY23.022
Consistent with our established process as discussed in section
II.C.1.b. of the preamble of this proposed rule, once the decision has
been made to propose to make further modifications to the MS-DRGs, such
as creating a new base MS-DRG, all five criteria to create subgroups
must be met for the base MS-DRG to be split (or subdivided) by a CC
subgroup. Therefore, we applied the criteria to create subgroups in a
base MS-DRG. We note that, as shown in the table that follows, a three-
way split of this base MS-DRG failed to meet the criterion that there
be at least 500 cases in both the CC and the NonCC (without CC/MCC)
subgroup and it also failed to meet the criterion that there be a 20%
difference in average costs between the CC and NonCC subgroup.
[GRAPHIC] [TIFF OMITTED] TP01MY23.023
As discussed in section II.C.1.b. of the preamble of this proposed
rule, if the criteria for a three-way split fail, the next step is to
determine if the criteria are satisfied for a two-way split. We
therefore applied the criteria for a two-way split for the ``with MCC
and without MCC'' subgroups. We note that, as shown in the table that
follows, a two-way split of this base MS-DRG failed to meet the
criterion that there be at least 500 cases in the without MCC
(CC+NonCC) subgroup. The following table illustrates our findings.
[[Page 26691]]
[GRAPHIC] [TIFF OMITTED] TP01MY23.024
We then applied the criteria for a two-way split for the ``with CC/
MCC and without CC/MCC'' subgroups. As with the analysis of the three-
way severity split as described previously, and as shown in the table
that follows, a two-way split of this base MS-DRG failed to meet the
criterion that there be at least 500 cases in the without CC/MCC
(NonCC) subgroup.
[GRAPHIC] [TIFF OMITTED] TP01MY23.025
We note that because the criteria for both of the two-way splits
failed, a split (or CC subgroup) is not warranted for the proposed new
base MS-DRG. As a result, for FY 2024, we are proposing to create new
base MS-DRG 173 (Ultrasound Accelerated and Other Thrombolysis with
Principal Diagnosis Pulmonary Embolism). The following table reflects a
simulation of the proposed new base MS-DRG.
[GRAPHIC] [TIFF OMITTED] TP01MY23.026
BILLING CODE 4120-01-C
We believe the resulting proposed MS-DRG better recognizes the
consumption of resources and maintains clinical coherence for both USAT
and CDT procedures performed for the treatment of PE.
We are proposing to define the logic for the proposed new MS-DRG
using the previously listed diagnosis codes for PE and the previously
listed procedure codes for USAT and CDT, as identified and discussed in
our analysis of the claims data in this section of this proposed rule.
b. Respiratory Infections and Inflammations Logic
The logic for case assignment to MS-DRGs 177, 178, and 179
(Respiratory Infections and Inflammations with MCC, with CC, and
without CC/MCC, respectively) as displayed in the ICD-10 MS-DRG V40.1
Definitions Manual (which is available 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>) is comprised of
two logic lists. The first logic list is entitled ``Principal Diagnosis
with Secondary Diagnosis'' and is defined by a list of five ICD-10-CM
diagnosis codes describing influenza due to other or unidentified
influenza virus with pneumonia in combination with a separate list of
ten diagnosis codes describing the specific pneumonia infection. When
any one of the five listed diagnosis codes from the ``Principal
Diagnosis'' logic list is reported as a principal diagnosis in
combination with any one of the ten listed diagnosis code from the
``with Secondary Diagnosis'' logic list as a secondary diagnosis, the
case results in assignment to MS-DRG 177, 178, or 179 depending on the
presence of any additional MCC or CC secondary diagnoses. All 15 of the
diagnosis codes included on the first logic list ``Principal Diagnosis
with Secondary Diagnosis'' are designated as MCCs.
The second logic list is entitled ``or Principal Diagnosis'' and is
defined by a list of 57 diagnosis codes describing various pulmonary
infections. When any one of the 57 diagnosis codes from this list is
reported as a principal diagnosis, the case results in assignment to
MS-DRG 177, 178, or 179 depending on the presence of any additional MCC
or CC secondary diagnoses.
