Rule2023-16252
Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 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; and Medicare Disproportionate Share Hospital (DSH) Payments: Counting Certain Days Associated With Section 1115 Demonstrations in the Medicaid Fraction
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
August 28, 2023
Effective
October 1, 2023
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This final rule will: 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. This final rule also revises our regulations on the counting of days associated with individuals eligible for certain benefits provided by section 1115 demonstrations in the Medicaid fraction of a hospital's disproportionate patient percentage (DPP) used in the disproportionate share hospital (DSH) calculation.
Full Text
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[Federal Register Volume 88, Number 165 (Monday, August 28, 2023)]
[Rules and Regulations]
[Pages 58640-59438]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16252]
[[Page 58639]]
Vol. 88
Monday,
No. 165
August 28, 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; 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; and Medicare Disproportionate Share
Hospital (DSH) Payments: Counting Certain Days Associated With Section
1115 Demonstrations in the Medicaid Fraction; Final Rule
Federal Register / Vol. 88, No. 165 / Monday, August 28, 2023 / Rules
and Regulations
[[Page 58640]]
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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-F and CMS-1788-F]
RINs 0938-AV08 and 0938-AV17
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Policy Changes and Fiscal Year 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; and Medicare Disproportionate Share
Hospital (DSH) Payments: Counting Certain Days Associated With Section
1115 Demonstrations in the Medicaid Fraction
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rules.
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SUMMARY: This final rule will: 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. This final rule also revises our regulations on the
counting of days associated with individuals eligible for certain
benefits provided by section 1115 demonstrations in the Medicaid
fraction of a hospital's disproportionate patient percentage (DPP) used
in the disproportionate share hospital (DSH) calculation.
DATES: This final rule is effective October 1, 2023. The amendments to
42 CFR 488.18(d), published at 59 FR 32120, June 22, 1994, is effective
August 1, 2023.
FOR FURTHER INFORMATION CONTACT:
Donald Thompson, and Michele Hudson, (410) 786-4487 or
<a href="/cdn-cgi/l/email-protection#92d6d3d1d2f1ffe1bcfafae1bcf5fde4"><span class="__cf_email__" data-cfemail="8bcfcac8cbe8e6f8a5e3e3f8a5ece4fd">[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#6226232122010f114c0a0a114c050d14"><span class="__cf_email__" data-cfemail="cb8f8a888ba8a6b8e5a3a3b8e5aca4bd">[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#59173c2e0d3c3a31193a342a7731312a773e362f"><span class="__cf_email__" data-cfemail="236d46547746404b63404e500d4b4b500d444c55">[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#523f33203b3e277c3a273712313f217c3a3a217c353d24"><span class="__cf_email__" data-cfemail="7d101c0f141108531508183d1e100e5315150e531a120b">[email protected]</span></a>, and Andrea Hazeley,
<a href="/cdn-cgi/l/email-protection#debfb0baacbbbff0b6bfa4bbb2bba79ebdb3adf0b6b6adf0b9b1a8"><span class="__cf_email__" data-cfemail="03626d677166622d6b6279666f667a43606e702d6b6b702d646c75">[email protected]</span></a>, MS-DRG Classifications Issues.
Siddhartha Mazumdar, <a href="/cdn-cgi/l/email-protection#b7c4ded3d3dfd6c5c3dfd699dad6cdc2dad3d6c5f7d4dac499dfdfc499d0d8c1"><span class="__cf_email__" data-cfemail="bbc8d2dfdfd3dac9cfd3da95d6dac1ced6dfdac9fbd8d6c895d3d3c895dcd4cd">[email protected]</span></a>, Rural
Community Hospital Demonstration Program Issues.
Jeris Smith, <a href="/cdn-cgi/l/email-protection#731916011a005d001e1a071b33101e005d1b1b005d141c05"><span class="__cf_email__" data-cfemail="9bf1fee9f2e8b5e8f6f2eff3dbf8f6e8b5f3f3e8b5fcf4ed">[email protected]</span></a>, Frontier Community Health
Integration Project (FCHIP) Demonstration Issues.
Lang Le, <a href="/cdn-cgi/l/email-protection#325e535c551c5e5772515f411c5a5a411c555d44"><span class="__cf_email__" data-cfemail="c8a4a9a6afe6a4ad88aba5bbe6a0a0bbe6afa7be">[email protected]</span></a>, Hospital Readmissions Reduction
Program--Administration Issues.
Ngozi Uzokwe, <a href="/cdn-cgi/l/email-protection#08666f677261267d7267637f6d486b657b2660607b266f677e"><span class="__cf_email__" data-cfemail="650b020a1f0c4b101f0a0e1200250608164b0d0d164b020a13">[email protected]</span></a>, Hospital Readmissions
Reduction Program--Measures Issues.
Jennifer Tate, <a href="/cdn-cgi/l/email-protection#016b646f6f686764732f7560756441626c722f6969722f666e77"><span class="__cf_email__" data-cfemail="f49e919a9a9d929186da80958091b4979987da9c9c87da939b82">[email protected]</span></a>, Hospital-Acquired
Condition Reduction Program--Administration Issues.
Ngozi Uzokwe, <a href="/cdn-cgi/l/email-protection#6a040d051003441f1005011d0f2a09071944020219440d051c"><span class="__cf_email__" data-cfemail="49272e263320673c3326223e2c092a243a6721213a672e263f">[email protected]</span></a>, Hospital-Acquired Condition
Reduction Program--Measures Issues.
Julia Venanzi, <a href="/cdn-cgi/l/email-protection#4228372e2b236c34272c232c382b02212f316c2a2a316c252d34"><span class="__cf_email__" data-cfemail="99f3ecf5f0f8b7effcf7f8f7e3f0d9faf4eab7f1f1eab7fef6ef">[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#ff929a93968c8c9ed1979e989a8dbf9c928cd197978cd1989089"><span class="__cf_email__" data-cfemail="167b737a7f656577387e7771736456757b65387e7e6538717960">[email protected]</span></a> and Ngozi Uzokwe,
<a href="/cdn-cgi/l/email-protection#82ece5edf8ebacf7f8ede9f5e7c2e1eff1aceaeaf1ace5edf4"><span class="__cf_email__" data-cfemail="28464f475241065d5247435f4d684b455b0640405b064f475e">[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#3e5b5257445f5c5b4a56105951525a4d4a5b57507e5d534d1056564d10595148"><span class="__cf_email__" data-cfemail="5a3f3633203b383f2e32743d35363e292e3f33341a39372974323229743d352c">[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#9ff0edfeb1fbfee8fafbfaf6ebdffcf2ecb1f7f7ecb1f8f0e9"><span class="__cf_email__" data-cfemail="9ff0edfeb1fbfee8fafbfaf6ebdffcf2ecb1f7f7ecb1f8f0e9">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting--Administration Issues.
Leah Domino, <a href="/cdn-cgi/l/email-protection#9af6fffbf2b4fef5f7f3f4f5daf9f7e9b4f2f2e9b4fdf5ec"><span class="__cf_email__" data-cfemail="f29e97939adc969d9f9b9c9db2919f81dc9a9a81dc959d84">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting Program-Measure Issues.
Ariel Cress, <a href="/cdn-cgi/l/email-protection#1a7b68737f763479687f69695a79776934727269347d756c"><span class="__cf_email__" data-cfemail="4524372c20296b2637203636052628366b2d2d366b222a33">[email protected]</span></a>, Lorraine Wickiser, Lorraine,
<a href="/cdn-cgi/l/email-protection#15427c767e7c667067557678663b7d7d663b727a63"><span class="__cf_email__" data-cfemail="54033d373f3d273126143739277a3c3c277a333b22">[email protected]</span></a>, Long-Term Care Hospital Quality Reporting
Program--Data Reporting Issues.
Jessica Warren, <a href="/cdn-cgi/l/email-protection#c7ada2b4b4aea4a6e9b0a6b5b5a2a987a4aab4e9afafb4e9a0a8b1"><span class="__cf_email__" data-cfemail="bed4dbcdcdd7dddf90c9dfccccdbd0feddd3cd90d6d6cd90d9d1c8">[email protected]</span></a> and Elizabeth Holland,
<a href="/cdn-cgi/l/email-protection#6500090c1f040700110d4b0d0a0909040b01250608164b0d0d164b020a13"><span class="__cf_email__" data-cfemail="60050c091a01020514084e080f0c0c010e0420030d134e0808134e070f16">[email protected]</span></a>, Medicare Promoting Interoperability
Program.
