Rule2024-17021
Medicare and Medicaid Programs and the Children's Health Insurance 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 2025 Rates; Quality Programs Requirements; and Other Policy Changes
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, 2024
Effective
October 1, 2024
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This final rule revises the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals; makes changes relating to Medicare graduate medical education (GME) for teaching hospitals; updates the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs); and makes other policy- related changes.
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<title>Federal Register, Volume 89 Issue 167 (Wednesday, August 28, 2024)</title>
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[Federal Register Volume 89, Number 167 (Wednesday, August 28, 2024)]
[Rules and Regulations]
[Pages 68986-70046]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-17021]
[[Page 68985]]
Vol. 89
Wednesday,
No. 167
August 28, 2024
Part II
Book 2 of 2 Books
Pages 68985-70094
Department of Health and Human Services
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Centers for Medicare and Medicaid Services
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42 CFR Parts 412, et al.
Medicare and Medicaid Programs and the Children's Health Insurance
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 2025 Rates; Quality Programs
Requirements; and Other Policy Changes; Final Rule
Federal Register / Vol. 89 , No. 167 / Wednesday, August 28, 2024 /
Rules and Regulations
[[Page 68986]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 412, 413, 431, 482, 485, 495, and 512
[CMS-1808-F]
RIN 0938-AV34
Medicare and Medicaid Programs and the Children's Health
Insurance 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 2025 Rates; Quality
Programs Requirements; and Other Policy Changes
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule revises the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related
costs of acute care hospitals; makes changes relating to Medicare
graduate medical education (GME) for teaching hospitals; updates the
payment policies and the annual payment rates for the Medicare
prospective payment system (PPS) for inpatient hospital services
provided by long-term care hospitals (LTCHs); and makes other policy-
related changes.
DATES: With the exception of instruction 2 (Sec. 405.1845),
instruction 29 (Sec. 482.42(e)) and instruction 31 (Sec. 485.640(d)),
this final rule is effective October 1, 2024. The regulation at Sec.
405.1845 is effective January 1, 2025. The regulations at Sec. Sec.
482.42(e) and 485.640(d) are effective on November 1, 2024.
FOR FURTHER INFORMATION CONTACT:
Donald Thompson, and Michele Hudson, (410) 786-4487 or
<a href="/cdn-cgi/l/email-protection#1e5a5f5d5e7d736d3076766d30797168"><span class="__cf_email__" data-cfemail="3a7e7b797a59574914525249145d554c">[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#1652575556757b65387e7e6538717960"><span class="__cf_email__" data-cfemail="a4e0e5e7e4c7c9d78accccd78ac3cbd2">[email protected]</span></a>, Long-Term Care
Hospital Prospective Payment System and MS-LTC-DRG Relative Weights
Issues.
Lily Yuan, <a href="/cdn-cgi/l/email-protection#86c8e3f1d2e3e5eec6e5ebf5a8eeeef5a8e1e9f0"><span class="__cf_email__" data-cfemail="703e15072415131830131d035e1818035e171f06">[email protected]</span></a>, New Technology Add-On Payments
Issues.
Mady Hue, <a href="/cdn-cgi/l/email-protection#224f43504b4e570c4a574762414f510c4a4a510c454d54"><span class="__cf_email__" data-cfemail="85e8e4f7ece9f0abedf0e0c5e6e8f6abededf6abe2eaf3">[email protected]</span></a>, and Andrea Hazeley,
<a href="/cdn-cgi/l/email-protection#c3a2ada7b1a6a2edaba2b9a6afa6ba83a0aeb0edababb0eda4acb5"><span class="__cf_email__" data-cfemail="8eefe0eafcebefa0e6eff4ebe2ebf7ceede3fda0e6e6fda0e9e1f8">[email protected]</span></a>, MS-DRG Classifications Issues.
Jonathan Rudy, <a href="/cdn-cgi/l/email-protection#2d4742434c59454c43035f5849546d4e405e0345455e034a425b"><span class="__cf_email__" data-cfemail="f09a9f9e918498919ede82859489b0939d83de989883de979f86">[email protected]</span></a>, Rural Community Hospital
Demonstration Program Issues.
Jeris Smith, <a href="/cdn-cgi/l/email-protection#e78d82958e94c9948a8e938fa7848a94c98f8f94c9808891"><span class="__cf_email__" data-cfemail="8ce6e9fee5ffa2ffe1e5f8e4ccefe1ffa2e4e4ffa2ebe3fa">[email protected]</span></a>, Frontier Community Health
Integration Project (FCHIP) Demonstration Issues.
Lang Le, <a href="/cdn-cgi/l/email-protection#4428252a236a2821042729376a2c2c376a232b32"><span class="__cf_email__" data-cfemail="402c212e276e2c2500232d336e2828336e272f36">[email protected]</span></a>, Hospital Readmissions Reduction
Program--Administration Issues.
Ngozi Uzokwe, <a href="/cdn-cgi/l/email-protection#f39d949c899add86899c988496b3909e80dd9b9b80dd949c85"><span class="__cf_email__" data-cfemail="d3bdb4bca9bafda6a9bcb8a4b693b0bea0fdbbbba0fdb4bca5">[email protected]</span></a>, Hospital Readmissions
Reduction Program--Measures Issues.
Jennifer Tate, <a href="/cdn-cgi/l/email-protection#066c6368686f606374287267726346656b75286e6e7528616970"><span class="__cf_email__" data-cfemail="b2d8d7dcdcdbd4d7c09cc6d3c6d7f2d1dfc19cdadac19cd5ddc4">[email protected]</span></a>, Hospital-Acquired
Condition Reduction Program--Administration Issues.
Ngozi Uzokwe, <a href="/cdn-cgi/l/email-protection#365851594c5f18434c595d415376555b45185e5e4518515940"><span class="__cf_email__" data-cfemail="e58b828a9f8ccb909f8a8e9280a5868896cb8d8d96cb828a93">[email protected]</span></a>, Hospital-Acquired Condition
Reduction Program--Measures Issues.
Julia Venanzi, <a href="/cdn-cgi/l/email-protection#1a706f76737b346c7f747b7460735a79776934727269347d756c"><span class="__cf_email__" data-cfemail="177d627b7e763961727976796d7e57747a64397f7f6439707861">[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#a8c5cdc4c1dbdbc986c0c9cfcddae8cbc5db86c0c0db86cfc7de"><span class="__cf_email__" data-cfemail="f49991989d878795da9c95939186b4979987da9c9c87da939b82">[email protected]</span></a>, and Ngozi Uzokwe,
<a href="/cdn-cgi/l/email-protection#355b525a4f5c1b404f5a5e4250755658461b5d5d461b525a43"><span class="__cf_email__" data-cfemail="f09e979f8a99de858a9f9b8795b0939d83de989883de979f86">[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#dbbeb7b2a1bab9beafb3f5bcb4b7bfa8afbeb2b59bb8b6a8f5b3b3a8f5bcb4ad"><span class="__cf_email__" data-cfemail="07626b6e7d666562736f2960686b637473626e6947646a74296f6f7429606871">[email protected]</span></a>, Hospital
Inpatient Quality Reporting and Hospital Value-Based Purchasing--
Hospital Consumer Assessment of Healthcare Providers and Systems
Measures Issues.
Jennifer Tate, <a href="/cdn-cgi/l/email-protection#2248474c4c4b4447500c5643564762414f510c4a4a510c454d54"><span class="__cf_email__" data-cfemail="97fdf2f9f9fef1f2e5b9e3f6e3f2d7f4fae4b9ffffe4b9f0f8e1">[email protected]</span></a>, PPS-Exempt Cancer
Hospital Quality Reporting--Administration Issues.
Kristina Rabarison, <a href="/cdn-cgi/l/email-protection#cea5bca7bdbaa7a0afe0bcafacafbca7bda1a08eada3bde0a6a6bde0a9a1b8"><span class="__cf_email__" data-cfemail="bbd0c9d2c8cfd2d5da95c9dad9dac9d2c8d4d5fbd8d6c895d3d3c895dcd4cd">[email protected]</span></a>, PPS-Exempt
Cancer Hospital Quality Reporting Program--Measure Issues.
Lorraine Wickiser, <a href="/cdn-cgi/l/email-protection#6a060518180b03040f441d03090103190f182a09071944020219440d051c"><span class="__cf_email__" data-cfemail="aac6c5d8d8cbc3c4cf84ddc3c9c1c3d9cfd8eac9c7d984c2c2d984cdc5dc">[email protected]</span></a>, Long-Term Care
Hospital Quality Reporting Program--Administration Issues.
Jessica Warren, <a href="/cdn-cgi/l/email-protection#ec86899f9f858f8dc29b8d9e9e8982ac8f819fc284849fc28b839a"><span class="__cf_email__" data-cfemail="751f1006061c16145b02140707101b351618065b1d1d065b121a03">[email protected]</span></a> and Elizabeth Holland,
<a href="/cdn-cgi/l/email-protection#31545d584b50535445591f595e5d5d505f5571525c421f5959421f565e47"><span class="__cf_email__" data-cfemail="47222b2e3d262522332f692f282b2b26292307242a34692f2f3469202831">[email protected]</span></a>, Medicare Promoting Interoperability
Program.
Bridget Dickensheets, <a href="/cdn-cgi/l/email-protection#82e0f0ebe6e5e7f6ace6ebe1e9e7ecf1eae7e7f6f1c2e1eff1aceaeaf1ace5edf4"><span class="__cf_email__" data-cfemail="1270607b767577663c767b7179777c617a7777666152717f613c7a7a613c757d64">[email protected]</span></a> and Mollie
Knight, <a href="/cdn-cgi/l/email-protection#ef82808383868ac184818688879baf8c829cc187879cc1888099"><span class="__cf_email__" data-cfemail="462b292a2a2f23682d282f212e3206252b35682e2e3568212930">[email protected]</span></a>, LTCH Market Basket Rebasing.
Benjamin Cohen, <a href="/cdn-cgi/l/email-protection#89ebece7e3e8e4e0e7a7eae6e1ece7c9eae4faa7e1e1faa7eee6ff"><span class="__cf_email__" data-cfemail="bad8dfd4d0dbd7d3d494d9d5d2dfd4fad9d7c994d2d2c994ddd5cc">[email protected]</span></a>, Provider Reimbursement
Review Board.
Nicholas Bonomo, <a href="/cdn-cgi/l/email-protection#ace2c5cfc4c3c0cddf82eec3c2c3c1c3eccfc1df82c4c4df82cbc3da"><span class="__cf_email__" data-cfemail="c08ea9a3a8afaca1b3ee82afaeafadaf80a3adb3eea8a8b3eea7afb6">[email protected]</span></a> and Tracy Smith,
<a href="/cdn-cgi/l/email-protection#add9dfccced483dec0c4d9c5d9ccd4c1c2dfedcec0de83c5c5de83cac2db"><span class="__cf_email__" data-cfemail="e99d9b888a90c79a84809d819d889085869ba98a849ac781819ac78e869f">[email protected]</span></a>, Payment Error Rate Measurement Program.
<a href="/cdn-cgi/l/email-protection#adeee0e0e4f2f9e8ece0edcec0de83c5c5de83cac2db"><span class="__cf_email__" data-cfemail="91d2dcdcd8cec5d4d0dcd1f2fce2bff9f9e2bff6fee7">[email protected]</span></a>, Transforming Episode Accountability Model
(TEAM).
Lauren Blum, <a href="/cdn-cgi/l/email-protection#f5b9948087909bdbb7998098c4b5969886db9d9d86db929a83"><span class="__cf_email__" data-cfemail="d894b9adaabdb6f69ab4adb5e998bbb5abf6b0b0abf6bfb7ae">[email protected]</span></a>, and Kristin Shifflett,
<a href="/cdn-cgi/l/email-protection#f6bd849f85829f98d8a59e9f90909a938282b6959b85d89e9e85d8919980"><span class="__cf_email__" data-cfemail="94dfe6fde7e0fdfabac7fcfdf2f2f8f1e0e0d4f7f9e7bafcfce7baf3fbe2">[email protected]</span></a>, Conditions of Participation Requirements
for Hospitals and Critical Access Hospitals to Report Acute Respiratory
Illnesses.
SUPPLEMENTARY INFORMATION:
Tables Available on the CMS Website
The IPPS tables for this fiscal year (FY) 2025 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 2025 IPPS Final Rule Home
Page'' or ``Acute Inpatient--Files for Download.'' The LTCH PPS tables
for this FY 2025 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-1808-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 2025 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#44000507042729376a2c2c376a232b32"><span class="__cf_email__" data-cfemail="94d0d5d7d4f7f9e7bafcfce7baf3fbe2">[email protected]</span></a>.
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2025 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
[[Page 68987]]
programs associated with Medicare IPPS hospitals, IPPS-excluded
hospitals, and LTCHs. In this FY 2025 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.
We are finalizing our proposal of a separate IPPS payment for
establishing and maintaining access to essential medicines.
In the Hospital Value-Based Purchasing (VBP) Program, we are
finalizing our proposal to modify scoring of the Person and Community
Engagement Domain for the FY 2027 through FY 2029 program years to only
score six unchanged dimensions of the Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) Survey measure, and we are
finalizing our proposal to adopt the updated HCAHPS Survey measure in
the Hospital VBP Program beginning with the FY 2030 program year after
the updated measure has been publicly reported under the Hospital
Inpatient Quality Reporting (IQR) Program for 1 year. We are also
finalizing our proposal to modify scoring on the HCAHPS Survey measure
beginning with the FY 2030 program year to incorporate the updated
HCAHPS Survey measure into nine survey dimensions. Lastly, we provide
previously and newly established performance standards for the FY 2027
through FY 2030 program years for the Hospital VBP Program.
In the Hospital IQR Program, we are finalizing our proposals to add
seven new measures, with modifications to our proposal to adopt the
Patient Safety Structural measure, modify two existing measures
including the HCAHPS Survey measure, and remove five measures. We are
also finalizing our proposed changes to the validation process for the
Hospital IQR Program data. We are finalizing the proposed reporting and
submission requirements for electronic clinical quality measures
(eCQMs) with modifications.
In the PPS-Exempt Cancer Hospital Quality Reporting Program
(PCHQR), we are finalizing the adoption of the Patient Safety
Structural measure with modification beginning with the CY 2025
reporting period/FY 2027 program year. We are also finalizing our
proposed changes to the HCAHPS Survey measure and our proposal to move
up the start date for publicly displaying hospital performance on the
Hospital Commitment to Health Equity measure.
In the LTCH Quality Reporting Program (QRP), we are finalizing our
proposals to add four assessment items to the LTCH Continuity
Assessment Record and Evaluation (CARE) Data Set (LCDS) and modify one
assessment item on the LCDS beginning with the FY 2028 LTCH QRP.
Additionally, we are finalizing our proposal to extend the admission
assessment window for the LCDS beginning with the FY 2028 LTCH QRP.
Finally, we summarize the feedback we received on our requests for
information on future measure concepts for the LTCH QRP and a future
LTCH Star Rating system.
In the Medicare Promoting Interoperability Program, we are
finalizing our proposal to separate the Antimicrobial Use and
Resistance (AUR) Surveillance measure into two measures, an
Antimicrobial Use (AU) Surveillance measure and an Antimicrobial
Resistance (AR) Surveillance measure, beginning with the electronic
health record (EHR) reporting period in CY 2025. We are also finalizing
the following proposals to: increase the performance-based scoring
threshold from 60 points to 70 points for the EHR reporting period in
CY 2025 and from 70 points to 80 points beginning with the EHR
reporting period in CY 2026; adopt two new eCQMs and modify one eCQM,
in alignment with the Hospital IQR Program; and change the reporting
and submission requirements for eCQMs with modifications, in alignment
with the Hospital IQR Program.