Currently, when a diagnosis code from the second logic list ``or
Principal Diagnosis'' is reported as the principal diagnosis and a
diagnosis code from the first logic list ``Principal Diagnosis with
Secondary Diagnosis'' is reported as a secondary diagnosis, the case is
grouping to MS-DRG 177 (Respiratory Infections and Inflammations with
MCC). Consistent with how other similar logic lists function in the
ICD-10 Grouper software for case assignment to the ``with MCC'' MS-DRG,
the logic for case assignment to MS-DRG 177 is intended to require any
other diagnosis designated as an MCC and reported as a secondary
diagnosis for appropriate assignment, and not the diagnoses currently
listed in the logic for the definition of the MS-DRG.
Therefore, for FY 2024, we are proposing to correct the logic for
case assignment to MS-DRG 177 by excluding the 15 diagnosis codes from
the first logic list ``Principal Diagnosis with Secondary Diagnosis''
from acting as an MCC when any one of the listed codes is reported as a
secondary diagnosis with a diagnosis code from the second logic list
``or Principal Diagnosis'' reported as the principal diagnosis.
5. MDC 05 (Diseases and Disorders of the Circulatory System)
a. Surgical Ablation
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44836 through
44848), we discussed a two-part request we received to review the MS-
DRG assignments for cases involving the surgical ablation procedure for
atrial fibrillation. The first part of the request
[[Page 26692]]
was to create a new classification of surgical ablation MS-DRGs to
better accommodate the costs of open concomitant surgical ablations.
The second part of the request was to reassign cases describing
standalone percutaneous endoscopic surgical ablation. In the part of
the request relating to the costs of open concomitant surgical
ablations, the requestor identified the following potential procedure
combinations that would comprise an ``open concomitant surgical
ablation'' procedure.
<bullet> Open CABG + open surgical ablation
<bullet> Open MVR + open surgical ablation
<bullet> Open AVR + open surgical ablation
<bullet> Open MVR + open AVR + open surgical ablation
<bullet> Open MVR + open CABG + open surgical ablation
<bullet> Open MVR + open AVR + open CABG + open surgical ablation
<bullet> Open AVR + open CABG + open surgical ablation
As discussed in the FY 2022 IPPS/LTCH PPS final rule, we examined
claims data from the March 2020 update of the FY 2019 MedPAR file and
the September 2020 update of the FY 2020 MedPAR file for cases
reporting procedure code combinations describing open concomitant
surgical ablations. We refer the reader to Table 6P.1o associated with
the FY 2022 final rule (which is available 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>) for data analysis findings of cases reporting
procedure code combinations describing open concomitant surgical
ablations. We stated our analysis showed while the average lengths of
stay and average costs of cases reporting procedure code combinations
describing open concomitant surgical ablations are higher than all
cases in their respective MS-DRG, we found variation in the volume,
length of stay, and average costs of the cases. We also stated findings
from our analysis indicated that MS-DRGs 216, 217, 218 (Cardiac Valve
and Other Major Cardiothoracic Procedures with Cardiac Catheterization
with MCC, with CC, and without CC/MCC, respectively) as well as
approximately 31 other MS-DRGs would be subject to change based on the
three-way severity level split criterion finalized in FY 2021.
In the FY 2022 final rule, we finalized our proposal to revise the
surgical hierarchy for the MS-DRGs in MDC 05 (Diseases and Disorders of
the Circulatory System) to sequence MS-DRGs 231-236 (Coronary Bypass,
with or without PTCA, with or without Cardiac Catheterization or Open
Ablation, with and without MCC, respectively) above MS-DRGs 228 and 229
(Other Cardiothoracic Procedures with and without MCC, respectively),
effective October 1, 2021. In addition, we also finalized the
assignment of cases with a procedure code describing coronary bypass
and a procedure code describing open ablation to MS-DRGs 233 and 234
and changed the titles of these MS-DRGs to ``Coronary Bypass with
Cardiac Catheterization or Open Ablation with and without MCC,
respectively'' to reflect this reassignment for FY 2022.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48845 through
48849), we discussed a request we received to again review the MS-DRG
assignment of cases involving open concomitant surgical ablation
procedures. The requestor stated they continue to believe that the
average hospital costs for surgical ablation for atrial fibrillation
demonstrates a cost disparity compared to all procedures within their
respective MS-DRGs. The requestor suggested that when open surgical
ablation is performed with MVR, or AVR or MVR/AVR + CABG that these
procedures are either (1) assigned to a different family of MS-DRGs or
(2) assigned to MS-DRGs 216 and 217 (Cardiac Valve and Other Major
Cardiothoracic Procedures with Cardiac Catheterization with MCC and
with CC, respectively) similar to what CMS did with CABG and open
ablation procedures in the FY 2022 rulemaking to better accommodate the
added cost of open concomitant surgical ablation.