Jennifer Milby, <a href="/cdn-cgi/l/email-protection#39535c5757505f5c4b175450555b40795a544a1751514a175e564f"><span class="__cf_email__" data-cfemail="94fef1fafafdf2f1e6baf9fdf8f6edd4f7f9e7bafcfce7baf3fbe2">[email protected]</span></a> and Sara Brice-Payne,
<a href="/cdn-cgi/l/email-protection#a4d7c5d6c58ac6d6cdc7c189d4c5ddcac1e4c7c9d78accccd78ac3cbd2"><span class="__cf_email__" data-cfemail="16657764773874647f75733b66776f787356757b65387e7e6538717960">[email protected]</span></a>, Special Requirements for Rural Emergency
Hospitals (REHs).
Lisa O. Wilson, <a href="/cdn-cgi/l/email-protection#377b5e445619605e5b4458590577545a44195f5f4419505841"><span class="__cf_email__" data-cfemail="fab693899bd4ad9396899594c8ba999789d4929289d49d958c">[email protected]</span></a>, Physician-Owned Hospital
Issues.
Frank Whelan, <a href="/cdn-cgi/l/email-protection#57112536393c79003f323b363917343a24793f3f2479303821"><span class="__cf_email__" data-cfemail="195f6b787772374e717c757877597a746a3771716a377e766f">[email protected]</span></a>, Disclosure of Ownership.
SUPPLEMENTARY INFORMATION:
Tables Available on the CMS Website
The IPPS tables for this fiscal year (FY) 2024 final rule 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. Click on the link
on the left side of the screen titled ``FY 2024 IPPS Final Rule Home
Page'' or ``Acute Inpatient--Files for Download.'' The LTCH PPS tables
for this FY 2024 final 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-F. For further details on the contents of the tables
referenced in this final rule, we refer readers to section VI. of the
Addendum to this FY 2024 IPPS/LTCH PPS final rule.
Readers who experience any problems accessing any of the tables
that are posted on the CMS websites, as previously identified, should
contact Michael Treitel, <a href="/cdn-cgi/l/email-protection#98dcd9dbd8fbf5ebb6f0f0ebb6fff7ee"><span class="__cf_email__" data-cfemail="febabfbdbe9d938dd096968dd0999188">[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 Final Rule
D. Issuance of a Notice Proposed Rulemaking and Summary of the
Proposed Provisions
E. Use of the Best Available Data in the FY 2024 IPPS and LTCH
PPS Ratesetting
F. Potential Payment Under the IPPS for Establishing and
Maintaining Access to Essential Medicines
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)
Classifications and Relative Weights
[[Page 58641]]
A. Background
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
C. 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. Changes to the Hospital Wage Index for Acute Care Hospitals
A. Background
B. Worksheet S-3 Wage Data for the FY 2024 Wage Index
C. Verification of Worksheet S-3 Wage Data
D. Method for Computing the FY 2024 Unadjusted Wage Index
E. Occupational Mix Adjustment to the FY 2024 Wage Index
F. Analysis and Implementation of the Occupational Mix
Adjustment and the FY 2024 Occupational Mix Adjusted Wage Index
G. Application of the Rural Floor, Application of the State
Frontier Floor, Continuation of the Low Wage Index Hospital Policy,
and Permanent Transition to Cap Wage Index Losses
H. FY 2024 Wage Index Tables
I. Revisions to the Wage Index Based on Hospital Redesignations
and Reclassifications
J. Out-Migration Adjustment Based on Commuting Patterns of
Hospital Employees
K. Reclassification From Urban to Rural Under Section
1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
L. Process for Requests for Wage Index Data Corrections
M. Labor-Related Share for the FY 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
F. Counting Certain Days Associated With Section 1115
Demonstration in the Medicaid Fraction
V. Other Decisions and Changes to the IPPS for Operating System
A. Changes to MS-DRGs Subject to Postacute Care Transfer Policy
and MS-DRG Special Payments Policies (Sec. 412.4)
B. 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) Annual Updates (Sec. 412.96)
E. Payment Adjustment for Low-Volume Hospitals (Sec. 412.101)
F. Medicare-Dependent, Small Rural Hospital (MDH) Program (Sec.
412.108)
G. 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. 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.
[thinsp]412.150 Through 412.154)
K. Hospital Value-Based Purchasing (VBP) Program: Policy Changes
(Sec. Sec. [thinsp]412.160 Through 412.167)
L. Hospital-Acquired Condition (HAC) Reduction Program
M. Rural Community Hospital Demonstration Program
VI. Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
C. Annual Update for FY 2024
D. Treatment of Rural Reclassifications for Capital DSH Payments
VII. Changes for Hospitals Excluded From the IPPS
A. Rate-of-Increase in Payments to Excluded Hospitals for FY
2024
B. Report on Adjustment (Exception) Payments
C. Critical Access Hospitals (CAHs)
VIII. 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 Changes to
the LTCH PPS for FY 2024
IX. 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 Coverage Among Healthcare Personnel Measure
C. Changes to the Hospital Inpatient Quality Reporting (IQR)
Program
D. Changes to the PPS-Exempt Cancer Hospital Quality Reporting
(PCHQR) Program
E. Changes to the Long-Term Care Hospital Quality Reporting
Program (LTCH QRP)
F. Changes to the Medicare Promoting Interoperability Program
X. Other Provisions Included in This Final Rule
A. Rural Emergency Hospitals (REHs)
B. Physician Self-Referral and Physician-Owned Hospitals
C. Technical Corrections to 42 CFR 411.353 and 411.357
D. Safety Net Hospitals 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
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2024 IPPS/LTCH PPS final rule makes 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 makes payment and policy changes for inpatient hospital
services provided by long-term care hospitals (LTCHs) under the long-
term care hospital prospective payment system (LTCH PPS). This final
rule also makes policy changes to programs associated with Medicare
IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2024
final rule, we are finalizing our proposal to continue policies to
address wage index disparities impacting low wage index hospitals. We
are also finalizing our proposed changes relating to Medicare graduate
medical education (GME) for teaching hospitals and new technology add-
on payments.
In this FY 2024 final rule, we are finalizing our changes to the
regulation governing the counting of days associated with individuals
eligible for certain benefits provided by section 1115 demonstrations
in the Medicaid fraction of a hospital's DPP that were proposed in CMS
1788-P, Medicare Program; Medicare Disproportionate Share Hospital
(DSH) Payments: Counting Certain Days Associated With Section 1115
Demonstrations in the Medicaid Fraction (88 FR 12623).
We are finalizing our proposals 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 finalizing our proposals 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, change
the scoring policy to include a health equity scoring adjustment, and
modify the Total Performance Score (TPS) maximum to be 110, resulting
in a 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.
[[Page 58642]]
In the HAC Reduction Program, we are finalizing our proposals to
establish a validation reconsideration process for data validation and
to add an additional targeting criterion for validation. We did not
propose any changes and are not finalizing any changes for the Hospital
Readmissions Reduction Program.
In the Hospital IQR Program, we are finalizing our proposals to add
three new measures, to modify three existing measures, and to remove
three measures. We are also finalizing our proposed changes to add
technical changes to the administration of the HCAHPS Survey and to add
an additional targeting criterion for validation.
In the PPS-Exempt Cancer Hospital Quality Reporting Program
(PCHQR), we are finalizing our proposals to add four new measures and
to modify an existing measure. We are also finalizing our proposed
changes to add technical changes to the administration of the HCAHPS
Survey and to begin public reporting of one measure.
In the LTCH QRP, we are finalizing our proposals to add two new
measures, modify an existing measure, remove two measures, and increase
the LTCH QRP data completion thresholds for LTCH Continuity Assessment
Record and Evaluation (CARE) Data Set (LCDS) items. Additionally, we
provide a summary of the comments received to our request for
information on principles for selecting and prioritizing LTCH QRP
quality measures and concepts under consideration for future years and
our update on CMS' continued efforts to close the health equity gap.