We proposed the creation and testing of a new mandatory alternative
payment model called the Transforming Episode Accountability Model
(TEAM). The intent of TEAM is to improve beneficiary care through
financial accountability for episodes categories that begin with one of
the following procedures: coronary artery bypass graft surgery (CABG),
lower extremity joint replacement (LEJR), major bowel procedure,
surgical hip/femur fracture treatment (SHFFT), and spinal fusion. TEAM
will test whether financial accountability for these episode categories
reduces Medicare expenditures while preserving or enhancing the quality
of care for Medicare beneficiaries. We anticipated that TEAM would
benefit Medicare beneficiaries through improving the coordination of
items and services paid for through Medicare fee-for-service (FFS)
payments, encouraging provider investment in health care infrastructure
and redesigned care processes, and incentivizing higher value care
across the inpatient and post-acute care settings for the episode. We
proposed to test TEAM for a 5-year model performance period, beginning
January 1, 2026, and ending December 31, 2030. Under the Quality
Payment Program (QPP), we anticipated that TEAM would be an Advanced
Alternative Payment Model (APM)for Track 2 and Track 3 and a Merit-
based Incentive Payment System (MIPS) APM for all participation tracks.
We are finalizing some policies as proposed and we are finalizing
others with modification. There are also certain proposed policies that
we are not finalizing, and we will instead go through future rulemaking
to promulgate new policies before the model start date.
We are also finalizing the proposal requiring respiratory illness
reporting for hospitals and critical access hospitals as a condition of
participation following the expiration of the COVID-19 public health
emergency requirements.
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 2025 and
subsequent fiscal years, and other policies and provisions included in
this rule. These statutory authorities include, but are not limited to,
the following:
<bullet> Section 1886(d) of the Social Security Act (the Act),
which sets forth a system of payment for the operating costs of acute
care hospital inpatient stays under Medicare Part A (Hospital
Insurance) based on prospectively set rates. Section 1886(g) of the Act
requires that, instead of paying for capital-related costs of inpatient
hospital services on a reasonable cost basis, the Secretary use a
prospective payment system (PPS).
<bullet> Section 1886(d)(1)(B) of the Act, which specifies that
certain hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: rehabilitation hospitals and units; LTCHs;
psychiatric hospitals and units; children's hospitals; cancer
hospitals; extended neoplastic disease care hospitals; and hospitals
located outside the 50 States, the District of Columbia, and Puerto
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa). Religious nonmedical
health care institutions (RNHCIs) are also excluded from the IPPS.
<bullet> Sections 123(a) and (c) of the Balanced Budget Refinement
Act of 1999 (BBRA) (Public Law (Pub. L.) 106-113) and section 307(b)(1)
of the Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L.
106-554) (as codified under section 1886(m)(1) of the
[[Page 68988]]
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 period 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 adjustment 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 based on their performance on measures established for a
performance period for such fiscal year.
<bullet> Section 1886(p) of the Act, which establishes a Hospital-
Acquired Condition (HAC) Reduction Program, under which payments to
applicable hospitals are adjusted to provide an incentive to reduce
hospital-acquired conditions.
<bullet> Section 1886(q) of the Act, as amended by section 15002 of
the 21st Century Cures Act, which establishes the Hospital Readmissions
Reduction Program. Under the program, payments for discharges from an
applicable hospital as defined under section 1886(d) of the Act will be
reduced to account for certain excess readmissions. Section 15002 of
the 21st Century Cures Act directs the Secretary to compare hospitals
with respect to the number of their Medicare-Medicaid dual-eligible
beneficiaries in determining the extent of excess readmissions.
<bullet> Section 1886(r) of the Act, as added by section 3133 of
the Affordable Care Act, which provides for a reduction to
disproportionate share hospital (DSH) payments under section
1886(d)(5)(F) of the Act and for an additional uncompensated care
payment to eligible hospitals. Specifically, section 1886(r) of the Act
requires that, for fiscal year 2014 and each subsequent fiscal year,
subsection (d) hospitals that would otherwise receive a DSH payment
made under section 1886(d)(5)(F) of the Act will receive two separate
payments: (1) 25 percent of the amount they previously would have
received under the statutory formula for Medicare DSH payments in
section 1886(d)(5)(F) of the Act if subsection (r) did not apply (``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 2 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 on
quality measures 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, which provides for the
establishment of standardized data reporting for certain post-acute
care providers, including LTCHs.
<bullet> Section 1115A of the Act authorizes the testing of
innovative payment and service delivery models that preserve or enhance
the quality of care furnished to Medicare, Medicaid, and Children's
Health Insurance Program (CHIP) beneficiaries while reducing program
expenditures.
<bullet> Sections 1866 and 1902 of the Act, which requires
providers of services seeking to participate in the Medicare or
Medicaid program, or both, to enter into an agreement with the
Secretary or the state Medicaid agency, as appropriate. Hospitals (all
hospitals to which the requirements of 42 CFR part 482 apply, including
short-term acute care hospitals, LTC hospitals, rehabilitation
hospitals, psychiatric hospitals, cancer hospitals, and children's
hospitals) and critical access hospitals (CAHs) seeking to be Medicare
and Medicaid providers of services under 42 CFR part 485, subpart F,
must be certified as meeting Federal participation requirements
(conditions of participation (CoPs) and conditions for coverage
(CfCs)). Section 1861(e) of the Act provides the patient health and
safety protections established by the Secretary for hospital CoPs.
Section 1820(e) of the Act provides similar authority for CAHs.
2. Summary of the Major Provisions
The following is a summary of the major provisions in this final
rule. In
[[Page 68989]]
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. 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 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.5. of the preamble of this final rule, while
we are using the FY 2021 cost report data for the FY 2025 wage index,
we are unable to comprehensively evaluate the effect, if any, the low
wage index hospital policy had on hospitals' wage increases during the
years the COVID-19 public health emergency (PHE) was in effect. We
believe it is necessary to wait until we have useable data from fiscal
years after the PHE before reaching any conclusions about the efficacy
of the policy. Therefore, after consideration of public comments, we
are finalizing our proposal that the low wage index hospital policy and
the related budget neutrality adjustment would be effective for at
least 3 more years, beginning in FY 2025.
b. Separate IPPS Payment for Establishing and Maintaining Access to
Essential Medicines
As discussed in section V.J. of the preamble of this final rule,
the Biden-Harris administration has made it a priority to strengthen
the resilience of medical supply chains and support reliable access to
products for public health, including through prevention and mitigation
of medical product shortages. As a first step in this initiative, we
proposed to establish a separate payment for small, independent
hospitals for the IPPS shares of the additional resource costs to
voluntarily establish and maintain a 6-month buffer stock of one or
more of 86 essential medicines, either directly or through contractual
arrangements with a pharmaceutical manufacturer, distributor, or
intermediary. For the purposes of this policy, eligibility is limited
to small, independent hospitals as hospitals with 100 beds or fewer
that are not part of a chain organization. We are finalizing our
proposal to make this separate payment in a non-budget neutral manner
under section 1886(d)(5)(I) of the Act. We are also finalizing our
proposal that the payment adjustments would commence for cost reporting
periods beginning on or after October 1, 2024.
c. DSH Payment Adjustment, Additional Payment for Uncompensated Care,
and Supplemental Payment
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 would have
been paid as Medicare DSH payments under section 1886(d)(5)(F) of the
Act if subsection (r) did not apply, is paid as additional payments
after the amount is reduced for changes in the percentage of
individuals that are uninsured. Each Medicare DSH that has
uncompensated care 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. This additional payment is known as the
uncompensated care payment.
In this final rule, we are finalizing the proposed update to our
estimates of the three factors used to determine uncompensated care
payments for FY 2025. We also proposed 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, and we are finalizing this approach. Consistent with the
regulation at Sec. 412.106(g)(1)(iii)(C)(11), which was adopted in the
FY 2023 IPPS/LTCH PPS final rule, for FY 2025, we will use the 3 most
recent years of audited data on uncompensated care costs from Worksheet
S-10 of the FY 2019, FY 2020, and FY 2021 cost reports to calculate
Factor 3 in the uncompensated care payment methodology for all eligible
hospitals.
Beginning with FY 2023 (87 FR 49047 through 49051), we also
established a supplemental payment for IHS and Tribal hospitals and
hospitals located in Puerto Rico. In section IV.D. of the preamble of
this final rule, we summarized the ongoing methodology for supplemental
payments.
In this final rule, we are finalizing our proposal to calculate the
per-discharge amount for interim uncompensated care payments for FY
2025 and subsequent fiscal years with modification. Specifically, for
FY 2025, we will calculate the per-discharge amount for interim
uncompensated care payments using the average of the most recent 2
years of discharge data. In light of the commenters' concerns regarding
a trend of decreasing discharge volume and possible overestimation of
discharges in recent years, we believe that, on balance, omitting FY
2021 data from the calculation of interim uncompensated care payments
is likely to more accurately estimate FY 2025 discharges. Therefore, we
are finalizing our proposal with modification. We are modifying the
text of Sec. 412.106(i)(1) to state that for FY 2025, interim
uncompensated care payments will be calculated based on an average of
the most recent 2 years of available historical discharge data, and,
consistent with the proposed rule,, interim uncompensated care payments
for FY 2026 and subsequent fiscal years will be calculated based on an
average of the most recent 3 years of available historical discharge
data.
d. Adoption of the Patient Safety Structural Measure in the Hospital
IQR Program and PCHQR Program
The Patient Safety Structural measure is an attestation-based
measure that assesses whether hospitals have a structure and culture
that prioritizes safety as demonstrated by the following five domains:
(1) leadership commitment to eliminating preventable harm; (2)
strategic planning and organizational policy; (3) culture of safety and
learning health system; (4) accountability and transparency; and (5)
patient and family engagement. Hospitals will attest to whether they
engage in specific evidence-based best practices within each of these
domains to achieve a score from zero to five out of five points. We
proposed that hospitals would be required to report this measure
beginning with the CY 2025 reporting period/FY 2027 program year for
the PCHQR Program and for the CY 2025 reporting period/FY 2027 payment
determination for the Hospital IQR Program. We are finalizing this
proposal, with a modification to one of the domains.
[[Page 68990]]
e. Updated Hospital Consumer Assessment of Healthcare Providers and
Systems (HCAHPS) Survey Measure in the Hospital IQR Program, Hospital
VBP Program, and PCHQR Program
The updated version of the HCAHPS Survey measure aligns with the
National Quality Strategy goal to bring patient voices to the forefront
by incorporating feedback from patients and caregivers. We proposed
that the updated HCAHPS Survey measure would be adopted for the
Hospital IQR and PCHQR Programs beginning with the CY 2025 reporting
period/FY 2027 payment determination and the CY 2025 reporting period/
FY 2027 program year, respectively. For the Hospital VBP Program, we
proposed to modify scoring on the Person and Community Engagement
Domain for the FY 2027 through FY 2029 program years to only score the
six dimensions of the HCAHPS Survey measure that would remain unchanged
from the current version of the survey. We proposed to adopt the
updated HCAHPS Survey measure beginning with the FY 2030 program year,
which would result in nine HCAHPS Survey measure dimensions for the
Person and Community Engagement Domain. We also proposed to modify
scoring of the Person and Community Engagement Domain beginning with
the FY 2030 program year to account for the proposed updates to the
HCAHPS Survey measure. We are finalizing all of these proposals.
f. 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. We
proposed to modify scoring on the Person and Community Engagement
Domain for the FY 2027 through FY 2029 program years while the updated
HCAHPS Survey measure would be publicly reported under the Hospital IQR
Program. In addition, we proposed to adopt the updated HCAHPS Survey
measure beginning with the FY 2030 program year and modify scoring
beginning with the FY 2030 program year to account for the updated
HCAHPS Survey measure. We are finalizing these proposals.
g. 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 2025 IPPS/LTCH PPS proposed rule, we
proposed several changes to the Hospital IQR Program. We proposed the
adoption of seven new measures: (1) Patient Safety Structural measure
beginning with the CY 2025 reporting period/FY 2027 payment
determination; (2) Age Friendly Hospital measure beginning with the CY
2025 reporting period/FY 2027 payment determination; (3) Catheter-
Associated Urinary Tract Infection (CAUTI) Standardized Infection Ratio
Stratified for Oncology Locations beginning with the CY 2026 reporting
period/FY 2028 payment determination; (4) Central Line-Associated
Bloodstream Infection (CLABSI) Standardized Infection Ratio Stratified
for Oncology Locations beginning with the CY 2026 reporting period/FY
2028 payment determination; (5) Hospital Harm--Falls with Injury eCQM
beginning with the CY 2026 reporting period/FY 2028 payment
determination; (6) Hospital Harm--Postoperative Respiratory Failure
eCQM beginning with the CY 2026 reporting period/FY 2028 payment
determination; and (7) Thirty-day Risk-Standardized Death Rate among
Surgical Inpatients with Complications (Failure-to-Rescue) measure
beginning with the July 1, 2023-June 30, 2025 reporting period/FY 2027
payment determination. We also proposed refinements to two measures
currently in the Hospital IQR Program measure set: (1) Global
Malnutrition Composite Score (GMCS) eCQM, beginning with the CY 2026
reporting period/FY 2028 payment determination; and (2) the HCAHPS
Survey beginning with the CY 2025 reporting period/FY 2027 payment
determination. In addition, we proposed the removal of five measures:
(1) Death Among Surgical Inpatients with Serious Treatable
Complications (CMS PSI 04) measure beginning with the July 1, 2023-June
30, 2025 reporting period/FY 27 payment determination; (2) Hospital-
level, Risk-Standardized Payment Associated with a 30-Day Episode-of-
Care for Acute Myocardial Infarction (AMI) measure beginning with the
July 1, 2021-June 30, 2024 reporting period/FY 2026 payment
determination; (3) Hospital-level, Risk-Standardized Payment Associated
with a 30-Day Episode-of-Care for Heart Failure (HF) measure beginning
with the July 1, 2021-June 30, 2024 reporting period/FY 2026 payment
determination; (4) Hospital-level, Risk-Standardized Payment Associated
with a 30-Day Episode-of-Care for Pneumonia (PN) measure beginning with
July 1, 2021-June 30, 2024 reporting period/FY 2026 payment
determination, and (5) Hospital-level, Risk-Standardized Payment
Associated with a 30-Day Episode-of-Care for Elective Primary Total Hip
Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) measure
beginning with the April 1, 2021-March 31, 2024 reporting period/FY
2026 payment determination. We are finalizing all of these proposals as
proposed with the exception of the Patient Safety Structural measure,
which we are finalizing with modifications.
Lastly, we proposed to modify eCQM data reporting and submission
requirements by proposing a progressive increase in the number of
mandatory eCQMs a hospital would be required to report on beginning
with the CY 2026 reporting period/FY 2028 payment determination. We
also proposed two changes to current policies related to validation of
hospital data: (1) to implement eCQM validation scoring based on the
accuracy of eCQM data beginning with the validation of CY 2025 eCQM
data affecting the FY 2028 payment determination; and (2) modification
of the data validation reconsideration request requirements to make
medical records submission optional for reconsideration requests
beginning with CY 2023 discharges/FY 2026 payment determination. We are
finalizing all of these proposals as proposed with the exception of the
proposed progressive increase in the number of mandatory eCQMs, which
we are finalizing with modifications.
h. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) 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. In the FY 2025 IPPS/LTCH PPS proposed
rule, we proposed the following:
<bullet> To adopt the Patient Safety Structural measure beginning
with the CY 2025 reporting period/FY 2027 program year.
<bullet> To modify the HCAHPS Survey measure beginning with the CY
2025 reporting period/FY 2027 program year.
<bullet> To move up the start date for publicly displaying hospital
performance on the Hospital Commitment to Health Equity measure from
July 2026 to January 2026 or as soon as feasible thereafter.
We are finalizing all of these proposals as proposed with the
[[Page 68991]]
exception of the Patient Safety Structural measure, which we are
finalizing with modifications.
i. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
We proposed and are finalizing the following changes to the LTCH
QRP: (1) add four assessment items to the LCDS beginning with the FY
2028 LTCH QRP; (2) modify one item on the LCDS beginning with the FY
2028 LTCH QRP; and (3) extend the admission assessment window for the
LCDS from 3 days to 4 days beginning with the FY 2028 LTCH QRP. We also
summarize the feedback we received on requests for information in the
proposed rule on future measure concepts for the LTCH QRP and a future
LTCH Star Rating system.
j. Medicare Promoting Interoperability Program
In section X.F. of the preamble of the proposed rule, we proposed
several changes to the Medicare Promoting Interoperability Program.