We stated our analysis using the September 2021 update of the FY
2021 MedPAR file reflected that the cases reporting an open concomitant
surgical ablation code combination are predominately found in the
higher (CC or MCC) severity level MS-DRGs of their current base MS-DRG
assignment, suggesting that the patient's co-morbid conditions may also
be contributing to the higher costs of these cases. Secondly, for the
numerous procedure combinations that would comprise an ``open
concomitant surgical ablation'' procedure, the increase in average
costs appeared to directly correlate with the number of procedures
performed. For example, cases that describe ``Open MVR + Open surgical
ablation'' generally demonstrated costs that were lower than cases that
describe ``Open MVR + Open AVR + Open CABG + Open surgical ablation.''
We also noted using the September 2021 update of the FY 2021 MedPAR
file, we analyzed how applying the NonCC subgroup criteria to all MS-
DRGs currently split into three severity levels would affect the MS-DRG
structure beginning in FY 2022. Similar to our findings discussed in
the FY 2022 IPPS/LTCH final rule, findings from our analysis using the
September 2021 update of the FY 2021 MedPAR file indicated that MS-DRGs
216, 217, 218 as well as approximately 40 other MS-DRGs would be
subject to change based on the three-way severity level split criterion
finalized in FY 2021.
Therefore, we stated we believe that additional time was needed to
allow for further analysis of the claims data to determine to what
extent the patient's co-morbid conditions are also contributing to
higher costs and to identify other contributing factors that might
exist with respect to the increased length of stay and costs of these
cases in these MS-DRGs. For the reasons summarized, and after
consideration of the public comments we received, we did not make any
MS-DRG changes for cases involving the open concomitant surgical
ablation procedures for FY 2023.
For this FY 2024 IPPS/LTCH PPS proposed rule, we again received a
request to review the MS-DRG assignment of cases involving open
concomitant surgical ablation procedures. The requestor recommended
that CMS reassign open concomitant surgical ablation procedures for
atrial fibrillation (AF) from MS-DRGs 219, 220, and 221 (Cardiac Valve
and Other Major Cardiothoracic Procedures without Cardiac
Catheterization with MCC, with CC, and without CC/MCC, respectively) to
MS-DRGs 216, 217 and 218. The requestor further recommended that if CMS
does not reassign cases involving open concomitant surgical ablation
procedures to MS-DRGs 216, 217 and 218, in the alternative, CMS should
create new MS-DRGs for all open mitral or aortic valve repair or
replacement procedures with concomitant surgical ablation for AF to
improve clinical coherence when three to four open heart procedures are
performed in one setting.
The requestor suggested that the following three MS-DRGs be created
to reflect current standard of care for these patients:
<bullet> Suggested New MS-DRG XXX--2 procedures;
<bullet> Suggested New MS-DRG XXX--3 procedures; and
<bullet> Suggested New MS-DRG XXX--4+ procedures.
The requestor stated that cases reporting open surgical ablation
procedures for AF performed during open valve repair/replacement
procedures are typically assigned to MS-DRGs 216, 217, 218, 219, 220
and
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221, with the majority of the cases being assigned to MS-DRGs 219, 220
and 221 because of the surgical hierarchy in MDC 05 and because there
is less of a need for cardiac catheterization in these cases. The
requestor performed its own data analysis, and stated their analysis
showed that the data continues to demonstrate that claims with open
surgical ablation procedures for AF are not clinically similar to the
remaining cases in MS-DRGs 219, 220 and 221, and there are significant
differences in resource utilization that reflect those clinical
differences.
To explore mechanisms to address this request, we began our
analysis by examining claims data from the September 2022 update of the
FY 2022 MedPAR file for cases reporting procedure code combinations
describing open concomitant surgical ablations assigned to MS-DRGs 216,
217, 218, 219, 220 and 221. We refer readers to Tables 6P.3a and 6P.3b
associated with this proposed rule (which are available 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>) for the data analysis of cases reporting
procedure code combinations describing open concomitant surgical
ablations in the September 2022 update of the FY 2022 MedPAR file.