Under various statutory authorities, we either discuss continued
program implementation or 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 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)(4) of the Act, which 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 electronic
health record (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(d)(5)(F) of the Act provides for additional
Medicare IPPS payments to subsection (d) hospitals that serve a
significantly disproportionate number of low-income patients. These
payments are known as the Medicare disproportionate share hospital
(DSH) adjustment. Section 1886(d)(5)(F) of the Act specifies the
methods under which a hospital may qualify for the DSH payment
adjustment.
<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, which 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 establishes the
requirements for an eligible hospital to be treated as a meaningful EHR
user of CEHRT for an EHR reporting period for a payment year or, for
purposes of subsection (b)(3)(B)(ix) of the Act, for a fiscal year.
<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
[[Page 58643]]
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 the statutory formula for Medicare
DSH payments in section 1886(d)(5)(F) of the Act (``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, in the absence of section 1886(r) of the Act; (2) 1 minus the
percent change in the percent of individuals who are uninsured; and (3)
the 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 final
rule. In general, these major provisions are being finalized as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
changes in this final rule is presented in section I.D. of the preamble
of this final rule.
a. Modification to the Rural Wage Index Calculation Methodology
As discussed in section III.G.1. of this final 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 will include hospitals with Sec.
412.103 reclassification along with geographically rural hospitals in
all rural wage index calculations and only exclude ``dual reclass''
hospitals (hospitals with simultaneous Sec. 412.103 and Medicare
Geographic Classification Review Board (MGCRB) reclassifications) in
accordance with the hold harmless provision at section
1886(d)(8)(C)(ii) of the Act.
b. 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 final 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 finalizing our proposal 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 final rule, we are finalizing our proposal to update our
estimates of the three factors used to determine uncompensated care
payments for FY 2024. We are also finalizing our proposal 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
[[Page 58644]]
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
the decision to discontinue use of the low-income insured days proxy in
the uncompensated care payment methodology for these providers.
In this final rule we are also finalizing our proposal (88 FR
12623) on counting of days associated with individuals eligible for
certain benefits provided by section 1115 demonstrations in the
Medicaid fraction of a hospital's disproportionate patient percentage
for the purposes of determining Medicare DSH payments to subsection (d)
hospitals under section 1886(d)(5)(F) of the Act. Specifically, under
our finalized policy, for purposes of the Medicare DSH calculation in
section 1886(d)(5)(F)(vi) of the Act we will ``regard as'' ``eligible
for medical assistance under a State plan approved under title XIX''
patients who (1) receive health insurance authorized by a section 1115
demonstration or (2) buy health insurance with premium assistance
provided to them under a section 1115 demonstration, where State
expenditures to provide the health insurance or premium assistance is
matched with funds from title XIX. Furthermore, of these expansion
groups we regard as eligible for Medicaid, we include in the
disproportionate patient percentage (DPP) Medicaid fraction numerator
only the days of those patients who receive from the demonstration (1)
health insurance that covers inpatient hospital services or (2) premium
assistance that covers 100 percent of the premium cost to the patient,
which the patient uses to buy health insurance that covers inpatient
hospital services, provided in either case that the patient is not also
entitled to Medicare Part A. Finally, patients whose inpatient hospital
costs are paid for with funds from an uncompensated/undercompensated
care pool authorized by a section 1115 demonstration will not be
patients ``regarded as'' eligible for Medicaid, and the days of such
patients may not be included in the DPP Medicaid fraction numerator.
d. Hospital Readmissions Reduction Program
We did not propose any changes to the Hospital Readmissions
Reduction Program. We note that all previously 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.
e. Hospital Value-Based Purchasing (VBP) Program
Section 1886(o) of the Act requires the Secretary to establish a
Hospital VBP Program under which value-based incentive payments are
made in a fiscal year to hospitals based on their performance on
measures established for a performance period for such fiscal year. In
this final rule, we are finalizing our proposal 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. In addition, we
are finalizing our proposal to adopt the Severe Sepsis and Septic
Shock: Management Bundle measure in the Safety Domain beginning with
the FY 2026 program year.
We are finalizing our proposal 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
finalizing our proposal to adopt a health equity scoring change for
rewarding excellent care in underserved populations beginning with the
FY 2026 program year, as well as the proposal 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 health equity scoring change.
f. 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 final rule,
we are finalizing our proposal 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 finalizing modification of the validation
targeting criteria to include hospitals granted an extraordinary
circumstances exceptions (ECEs) beginning with the FY 2027 program
year, affecting calendar year 2024 discharges.
g. Modification of the COVID-19 Vaccination Coverage Among Healthcare
Personnel (HCP) Measure in the Hospital IQR Program, PCHQR Program, and
LTCH QRP
In the FY 2024 IPPS/LTCH PPS final rule, we are finalizing our
proposal to modify the COVID-19 Vaccination Coverage among 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.
h. 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 the FY 2024 IPPS/LTCH PPS final rule, we are finalizing several
changes to the Hospital IQR Program. We are finalizing 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 eCQM beginning with the CY
2025 reporting period/FY 2027 payment determination. We are also
finalizing 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 Coverage among HCP
measure beginning with the Q4 CY 2023 reporting period/FY 2025 payment
determination. We are also finalizing the removal of three current
measures: (1) Hospital-level Risk-standardized Complication Rate (RSCR)
Following Elective Primary Total Hip Arthroplasty
[[Page 58645]]
(THA) and/or Total Knee Arthroplasty (TKA) measure beginning with the
April 1, 2025-March 31, 2028 reporting period/FY 2030 payment
determination pursuant to Removal Factor 8; (2) Medicare Spending Per
Beneficiary (MSPB) Hospital measure beginning with the CY 2026
reporting period/FY 2028 payment determination pursuant to Removal
Factor 8; and (3) Elective Delivery (PC-01) measure beginning with the
CY 2024 reporting period/FY 2026 payment determination pursuant to
Removal Factor 1. We are finalizing the codification of our Measure
Removal Factors.
We are also finalizing two changes to current policies related to
data submission, reporting, and validation: (1) Technical changes to
the form and manner of the administration of the 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.
i. 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 the FY 2024 IPPS/LTCH PPS final rule, we are finalizing our
proposals 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 also finalizing
our proposal to adopt a modified version of the COVID-19 Vaccination
Coverage among HCP measure beginning with the FY 2025 program year. We
are also finalizing our proposals to publicly report the Surgical
Treatment Complications for Localized Prostate Cancer (PCH-37) measure
beginning with data from the FY 2025 program year, and technical
changes to the form and manner of the administration of the HCAHPS
survey measure beginning with the FY 2027 program year.
j. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
We are finalizing several changes to the LTCH QRP. Specifically, we
are: (1) adopting a modified version of the COVID-19 Vaccination
Coverage among HCP measure beginning with the FY 2025 LTCH QRP; (2)
adopting the Discharge Function Score measure beginning with the FY
2025 LTCH QRP; (3) removing 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)
removing 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) adopting the
COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date
measure beginning with the FY 2026 LTCH QRP; (6) increasing the LTCH
QRP data completion thresholds for the LCDS beginning with the FY 2026
LTCH QRP; and (7) beginning public reporting of the Transfer of Health
(TOH) Information to the Patient-Post-Acute Care (PAC) and TOH
Information to the Provider-PAC measures.
k. Medicare Promoting Interoperability Program
In this final rule, we are finalizing several changes to the
Medicare Promoting Interoperability Program. Specifically, we are
finalizing our proposals 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.
l. Changes to the Severity Level Designation for Z Codes Describing
Homelessness
As discussed in section II.C. of the preamble of this final rule,
we are finalizing the proposed 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
[[Page 58646]]
provisions described in section I.A.2. of the preamble of this final
rule.