Specifically, we proposed: (1) to separate the Antimicrobial Use and
Resistance (AUR) Surveillance measure into two measures, an
Antimicrobial Use (AU) Surveillance measure and an Antimicrobial
Resistance (AR) Surveillance measure, beginning with the EHR reporting
period in CY 2025; to add a new exclusion for eligible hospitals or
critical access hospitals (CAHs) that do not have a data source
containing the minimal discrete data elements that are required for AU
or AR Surveillance reporting; to modify the existing exclusions for the
AUR Surveillance measure to apply to the proposed AU Surveillance and
AR Surveillance measures, respectively; and to treat the AU
Surveillance and AR Surveillance measures as new measures with respect
to active engagement beginning with the EHR reporting period in CY
2025; (2) to increase the performance-based scoring threshold for
eligible hospitals and CAHs reporting under the Medicare Promoting
Interoperability Program from 60 points to 80 points beginning with the
EHR reporting period in CY 2025; (3) to adopt two new eCQMs that
hospitals can select as one of their three self-selected eCQMs
beginning with the CY 2026 reporting period: the Hospital Harm--Falls
with Injury eCQM and the Hospital Harm--Postoperative Respiratory
Failure eCQM; (4) beginning with the CY 2026 reporting period, to
modify one eCQM, the Global Malnutrition Composite Score eCQM; and (5)
to modify eCQM data reporting and submission requirements by proposing
a progressive increase in the number of mandatory eCQMs eligible
hospitals and CAHs would be required to report on beginning with the CY
2026 reporting period. We are finalizing all proposals as proposed,
with the exception of our proposals to increase the performance-based
scoring threshold for eligible hospitals and CAHs, and to progressively
increase the number of mandatory eCQMs required for reporting, which we
are finalizing with modification. We are finalizing, with modification,
an increase to the performance-based scoring threshold for eligible
hospitals and CAHs from 60 points to 70 points for the EHR reporting
period in CY 2025 and from 70 points to 80 points beginning with the
EHR reporting period in CY 2026, and finalizing, with modification, the
regulatory text accordingly. We are also finalizing, with modification,
our proposal to increase the eCQM reporting requirements in the
Medicare Promoting Interoperability Program for the CY 2026, CY 2027,
CY 2028, and subsequent years' reporting periods. Specifically,
eligible hospitals and CAHs will be required to report a total of eight
eCQMs for the CY 2026 reporting period, a total of nine eCQMs for the
CY 2027 reporting period, and a total of eleven eCQMs beginning with
the CY 2028 reporting period.
k. Proposed Distribution of Additional Residency Positions Under the
Provisions of Section 4122 of Subtitle C of the Consolidated
Appropriations Act, 2023 (CAA, 2023)
In the proposed rule, we included a proposal to implement section
4122 of the CAA, 2023. Section 4122(a) of the CAA, 2023, amended
section 1886(h) of the Act by adding a new section 1886(h)(10) of the
Act requiring the distribution of additional residency positions (also
referred to as slots) to hospitals. After consideration of public
comments, we are finalizing this proposal, with minor modifications. We
refer readers to section V.F.2. of the preamble of this final rule for
a summary of the provisions of section 4122 of the CAA, 2023 that we
are implementing in this final rule.
l. Extension of the Medicare-Dependent, Small Rural Hospital (MDH)
Program and the Temporary Changes to the Low-Volume Hospital Payment
Adjustment
The Consolidated Appropriations Act, 2024 (CAA, 2024) (Pub. L. 118-
42), enacted on March 9, 2024, extended the MDH program and the
temporary changes to the low-volume hospital qualifying criteria and
payment adjustment under the IPPS for a portion of FY 2025.
Specifically, section 306 of the CAA, 2024, further extended the
modified definition of low-volume hospital and the methodology for
calculating the payment adjustment for low-volume hospitals under
section 1886(d)(12) of the Act through December 31, 2024. Section 307
of the CAA, 2024, extended the MDH program under section 1886(d)(5)(G)
of the Act through December 31, 2024. Prior to enactment of the CAA,
2024, the low-volume hospital qualifying criteria and payment
adjustment were set revert to the statutory requirements that were in
effect prior to FY 2011 at the end of FY 2024 and beginning October 1,
2024, the MDH program would have no longer been in effect.
We recognize the importance of these extensions with respect to the
goal of advancing health equity by addressing the health disparities
that underlie the health system is one of CMS' strategic pillars \1\
and a Biden-Harris Administration priority.\2\ These provisions are
projected to increase payments to IPPS hospitals by approximately $137
million in FY 2025.
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\1\ <a href="https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan">https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan</a>.
\2\ <a href="https://www.whitehouse.gov/priorities/">https://www.whitehouse.gov/priorities/</a>.
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m. Transforming Episode Accountability Model (TEAM)
As discussed in section X.A. of the preamble of this final rule, we
are finalizing the Transforming Episode Accountability Model (TEAM).
TEAM will be a 5-year mandatory model tested under the authority of
section 1115A of the Act, beginning on January 1, 2026, and ending on
December 31, 2030. The intent of TEAM is to improve beneficiary care
through financial accountability for episode categories that begin with
one of the following procedures: coronary artery bypass graft surgery
(CABG), lower extremity joint replacement (LEJR), major bowel
procedure, surgical hip/femur fracture treatment (SHFFT), and spinal
fusion. TEAM will test whether financial accountability for these
episode categories reduces Medicare expenditures while preserving or
enhancing the quality of care for Medicare beneficiaries.
Under Traditional Medicare, Medicare makes separate payments to
providers and suppliers for the items and services furnished to a
beneficiary over the course of an episode of care. Because providers
and suppliers are paid for each individual item or service delivered,
providers may not be incentivized to invest in quality improvement and
care coordination
[[Page 68992]]
activities. As a result, care may be fragmented, unnecessary, or
duplicative. By holding hospitals accountable for all items and
services provided during an episode, providers would be better
incentivized to coordinate patient care, avoid duplicative or
unnecessary services, and improve the beneficiary care experience
during care transitions.
Under TEAM, all acute care hospitals, with limited exceptions,
located within the mandatory Core-Based Statistical Areas (CBSAs) that
CMS selected for model implementation will be required to participate
in TEAM. CMS will allow a one-time opportunity for hospitals that
participate until the last day of the last performance period in the
BPCI Advanced model or the last day of the last performance year of the
CJR model, that are not located in a mandatory CBSA selected for TEAM
participation to voluntarily opt into TEAM.\3\ TEAM will have a 1-year
glide path opportunity for all TEAM participants and a 3-year glide
path opportunity for TEAM participants that are safety net hospitals,
which will allow TEAM participants to ease into full financial risk.
Episodes will include non-excluded Medicare Parts A and B items and
services and would begin with an anchor hospitalization or anchor
procedure and will end 30 days after hospital discharge. The following
episode categories, when furnished by a TEAM participant, will initiate
an episode in TEAM: lower extremity joint replacement, surgical hip
femur fracture treatment, spinal fusion, coronary artery bypass graft,
and major bowel procedure.
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\3\ For the BPCI Advanced model, the last day of the last
performance period is December 31, 2025. For the CJR model, the last
day of the last performance year is December 31, 2024.
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TEAM participants will continue to bill Medicare FFS as usual but
will receive target prices for episodes prior to each performance year.
Target prices will be based on 3 years of baseline data, prospectively
trended forward to the relevant performance year, and calculated at the
level of MS-DRG/HCPCS episode type and region. Target prices will also
include a discount factor, normalization factor, retrospective trend
adjustment factor, and beneficiary and provider level risk-adjustment.
Performance in the model will be assessed by comparing TEAM
participants' actual Medicare FFS spending during a performance year to
their reconciliation target price as well as by performance on three
quality measures. TEAM participants will earn a payment from CMS,
subject to a quality performance adjustment, if their spending is below
the reconciliation target price. TEAM participants will owe CMS a
repayment amount, subject to a quality performance adjustment, if their
spending is above the reconciliation target price. In section X.A. of
the preamble of this final rule some policies as proposed, and we are
finalizing others with modification. There are also certain proposed
policies that we are not finalizing, and we will instead go through
rulemaking in the future to promulgate new policies before the model
start date.
n. Maternity Care Request for Information (RFI)
In alignment with the Biden-Harris Administration's commitment to
addressing the maternal health crisis, this RFI sought to gather
information on differences between hospital resources required to
provide inpatient pregnancy and childbirth services to Medicare
patients as compared to non-Medicare patients. To the extent that the
resources required differ between patient populations, we also wanted
to gather information on the extent to which non-Medicare payers, or
other commercial insurers may be using the IPPS as a basis for
determining their payment rates for inpatient pregnancy and childbirth
services and the effect, if any, that the use of the IPPS as a basis
for determining payment by those payers may have on maternal health
outcomes. We summarize the comments received in section X.C. of the
preamble of this final rule.
o. Conditions of Participation Requirements for Hospitals and Critical
Access Hospitals To Report Acute Respiratory Illnesses
In section X.F. of the preamble of the proposed rule, we proposed
to update the hospital and CAH infection prevention and control and
antibiotic stewardship programs conditions of participation (CoPs) to
extend a limited subset of the current COVID-19 and influenza data
reporting requirements. These proposed reporting requirements ensure
that hospitals and CAHs have appropriate insight related to evolving
infection control needs. Specifically, we proposed to replace the
COVID-19 and Seasonal Influenza reporting standards for hospitals and
CAHs with a new standard addressing acute respiratory illnesses to
require that, beginning on October 1, 2024, hospitals and CAHs would
have to electronically report information about COVID-19, influenza,
and RSV. We also proposed that outside of a public health emergency
(PHE), hospitals and CAHs would have to report these data on a weekly
basis. In section X.F. of the preamble of this final rule, we are
finalizing these proposals with revisions.
p. Changes to the Severity Level Designation for Z Codes Describing
Inadequate Housing and Housing Instability
As discussed in section II.C. of the preamble of this final rule,
we are finalizing the proposed change to the severity level designation
for the social determinants of health (SDOH) diagnosis codes describing
inadequate housing and housing instability from non-complication or
comorbidity (NonCC) to complication or comorbidity (CC) for FY 2025.
Consistent with our annual updates to account for changes in resource
consumption, treatment patterns, and the clinical characteristics of
patients, we recognize inadequate housing and housing instability as
indicators 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
further 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, Transfers, Savings, and Benefits
The following table provides a summary of the costs, transfers,
savings, and benefits associated with the major provisions described in
section I.A.2. of the preamble of this final rule.
BILLING CODE 4120-01-P
[[Page 68993]]
[GRAPHIC] [TIFF OMITTED] TR28AU24.000
[[Page 68994]]
[GRAPHIC] [TIFF OMITTED] TR28AU24.001
[[Page 68995]]
BILLING CODE 4120-01-C
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.
With the recent enactment of section 307 of the CAA, 2024, under
current law, the Medicare-dependent, small rural hospital (MDH) program
is effective through December 31, 2024. For discharges occurring on or
after October 1, 2007, but before January 1, 2025, an MDH receives the
higher of the Federal rate or the Federal rate plus 75 percent of the
amount by which the Federal rate is exceeded by the highest of its FY
1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major
source of care for Medicare beneficiaries in their areas. Section
1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is
located in a rural area (or, as amended by the Bipartisan Budget Act of
2018, a hospital located in a State with no rural area that meets
certain statutory criteria), has not more than 100 beds, is not an SCH,
and has a high percentage of Medicare discharges (not less than 60
percent of its inpatient days or discharges in its cost reporting year
beginning in FY 1987 or in two of its three most recently settled
Medicare cost reporting years). As section 307 of the CAA, 2024,
extended the MDH program through the first quarter of FY 2025 only,
beginning on January 1, 2025, the MDH program will no longer be in
effect absent a change in law. Because the MDH program is not
authorized by statute beyond December 31, 2024, beginning January 1,
2025, all hospitals that previously qualified for MDH status under
section 1886(d)(5)(G) of the Act will no longer have MDH status and
will be paid based on the IPPS Federal rate.
Section 1886(g) of the Act requires the Secretary to pay for the
capital-related costs of inpatient hospital services in accordance with
a prospective payment system established by the Secretary. The basic
methodology for determining capital prospective payments is set forth
in our regulations at 42 CFR 412.308 and 412.312. Under the capital
IPPS, payments are adjusted by the same DRG for the case as they are
under the operating IPPS. Capital IPPS payments are also adjusted for
IME and DSH, similar to the adjustments made under the operating IPPS.
In addition, hospitals may receive outlier payments for those cases
that have unusually high costs.
The existing regulations governing payments to hospitals under the
IPPS are located in 42 CFR part 412, subparts A through M.
2. Hospitals and Hospital Units Excluded From the IPPS
Under section 1886(d)(1)(B) of the Act, as amended, certain
hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Inpatient rehabilitation facility (IRF)
hospitals and units; long-term care hospitals (LTCHs); psychiatric
hospitals and units; children's hospitals; cancer hospitals; extended
neoplastic disease care hospitals, and hospitals located outside the 50
States, the District of Columbia, and Puerto Rico (that is, hospitals
located in the U.S. Virgin
[[Page 68996]]
Islands, Guam, the Northern Mariana Islands, and American Samoa).
Religious nonmedical health care institutions (RNHCIs) are also
excluded from the IPPS. Various sections of the Balanced Budget Act of
1997 (BBA) (Pub. L. 105-33), the Medicare, Medicaid and SCHIP [State
Children's Health Insurance Program] Balanced Budget Refinement Act of
1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554)
provide for the implementation of PPSs for IRF hospitals and units,
LTCHs, and psychiatric hospitals and units (referred to as inpatient
psychiatric facilities (IPFs)). (We note that the annual updates to the
LTCH PPS are included along with the IPPS annual update in this
document. Updates to the IRF PPS and IPF PPS are issued as separate
documents.) Children's hospitals, cancer hospitals, hospitals located
outside the 50 States, the District of Columbia, and Puerto Rico (that
is, hospitals located in the U.S. Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa), and RNHCIs continue to be paid
solely under a reasonable cost-based system, subject to a rate-of-
increase ceiling on inpatient operating costs. Similarly, extended
neoplastic disease care hospitals are paid on a reasonable cost basis,
subject to a rate-of-increase ceiling on inpatient operating costs.
The existing regulations governing payments to excluded hospitals
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
The Medicare prospective payment system (PPS) for LTCHs applies to
hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective
for cost reporting periods beginning on or after October 1, 2002. The
LTCH PPS was established under the authority of sections 123 of the
BBRA and section 307(b) of the BIPA (as codified under section
1886(m)(1) of the Act). Section 1206(a) of the Pathway for SGR Reform
Act of 2013 (Pub. L. 113-67) established the site neutral payment rate
under the LTCH PPS, which made the LTCH PPS a dual rate payment system
beginning in FY 2016. Under this statute, effective for LTCH's cost
reporting periods beginning in FY 2016 cost reporting period, LTCHs are
generally paid for discharges at the site neutral payment rate unless
the discharge meets the patient criteria for payment at the LTCH PPS
standard Federal payment rate. The existing regulations governing
payment under the LTCH PPS are located in 42 CFR part 412, subpart O.
Beginning October 1, 2009, we issue the annual updates to the LTCH PPS
in the same documents that update the IPPS.
4. Critical Access Hospitals (CAHs)
Under sections 1814(l), 1820, and 1834(g) of the Act, payments made
to critical access hospitals (CAHs) (that is, rural hospitals or
facilities that meet certain statutory requirements) for inpatient and
outpatient services are generally based on 101 percent of reasonable
cost. Reasonable cost is determined under the provisions of section
1861(v) of the Act and existing regulations under 42 CFR part 413.