Table 6P.3a associated with this proposed rule sets forth the list of
ICD-10-PCS procedure codes reflecting mitral valve repair or
replacement (MVR), aortic valve repair or replacement (AVR), coronary
artery bypass grafting (CABG) and surgical ablation procedures that we
examined in this analysis. Table 6P.3b associated with this proposed
rule shows the data analysis findings of cases reporting procedure code
combinations describing open concomitant surgical ablations assigned to
MS-DRGs 216, 217, 218, 219, 220 and 221 from the September 2022 update
of the FY 2022 MedPAR file.
As shown in Table 6P.3b associated with this proposed rule, while
the average lengths of stay and average costs of cases reporting
procedure code combinations describing open concomitant surgical
ablations are higher than all cases in their respective MS-DRG, we
found there is variation in the volume, length of stay, and average
costs of the cases. For MS-DRG 216, we found 439 cases reporting
procedure code combinations describing open concomitant surgical
ablations with the average length of stay ranging from 16.7 days to
20.3 days and average costs ranging from $78,586 to $111,439 for these
cases. For MS-DRG 217, we found 92 cases reporting procedure code
combinations describing open concomitant surgical ablations with the
average length of stay ranging from 8.5 days to 14 days and average
costs ranging from $43,221 to $98,001 for these cases. For MS-DRG 218,
we found 2 cases reporting procedure code combinations describing open
concomitant surgical ablations with the average length of stay of 6.5
days and average cost of $38,519 for these cases. For MS-DRG 219, we
found 1,136 cases reporting procedure code combinations describing open
concomitant surgical ablations with the average length of stay ranging
from 9.5 days to 13.6 days and average costs ranging from $60,495 to
$94,572 for these cases. For MS-DRG 220, we found 770 cases reporting
procedure code combinations describing open concomitant surgical
ablations with the average length of stay ranging from 6.7 days to 9.6
days and average costs ranging from $49,900 to $84,293 for these cases.
For MS-DRG 221, we found 38 cases reporting procedure code combinations
describing open concomitant surgical ablations with the average length
of stay ranging from 4.5 days to 5.8 days and average costs ranging
from $30,725 to $59,024 for these cases.
Similar to our analysis of the data as discussed in the FY 2023
IPPS/LTCH PPS final rule, this data analysis also shows for the
numerous procedure combinations that would comprise an ``open
concomitant surgical ablation'' procedure, the increase in average
costs appears to directly correlate with the number of procedures
performed. The data analysis reflects that cases that describe ``Open
MVR + Open AVR'' in addition to other concomitant procedures generally
demonstrate higher average costs in their respective MS-DRGs. In MS-DRG
216, we identified a total of 439 cases reporting procedure code
combinations describing open concomitant surgical ablations with an
average length of stay of 17.7 days and average costs of $89,877. Of
those 439 cases, there were 40 cases reporting an aortic valve repair/
replacement procedure, a mitral valve repair/replacement procedure, and
another concomitant procedure with average costs of $106,301 and an
average length of stay of 17.9 days. In MS-DRG 217, we identified a
total of 92 cases reporting procedure code combinations describing open
concomitant surgical ablations with an average length of stay of 10
days and average costs of $60,975. Of those 92 cases, there were 9
cases reporting an aortic valve repair/replacement procedure, a mitral
valve repair/replacement procedure, and another concomitant procedure
with average costs of $82,514 and an average length of stay of 12.5
days. In MS-DRG 219, we identified a total of 1,136 cases reporting
procedure code combinations describing open concomitant surgical
ablations with an average length of stay of 11.2 days and average costs
of $70,693. Of those 1,136 cases, there were 102 cases reporting an
aortic valve repair/replacement procedure, a mitral valve repair/
replacement procedure, and another concomitant procedure with average
costs of $85,537 and an average length of stay of 12.8 days. In MS-DRG
220, we identified a total of 770 cases reporting procedure code
combinations describing open concomitant surgical ablations with an
average length of stay of 7.3 days and average costs of $52,456. Of
those 770 cases, there were 48 cases reporting an aortic valve repair/
replacement procedure, a mitral valve repair/replacement procedure, and
another concomitant procedure with average costs of $67,344 and an
average length of stay of 8.4 days. For MS-DRG 218 and MS-DRG 221, we
did not identify any cases reporting procedure code combinations
describing open concomitant surgical ablations with an aortic valve
repair/replacement procedure, a mitral valve repair/replacement
procedure, and another concomitant procedure.
In examining this request, we note that the requestor suggested
[…truncated; see source link]Indexed from Federal Register on May 1, 2023.
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