[GRAPHIC] [TIFF OMITTED] TR28AU23.000
[[Page 58647]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.001
[[Page 58648]]
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 58649]]
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 (DGME)
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 Will Be Implemented
in This Final 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. Issuance of the Notices of Proposed Rulemaking and Summary of the
Proposed Provisions
1. FY 2024 IPPS/LTCH PPS Proposed Rule
In the proposed rule that appeared in the Federal Register on May
1, 2023 (88 FR 26658), 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 proposed
to make.
a. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
In section II. of the preamble of the proposed rule, we included
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
[[Page 58650]]
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 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 deadline for FDA marketing authorization from
July 1 to May 1 of the year before the fiscal year for which the
applicant applied for new technology add-on payments, beginning with
applications for FY 2025 (as discussed in section II.E.9. of the
preamble of the proposed rule).
b. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble of the proposed rule, we proposed
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 2024 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.
c. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2024
In section IV. of the preamble of the 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.
d. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of the proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
<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 to establish a validation reconsideration process
and update the data validation targeting criteria under the HAC
Reduction Program for FY 2024.
<bullet> Proposed to update the MSPB Hospital and THA/TKA
Complications measures, to adopt the new Severe Sepsis and Septic
Shock: Management Bundle measure, to update the changes to the data
collection and submission requirements for the HCAHPS Survey measure,
to revise the scoring methodology to include a health equity scoring
adjustment, to modify the Total Performance Score numeric score range
to be 0-110, and to codify the measure removal factors, the revised
scoring methodology and TPS numeric score range, and the minimum
numbers of cases.
<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.
e. Proposed FY 2024 Policy Governing the IPPS for Capital-Related Costs
In section VI. of the preamble of the 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.
f. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VII. of the preamble of the proposed rule, we 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.
g. Proposed Changes to the LTCH PPS
In section VIII. of the preamble of the proposed rule, we set forth
proposed changes to the LTCH PPS Federal payment rates, factors, and
other payment rate policies under the LTCH PPS for FY 2024.
h. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
In section IX. of the preamble of the proposed rule, we addressed
the following:
<bullet> Proposed adoption of a modified version of the COVID-19
Vaccination Coverage 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 PPS-Exempt
Cancer Hospital Quality Reporting Program (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
[[Page 58651]]
CAHs participating in the Medicare Promoting Interoperability Program.
i. Other Proposals and Comment Solicitations Included in the Proposed
Rule
Section X. of the preamble of the proposed rule included 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 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.
j. Other Provisions of the Proposed Rule
Section XI.A. of the preamble of the proposed rule includes our
discussion of the MedPAC Recommendations.
Section XI.B. of the preamble of the proposed rule includes a
descriptive listing of the public use files associated with the
proposed rule.
Section XII. of the preamble of the proposed rule includes the
collection of information requirements for entities based on our
proposals.
Section XIII. of the preamble of the proposed rule includes
information regarding our responses to public comments.
k. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum of the 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 proposed to
establish the threshold amounts for outlier cases. In addition, in
section IV. of the Addendum of the 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.
l. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum of the 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.
m. Impact Analysis
In appendix A of the proposed rule, we set forth an analysis of the
impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs and other entities.
n. Recommendation of Update Factors for Operating Cost Rates of Payment
for Hospital Inpatient Services
In appendix B of the proposed rule, as required by sections
1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the
appropriate percentage changes for FY 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.
o. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, MedPAC is required to submit a
report to Congress, no later than March 15 of each year, in which
MedPAC reviews and makes recommendations on Medicare payment policies.
MedPAC's March 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 the 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>.
2. Section 1115 Demonstration Disproportionate Share Hospital Proposed
Rule
In addition, in the proposed rule that appeared in the Federal
Register on February 28, 2023 (88 FR 12623), we set forth proposed
revisions to the regulations on the counting of days associated with
individuals eligible for certain benefits provided by section 1115
demonstrations in the Medicaid fraction of a hospital's
disproportionate patient percentage for the purposes of determining
Medicare DSH payments to subsection (d) hospitals under section
1886(d)(5)(F) of the Act. Specifically, we proposed for purposes of the
Medicare DSH calculation in section 1886(d)(5)(F)(vi) of the Act to
``regard as'' ``eligible for medical assistance under a State plan
approved under title XIX'' patients who (1) receive health insurance
authorized by a section 1115 demonstration or (2) buy health insurance
with premium assistance provided to them under a section 1115
demonstration, where State expenditures to provide the health insurance
or premium assistance is matched with funds from title XIX.
Furthermore, of these expansion groups we proposed to regard as
eligible for Medicaid, we proposed to include in the disproportionate
patient percentage (DPP) Medicaid fraction numerator only the days of
those patients who receive from the demonstration (1) health insurance
that covers inpatient hospital services or (2) premium assistance that
covers 100 percent of the premium cost to the patient, which the
patient uses to buy health insurance that covers inpatient hospital
services, provided in either case that the patient is not also entitled
to Medicare Part A. Finally, we proposed specifically that patients
whose inpatient hospital costs are paid for with funds from an
uncompensated/undercompensated care pool authorized by a section 1115
demonstration would not be patients ``regarded as'' eligible for
Medicaid, and the days of such patients may not be included in the DPP
Medicaid fraction numerator.
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
[[Page 58652]]
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.
As discussed 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 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.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26671), we
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.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26671), we also
reviewed the most recent COVID-19 related data and information released
by the CDC. We presented this CDC graph which 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).
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[GRAPHIC] [TIFF OMITTED] TR28AU23.002
We stated that the graph shows that in the United States, patients
continue to be hospitalized with the virus that causes COVID-19. We
also noted that 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\ In the proposed rule, we concluded
that based on the information available at the 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. We also stated that based on the information available
at the 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 to the extent 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 stated our belief 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 proposed 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 did
not propose any modifications to our usual ratesetting methodologies to
account for the impact of COVID-19 on the ratesetting data.
The comments we received on our proposal to use FY 2022 data for
purposes of the FY 2024 IPPS and LTCH PPS ratesetting were focused on
the specific use of FY 2022 data when determining the FY 2024 outlier
fixed-loss amounts. Therefore, we refer the reader to section II.A.4.
of the addendum to this final rule for our summary and response to
comments received on our proposal to use FY 2022 data and our usual
methodology when determining the FY 2024 outlier fixed-loss amounts for
IPPS cases. We refer the reader to section V.D.3. of the Addendum to
this final rule for our summary and response to comments received on
our proposal to use FY 2022 data and our usual methodology when
determining the FY 2024 outlier fixed-loss amounts for LTCH PPS
standard Federal payment rate cases.
For the reasons discussed in those sections, we are finalizing our
proposal to use FY 2022 data for purposes of the FY 2024 IPPS and LTCH
PPS ratesetting. (That is, 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).) We also
are finalizing, with modification, our proposal to use our usual
ratesetting methodologies for purposes of the FY 2024 IPPS and LTCH PPS
ratesetting. As discussed in section V.D.3. of the addendum to this
final rule, after consideration of the comments received, we are
modifying our proposed methodology for establishing the FY 2024 outlier
fixed-loss amount for LTCH PPS standard Federal payment rate cases.
F. Potential Payment Under the IPPS for Establishing and Maintaining
Access to Essential Medicines
In the CY 2024 Medicare Hospital Outpatient Prospective Payment
System and Ambulatory Surgical Center Payment System Proposed Rule (CMS
1786-P) issued on July 13, 2023, we included a request for public
comments on potential payment under the IPPS for establishing and
maintaining access to essential medicines. As discussed in that rule,
we are seeking comment on, and may consider finalizing based on the
review of comments received, as early as for cost reporting periods
beginning on or after January 1, 2024, separate payment under IPPS, for
establishing and maintaining access to a buffer stock of essential
medicines to foster a more reliable, resilient supply of these
medicines. Public comments are being accepted through September 11,
2023.
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)
Classifications and Relative Weights
A. Background
Section 1886(d) of the Act specifies that the Secretary shall
establish a classification system (referred to as diagnosis-related
groups (DRGs)) for inpatient discharges and adjust payments under the
IPPS based on appropriate weighting factors assigned to each DRG.
Therefore, under the IPPS, Medicare pays for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment for a specific case multiplies an
[[Page 58654]]
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).
Comment: Several commenters requested that CMS make a positive
adjustment to restore the full amount of the documentation and coding
recoupment adjustments in the FY 2024 IPPS final rule which they
asserted is required under section (7)(B)(2) and (4) of the TMA
[Transitional Medical Assistance], Abstinence Education, and QI
[Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 110-
90). Commenters stated that the statute is explicit that CMS may not
carry forward any documentation and coding adjustments applied in
fiscal years 2010 through 2017 into IPPS rates after FY 2023.