5. Payments for Graduate Medical Education (GME)
Under section 1886(a)(4) of the Act, costs of approved educational
activities are excluded from the operating costs of inpatient hospital
services. Hospitals with approved graduate medical education (GME)
programs are paid for the direct costs of GME in accordance with
section 1886(h) of the Act. The amount of payment for direct GME costs
for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year. The existing regulations governing payments to the various
types of hospitals are located in 42 CFR part 413. Section
1886(d)(5)(B) of the Act provides that prospective payment hospitals
that have residents in an approved GME program receive an additional
payment for each Medicare discharge to reflect the higher patient care
costs of teaching hospitals relative to non-teaching hospitals. The
additional payment is based on the indirect medical education (IME)
adjustment factor, which is calculated using a hospital's ratio of
residents to beds and a multiplier, which is set by Congress. Section
1886(d)(5)(B)(ii)(XII) of the Act provides that, for discharges
occurring during FY 2008 and fiscal years thereafter, the IME formula
multiplier is 1.35. The regulations regarding the indirect medical
education (IME) adjustment are located at 42 CFR 412.105.
C. Summary of Provisions of Recent Legislation That Are Implemented in
This Final Rule
1. The Consolidated Appropriations Act, 2023 (CAA 2023; Pub. L. 117-
328)
Section 4122 of the CAA, 2023, amended section 1886(h) of the Act
by adding a new section 1886(h)(10) of the Act requiring the
distribution of additional residency positions (also referred to as
slots) to hospitals. Section 1886(h)(10)(A) of the Act requires that
for FY 2026, the Secretary shall initiate an application round to
distribute 200 residency positions. At least 100 of the positions made
available under section 1886(h)(10)(A) of the Act shall be distributed
for psychiatry or psychiatry subspecialty residency training programs.
The Secretary is required, subject to certain provisions in the law, to
increase the otherwise applicable resident limit for each qualifying
hospital that submits a timely application by the number of positions
that may be approved by the Secretary for that hospital. The Secretary
is required to notify hospitals of the number of positions distributed
to them by January 31, 2026, and the increase is effective beginning
July 1, 2026.
In determining the qualifying hospitals for which an increase is
provided, section 1886(h)(10)(B)(i) of the Act requires the Secretary
to take into account the ``demonstrated likelihood'' of the hospital
filling the positions made available within the first 5 training years
beginning after the date the increase would be effective, as determined
by the Secretary.
Section 1886(h)(10)(B)(ii) of the Act requires a minimum
distribution for certain categories of hospitals. Specifically, the
Secretary is required to distribute at least 10 percent of the
aggregate number of total residency positions available to each of four
categories of hospitals. Stated briefly, and discussed in greater
detail later in this final rule, the categories are as follows: (1)
hospitals located in rural areas or that are treated as being located
in a rural area (pursuant to sections 1886(d)(2)(D) and 1886(d)(8)(E)
of the Act); (2) hospitals in which the reference resident level of the
hospital is greater than the otherwise applicable resident limit; (3)
hospitals in States with new medical schools or additional locations
and branches of existing medical schools; and (4) hospitals that serve
areas designated as Health Professional Shortage Areas (HPSAs). Section
1886(h)(10)(F)(iii) of the Act defines a qualifying hospital as a
hospital in one of these four categories.
Section 1886(h)(10)(B)(iii) of the Act further requires that each
qualifying hospital that submits a timely application receive at least
1 (or a fraction of 1) of the residency positions made available under
section 1886(h)(10) of the Act before any qualifying hospital receives
more than 1 residency position.
Section 1886(h)(10)(C) of the Act places certain limitations on the
distribution of the residency positions.
[[Page 68997]]
First, a hospital may not receive more than 10 additional full-time
equivalent (FTE) residency positions. Second, no increase in the
otherwise applicable resident limit of a hospital may be made unless
the hospital agrees to increase the total number of FTE residency
positions under the approved medical residency training program of the
hospital by the number of positions made available to that hospital.
Third, if a hospital that receives an increase to its otherwise
applicable resident limit under section 1886(h)(10) of the Act is
eligible for an increase to its otherwise applicable resident limit
under 42 CFR 413.79(e)(3) (or any successor regulation), that hospital
must ensure that residency positions received under section 1886(h)(10)
of the Act are used to expand an existing residency training program
and not for participation in a new residency training program.
2. The Consolidated Appropriations Act, 2024 (CAA, 2024; Pub. L. 118-
42)
Section 306 of the CAA, 2024, extended through the first 3 months
of FY 2025 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 2024. Specifically, under
section 1886(d)(12)(C)(i) of the Act, as amended, for FYs 2019 through
2024 and the portion of FY 2025 occurring before January 1, 2025, 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 December 31, 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 307 of the CAA, 2024, 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 the first 3 months of FY 2025 (that is, through
December 31, 2024).
D. Issuance of a Notice of Proposed Rulemaking and Summary of the
Proposed Provisions
The FY 2025 IPPS/LTCH PPS proposed rule appeared in the May 2,
2024, Federal Register (89 FR 35934). In this proposed rule, we set
forth proposed payment and policy changes to the Medicare IPPS for FY
2025 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 2025.
The following is a general summary of the changes that we proposed
to make:
1. 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 2025.
<bullet> Proposed recalibration of the MS-DRG relative weights.
<bullet> A discussion of the proposed FY 2025 status of new
technologies approved for add-on payments for FY 2024, a presentation
of our evaluation and analysis of the FY 2025 applicants for add-on
payments for high-cost new medical services and technologies (including
public input, as directed by the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) Public Law 108-173,
obtained in a town hall meeting for applications not submitted under an
alternative pathway), and a discussion of the proposed status of FY
2025 new technology applicants under the alternative pathways for
certain medical devices and certain antimicrobial products.
<bullet> A proposed change to the April 1 cutoff to October 1 for
determining whether a technology would be within its 2- to 3-year
newness period when considering eligibility for new technology add-on
payments, beginning in FY 2026, effective for those technologies that
are approved for new technology add-on payments starting in FY 2025 or
a subsequent year (as discussed in II.E.8. of the preamble of the
proposed rule).
<bullet> A proposal that, beginning with new technology add-on
payment applications for FY 2026, we will no longer consider a hold
status to be an inactive status for the purposes of eligibility for the
new technology add-on payment (as discussed in section II.E.9. of the
preamble of the proposed rule).
<bullet> A proposal that, subject to our review of the new
technology add-on payment eligibility criteria, for certain gene
therapies approved for new technology add-on payments in the FY 2025
IPPS/LTCH final rule that are indicated and used specifically for the
treatment of sickle cell disease (SCD), effective with discharges on or
after October 1, 2024, and concluding at the end of the 2- to 3-year
newness period for such therapy, we would temporarily increase the new
technology add-on payment percentage to 75 percent (as discussed in
section II.E.10. of the preamble of the proposed rule).
2. 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> Proposed changes in core-based statistical areas (CBSAs)
as a result of new OMB labor market area delineations and proposed
policies related to the proposed changes in CBSAs.
<bullet> The proposed FY 2025 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 2025 based on the 2022 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 2025 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 FY 2025 wage index.
3. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2025
In section IV. of the preamble of this proposed rule, we discuss
the following:
<bullet> Proposed calculation of Factor 1 and Factor 2 of the
uncompensated care payment methodology.
<bullet> Proposed methodological approach for determining Factor 3
of the uncompensated care payment for FY 2025, which is the same
methodology that was used for FY 2024.
[[Page 68998]]
<bullet> Proposed methodological approach for determining the
amount of interim uncompensated care payments using the average of the
most recent 3 years of discharge data.
4. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of the proposed rule, we discussed
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
<bullet> Proposed inpatient hospital update for FY 2025.
<bullet> Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status and clarification of
the qualification under the discharge criterion for osteopathic
hospitals.
<bullet> Proposed implementation of the statutory extension of the
temporary changes to the low-volume hospital payment adjustment through
December 31, 2024, the statutory expiration beginning January 1, 2025,
and the proposed payment adjustments for low-volume hospitals for FY
2025.
<bullet> Proposed implementation of the statutory extension of the
MDH program through December 31, 2024, and the statutory expiration
beginning January 1, 2025.
<bullet> A proposal to implement a provision of the Consolidated
Appropriations Act relating to payments to hospitals for GME and IME
costs, proposed direct graduate medical education (DGME) and IME policy
modifications to the criteria for new residency programs; technical
fixes to the DGME regulations; and a notice of closure of two teaching
hospitals and opportunities to apply for available slots and a reminder
of CBSA changes and application to GME policies.
<bullet> Proposed nursing and allied health education program
Medicare Advantage (MA) add-on rates and direct GME MA percent
reductions for CY 2023.
<bullet> Proposed update to the payment adjustment for certain
clinical trial and expanded access use immunotherapy cases.
<bullet> Proposed separate IPPS payment for establishing and
maintaining access to essential medicines.
<bullet> Proposed update to the estimate of the financial impacts
for the FY 2025 Hospital Readmissions Reduction Program.
<bullet> Proposed modifications to the scoring of the Person and
Community Engagement Domain in the Hospital VBP Program.
++ For the FY 2027 through FY 2029 program years to only score on
six unchanged dimensions of the HCAHPS Survey.
++ Beginning with the FY 2030 program year to account for the
proposed updated HCAHPS Survey.
<bullet> Updating the proposed estimate of the financial impacts
for the FY 2025 Hospital-Acquired Conditions Reduction Program.
<bullet> Discussion of and proposed changes relating to the
implementation of the Rural Community Hospital Demonstration Program in
FY 2025.
5. Proposed FY 2025 Policy Governing the IPPS for Capital-Related Costs
In section VI. of the preamble of the proposed rule, we discussed
the proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2025.
6. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VII. of the preamble of the proposed rule, we discussed
the following:
<bullet> Proposed changes to payments to certain excluded hospitals
for FY 2025.
<bullet> Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
7. Proposed Changes to the LTCH PPS
In section VIII. of the preamble of the proposed rule, we proposed
to rebase and revise the LTCH market basket to reflect a 2022 base
year, which includes a proposed update to the LTCH PPS labor-related
share. 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 2025. We also
proposed a technical clarification to the regulations for hospitals
seeking to be classified as an LTCH.
8. 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> Solicitation of comment on adopting measures across the
hospital quality reporting and value-based purchasing programs which
capture more forms of unplanned post-acute care and encourage hospitals
to improve discharge processes.
<bullet> Proposed changes to the requirements for the Hospital IQR
Program.
<bullet> Proposed changes to the requirements for the PCHQR
Program.
<bullet> Proposed adoption of the Patient Safety Structural measure
in the Hospital IQR Program and the PCHQR Program.
<bullet> Proposed updated HCAHPS Survey measure in the Hospital IQR
Program, PCHQR Program, and Hospital VBP Program.
<bullet> Proposed changes to the requirements for the LTCH QRP, and
requests for information on future measure concepts for the LTCH QRP
and a star rating system for the LTCH QRP.
<bullet> Proposed changes to requirements pertaining to eligible
hospitals and CAHs participating in the Medicare Promoting
Interoperability Program.
9. Other Proposals and Comment Solicitations Included in the Proposed
Rule
Section X. of the preamble of the proposed rule includes the
following:
<bullet> Proposed implementation of TEAM that would test whether an
episode-based pricing methodology linked with accountability for
quality measure performance for select acute care hospitals reduces
Medicare program expenditures while preserving or improving the quality
of care for Medicare beneficiaries.
<bullet> Proposed changes to permit a Provider Reimbursement Review
Board (PRRB) member to serve up to 3 consecutive terms (9 consecutive
years total), and up to 4 consecutive terms (12 consecutive years
total) in cases where a PRRB Member who, in their second or third
consecutive term, is designated as Chairperson, to continue serving as
Chairperson in the fourth consecutive term.
<bullet> Solicitation of comments to gather information on
differences between hospital resources required to provide inpatient
pregnancy and childbirth services to Medicare patients as compared to
non-Medicare patients.
<bullet> Solicitation of comments to gather information on
potential solutions that can be implemented through the hospital CoPs
to address well-documented concerns regarding maternal morbidity,
mortality, disparities, and maternity care access in the United States.
See the calendar year (CY) 2025 Outpatient Prospective Payment System
(OPPS) proposed rule (89 FR XXXXX) for more information about this RFI.
<bullet> Proposal to remove the exclusion of Puerto Rico from the
Payment Error Rate Measurement (PERM) program found at 42 CFR
431.954(b)(3).
<bullet> Proposal for a new hospital CoP to replace the COVID-19
and Seasonal Influenza reporting standards for
[[Page 68999]]
hospitals and CAHs that were created during PHE.
10. 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 this
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.
11. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum of the proposed rule, we
set forth proposed changes to the amounts and factors for determining
the proposed FY 2025 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 addressed the
proposed update factors for determining the rate-of-increase limits for
cost reporting periods beginning in FY 2025 for certain hospitals
excluded from the IPPS.
12. 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 2025 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
2025. We proposed to establish the adjustments for the wage index
(including proposed changes to the LTCH PPS labor market area
delineations based on the new OMB delineations), labor-related share,
the cost-of-living adjustment, and high-cost outliers, including the
applicable fixed-loss amounts and the LTCH cost-to-charge ratios (CCRs)
for both payment rates.
13. Impact Analysis
In Appendix A of the proposed rule, we set forth an analysis of the
impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs and other entities.
14. Recommendation of Update Factors for Operating Cost Rates of
Payment for Hospital Inpatient Services
In Appendix B of the proposed rule, as required by sections
1886(e)(4) and (e)(5) of the Act, we provided our recommendations of
the appropriate percentage changes for FY 2025 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.
15. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, MedPAC is required to submit a
report to Congress, no later than March 15 of each year, in which
MedPAC reviews and makes recommendations on Medicare payment policies.
MedPAC's March 2024 recommendations concerning hospital inpatient
payment policies address the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We addressed these recommendations in Appendix B of the proposed rule.
For further information relating specifically to the MedPAC March 2024
report or to obtain a copy of the report, contact MedPAC at (202) 220-
3700 or visit MedPAC's website at <a href="https://www.medpac.gov">https://www.medpac.gov</a>.
E. Public Comments Received in Response to the FY 2025 IPPS/LTCH PPS
Proposed Rule
We received approximately 6,180 timely pieces of correspondence
containing multiple comments on the proposed rule that appeared in the
May 2, 2024 Federal Register (89 FR 39534) titled ``Medicare and
Medicaid Programs and the Children's Health Insurance 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 2025 Rates; Quality Programs Requirements; and Other
Policy Changes'' (hereinafter referred to as the FY 2025 IPPS/LTCH PPS
proposed rule). We note that some of these public comments were outside
of the scope of the proposed rule. These out-of-scope public comments
are not addressed with policy responses in this final rule. Summaries
of the public comments that are within the scope of the proposed rule
and our responses to those public comments are set forth in the various
sections of this final rule under the appropriate heading.
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)
Classifications and Relative Weights
A. Background
Section 1886(d) of the Act specifies that the Secretary shall
establish a classification system (referred to as diagnosis-related
groups (DRGs)) for inpatient discharges and adjust payments under the
IPPS based on appropriate weighting factors assigned to each DRG.
Therefore, under the IPPS, Medicare pays for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment for a specific case multiplies an individual
hospital's payment rate per case by the weight of the DRG to which the
case is assigned. Each DRG weight represents the average resources
required to care for cases in that particular DRG, relative to the
average resources used to treat cases in all DRGs.
Section 1886(d)(4)(C) of the Act requires that the Secretary adjust
the DRG classifications and relative weights at least annually to
account for changes in resource consumption. These adjustments are made
to reflect changes in treatment patterns, technology, and any other
factors that may change the relative use of hospital resources.
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
For information on the adoption of the MS-DRGs in FY 2008, we refer
readers to the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189).