Commenters contended that CMS, by its own admission, has restored only
2.9588 percentage points of a total 3.9 percentage point reduction. By
not fully restoring the total reductions, commenters believe that CMS
is improperly extending payment adjustments beyond the FY 2023
statutory limit. A commenter stated that, even if CMS disputes it is
required to make such an adjustment, CMS should use its special
exceptions and adjustments authority to address the shortfall.
Response: As of FY 2023, CMS completed the statutory requirements
of section 7(b)(1)(B) of Pub. L. 110-90 as amended by section 631 of
the American Taxpayer Relief Act of 2012 (ATRA, Pub. L. 112- 240),
section 404 of the Medicare Access and CHIP Reauthorization Act of 2015
(MACRA), and section 15005 of the 21st Century Cures Act (Pub. L. 114-
255). As we discussed in the FY 2022 IPPS/LTCH PPS final rule (86 FR
44794 through 44795), the FY 2021 IPPS/LTCH PPS final rule (85 FR 58444
through 58445) and in prior rules, we believe section 414 of the MACRA
and section 15005 of the 21st Century Cures Act set forth the levels of
positive adjustments for FYs 2018 through 2023. We are not convinced
that the adjustments prescribed by MACRA were predicated on a specific
adjustment level estimated or implemented by CMS in previous
rulemaking. We see no evidence that Congress enacted these adjustments
with the intent that CMS would make an additional +0.7 percentage point
adjustment in FY 2018 to compensate for the higher than expected final
ATRA adjustment made in FY 2017, nor are we persuaded that it would be
appropriate to use the Secretary's exceptions and adjustments authority
under section 1886(d)(5)(I) of the Act to adjust payments in FY 2024
restore any additional amount of the original 3.9 percentage point
reduction, given Congress' directive regarding prescriptive adjustment
levels under section 414 of the MACRA and section 15005 of the 21st
Century Cures Act. Accordingly, in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38009), we implemented the required +0.4588 percentage point
adjustment to the standardized amount for FY 2018. In the FY 2019 IPPS/
LTCH PPS final rule (FY 2019 final rule) (83 FR 41157), the FY 2020
IPPS/LTCH PPS final rule (FY 2020 final rule) (84 FR 42057), the FY
2021 IPPS/LTCH PPS final rule (FY 2021 final rule) (85 FR 58444 and
58445), the FY 2022 IPPS/LTCH PPS final rule (FY 2022 final rule) (86
FR 44794 and 44795), and the FY 2023 IPPS/LTCH PPS final rule (FY 2023
final rule) (87 FR 48800), consistent with the requirements of section
414 of the MACRA, we implemented 0.5 percentage point positive
adjustments to the standardized amount for FY 2019, FY 2020, FY 2021,
FY 2022 and FY 2023, respectively. As discussed in the FY 2023 final
rule, the finalized 0.5 percentage point positive adjustment for FY
2023 is the final adjustment prescribed by section 414 of the MACRA.
C. Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for 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 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
[[Page 58655]]
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<SUP>TM</SUP> at:
<a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
As we did for the FY 2023 IPPS/LTCH PPS proposed rule, for the FY
2024 IPPS/LTCH PPS proposed rule we provided 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 the
proposed rule. We noted that this test software reflected the proposed
GROUPER logic for FY 2024. Therefore, it included 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 that were associated with the 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 the proposed rule. We noted that at the time of the development of
the proposed rule there were no procedure codes designated as invalid
for FY 2024, and therefore, there was no Table 6D- Invalid Procedure
Codes--FY 2024 associated with the proposed rule. Those tables were not
published in the Addendum to the 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 the proposed rule. Because the diagnosis codes
no longer valid for FY 2024 are not reflected in the test software, we
made 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 had access to the test
software allowing them to build case examples that reflect the
proposals that were included in the proposed rule. In addition, users
were able to view the draft version of the ICD-10 MS-DRG Definitions
Manual, Version 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 proposed to the MS-DRGs for FY
2024. We invited public comments on each of the MS-DRG classification
proposed changes, as well as our proposals to maintain certain existing
MS-DRG classifications discussed in the proposed rule. In some cases,
we proposed changes to the MS-DRG classifications based on our analysis
of claims data and clinical appropriateness. In other cases, we
proposed to maintain the existing MS-DRG classifications based on our
analysis of claims data and clinical appropriateness. As discussed in
the 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 referred to those 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 referred to those claims data as the
``December 2022 update of the FY 2022 MedPAR file.'' Specifically, as
discussed further in the proposed rule and 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.
As explained in previous rulemaking (76 FR 51487), in deciding
whether to propose to make further modifications to the MS-DRGs for
particular circumstances brought to our attention, we consider whether
the resource consumption and clinical characteristics of the patients
with a given set of conditions are significantly different than the
remaining patients represented in the MS-DRG. We evaluate patient care
costs using average costs and lengths of stay and rely on 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
[[Page 58656]]
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.--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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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 the 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
[[Page 58657]]
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 the 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 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 the 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. In the FY 2024 IPPS/
LTCH PPS proposed rule, we noted that 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 referred
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 the 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 noted 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 the
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 stated we believed 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] TR28AU23.004
[[Page 58658]]
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We also referred 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 noted, 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 referred 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-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 the 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 noted 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) did not reflect application of
the 10-percent cap. We further noted that changes in the status for
transfer adjusted cases were reflected for the relative weights
calculated using the proposed V41 GROUPER Software only and were not
reflected for the alternate MS-DRG weights with application of the
NonCC subgroup criteria. We noted, 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). In the proposed rule, we stated that the
findings were 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 made 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 included 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 the 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 the FY 2024 IPPS/LTCH PPS proposed rule we also provided 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 the proposed rule if the NonCC subgroup
criteria were to be applied to existing MS-DRGs with a three-way
severity level split. We noted that this alternate test software
reflected the proposed GROUPER logic for FY 2024 as modified by the
application of the NonCC subgroup criteria. Therefore, it included 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 the proposed rule and did not
include the diagnosis codes that are invalid beginning in FY 2024 as
reflected in Table 6C.--Invalid Diagnosis Codes--FY 2024 associated
with the proposed rule. As previously noted, at the time of the
development of the proposed rule there were no procedure codes
designated as invalid for FY 2024, and therefore, there was no Table
6D- Invalid Procedure Codes--FY 2024 associated with the proposed rule.
These tables were not published in the Addendum to the 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 the proposed rule. Because
the diagnosis codes no longer valid for FY 2024 are not reflected in
the alternate test software, we made 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 had access to the alternate test software allowing them to build
case examples that reflect the proposals included in the proposed rule
[[Page 58659]]
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 the 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 made 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 proposed 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 stated that we were 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.
Comment: Commenters expressed appreciation that CMS provided
additional files for review and consideration that reflect application
of the NonCC subgroup criteria in connection with the FY 2024 proposed
MS-DRG changes.
Response: We thank the commenters for their feedback.
Comment: Commenters supported the proposal to delay application of
the NonCC subgroup criteria to existing MS-DRGs with a three-way
severity level split for FY 2024 and to maintain the current structure
of the 45 MS-DRGs that currently have a three-way split (total of 135
MS-DRGs). The commenters also expressed support for the proposal to
exclude the 12 obstetric related MS-DRGs from application of the NonCC
subgroup criteria in the future. Some commenters stated they agreed
with the methodology for creating subgroups and viewed the
consolidation as a positive change, however, the commenters also
recommended that CMS continue to collect data and identify any
unintended impacts to the MS-DRG relative weights because of the
redistribution of cases from application of the NonCC subgroup
criteria. Other commenters stated that although the COVID-19 PHE has
ended, several hospitals are still recovering and further assessment of
the impacts for low volume procedures in connection with the potential
MS-DRG changes with application of the NonCC subgroup criteria is
needed.
A couple commenters specifically requested that CMS provide data
analysis by hospital type for FY 2025 rulemaking to afford
organizations additional time to review and forecast impacts, as well
as to facilitate more informed comments in response to the CMS request
for comments related to experiences of large urban hospitals, rural
hospitals, and other hospital types.
Response: We appreciate the commenters' support. We will continue
to review and consider the feedback we have received for our
development of the FY 2025 proposed rule.
Comment: A couple commenters who expressed support for the proposed
delay in application of the NonCC subgroup criteria for FY 2024 and
appreciation for the additional analysis files that were made available
stated that deleting and adding a large volume of MS-DRGs may create
additional administrative burden. The commenters stated providers will
need more time than is typically provided for implementation of
finalized policies under the IPPS. The commenters urged CMS to work
with interested parties in developing an appropriate implementation
timeline. A commenter suggested that CMS consider implementing
application of the NonCC subgroup criteria using a phased approach,
over several years, to assist in the transition. This commenter
encouraged CMS to continue to provide additional analysis files as was
done with the proposed rule and to include the potential effects of a
multi-year implementation plan.
Response: We thank the commenters for their support and feedback.
We will continue to review and consider the feedback we have received
for our development of the FY 2025 proposed rule.
Comment: A commenter who agreed it is appropriate to defer
implementation of MS-DRG consolidation based on the three-way severity
criteria specifically expressed concern that the policy may result in
additional reductions to relative weights for important procedures,
including intracranial vascular procedures. According to the commenter,
intracranial vascular procedures have already experienced significant
cuts in recent years. The commenter stated that based on the data that
was made available in connection with the proposed rule, the estimates
show that consolidation for five MS-DRGs, including potential new MS-
DRG 105 (Intracranial Vascular Procedures with Principal Diagnosis
Hemorrhage without MCC) would result in a more than 10 percent relative
weight reduction (prior to the application of the current 10-percent
cap). To the extent that CMS does adopt such MS-DRG consolidation in
the future, the commenter recommended that CMS limit the single-year
relative weight reductions resulting from cumulative policy changes to
5 percent.
The commenter also suggested that CMS consider building more
flexibility into its assessment of severity level subdivisions for both
new and existing MS-DRGs. According to the commenter, the requirement
to meet multiple, rigid cost and volume cut-offs may detract from the
assessment of important clinical and resource distinctions in patient
populations within the MS-DRGs.
A few commenters expressed concern that the criterion of a 500-case
volume may be too high, particularly for low volume services and MS-
DRGs. The commenters stated that there has been tremendous growth in
Medicare Advantage claims with a decrease in fee-for-service (FFS)
claims flowing into rate-setting. The commenters stated additional
analysis of this criterion is warranted and requested that CMS provide
further information about the benefits.
Response: We appreciate the commenters' feedback. We acknowledge
the growth in Medicare Advantage claims and will continue to review and
consider the feedback we have received for our development of the FY
2025 proposed rule.
In response to the commenter's recommendation that CMS limit the
single-year relative weight reductions to 5 percent, we note that there
was extensive discussion in the FY 2023 IPPS/LTCH PPS final rule (87 FR
48897 through 48900) regarding the cap for relative weight reductions
and refer the reader to that discussion for detailed information. We
also refer the reader to the additional discussion in the FY 2024 IPPS/
LTCH PPS proposed rule (88 FR 26774 through 26775) and in section
II.D.2.c. of the preamble of this final rule.
With regard to the commenter's suggestion that more flexibility
should be built into CMS' assessment of severity level subdivisions for
both new
[[Page 58660]]
and existing MS-DRGs, we note that currently, the minimum case volume
requirements were established to avoid overly fragmenting the MS-DRG
classification system. With smaller volumes they will be subject to
stochastic (unpredictable) effects that may indicate a cost difference
within the data sample. Reevaluation in subsequent years may result in
those cost differences being insufficient to support the split.
We do not believe it is in the interest of the Medicare program or
providers to establish and then remove MS-DRG splits. We believe that
stability of MS-DRG payment is an important objective and therefore,
that a volume requirement is a necessary adjunct to cost
differentiation. We established a 500-case limit to meet this stability
requirement. With this case limit, an MS-DRG split not meeting this
minimum volume threshold will have fewer than 0.007% cases from which
the MS-DRG RW is constructed. Under application of the NonCC subgroup
criteria, hospitals would receive a payment weight that averages the
two comorbidity split levels (CC and NonCC) and will thus only
experience any potential negative impact to the extent that their case
mix is comprised of cases with the (potentially) higher weight. We
note, as discussed in prior rulemaking (86 FR 44878), the MS-DRG system
is a system of averages and it is expected that within the diagnostic
related groups, some cases may demonstrate higher than average costs,
while other cases may demonstrate lower than average costs. We also
provide outlier payments to mitigate extreme loss on individual cases.
Comment: A couple commenters requested clarification on how the
policy to cap the reductions for MS-DRG relative weights to 10-percent
would apply as CMS considers implementation of the NonCC subgroup
criteria.
Response: As stated in the FY 2023 IPPS/LTCH PPS final rule (87 FR
48900), the 10- percent cap on reductions to an MS-DRG's relative
weight applies to new or modified MS-DRGs after the first fiscal year
that the new or modified MS-DRGs take effect. Therefore, the 10-percent
cap would not apply to the relative weight for any new or renumbered
MS-DRGs for the first fiscal year. However, we recognize that
application of the NonCC subgroup criteria may warrant special
consideration with respect to the 10-percent cap on reductions to an
MS-DRG's relative weight and will continue to consider this issue in
connection with our efforts to promote predictability and mitigate
financial impacts resulting from significant fluctuations in the
relative weights.
Comment: A couple commenters expressed concern that the additional
files made available in connection with the proposed rule did not
demonstrate how the explanatory power of the potential new MS-DRGs with
application of the NonCC subgroup criteria is an improvement over the
current MS-DRGs. The commenters expressed concern that the impact of
the presence of a CC for MS-DRG assignment appears to be declining
because the application of the NonCC subgroup criteria is resulting in
fewer MS-DRGs split by the presence of a CC. Specifically, the
commenters stated that when the NonCC subgroup criteria were applied to
existing MS-DRGs currently split into three severity levels, as well as
when the criteria were applied to proposed new MS-DRG classification
requests, none of the proposed new MS-DRGs with a two-way severity
level split involved a ``with CC/MCC'' and ``without CC/MCC'' split.
Response: As discussed in the FY 2024 IPPS/LTCH proposed rule, we
provided both a test version of the ICD-10 MS-DRG GROUPER Software,
Version 41 and an alternate version of the ICD-10 MS-DRG GROUPER
Software, Version 41.A so that the public could better analyze and
understand the impact on the proposals included in the proposed rule if
the NonCC subgroup criteria were to be applied to existing MS-DRGs with
a three-way severity level split. We noted that this alternate test
software reflected the proposed GROUPER logic for FY 2024 as modified
by the application of the NonCC subgroup criteria. Overall, we believe
the explanatory power (R2) for the V41.A alternate GROUPER yields
similar results to the proposed V41 GROUPER. Based on our review, the
explanatory power (R2) goes down by 0.04 percent with the V41.A
alternate GROUPER, explaining less variation when compared to the V41
notice of proposed rulemaking (NPRM) GROUPER, however this result is as
we would expect since the MS-DRGs subject to the NonCC subgroup
criteria considered for potential adjustment are low volume to begin
with.
[GRAPHIC] [TIFF OMITTED] TR28AU23.005
In response to the concerns expressed that application of the NonCC
subgroup criteria to existing MS-DRGs with a three-way severity level
split appears to result in fewer MS-DRGs split by the presence of a CC,
we note that the criteria for the two-way split of ``with CC/MCC'' and
``without CC/MCC'' requires that there be at least 500 cases in the
NonCC group, and as discussed in the proposed rule, in applying the
criteria for proposed new MS-DRGs, that volume requirement was not met.
Alternatively, the criteria for the two-way split of ``with MCC'' and
``without MCC'' was met for specific proposals, and therefore,
proposed.
We recognize and acknowledge the concerns raised by the commenters
regarding the impact the application of the NonCC subgroup criteria to
existing MS-DRGs with a three-way split appears to have on the presence
of a CC for MS-DRG assignment. We will continue to examine this issue
with respect to the criteria and how it also relates to the
comprehensive CC/MCC analysis. We refer the reader to section
II.C.12.b. of the preamble of this final rule for additional discussion
related to the comprehensive CC/MCC analysis.