For general information about the MS-DRG system, including yearly
reviews and changes to the MS-DRGs, we refer readers to the previous
discussions in the FY 2010 IPPS/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
[[Page 69000]]
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 the standardized amount to restore the full amount of the
documentation and coding recoupment adjustments, 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.
Response: As of FY 2023, CMS completed the statutory requirements
of section 7(b)(1)(B) of Public Law 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 2025 to
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 2025 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 2025 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<SUP>TM</SUP>
(MEARIS<SUP>TM</SUP>), accessed at <a href="https://mearis.cms.gov">https://mearis.cms.gov</a>. We stated
that effective with FY 2024 MS-DRG classification change requests, CMS
will only accept requests submitted via MEARIS<SUP>TM</SUP> and will no
longer consider requests sent via email. Additionally, we noted that
within MEARIS<SUP>TM</SUP>, 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<SUP>TM</SUP> site.
Questions regarding the MEARIS<SUP>TM</SUP> system can be submitted to
CMS using the form available under ``Contact'', also at the bottom of
the MEARIS<SUP>TM</SUP> site. Accordingly, interested parties had to
submit MS-DRG classification change requests for FY 2025 by October 20,
2023.
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 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 2025 by October 20, 2023. 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. In the proposed rule, we
noted those topics for which further research and analysis
[[Page 69001]]
are required, and which we will continue to consider in connection with
future rulemaking as summarized in the discussion that follows.
As discussed in the proposed rule, we received four requests to
modify the GROUPER logic in a number of cardiac MS-DRGs under Major
Diagnostic Category (MDC) 05 (Diseases and Disorders of the Circulatory
System). Specifically, we received requests to:
<bullet> Modify the GROUPER logic of new MS-DRG 212 (Concomitant
Aortic and Mitral Valve Procedures) to be defined by cases reporting
procedure codes describing a single open mitral or aortic valve
replacement/repair (MVR or AVR) procedure, plus an open coronary artery
bypass graft procedure (CABG) or open surgical ablation or cardiac
catheterization procedure plus a second concomitant procedure.
<bullet> Modify the GROUPER logic of new MS-DRG 212 by redefining
the procedure code list that describes the performance of a cardiac
catheterization by either removing the ICD-10-PCS codes that describe
plain radiography of coronary artery codes from the logic list or
adding ICD-10-PCS procedure codes that involve computed tomography (CT)
or magnetic resonance imaging (MRI) scanning using contrast to the
list. This requestor also suggested that CMS add ICD-10-PCS procedures
codes that describe endovascular valve replacement or repair procedures
into the GROUPER logic of MS-DRG 212.
<bullet> Modify the GROUPER logic of new MS-DRGs 323, 324, and 325
(Coronary Intravascular Lithotripsy with Intraluminal Device with MCC,
without MCC, and without Intraluminal Device, respectively). In two
separate but related requests, the requestors suggested that we add
procedure codes that describe additional percutaneous coronary
intervention (PCI) procedures such as percutaneous coronary rotational,
laser, and orbital atherectomy to the GROUPER logic of new MS-DRGs 323,
324, and 325.
In the proposed rule, we stated that we appreciated the submissions
and related analyses provided by the requestors for our consideration
as we reviewed MS-DRG classification change requests for FY 2025;
however, we also noted the complexity of the GROUPER logic for these
MS-DRGs in connection with these requests requires more extensive
analyses to identify and evaluate all of the data relevant to assessing
these potential modifications. Specifically, we noted the list of
procedure codes that describe the performance of a cardiac
catheterization is in the definition of multiple MS-DRGs in MDC 05.
Analyzing the impact of revising this list would necessitate evaluating
the impact across numerous other MS-DRGs in MDC 05 that also include
this list in their definition, in addition to new MS-DRG 212. Secondly,
as discussed further in section II.C.4.c. of the preamble of the
proposed rule, we stated that our analysis continues to indicate that,
when performed, open cardiac valve replacement and supplement
procedures are clinically different from endovascular cardiac valve
replacement and supplement procedures in terms of technical complexity
and hospital resource use. Lastly, as we have stated in prior rule
making (88 FR 58708), atherectomy is distinct from coronary lithotripsy
in that each of these procedures are defined by clinically distinct
definitions and objectives. Additional analysis to assess for
unintended consequences across the classification is needed as we have
made a distinction between the root operations used to describe
atherectomy (Extirpation) and the root operation used to describe
lithotripsy (Fragmentation) in evaluating other requests in rulemaking.
We stated we will need to consider the application of these two root
operations in other scenarios where we have also specifically stated
that Extirpation is not the same as Fragmentation and do not warrant
similar MS-DRG assignment (85 FR 58572 through 58573). Furthermore, as
MS-DRG 212 and MS-DRGs 323, 324, and 325 recently became effective on
October 1, 2023 (FY 2024), we stated additional time is needed to
review and evaluate extensive modifications to the structure of these
MS-DRGs.
Comment: Commenters stated that they appreciated CMS' decision to
await further data before analyzing the impact of the requested changes
to MS-DRG 212 and MS-DRGs 323, 324, and 325, and agreed that any
changes to these MS-DRGs should be carefully reviewed, as they stated
these changes could have a significant impact on the remaining MS-DRGs
in MDC 05. While thanking CMS for the continued consideration of
appropriate MS-DRG assignment for concomitant open cardiac procedures,
many commenters reiterated the request to modify the GROUPER logic of
new MS-DRG 212. Some commenters stated it would be more impactful if
cases reporting a single valve procedure, a coronary artery bypass
grafting (CABG) procedure, and a procedure code describing surgical
ablation were assigned to MS-DRG 212 (Concomitant Aortic and Mitral
Valve Procedures). Other commenters stated that they believe that the
logic of MS-DRG 212 should be modified to recognize an open aortic
valve repair or replacement procedure or a mitral valve repair or
replacement procedure when performed with any of the other concomitant
procedures currently listed in the logic for MS-DRG 212. Another
commenter suggested that MS-DRG 212 be defined by cases reporting
either a mitral valve repair or replacement (MVR) procedure or an
aortic valve repair or replacement (AVR) procedure, plus two other
concomitant cardiac procedures such as surgical ablation, coronary
artery bypass graft surgery, pulmonary valve replacement, or tricuspid
valve replacement. This commenter stated that they performed their own
analysis of recent MedPAR data, and stated they found that cases for
beneficiaries who are not treated for their atrial fibrillation (AF)
during open MVR or AVR (or CABG) procedures (currently assigned to MS-
DRGs 216, 217, 218, 219, 220, and 221 (Cardiac Valve & Other Major
Cardiothoracic Procedure with and without Cardiac Catheterization, with
MCC, with CC, and without CC/MCC, respectively)) may have as much as
$7,000 in incremental hospital index costs and 1.6 extra hospital stay
days compared to similar non-AF patients during their open MVR or AVR
procedures.
Some commenters were not supportive of the suggestion to assign
cases reporting a single AVR or MVR procedure and another concomitant
procedure to MS-DRG 212. These commenters stated that assigning cases
reporting a single AVR or MVR procedure and another concomitant
procedure to MS-DRG 212 would have a significant negative impact on the
remaining MS-DRGs, notably MS-DRG 216. Other commenters suggested that
CMS consider moving the aortic and mitral valve procedure codes with
the root operations of ``Creation'', ``Release'', ``Restriction'' and
``Supplement,'' that are currently listed under the Concomitant
Procedures list in the GROUPER logic for MS-DRG 212 in the ICD-10 MS-
DRG Definitions Manual Version 41.1 to the appropriate logic list of
aortic valve or mitral valve procedures. This commenter stated that
procedure codes with these other root operations also represent types
of valvular repairs and should be included on the aortic valve
procedures and mitral valve procedures logic lists rather than the
``Concomitant Procedure'' logic list. A few commenters urged CMS to
devise a broader, more inclusive, supplemental payment mechanism to
facilitate incremental payment when
[[Page 69002]]
two major procedures are performed during the same hospital admission.
In regard to the request to modify the GROUPER logic of new MS-DRGs
323, 324, and 325 (Coronary Intravascular Lithotripsy with Intraluminal
Device with MCC, without MCC, and without Intraluminal Device,
respectively), some commenters stated they agreed with CMS' assessment
that atherectomy and coronary lithotripsy are mechanistically and
clinically distinct. A commenter specifically noted that this
distinction is supported by scientific literature and applauded CMS for
demonstrating consistency on these questions and awareness of their
impact across MDC 05. Other commenters stated they were disappointed
that CMS did not propose to modify MS-DRGs 323, 324, and 325 to add
procedure codes describing complex PCI procedures, including
percutaneous coronary atherectomy procedures for FY 2025. A commenter
stated that they offer a broad portfolio of products across the
percutaneous coronary intervention space and believe they can provide
additional input and data for consideration that would be helpful to
CMS in evaluating potential modifications to the GROUPER logic to
include orbital atherectomy procedures in the newly created MS-DRGs.
Another commenter noted that the pipeline for additional technologies
in the atherectomy family is expanding and recommended that CMS
undertake an analysis of all ICD-10-PCS codes for atherectomy. A
commenter questioned if Extirpation was the appropriate root operation
to describe rotational and orbital atherectomy, as in their view, the
procedures themselves are not removing calcified material. This
commenter stated that in prior rulemaking CMS has stated procedures
such as rotational and orbital atherectomy are reported with the root
operation Extirpation because both techniques cut up the calcified
material into small particles that are removed from the blood stream by
the normal hemofiltration process and noted that in lithotripsy
procedures, which are reported with the root operation Fragmentation,
the normal hemofiltration process also removes the fragmented calcified
material from the blood stream and suggested that CMS reconsider the
root operation of atherectomy procedures as Fragmentation rather than
Extirpation.
Response: We thank the commenters for sharing their feedback on
these requests. As discussed in the proposed rule, 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 the relevant data for evaluating a potential change. The
comments received in response to our proposed rule discussion of the
requests to modify the GROUPER logic of new MS-DRG 212, specifically,
illustrate the complexity of the analysis and evaluation required to
address these requests. Notably, many commenters believe that a
modification to the logic of MS-DRG 212 may be warranted but differ
greatly in the solution they believe would best address the concerns
noted. We appreciate the public comments we received on these requests
and will take these suggestions under consideration as we continue to
monitor for impacts in MDC 05 and across the MS-DRGs to avoid
unintended consequences or missed opportunities in most appropriately
capturing the resource utilization and clinical coherence for these
subsets of procedures. We note that we would address any proposed
modifications to the existing logic in future rulemaking.
As discussed in the proposed rule, as we continue the analysis of
the claims data with respect to MS-DRGs in MDC 05, we welcome public
comments and feedback on other factors that should be considered in the
potential restructuring of these MS-DRGs. Feedback and other
suggestions may be directed to MEARIS<SUP>TM</SUP> at: <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>. Interested parties should submit any MS-DRG
classification change requests, including any comments and suggestions
for FY 2026 consideration by October 20, 2024 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 2024 IPPS/LTCH PPS proposed rule, for the FY
2025 IPPS/LTCH PPS proposed rule we provided a test version of the ICD-
10 MS-DRG GROUPER Software, Version 42, 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 2025. Therefore, it included the new diagnosis and
procedure codes that are effective for FY 2025 as reflected in Table
6A.--New Diagnosis Codes--FY 2025 and Table 6B.--New Procedure Codes--
FY 2025 that were associated with the proposed rule, and does not
include the diagnosis codes that are invalid beginning in FY 2025 as
reflected in Table 6C.--Invalid Diagnosis Codes--FY 2025, and Table
6D.--Invalid Procedure Codes--FY 2025 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 2025 are not
reflected in the test software, we made available a supplemental file
in Table 6P.1a and 6P.1b that includes the mapped Version 42 FY 2025
ICD-10-CM and ICD-10-PCS codes and the deleted Version 41 FY 2024 ICD-
10-CM codes and V41.1 ICD-10-PCS codes that should be used for testing
purposes with users' available claims data. Therefore, users had access
to the test software allowing them to build case examples that reflect
the proposals that were included in the proposed rule. In addition,
users were able to view the draft version of the ICD-10 MS-DRG
Definitions Manual, Version 42.
Comment: A commenter expressed its appreciation that we provided a
test version of the ICD-10 MS-DRG GROUPER Software, Version 42,
however, the commenter stated that this version essentially only allows
for a case-by-case analysis and a minimal batch analysis. The commenter
stated that it would be more beneficial to have a Batch z/OS version of
the test GROUPER so that it could be better utilized for broader and
more meaningful analysis purposes. The commenter requested that
availability of a Batch z/OS version of the test GROUPER be made
publicly available for all future rulemaking.
Response: We appreciate the commenter's feedback and will take the
suggestion into consideration.
We noted in the proposed rule that in the FY 2024 IPPS/LTCH PPS
final rule (88 FR 58764), as discussed in the CY 2024 Outpatient
Prospective Payment System and Ambulatory Surgical Center (OPPS/ASC)
proposed rule (CY 2024 OPPS/ASC proposed rule) (88 FR 49552, July 31,
2023), we stated that, consistent with the process that is used for
updates to the ``Integrated'' Outpatient Code Editor (I/OCE) and other
Medicare claims editing systems, we proposed to address any future
revisions to the IPPS Medicare Code Editor (MCE), including any
additions or deletions of claims edits, as well as the addition or
deletion of ICD-10 diagnosis and procedure codes to the applicable MCE
edit code lists, outside of the annual IPPS rulemakings. As discussed
in the CY 2024 OPPS/ASC proposed rule, we proposed to remove discussion
of the IPPS MCE from the annual IPPS rulemakings, beginning with the FY
2025 rulemaking, and to generally address future changes or updates to
the MCE through instruction to the
[[Page 69003]]
Medicare administrative contractors (MACs). We encouraged readers to
review the discussion in the CY 2024 OPPS/ASC proposed rule and submit
comments in response to the proposal by the applicable deadline by
following the instructions provided in that proposed rule.
As also discussed in the proposed rule, in the CY 2024 OPPS/ASC
final rule (88 FR 82121 through 82124), after consideration of the
public comments we received, we finalized the proposal to remove
discussion of the MCE from the annual IPPS rulemakings, beginning with
FY 2025 rulemaking, and to generally address future changes or updates
to the MCE through instruction to the MACs. We also stated that,
beginning with FY 2025, in association with the annual proposed rule,
we are making available a draft version of the Definitions of Medicare
Code Edits (MCE) Manual to provide the public with an opportunity to
review any changes that will become effective October 1 for the
upcoming fiscal year. In addition, as a result of new and modified code
updates approved after the annual spring ICD-10 Coordination and
Maintenance Committee meeting, any further changes to the MCE will be
reflected in the finalized Definitions of Medicare Code Edits (MCE)
Manual, made available in association with the annual final rule. As
such, we made available the draft FY 2025 ICD-10 MCE Version 42 Manual
file on the CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software</a>.
We noted in the proposed rule that the MCE manual is comprised of
two chapters: Chapter 1: Edit code lists provides a listing of each
edit, an explanation of each edit, and as applicable, the diagnosis
and/or procedure codes for each edit, and Chapter 2: Code list changes
summarizes the changes in the edit code lists (for example, additions
and deletions) from the prior release of the MCE software. We also
stated that the public may submit any questions, comments, concerns, or
recommendations regarding the MCE to the CMS mailbox at
<a href="/cdn-cgi/l/email-protection#ce839d8a9c898da2afbdbda7a8a7adafbaa7a1a08da6afa0a9ab8eada3bde0a6a6bde0a9a1b8"><span class="__cf_email__" data-cfemail="7f322c3b2d383c131e0c0c1619161c1e0b1610113c171e11181a3f1c120c5117170c51181009">[email protected]</span></a> for our review and consideration.