Comment: Some commenters requested additional insight and rationale
as to why CMS applied the NonCC subgroup criteria to the proposed MS-
DRG changes for FY 2024 if the intent is to delay application of the
NonCC subgroup criteria until future rulemaking.
Response: As discussed in prior rulemaking, in general, 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 must be
met for the base MS-DRG to be split (or subdivided) by a CC subgroup.
We note that we have applied the criteria to create subgroups,
including application of the NonCC subgroup criteria, in our annual
analysis of the MS-DRG classification requests
[[Page 58661]]
effective FY 2021 (85 FR 58446 through 58448). For example, we applied
the criteria to create subgroups, including application of the NonCC
subgroup criteria, for a proposed new base MS-DRG as discussed in our
finalization of new base MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-
cell Immunotherapy), new base MS-DRG 019 (Simultaneous Pancreas and
Kidney Transplant with Hemodialysis), new base MS-DRG 140 (Major Head
and Neck Procedures), new base MS-DRG 143 (Other Ear, Nose, Mouth and
Throat O.R. Procedures), new base MS-DRG 521 (Hip Replacement with
Principal Diagnosis of Hip Fracture) and new base MS-DRG 650 (Kidney
Transplant with Hemodialysis) for FY 2021. 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 CC or 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.
Similarly, we applied the criteria to create subgroups including
application of the NonCC subgroup criteria for MS-DRG classification
requests for FY 2022 that we received by November 1, 2020 (86 FR 44796
through 44798), for MS-DRG classification requests for FY 2023 that we
received by November 1, 2021 (87 FR 48801 through 48804), and for MS-
DRG classification requests for FY 2024 that we received by October 20,
2022 (88 FR 26673 through 26676), as well as any additional analyses
that were conducted in connection with those requests.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798) and FY 2023
IPPS/LTCH PPS final rule (87 FR 48803), we finalized a delay in
applying this technical criterion to existing MS-DRGs in light of the
PHE. We take this opportunity to clarify that the delay referenced was
in applying this technical criterion to existing MS-DRGs with a three-
way severity level split. Therefore, while we have made analyses for
potential MS-DRG changes with application of the NonCC subgroup
criteria publicly available, we have not yet proposed application of
the NonCC subgroup criteria to existing MS-DRGs with a three-way
severity level split. We note that we will continue to apply the
criteria to create subgroups, including application of the NonCC
subgroup criteria, in our annual analysis of MS-DRG classification
requests, consistent with our approach since FY 2021 when we finalized
the expansion of the criteria to include the NonCC subgroup for a
three-way severity level split.
Comment: A few commenters expressed concerns about the fluctuations
in potential MS-DRG restructuring with application of the NonCC
subgroup criteria from FY 2021 through FY 2024 based on different sets
of claims data.
Response: We note that we addressed similar comments in detail in
the FY 2023 IPPS/LTCH PPS final rule (87 FR 48803 through 48804) and
refer the reader to that discussion.
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal to delay the
application of the NonCC subgroup criteria to existing MS-DRGs with a
three-way severity level split until FY 2025 or later, and are
finalizing for FY 2024 our proposal to maintain the current structure
of the 45 MS-DRGs that currently have a three-way severity level split.
We are making the FY 2024 ICD-10 MS-DRG GROUPER and Medicare Code
Editor (MCE) Software Version 41, the ICD-10 MS-DRG Definitions Manual
files Version 41 and the Definitions of Medicare Code Edits Manual
Version 41 available to the public on our CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a>.
2. Major Diagnostic Category (MDC) 01: (Diseases and Disorders of the
Nervous System): Epilepsy With Neurostimulator
The Responsive Neurostimulator (RNS[supreg]) 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. In the FY 2024
IPPS/LTCH PPS proposed rule (88 FR 26676 through 26681), we stated that
cases involving the use of the RNS[supreg] 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
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 referred 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[supreg]
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[supreg] 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
[[Page 58662]]
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[supreg] 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[supreg] neurostimulator) from MS-DRG 023 to MS-DRG 021.
We also did not propose to reassign Responsive Neurostimulator
(RNS[supreg]) 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[supreg] neurostimulator), and a principal diagnosis of
epilepsy.
In the FY 2024 IPPS/LTCH PPS proposed rule, we stated 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[supreg]
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. We stated in the FY 2024
IPPS/LTCH PPS proposed rule that 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[supreg]
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[supreg] 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[supreg] 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[supreg] 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 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[supreg] cases and therefore creating a new MS-DRG for all cases
involving a craniectomy/craniotomy with device implant was a reasonable
alternative option.
We stated in the proposed rule that to begin our analysis, we
identified the ICD-10-CM diagnosis codes that describe a diagnosis of
epilepsy. We referred the reader to Table 6P.2a associated with the
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 stated in the proposed rule that 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[supreg] 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] TR28AU23.006
[[Page 58663]]
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[supreg] neurostimulator) that had a
principal diagnosis of epilepsy. We noted 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[supreg] neurostimulator) and a principal diagnosis of
epilepsy had 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. We stated that
while these neurostimulator cases had average costs that were $11,355
higher than the average costs of all cases in MS-DRG 023, there were
only a total of 57 cases. We stated we reviewed these data, and agreed
with the requestor that the number of cases continued 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).
As stated in the proposed rule, 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[supreg] 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, we noted that 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[supreg] 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] TR28AU23.007
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[supreg]
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, in the proposed rule we stated
we also analyzed the 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[supreg]
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] TR28AU23.008
[[Page 58664]]
As noted in the proposed rule, 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[supreg] 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 CC or an 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 stated we reviewed the clinical
issues and the claims data and continued 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[supreg] neurostimulator) and a
principal diagnosis of epilepsy from MS-DRG 023 to MS-DRGs 020, 021, or
022. We noted in the proposed rule that 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[supreg] neurostimulator generators are not used to treat patients
with diagnosis of a hemorrhage. We stated we continued 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). We noted that the
differences in average length of stay and average costs based on the
more recent data continued to support this recommendation.
We noted, as discussed in section II.C.1.b of the 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. As stated in the proposed rule, 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
referred the reader to Table 6P.10b associated with the 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 stated that we then explored alternative options, as was
requested. As stated in the proposed rule, we did 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 was a reasonable
approach to find cases comparable to cases involving the use of the
RNS[supreg] System as these root operations all describe procedures
performed for distinct and differing objectives. Instead, to review for
similar utilization of resources, we stated 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[supreg]
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 the brain. The following table
shows our findings:
[[Page 58665]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.009
BILLING CODE 4120-01-C
We noted that the 90 Major Device Implant list cases involving a
neurostimulator generator (including cases involving the use of the
RNS[supreg] 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 noted 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. In the proposed rule, we stated that while these
neurostimulator cases have average costs that are higher than the
average costs of all cases in their respective MS-DRGs, it was
difficult to detect patterns of complexity and resource intensity.
Moreover, we stated we were 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 noted that while our data findings demonstrated 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. We stated that while we
appreciated the requestor's 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
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. In the proposed rule, we stated
that 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
[[Page 58666]]
of these patient populations in the MS-DRGs.
As part of this evaluation, as discussed in the proposed rule, 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 the
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, in the proposed rule, we stated 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[supreg] 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 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[supreg] neurostimulator) from MS-DRG 023
to MS-DRG 021. We also did not propose to create a new MS-DRG for cases
involving a craniectomy/craniotomy with device implant at this time.
Comment: Some commenters expressed support for CMS' proposal to
maintain the assignment of cases reporting procedure codes that
describe 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[supreg] neurostimulator) in MS-DRG 023 and
to not propose to create a new MS-DRG for cases involving a
craniectomy/craniotomy with device implant. A commenter stated they
agreed that it was inappropriate to reassign cases that involve
craniectomy or craniotomy with the insertion of neurostimulator into
the skull in combination with the insertion of a neurostimulator lead
into the brain from MS-DRG 023 (Craniotomy with Major Device Implant or
Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant
or Epilepsy with Neurostimulator) to MS-DRG 021 (Intracranial Vascular
Procedures with Principal Diagnosis Hemorrhage with CC). This commenter
also stated that due to the low volume of total cases, they agreed that
creation of a new MS-DRG was not warranted.
Response: We appreciate the commenters' support.
Comment: Another commenter opposed CMS' proposal. The commenter
stated CMS' data analysis demonstrated that the average costs of
RNS[supreg] System cases continue to be substantially higher than the
average costs of all cases in their assigned MS-DRG 023. This commenter
further stated that they believed the data analysis supports extracting
cases reporting procedure codes that describe 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[supreg] neurostimulator) (e.g., Major Device Implant list
cases) from MS-DRGs 023 and 024 and creating two new MS-DRGs with logic
maintained for cases with a principal diagnosis of epilepsy with
neurostimulator generator inserted into the skull and insertion of a
neurostimulator lead into brain. The commenter stated this refinement
would result in a much better alignment of the average costs of these
cases compared to their current MS-DRG assignment.
Response: We thank the commenter for their feedback. We continue to
be receptive to concerns about payment for cases reporting procedure
codes that describe 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[supreg] neurostimulator). While we
agree these neurostimulator cases can have average costs that are
higher than the average costs of all cases in their respective MS-DRGs,
in our analysis of this issue, it was difficult to detect patterns of
complexity and resource intensity. As discussed in the proposed rule
and earlier in this section, to review for similar utilization of
resources, we 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[supreg] 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. In our analysis in MS-DRG 023, we
found 90 cases reporting a procedure code combination representing
neurostimulator generator and lead code combination captured under the
list referred to as ``Major Device Implant'' with the average length of
stay ranging from 1 day to 249 days and average costs ranging from
$22,717 to $250,272 for these cases. In MS-DRG 024, we found 395 cases
reporting a procedure code combination representing neurostimulator
generator and lead code combination captured under the list referred to
as ``Major Device Implant'' with the average length of stay ranging
from 1 day to 12 days and average costs ranging from $16,359 to $70,949
for these cases. We continue to believe that 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 part of our ongoing,
comprehensive analysis of the MS-DRGs under ICD-10, we will continue to
explore mechanisms to ensure clinical coherence between these cases and
the other cases with which they may potentially be grouped.
Therefore, after consideration of the public comments we received,
and for the reasons stated earlier, we are finalizing our proposal to
maintain the current assignment of cases describing a neurostimulator
generator inserted into the skull with the insertion of a
neurostimulator lead into the brain (including cases involving the use
of the RNS[supreg] neurostimulator), without modification, for FY 2024.
As noted in the proposed rule, 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
[[Page 58667]]
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 the proposed rule and this final rule at: <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
Comment: In response to CMS' request for public comment and
feedback on the potential restructuring of the craniotomy MS-DRGs for
future consideration, a commenter stated they do not believe there is a
need for CMS to re-evaluate the assignment of neurosurgical procedures
within the craniotomy MS-DRGs 023 through 027. This commenter stated
that the procedures in these MS-DRGs have been well established from a
clinical homogeneity perspective, as well as a resource utilization
perspective, and the procedures costs have been stable. Another
commenter stated they appreciate CMS' willingness to review the
craniotomy/craniectomy MS-DRGs to ensure proper alignment of
procedures, indications, technical complexity, and resource
utilization. This commenter further noted there are a wide array of
diagnoses and procedures that fall within this range of MS-DRG and
stated they believe there are a variety of ways these MS-DRGs can be
classified.
A commenter mentioned that CMS referred the reader to Tables 6P.2b
through 6P.2f associated with the 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 data analysis findings of
cases assigned to MS-DRGs 023 through 027 and expressed concern that
there was no discussion of these findings or their significance in the
proposed rule. This commenter suggested that CMS comment on the
following:
<bullet> How is CMS defining technical complexity and what factors
are being considered in the analysis?
<bullet> Are there other data not included in Tables 6P.2b through
6P.2f that CMS is analyzing?
<bullet> What is the timing for completion of the full analysis of
MS-DRGs 023-027?
Response: We thank the commenters for their feedback and will take
these recommendations into consideration as we further examine the
logic for case assignment. The data analysis as displayed in Tables
6P.2b through 6P.2f associated with the proposed rule was displayed to
provide the public an opportunity to review our examination of the
procedures by their approach (open versus percutaneous), clinical
indications, and procedures that involve the insertion or implantation
of a device and to reflect on what factors should be considered in the
potential restructuring of these MS-DRGs. We welcome further feedback
on how CMS should define technical complexity, what factors should be
considered in the analysis, and whether there are other data not
included in Tables 6P.2b through 6P.2f that CMS should analyze.
As discussed in the proposed rule, and earlier in this section, as
we continue the analysis of the claims data with respect to MS-DRGs 023
through 027, we are interested in receiving feedback on 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 these MS-DRGs. 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>) at
<a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>. We note that we would address any
proposed modifications to the existing logic in future rulemaking.
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.
In response to this final policy, as discussed in the FY 2024 IPPS/
LTCH PPS proposed rule (88 FR 26681 through 26684), 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. We stated in the proposed
rule that the requestor stated they 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.
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.
[[Page 58668]]
<bullet> Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent without CC/MCC.
We stated in the proposed rule that in reviewing this issue, it was
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.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.010
We stated in the proposed rule that thrombolytic therapy is
identified with the following ICD-10-PCS procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.011
In this final rule, we would like to correct the statement in the
proposed rule and add that thrombolytic therapy is also identified with
the following two ICD-10-PCS procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.012
We stated in the proposed rule that 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-DRG 123.
To begin our analysis, as discussed in the proposed rule, 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 58669]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.013
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.
We stated in the proposed rule that the data analysis showed 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 stated in the proposed rule that we reviewed these data and did
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 warranted 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 did not propose
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 noted in the proposed rule that we recognized 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. As discussed in
the proposed rule, 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 stated that 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 stated 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 58670]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.014
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.
We stated in the proposed rule that our analysis demonstrated 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 of the cases currently grouping to MS-DRG 124. We stated we
reviewed these data and supported the addition of the ten 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 stated we believed reassigning
these diagnosis codes to MS-DRGs 124 and 125 would better account for
the subset of patients who are treated with a thrombolytic agent, and
would more appropriately reflect the resources involved in evaluating
and treating these patients. We also stated we supported 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 proposed 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 also proposed to add the procedure codes
describing the administration of a thrombolytic agent listed previously
to MS-DRG 124. In the proposed rule, we noted 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 also proposed to designate these codes as non-O.R.
procedures affecting the MS-DRG. Lastly, for consistency, we also
proposed 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.
Comment: Commenters agreed with our proposal 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. A
commenter stated that this proposal better aligns with the resource
consumption of these cases. Another commenter stated that the proposed
MS-DRG assignment of cases reporting a principal diagnosis code
describing CRAO or BRAO with a procedure code describing the
administration of a thrombolytic agent would more accurately capture
the complexity of the condition and the necessary resources associated
with administering critical treatments.
Response: We thank the commenters for their support.
After consideration of the public comments we received, we are
finalizing our proposal 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, without modification, effective
October 1, 2023, for FY 2024. In addition, we are finalizing our
proposal to add the procedure codes describing the administration of a
thrombolytic agent listed previously to MS-DRG 124. As part of the
logic for MS-DRG 124, we are also finalizing our proposal to designate
the 10 ICD-10-PCS procedure codes describing the administration of a
thrombolytic agent listed previously as non-O.R. procedures affecting
the MS-DRG. Lastly, we are finalizing our proposal 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 for FY 2024.
4. MDC 04 (Diseases and Disorders of the Respiratory System)
a. Ultrasound Accelerated Thrombolysis for Pulmonary Embolism
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26684 through 26691), 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
[[Page 58671]]
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[supreg] 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.
As discussed in the proposed rule, 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.
[GRAPHIC] [TIFF OMITTED] TR28AU23.015
We noted in the proposed rule 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 85 FR
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). We
noted in the proposed rule that 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 85 FR 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.
As discussed in the proposed rule, 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.
[[Page 58672]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.016
[GRAPHIC] [TIFF OMITTED] TR28AU23.017
[GRAPHIC] [TIFF OMITTED] TR28AU23.018
We noted 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 noted 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 04 (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.
[GRAPHIC] [TIFF OMITTED] TR28AU23.019
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
[[Page 58673]]
average costs of $27,897. The data demonstrate 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 demonstrate
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 w
[…truncated; see source link]Indexed from Federal Register on August 28, 2023.
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