Comment: Several commenters requested that CMS reconsider including
updates to the MCE as part of the IPPS rulemaking process. A commenter
stated that it recognized the importance of the MCE and expressed
concern with the removal of MCE proposals from IPPS rulemaking. The
commenter stated that identifying key considerations and mitigating
unintended consequences are a key benefit of public review and
consideration of stakeholder comments. The commenter stated that the
proposed process is not transparent on key areas such as when the
manual will be updated, effective dates, or the ability to provide
feedback with timely responses. Other commenters stated that the MCE
and related proposals include essential topics that warrant thorough
review and consideration specific to inpatient hospital admissions and
operational processes. The commenters asserted that these topics are
vital to coding, clinical documentation, and revenue cycle
professionals to ensure awareness and understanding ahead of
implementation and historically allowed the opportunity for comment as
applicable. According to the commenters, MCE change updates managed
outside the IPPS rulemaking process create a strong potential for
missed opportunities for pertinent public review and comment. The
commenters stated these missed opportunities will create the potential
for unintended consequences and administrative burdens for hospital
teams. The commenters also stated that a historical review of IPPS
comments in response to MCE proposals includes feedback on unacceptable
principal diagnoses, age edits, and especially comments that affected
the proposal and final implementation of CMS's unspecified code edit
implemented in FY 2022.
The commenters stated that the draft version of the Definitions of
Medicare Code Edits (MCE) Manual file made available in association
with the proposed rule is a helpful reference, however revisions should
be explicitly stated as proposed revisions or additions for
consideration. According to the commenters, as currently written, the
changes are not listed as proposals within the manual and are implied
as changes that have already been decided and will be effective with
the upcoming fiscal year. Another commenter expressed appreciation that
CMS stated it will make available a draft version of the Definitions of
Medicare Code Edits (MCE) Manual file in association with the annual
proposed rule to provide the public with an opportunity to review any
changes that will become effective October 1 for the upcoming fiscal
year. However, the commenter also stated that it is difficult to
identify the changes in the draft version of the MCE Manual and
recommended that CMS provide a list of the draft MCE changes each year
(including any additions or deletions of diagnosis or procedure codes
or MCE edits).
Response: We appreciate the commenters' feedback. As stated in the
CY 2024 OPPS/ASC final rule (88 FR 82121 through 82124), in the
preamble of the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 35949), and
previously described in the preamble of this final rule, after
consideration of the public comments we received, we finalized the
proposal to remove discussion of the MCE from the annual IPPS
rulemakings, beginning with FY 2025 rulemaking. In the FY 2025 IPPS/
LTCH PPS proposed rule (89 FR 35949), we stated that beginning with FY
2025, in association with the annual proposed rule, we are making
available a draft version of the Definitions of Medicare Code Edits
(MCE) Manual to provide the public with an opportunity to review any
changes that will become effective October 1 for the upcoming fiscal
year.
We noted in the proposed rule, and as previously described in this
final rule, that the MCE manual is comprised of two chapters: Chapter
1: Edit code lists provides a listing of each edit, an explanation of
each edit, and as applicable, the diagnosis and/or procedure codes for
each edit, and Chapter 2: Code list changes summarizes the changes in
the edit code lists (for example, additions and deletions) from the
prior release of the MCE software. We believe that Chapter 2: Code list
changes in the MCE manual is clear as it lists the specific edit,
followed by the list of codes that were added or deleted. The draft
version of the Definitions of Medicare Code Edits (MCE) Manual will
continue to be made publicly available in association with the annual
proposed rulemaking, and it is referred to as a ``draft version''.
However, the Chapter 2: Code list changes are not ``draft'' MCE
changes. Rather, consistent with our established process to assign MS-
DRGs to new diagnosis codes and new procedures codes, for which we
examine the MS-DRG assignment for the predecessor code to determine the
most appropriate MS-DRG assignment, we have historically used, and will
continue to use, a similar process in the assignment of new diagnosis
codes and new procedure codes to the edit codes lists under the MCE.
Specifically, we review the predecessor code to determine if there are
edits under the MCE for which the predecessor code is listed to
determine which edit lists may be appropriate for the newly created
codes.
As discussed in prior rulemaking (88 FR 58764), as a result of new
and modified code updates approved after the annual spring ICD-10
Coordination
[[Page 69004]]
and Maintenance Committee meeting, we routinely make changes to the MCE
without discussion in IPPS rulemaking. In the past, in both the IPPS
proposed and final rules, we have only provided the list of changes to
the MCE that were brought to our attention after the prior year's final
rule. We historically have not listed all of the changes we have made
to the MCE because of the new and modified codes approved after the
annual spring ICD-10 Coordination and Maintenance Committee meeting. We
stated that these changes are, and would still be, approved too late in
the rulemaking schedule for inclusion in the proposed rule.
Furthermore, although in the past our MCE policies have been described
in our proposed and final rules, we have not provided the detail of
each new or modified diagnosis and procedure code edit in the final
rule.
Therefore, although we published, and will continue to publish, the
edit code list changes in the ``draft version'' of the MCE manual,
because discussion of the MCE has been removed from IPPS rulemakings,
beginning with FY 2025 rulemaking as previously described, the edit
code lists that appear in the ``draft version'' of the MCE manual in
association with the proposed rule are considered final at the time of
the development of the proposed rule. While the public may continue to
submit any questions, comments, concerns, or recommendations regarding
the MCE to the CMS mailbox at <a href="/cdn-cgi/l/email-protection#b4f9e7f0e6f3f7d8d5c7c7ddd2ddd7d5c0dddbdaf7dcd5dad3d1f4d7d9c79adcdcc79ad3dbc2"><span class="__cf_email__" data-cfemail="4d001e091f0a0e212c3e3e242b242e2c392422230e252c232a280d2e203e6325253e632a223b">[email protected]</span></a> for
our review and consideration, we will continue to make available on the
CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software</a>
the changes to the edit code lists for both the draft version (at the
time of the development of the proposed rule) and finalized version of
the Definitions of Medicare Code Edits (MCE) file, in association with
the annual IPPS proposed and final rules.
Comment: Some commenters encouraged CMS to delay, revisit, and
provide details of specific code changes and the deactivation of edits.
The commenters also stated that the edits are an additional quality
assurance mechanism to ensure appropriate ICD-10-CM/PCS assignment for
accurate and timely claims submission. The commenters further stated
that the edits help to prevent added administrative burden associated
with unnecessary claims rework and resubmission.
Response: We thank the commenters for their feedback. We believe
that the FY 2025 MCE updates reflect our established process as
previously described in this final rule, as well as address concerns
related to claims processing discussed in prior rulemaking (88 FR
58768). We will continue to monitor these updates and consider issuing
additional provider guidance to ensure accurate claims submission and
processing.
Comment: Similar to the discussion in the FY 2024 IPPS/LTCH PPS
final rule (88 FR 58789), a commenter requested that CMS implement an
edit for claims that group to MS-DRG 014 (Allogeneic Bone Marrow
Transplant), that would reject claims when an inpatient type of bill
11X claim is received without charges mapped to revenue code 0815,
which is intended to capture the costs of donor search and cell
acquisition activities for allogeneic hematopoietic stem cell
transplants. The commenter stated that mandatory reporting of the
revenue code on inpatient claims would have several benefits, including
increasing the accuracy of claims reporting by transplant centers,
ensuring the accuracy of CMS's budget neutrality calculations, and
helping to ensure that CMS does not inappropriately generate outlier
payment on MS-DRG 014 claims (given that CMS removes costs associated
with revenue code 0815 from its outlier calculation). The commenter
stated it would also mirror the edit established under the outpatient
code editor.
Response: We appreciate the commenter's feedback. As stated in the
FY 2024 IPPS/LTCH PPS final rule (88 FR 58789), we may consider
provider education materials regarding the reporting of Allogeneic Stem
Cell Acquisition/Donor Services in the future. We continue to believe
that the suggested claims processing edit is not necessary at this time
and expect providers to appropriately report charges associated with
revenue code 0815.
Comment: A commenter stated it supported the removal of the
vascular dementia codes from the Unacceptable Principal Diagnosis edit
code list and that doing so will reduce administrative challenges with
billing for services, improve the clinical accuracy of medical records
and encourage appropriate care for this set of patients.
Response: We appreciate the commenter's support.
In summary, we thank the commenters for their views and feedback.
Because we finalized the proposal to remove discussion of the MCE from
the annual IPPS rulemakings beginning with FY 2025 rulemaking, the
public may submit any future questions, comments, concerns, or
recommendations regarding the MCE to the CMS mailbox at
<a href="/cdn-cgi/l/email-protection#efa2bcabbda8ac838e9c9c8689868c8e9b868081ac878e81888aaf8c829cc187879cc1888099"><span class="__cf_email__" data-cfemail="97dac4d3c5d0d4fbf6e4e4fef1fef4f6e3fef8f9d4fff6f9f0f2d7f4fae4b9ffffe4b9f0f8e1">[email protected]</span></a> for our review and consideration.
In association with the proposed rule, we made available the test
version of the ICD-10 MS-DRG GROUPER Software, Version 42, the draft
version of the ICD-10 MS-DRG Definitions Manual, Version 42, the draft
version of the Definitions of Medicare Code Edits Manual, Version 42,
and the supplemental mapping files in Table 6P.1a and 6P.1b of the FY
2024 and FY 2025 ICD-10-CM diagnosis and ICD-10-PCS procedure codes
which 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
2025. 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 2025 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based
on ICD-10 claims data from the September 2023 update of the FY 2023
MedPAR file, which contains hospital bills received from October 1,
2022, through September 30, 2023. In our discussion of the proposed MS-
DRG reclassification changes, we referred to these claims data as the
``September 2023 update of the FY 2023 MedPAR file.''
As explained in previous rulemaking (76 FR 51487), in deciding
whether to propose to make further modifications to the MS-DRGs for
particular circumstances brought to our attention, we consider whether
the resource consumption and clinical characteristics of the patients
with a given set of conditions are significantly different than the
remaining patients represented in the MS-DRG. We evaluate patient care
costs using average costs and lengths of stay and rely on 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
[[Page 69005]]
remainder of cases in the MS-DRG. We also consider variation in costs
within these groups; that is, whether observed average differences are
consistent across patients or attributable to cases that are extreme in
terms of costs or length of stay, or both. Further, we consider the
number of patients who will have a given set of characteristics and
generally prefer not to create a new MS-DRG unless it would include a
substantial number of cases.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
our proposal to expand our existing criteria to create a new
complication or comorbidity (CC) or major complication or comorbidity
(MCC) subgroup within a base MS-DRG. Specifically, we finalized the
expansion of the criteria to include the NonCC subgroup for a three-way
severity level split. We stated we believed that applying these
criteria to the NonCC subgroup would better reflect resource
stratification as well as promote stability in the relative weights by
avoiding low volume counts for the NonCC level MS-DRGs. We noted that
in our analysis of MS-DRG classification requests for FY 2021 that were
received by November 1, 2019, as well as any additional analyses that
were conducted in connection with those requests, we applied these
criteria to each of the MCC, CC, and NonCC subgroups. We also noted
that the application of the NonCC subgroup criteria going forward may
result in modifications to certain MS-DRGs that are currently split
into three severity levels and result in MS-DRGs that are split into
two severity levels. We stated that any proposed modifications to the
MS-DRGs would be addressed in future rulemaking consistent with our
annual process and reflected in Table 5--Proposed List of Medicare
Severity Diagnosis Related Groups (MS-DRGs), Relative Weighting
Factors, and Geometric and Arithmetic Mean Length of Stay for the
applicable fiscal year.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798), we finalized
a delay in applying this technical criterion to existing MS-DRGs until
FY 2023 or future rulemaking, in light of the public health emergency
(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 association with our discussion of application of the NonCC
subgroup criteria in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26673 through 26676), we provided an alternate test version of the ICD-
10 MS-DRG GROUPER Software, Version 41.A, reflecting the proposed
GROUPER logic for FY 2024 as modified by the application of the NonCC
subgroup criteria to existing MS-DRGs with a three-way severity level
split, 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>.
Therefore, users had access to the alternate test software allowing
them to build case examples that reflect the proposals included in the
proposed rule with application of the NonCC subgroup criteria. We also
provided additional files including 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 FY 2024 IPPS/LTCH PPS proposed rule on the CMS website at:
<a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps</a>. We stated that the alternate test software and
additional files were made available 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 refer
readers to the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26673 through
26676) for further discussion of the alternate test software and
additional files that were made available.
In the FY 2024 IPPS/LTCH PPS final rule (88 FR 58655 through
58661), we finalized to delay the application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2024. We stated that we would continue to review and consider the
feedback we had received in response to the additional information we
made available in association with the FY 2024 IPPS/LTCH PPS proposed
rule for our development of the FY 2025 proposed rule.
In the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 35950), we noted
that the IPPS Payment Impact File made available in connection with our
annual IPPS rulemakings includes information used to categorize
hospitals by various geographic and special payment consideration
groups, including geographic location (urban or rural), teaching
hospital status (that is, whether or not a hospital has GME residency
programs and receives an IME adjustment), DSH hospital status (that is,
whether or not a hospital receives Medicare DSH payments), special
payment groups (that is, SCHs, MDHs, and RRCs) and other categories
reflected in the impact analysis generally shown in Appendix A of the
annual IPPS rulemakings. The IPPS Payment Impact File associated with
the FY 2024 IPPS/LTCH PPS final rule can be found on the CMS website
at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page#Data">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page#Data</a>.
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 2025, as we continue to consider the public comments received in
response to the FY 2024 rulemaking. In addition, we encouraged
interested parties to review the impacts and other information made
available with the alternate test software (V41.A) and other additional
files provided in connection with the FY 2024 IPPS/LTCH PPS proposed
rule, as previously discussed, and stated that we continue to welcome
feedback for consideration for future rulemaking.
Comment: Numerous commenters supported the proposal to continue to
delay application of the NonCC subgroup criteria to existing MS-DRGs
with a three-way severity level split for FY 2025.
Response: We thank the commenters for their support.
Comment: Several commenters expressed appreciation that CMS
provided the meaningful data analysis and availability of the version
41.A alternate test GROUPER in association with the FY 2024 proposed
rule, however, the commenters stated that the ability to utilize an
updated alternate test software and a current batch GROUPER along with
additional
[[Page 69006]]
streamlined data by hospital type is needed. According to the
commenters, updated test software and an available batch GROUPER would
allow hospitals to further analyze the operational and monetary impact
of this type of proposed change more thoroughly and over a longer time
span.
Response: We appreciate the commenters' feedback. As we noted in
the proposed rule, the IPPS Payment Impact File made available in
connection with our annual IPPS rulemakings includes information used
to categorize hospitals by various geographic and special payment
consideration groups and other categories reflected in the impact
analysis generally shown in Appendix A of the annual IPPS rulemakings.
We will consider the commenters' request to provide updated test
software and a batch GROUPER for future rulemaking.
Comment: A commenter who agreed with the proposal to delay
application of the NonCC subgroup criteria stated that CMS did not
provide any new information from, or analysis of, the FY 2023 MedPAR
file as it related to base, deleted, or new MS-DRGs related to the
application of the NonCC subgroup criteria. The commenter stated that
new data should have been included with the proposed rule to continue
efforts to view the impact of the policy.
Response: We appreciate the commenter's support and feedback. In
response to the commenter's request that we provide the potential
impacts using the FY 2023 claims data, we are making it available in
Table 6P.4 on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps</a> in association with
this final rule.
We note that we did not propose to apply the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2025. Moreover, as noted, we are continuing to consider comments
received in response to FY 2024 rulemaking.
Comment: A commenter stated it utilized the files provided by CMS
to analyze the impact of application of the NonCC subgroup criteria
based on its own hospital volumes. The commenter reported that while it
found some positive impacts to the relative weight of the MS-DRGs
impacted when applying the NonCC subgroup criteria, they continue to
have concerns regarding the variations in claims data from year-to-year
that may be used in the proposed MS-DRG restructuring. The commenter
stated it agreed with comments in prior years from various professional
organizations that have noted the variability in claims data and, thus,
case mix variations from year-to-year.
Response: We appreciate the commenter's feedback.
Comment: A few commenters expressed concern that application of the
NonCC subgroup criteria to existing MS-DRGs with a three-way severity
level split will reduce the impact of CCs. The commenters noted from
prior year's analyses findings that there are a number of MS-DRGs that
would potentially be consolidated to reflect the two-way severity split
for ``with MCC'' and ``without MCC'' and there were not any that
reflected a ``with CC/MCC'' and ``without CC/MCC'' severity level
split. The commenters stated that the impact of CCs would decrease as a
result of the application of the expanded criteria, meaning that
conditions designated as CC would increasingly need to be MCCs in order
to impact case complexity and severity.
Response: We thank the commenters for their feedback. We disagree
that application of the NonCC subgroup criteria specifically reduces
the impact of CCs. Rather, we believe that application of the criteria
combines the subset of cases that may or may not report a CC into one
MS-DRG grouping that reflects the average costs and length of stay for
that subset. Because the IPPS MS-DRGs are a system of averages, the
cases reporting a CC continue to impact the average costs and average
length of stay within the subgroup. We note that in the majority of the
MS-DRGs where we previously assessed the impact of application of the
NonCC subgroup criteria to existing MS-DRGs with a three-way severity
level split and provided the potential MS-DRG changes, the volume of
cases in the CC subgroup was significantly greater than those in the
NonCC subgroup, thus contributing more to the overall average costs and
average length of stay of the ``potential'' new MS-DRG structure. We
also note that providers have the ability to identify the subset of
cases reporting a CC within the existing ``with MCC'' and ``without
MCC'' MS-DRGs construct within their respective facilities.
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 for FY 2025 as we continue to consider
the public comments received in response to the FY 2024 rulemaking. We
also continue to encourage interested parties to review the impacts and
other information made available with the alternate test software
(V41.A) and other additional files provided in connection with the FY
2024 IPPS/LTCH PPS proposed rule, as previously discussed. We continue
to welcome feedback for consideration for future rulemaking that may be
directed to MEARIS<SUP>TM</SUP> at <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
As discussed in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58661),
we 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. Accordingly, in
our analysis of the MS-DRG classification requests for FY 2025 that we
received by October 20, 2023, as well as any additional analyses that
were conducted in connection with those requests, we applied these
criteria to each of the MCC, CC, and NonCC subgroups, as described in
the following table.
[[Page 69007]]
[GRAPHIC] [TIFF OMITTED] TR28AU24.002
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 2025 IPPS/LTCH PPS proposed rule, our
MS-DRG analysis was based on ICD-10 claims data from the September 2023
update of the FY 2023 MedPAR file. However, in our evaluation of
requests to split an existing base MS-DRG into severity levels, as
noted in prior rulemaking (80 FR 49368), we typically analyze the most
recent two years of data. This analysis includes two years of MedPAR
claims data to compare the data results from one 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.
Comment: A commenter recommended that CMS consider patient risk
adjustment as a criterion for creating CC and MCC subgroups, including
the impact of multiple comorbidities. According to the commenter,
published literature suggests that as comorbidity status increases,
patient risk of clinical events increase, as well as potential resource
use. For example, the commenter stated that studies suggest that in
patients with one presenting risk factor/comorbidity (either
hypertension, congenital heart disease, previous stroke, or diabetes),
compared to patients without these risks, that the risk of future
stroke was 1.96 greater.\4\ According to the commenter, the authors
also found patients with 2 or more of these risk factors to have an
increased risk of future stroke at 2.87 greater the risk of patients
without risk factors and stated that these results suggest the
cumulative effect of multiple CCs can dramatically impact a patient's
risk and resource use in the absence of an MCC. The commenter suggested
that CMS should consider the impact of multiple CCs (heart failure, AF,
etc.) as a criterion when grouping an inpatient procedure to an MCC
grouping in the absence of MCC.
---------------------------------------------------------------------------
\4\ Zhang Y, et al. Association of total pre-existing
comorbidities with stroke risk: a large-scale community-based cohort
study from China. BMC Public Health. 2021; 21(1):1910.
---------------------------------------------------------------------------
Response: We appreciate the commenter's input and will take it
under consideration as we continue to consider feedback associated with
application of the NonCC subgroup criteria.
We are making the FY 2025 ICD-10 MS-DRG GROUPER and Medicare Code
Editor (MCE) Software Version 42, the ICD-10 MS-DRG Definitions Manual
files Version 42 and the Definitions of Medicare Code Edits Manual
Version 42 available to the public on our CMS
[[Page 69008]]
website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software</a>.
2. Pre-MDC MS-DRG 018 Chimeric Antigen Receptor (CAR) T-Cell and Other
Immunotherapies
In the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 35951 through
35952), we discussed a request we received to revise the title of Pre-
MDC MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell and Other
Immunotherapies) in connection with an ICD-10-PCS procedure code
request that was submitted via MEARIS<SUP>TM</SUP> by the December 1,
2023 deadline for consideration as an agenda topic to be discussed at
the March 19-20, 2024 ICD-10 Coordination and Maintenance Committee
meeting. The procedure code request involves the application of an
autologous genetically engineered cell-based gene therapy, prademagene
zamikeracel (PZ), that is indicated in the treatment of recessive
dystrophic epidermolysis bullosa (RDEB), an extremely rare genetic
disease of the skin that leads to large chronic wounds. The proposal
was presented and discussed at the March 19-20, 2024, ICD-10
Coordination and Maintenance Committee meeting. We refer the reader to
the CMS website at <a href="https://www.cms.gov/medicare/coding-billing/icd-10-codes/icd-10-coordination-maintenance-committee-materials">https://www.cms.gov/medicare/coding-billing/icd-10-codes/icd-10-coordination-maintenance-committee-materials</a> for
additional detailed information regarding the request, including a
recording of the discussion and the related meeting materials. Public
comments in response to the code proposal were due by April 19, 2024.
The requestor suggested that if finalized, a new procedure code to
identify the application of PZ should be assigned to Pre-MDC MS-DRG 018
and that the title for Pre-MDC MS-DRG 018 be revised to reflect
``Chimeric Antigen Receptor (CAR) T and Other Autologous Gene and Cell
Therapies''.
Because the diagnosis and procedure code proposals that are
presented at the March ICD-10-CM Coordination and Maintenance Committee
meeting for an October 1 implementation (upcoming FY) are not finalized
in time to include in Table 6A.--New Diagnosis Codes and Table 6B.--New
Procedure Codes in association with the proposed rule, as we have noted
in prior rulemaking, we use our established process to examine the MS-
DRG assignment for the predecessor codes to determine the most
appropriate MS-DRG assignment. Specifically, we review the predecessor
code and MS-DRG assignment most closely associated with the new
procedure code, and in the absence of claims data, we consider other
factors that may be relevant to the MS-DRG assignment, including the
severity of illness, treatment difficulty, complexity of service and
the resources utilized in the diagnosis and/or treatment of the
condition. We have noted in prior rulemaking that this process does not
automatically result in the new procedure code being assigned to the
same MS-DRG or to have the same designation (O.R. versus Non-O.R.) as
the predecessor code. Under this established process, the MS-DRG
assignment for the upcoming fiscal year for any new diagnosis or
procedure codes finalized after the March meeting would be reflected in
Table 6A.--New Diagnosis Codes and Table 6B.--New Procedure Codes
associated with the final rule for that fiscal year. Accordingly, we
stated that the MS-DRG assignment for any new procedure codes
describing PZ, if finalized following the March meeting, would be
reflected in Table 6B.--New Procedure Codes associated with the final
rule for FY 2025. As noted in prior rulemaking (87 FR 28135), the codes
that are finalized after the March meeting are specifically identified
with a footnote in Table 6A.--New Diagnosis Codes and Table 6B.--New
Procedure Codes that are made publicly available in association with
the final rule on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps</a>. The public may
provide feedback on these finalized assignments, which is then taken
into consideration for the following fiscal year.
We note that the proposal to create new procedure codes that
describe the application of PZ as discussed at the March 19-20, 2024,
ICD-10 Coordination and Maintenance Committee meeting was approved and
finalized as reflected in the FY 2025 ICD-10-PCS Code Update files that
were made publicly available on the CMS website on June 5, 2024 at
<a href="https://www.cms.gov/medicare/coding-billing/icd-10-codes/2025-icd-10-pcs">https://www.cms.gov/medicare/coding-billing/icd-10-codes/2025-icd-10-pcs</a>.
We stated in the proposed rule that we did not agree with the
request to revise the title for Pre-MDC MS-DRG 018 for FY 2025 as
requested because the logic for Pre-MDC MS-DRG 018 is intended to
include other immunotherapies and is not restricted to CAR T-cell and
autologous gene and cell therapies. As discussed in the FY 2022 IPPS/
LTCH PPS final rule (86 FR 44798 through 44806), we finalized our
proposal to revise the title of Pre-MDC MS-DRG 018 to include ``Other
Immunotherapies'' to better reflect the cases reporting the
administration of non-CAR T-cell therapies and other immunotherapies
that would also be assigned to this MS-DRG, in addition to CAR T-cell
therapies. We noted that the term ``Other Immunotherapies'' is intended
to encompass the group of therapies that are currently available and
being utilized today (for which codes have been created for reporting
in response to industry requests or are being considered for
implementation), and to enable appropriate MS-DRG assignment for any
future therapies that may also fit into this category and are not
specifically identified as a CAR T-cell product, that may become
available (for example receive marketing authorization or a newly
established procedure code in the ICD-10-PCS classification).
In the proposed rule we also noted that, as discussed in prior
rulemaking, this category of therapies continues to evolve, and we are
in the process of carefully considering the feedback we have previously
received about ways in which we can continue to appropriately reflect
resource utilization while maintaining clinical coherence and stability
in the relative weights under the IPPS MS-DRGs. We stated we will
continue to examine these complex issues in connection with future
rulemaking and acknowledged that there may be distinctions to account
for as we continue to gain more experience in the use of these
therapies and have additional claims data to analyze.
Therefore, we did not propose to revise the title for Pre-MDC MS-
DRG 018 to reflect ``Chimeric Antigen Receptor (CAR) T and Other
Autologous Gene and Cell Therapies'' and proposed to maintain the
existing title to Pre-MDC MS-DRG 018, ``Chimeric Antigen Receptor (CAR)
T-cell and Other Immunotherapies'' for FY 2025.
Comment: Commenters expressed support for the proposal to maintain
the existing title to Pre-MDC MS-DRG 018, ``Chimeric Antigen Receptor
(CAR) T-cell and Other Immunotherapies'' for FY 2025.
Response: We thank the commenters for their support.
Comment: A commenter stated that application of PZ (prademagene
zamikeracel) seems to differ significantly in terms of clinical
coherence and resource utilization from other therapies currently
mapped to MS-DRG 018, specifically in that it requires an operating
room and subsequent post-surgical care. According to the commenter,
although CMS did not specifically propose to map cases reporting the
application of PZ to Pre-MDC MS-DRG 018 for FY
[[Page 69009]]
2025, PZ does not appear to be a match for the technologies currently
included in Pre-MDC MS-DRG 018 since it is not an immunotherapy and
would be the only surgical episode of care in the MS-DRG. The commenter
requested that CMS not finalize the mapping for application of PZ to
Pre-MDC MS-DRG 018 due to differences in resource use.
Another commenter stated that if CMS were to continue to assign
new, higher volume, lower cost therapies to MS-DRG 018, it could
potentially distort the relative weight of the MS-DRG, resulting in
inadequate payment for CAR T-cell therapies. This commenter also
recommended that CMS not map cases reporting application of PZ to Pre-
MDC MS-DRG 018 due to clinical resource differences with other
therapies currently mapped to Pre-MDC MS-DRG 018. The commenter further
stated that given the important role CAR T-cell therapies play, and
will continue to play for cancer patients, CMS should clarify its
methodology for the inclusion of new procedure codes within Pre-MDC MS-
DRG 018 and consider the resource costs and needs of potential new
therapies to this MS-DRG so as not to limit access to current
therapies. Other commenters recommended that CMS provide transparency
in the assignment of therapies to Pre-MDC MS-DRG 018 to ensure
accurate, predictable, and appropriate payment, including consideration
of comparable resource use to existing therapies currently mapped to
Pre-MDC MS-DRG 018.
Another commenter requested that CMS map the new procedure codes
describing application of PZ to Pre-MDC MS-DRG 018, given the clinical
characteristics and resource intensity of the gene and cellular
therapy. According to the commenter, administration of both autologous
CAR T-cell therapies and PZ is initiated through the collection of a
sample of the patient's own cells. The commenter stated the cells are
then modified as part of a complex and resource intensive process
requiring the insertion of a new gene into the patient's own cells
before administering them back to the patient. Specifically, the
commenter stated that the keratinocyte cells (that is, the most
prominent cells in the epidermis) of patients diagnosed with RDEB are
collected via a ``punch'' biopsy procedure and transduced with a
functional COL7A1 transgene using a retroviral vector, which is
intended to result in adequate expression and secretion of the type VII
collagen protein critical to anchoring the epidermis and facilitating
wound healing. The commenter stated the transduced cells are then
expanded, matured, and processed into sheets through an approximate 25-
day process before they can be delivered to the hospital site and
applied to the patient. The commenter stated that this process mirrors
the CAR T-cell therapy development and administration process, where
cells are harvested from the patient's blood, the patient's T-cells are
isolated through a leukapheresis procedure, and the T-cells then are
transduced with a CAR-encoding viral vector and expanded over an
approximate month-long period before being returned to the treatment
center for administration to the patient. The commenter also stated
that the application of PZ shares other similarities with the
technologies currently assigned to Pre-MDC MS-DRG 018, including the
need for an inter-disciplinary team of health care personnel, and an
extended length of stay following treatment. According to the
commenter, from a resource perspective, like other therapies currently
assigned to Pre-MDC MS-DRG 018, the main driver of resource utilization
for an inpatient stay is the administration of the technology.
Response: We appreciate the commenters' feedback. In response to
the commenters who requested that CMS not finalize the mapping for
application of PZ to Pre-MDC MS-DRG 018 due to the belief that there
are differences in resource use when compared to other therapies
currently mapped to Pre-MDC MS-DRG 018, we note that the commenters did
not indicate whether they believed the differences in resource use for
application of PZ are higher or lower in comparison to the other
therapies currently mapped to Pre-MDC MS-DRG 018, nor did the
commenters offer any alternative MS-DRG suggestions for CMS's
consideration. We acknowledge that application of PZ requires use of an
operating room and the administration of other therapies currently
assigned to Pre-MDC MS-DRG 018 do not. We also note that consistent
with our established process for assigning new diagnosis or new
procedure codes to MDCs, MS-DRGs, and the associated attributes
(severity level and O.R. status), we examined the MDCs, MS-DRG
assignment and O.R. status of the predecessor procedure codes to inform
our assignments and designations. As discussed in prior rulemaking and
previously in the preamble of this final rule, we review the
predecessor code and MS-DRG assignment most closely associated with the
new diagnosis or procedure code, and in the absence of claims data, we
consider other factors that may be relevant to the MS-DRG assignment,
including the severity of illness, treatment difficulty, complexity of
service and the resources utilized in the diagnosis and/or treatment of
the condition. We have previously noted that this process does not
automatically result in the new diagnosis or procedure code being
assigned to the same MS-DRG or to have the same designation as the
predecessor code. In our evaluation of MS-DRG classification requests
under the IPPS MS-DRGs, consideration is also given to the similarities
and differences in resource utilization among patients in each MS-DRG
and we strive to ensure that resource utilization is relatively
consistent across patients in each MS-DRG. However, some variation in
resource intensity will remain among the patients in each MS-DRG
because the definition of the MS-DRG is not so specific that every
patient is identical, rather the average pattern of resource intensity
of a group of patients in an MS-DRG can be predicted.
We note that historically, in the development of the DRGs, the
initial step in the determination of the DRG had been the assignment of
the appropriate MDC based on the principal diagnosis, however,
beginning with the eighth version of the GROUPER (CMS 8.0), the initial
step in DRG assignment was based on the procedure being performed, thus
the creation of the Pre-MDC DRGs, where the patient is assigned to
these DRGs independent of the MDC of the principal diagnosis.
Therefore, while the existing therapies (that is, CAR T-cell and non-
CAR T-cell) currently mapped to Pre-MDC MS-DRG 018 may be indicated in
the treatment of patients with cancer, the logic for case assignment to
Pre-MDC MS-DRG 018 does not preclude the assignment of other therapies
indicated in the treatment of patients that do not have a diagnosis of
cancer. In our review of the MS-DRG assignment for application of PZ,
we recognized that this technology is defined as an investigational
genetically engineered autologous cell therapy. We also note that
similar to the discussions in prior rulemaking with respect to the
difficulty in predicting what the associated costs will be in the
future for CAR T-cell and other immunotherapies that remain under
development (87 FR 48806), it is also difficult to predict what the
associated costs will be in the future for cell and gene therapies that
remain under development or in clinical trials.
We further note that, in response to the President's Executive
Order 14087, ``Lowering Prescription Drug Costs for Americans'', a Cell
and Gene Therapy
[[Page 69010]]
(CGT) Access Model was developed, which could help inform future
inpatient payment policy for cell and gene therapies more generally.
For additional information on the CGT Access Model, we refer the reader
to the CMS website at <a href="https://www.cms.gov/priorities/innovation/innovation-models/cgt">https://www.cms.gov/priorities/innovation/innovation-models/cgt</a>.
Until such time additional data becomes available, we believe it is
appropriate to map cases reporting the application of PZ to Pre-MDC MS-
DRG 018 for FY 2025 based on the information currently available
indicating similar utilization of resources for other cases currently
mapped to MS-DRG 018 with regard to patients' severity of illness,
treatment difficulty, and complexity of service.
In response to concerns that the assignment of new, higher volume,
lower cost therapies to MS-DRG 018 could potentially distort the
relative weight of the MS-DRG resulting in inadequate payment for CAR
T-cell therapies, we note that in the FY 2023 IPPS/LTCH PPS final rule
(87 FR 48807), we addressed similar comments and also noted that we
provided detailed summaries and responses to these same or similar
comments in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798 through
44806). We also refer the reader to the discussion in the FY 2025 IPPS/
LTCH PPS proposed rule (89 FR 36018 through 36020), and in section
II.D.2.b. of this final rule, regarding the proposed and finalized
relative weight methodology for cases mapping to Pre-MDC MS-DRG 018
effective October 1, 2024, for FY 2025.
After consideration of the public comments we received, we are
finalizing our proposal to maintain the existing title to Pre-MDC MS-
DRG 018, ``Chimeric Antigen Receptor (CAR) T-cell and Other
Immunotherapies'' for FY 2025. We are also finalizing the assignment of
the eight procedure codes describing the use of PZ to Pre-MDC MS-DRG
018 as reflected in Table 6B.--New Procedure Codes, in association with
this final rule and available on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps</a>.
3. MDC 01 (Diseases and Disorders of the Nervous System)
a. Logic for MS-DRGs 023 Through 027
In the FY 2024 IPPS/LTCH PPS final rule (88 FR 58661 through
58667), 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 (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) 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.
We stated 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 was 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 believed
that MS DRG 021 was the most logical fit in terms of average costs and
clinical coherence for reassignment 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.
We noted that while our data findings demonstrated the average
costs are higher for the cases with a principal diagnosis of epilepsy
with a 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 represented 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
believed additional time was needed to evaluate these cases as part of
our ongoing examination of the case logic to the MS-DRGs for craniotomy
and endovascular procedures, which are MS-DRG 023, MS-DRG 024
(Craniotomy with Major Device Implant or Acute Complex CNS Principal
Diagnosis without MCC), and MS-DRGs 025, 026, and 027 (Craniotomy and
Endovascular Intracranial Procedures with MCC, with CC, and without CC/
MCC, respectively).
As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48808
through 48820), in connection with our analysis of cases reporting
laser interstitial thermal therapy (LITT) procedures performed on the
brain or brain stem in MDC 01, we stated 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. We stated
that specifically, we were 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 stated
we were also reviewing the indications for these procedures, for
example, malignant neoplasms versus epilepsy to consider if there may
be merit in considering restructuring the current MS-DRGs to better
recognize the clinical distinctions of these patient populations in the
MS-DRGs.
As part of this evaluation, as discussed in the FY 2024 IPPS/LTCH
PPS final rule, we have begun to analyze the ICD-10 coded claims data
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 referred the reader to Tables 6P.2b through
6P.2f associated with the FY 2024 IPPS/LTCH PPS proposed rule
(available on the CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps</a>) for data analysis
findings of cases assigned to MS-DRGs 023 through 027 from the
September 2022 update of the FY 2022 MedPAR file as we continue to look
for patterns of complexity and resource intensity.
In summary, we stated that while we agreed that 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
[[Page 69011]]
patterns of complexity and resource intensity. Therefore, for the
reasons discussed, we finalized 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 for FY 2024.
In the FY 2024 IPPS/LTCH PPS final rule, we stated 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 stated we would continue to explore mechanisms to
ensure clinical coherence between these cases and the other cases with
which they may potentially be grouped. We stated that the data analysis
as displayed in Tables 6P.2b through 6P.2f associated with the FY 2024
IPPS/LTCH PPS 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 welcomed 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. We also stated 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.
In the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 35952 through
35953), we discussed two comments we received by the October 20, 2023
deadline in response to this discussion in the FY 2024 IPPS/LTCH PPS
final rule. A commenter recommended that CMS not use surgical approach
(for example, open versus percutaneous) as a factor to reclassify MS-
DRGs 023 through 027. The commenter stated whether the opening is
created via a drill into the skull percutaneously or through a larger
incision in the skull for a craniotomy, both approaches involve the
risk of intracranial bleeding, infection, and brain swelling. The
commenter further stated they do not support a consideration of the
reassignment of the ICD-10-PCS procedure codes describing LITT,
currently assigned to MS-DRGs 025 through 027, based on the diagnosis
being treated. The commenter stated that the LITT procedure requires
the same steps, time, and clinical resources when performed for brain
cancer or epilepsy. In the commenter's view, differences in the disease
causing the tumors or lesions do not affect the resources used for
performing the procedure or the post-operative care for the patient.
Lastly, the commenter stated they support the current structure of MS-
DRGs 023 and 024 based on an acute complicated principal diagnosis, or
chemotherapy implant, or epilepsy with neurostimulator. The commenter
stated these diagnoses represent severe complex conditions that require
immediate and urgent intervention.
Another commenter stated that the current logic for MS-DRGs 023
through 027 is sufficient and supports the clinical and resource
similarities of the procedures reflected in these MS-DRGs. The
commenter performed its own analysis and stated they found that
realignment based on surgical approach or root operation could create
significant new inequities. The commenter recommended that CMS maintain
the current logic for MS-DRGs 025 through 027, as making changes could
be disruptive to hospitals and create challenges for Medicare
beneficiary access to life-saving technologies. The commenter stated
they strongly believe that maintaining the current structure provides
payment stability and integrity of these procedures over time.
In this final rule, we summarize the additional comments we
received in response to this discussion in the FY 2025 IPPS/LTCH PPS
proposed rule.
Comment: Commenters stated they support CMS' decision to continue
to monitor the case logic for MS-DRGs 023 through 027 to determine if
future changes are warranted. A commenter specifically stated in their
review, they were unable to detect misalignment in patterns of
complexity or resource intensity within MS-DRGs 023 through 027 and
noted the procedures are well-established. Another commenter stated
they appreciate CMS reviewing the craniotomy MS-DRGs and stated that
CMS should ensure that MS-DRG assignments fully reflect all costs for
very resource-intensive craniotomy procedures. This commenter also
recommended that CMS expand its review of the craniotomy MS-DRGs to
include MS-DRGs 020, 021, and 022 (Intracranial Vascular Procedures
with Principal Diagnosis Hemorrhage with MCC, with CC, and without CC/
MCC, respectively) and stated that the payments for these MS-DRGs have
been highly variable in recent years, notably being proposed to reduce
by more than 7 percent for FY 2025, and may fail to adequately reflect
the resources associated with care for patients with diagnoses such as
aneurysms. The commenter encouraged CMS to examine these MS-DRGs with
the goal of providing more stable payments for hospitals that furnish
intensive craniotomy procedures and to mitigate the financial impact of
large payment declines. Several other commenters expressed caution,
however, and stated that CMS should allow providers more time to
identify which diagnoses support this procedure code and as such do not
agree with moving it to MS-DRG 021.
Response: We thank the commenters and appreciate the commenters'
support and feedback. CMS will continue to monitor and analyze the
claims data with respect to MS-DRGs 023 through 027 and we will take
the recommendation to also review MS-DRGs 020, 021, and 022 into
consideration as we further examine the logic for case assignment to
the craniotomy MS-DRGs. We note that we did not propose or finalize a
change to the GROUPER logic of MS-DRGs 020, 021, and 022 in FY 2024
IPPS/LTCH PPS rulemaking, nor did we propose a change to the GROUPER
logic of these MS-DRGS in the FY 2025 IPPS/LTCH PPS proposed rule,
therefore, the difference in the relative weights reflected in Table
5--List of Medicare Severity Diagnosis Related Groups (MS-DRGs),
Relative Weighting Factors, and Geometric and Arithmetic Mean Length of
Stay associated with FY 2025 proposed rule for MS-DRGs 020, 021, and
022 can be attributed to changes in the underlying data.
In response to the comments suggesting that CMS allow more time, it
is unclear which diagnosis code and which procedure code the commenters
were referring to as CMS did not propose to move any codes to MS-DRG
021 in the FY 2025 IPPS/LTCH proposed rule, and the commenters did not
specifically identify any ICD-10 codes for CMS to consider.
CMS appreciates the comments submitted in response to the request
for feedback in the FY 2024 IPPS/LTCH PPS final rule, as well as the
comments submitted in response to the discussion in the FY 2025 IPPS/
LTCH PPS proposed rule. As we continue 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 stated in prior
[[Page 69012]]
rulemaking, 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 42 (available on the CMS website at:
<a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software</a>) for complete
documentation of the GROUPER logic for MS-DRGs 023 through 027 for FY
2025. Feedback and other suggestions may continue to be directed to
MEARIS<SUP>TM</SUP>, discussed in section II.C.1.b. of the preamble of
this final rule at: <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
b. Intraoperative Radiation Therapy (IORT)
As discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR
35953 through 35956), we received a request to add ICD-10-PCS procedure
codes D0Y0CZZ (Intraoperative radiation therapy (IORT) of brain) and
D0Y1CZZ (Intraoperative radiation therapy (IORT) of brain stem), to the
Chemotherapy Implant logic list in MS-DRG 023 (Craniotomy with Major
Device Implant or Acute Complex CNS Principal Diagnosis with MCC or
Chemotherapy Implant or Epilepsy with Neurostimulator). According to
the requestor, intraoperative radiation therapy (IORT) for the brain is
always performed as part of the surgery to remove a brain tumor during
the same operative episode. The requestor stated that once maximal safe
tumor resection is achieved, the tumor cavity is examined for active
egress of cerebrospinal fluid or bleeding. Next, intraoperative
measurements are made using neuro-navigation or intraoperative imaging
such as magnetic resonance imaging (MRI) or computed tomography (CT) to
ensure safe distance to organs or tissues at risk, aid in appropriate
dose calculation, and selection of proper applicator size. The
applicator is then implanted into the tumor cavity and the radiation
dose is delivered. The requestor stated that delivery time can be up to
40 minutes and upon completion of the treatment, the source is removed,
and the cavity is re-inspected for active egress of cerebrospinal fluid
and bleeding.
As discussed in the proposed rule, the requestor stated that
currently the ICD-10-PCS procedure codes for excision of a brain tumor,
00B00ZZ (Excision of brain, open approach) and 00B70ZZ (Excision of
cerebral hemisphere, open approach) map to both sets of craniotomy MS-
DRGs. Specifically, MS-DRG 023 (Craniotomy with Major Device Implant or
Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant
or Epilepsy with Neurostimulator) and MS-DRG 024 (Craniotomy with Major
Device Implant or Acute Complex CNS Principal Diagnosis without MCC),
and MS-DRGs 025, 026, and 027 (Craniotomy and Endovascular Intracranial
Procedures with MCC, with CC, and without CC/MCC, respectively).
However, the requestor also stated that the procedure codes describing
IORT (D0Y0CZZ or D0Y1CZZ) are not listed in the GROUPER logic and do
not affect MS-DRG assignment. Therefore, cases reporting a procedure
code describing excision of a brain tumor (00B00ZZ or 00B70ZZ) with
IORT currently map to MS-DRGs 025, 026, and 027. The requestor
suggested that cases reporting a procedure code describing excision of
a brain tumor (00B00ZZ or 00B70ZZ) with IORT (D0Y0CZZ or D0Y1CZZ)
should map to MS-DRG 023 because of the higher costs associated with
the addition of IORT to the excision of brain tumor surgery. According
to the requestor, MS-DRG 023 includes complicated craniotomy cases
involving the placement of radiological sources and chemotherapy
implants. The requestor stated that because IORT involves a full course
of radiation therapy delivered directly to the tumor bed via an
applicator that is implanted into the tumor cavity during the same
surgical session and is clinically similar to two other procedures
listed in the Chemotherapy Implant logic list, it should also be
included in the Chemotherapy Implant logic list. Specifically, the
requestor stated procedure code 00H004Z (Insertion of radioactive
element, cesium-131 collagen implant into brain, open approach) and
procedure code 3E0Q305 (Introduction of other antineoplastic into
cranial cavity and brain, percutaneous approach) also involve the
delivery of either radiation or chemotherapy directly after tumor
resection. According to the requestor, the resources involved in
placing the delivery device are similar for all three procedures and
the distinction is that the procedures described by codes 00H004Z and
3E0Q305 involve the insertion of devices that deliver radiation or
chemotherapy over a period of time, whereas IORT delivers the entire
dose of radiation during the operative session. As such, the requestor
asserted that IORT is clinically aligned with the other procedures from
a therapeutic and resource utilization perspective.
We noted in the proposed rule that the requestor performed its own
analysis using the FY 2022 MedPAR file that was made available in
association with the FY 2024 IPPS/LTCH PPS final rule and stated it
found fewer than 11 cases reporting IORT in MS-DRGs 025, 026, and 027,
with the majority of those cases mapping to MS-DRG 025. According to
the requestor, the volume of claims reporting IORT is anticipated to
increase as appropriate use of the technology is adopted.
We also noted in the proposed rule that the requestor is correct
that currently, the logic for case assignment to MS-DRG 023 includes a
Chemotherapy Implant logic list and the procedure codes that identify
IORT (D0Y0CZZ and D0Y1CZZ) are not listed in the GROUPER logic and do
not affect MS-DRG assignment as the procedures are designated as non-
O.R. procedures. The requestor is also correct that cases reporting a
procedure code describing excision of a brain tumor (00B00ZZ or
00B70ZZ) with IORT currently map to MS-DRGs 025, 026, and 027. We refer
the reader to the ICD-10 MS-DRG Definitions Manual Version 41.1
(available on the CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software">https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/ms-drg-classifications-and-software</a>) for complete documentation of the GROUPER logic.
As discussed in the proposed rule, we analyzed claims data from the
September 2023 update of the FY 2023 MedPAR file for MS-DRGs 023, 024,
025, 026, and 027 and for cases reporting excision of brain tumor and
IORT. We identified claims reporting excision of brain tumor with
procedure code 00B00ZZ or 00B70ZZ and identified claims reporting IORT
with procedure code D0Y0CZZ or D0Y1CZZ. The findings from our analysis
are shown in the following table. We note that there were no cases
found to report IORT of brain (D0Y0CZZ) or brain stem (D0Y1CZZ) with
excision of brain (00B00ZZ) or excision of cerebral hemisphere
(00B70ZZ).
BILLING CODE 4120-01-P
[[Page 69013]]
[GRAPHIC] [TIFF OMITTED] TR28AU24.003
BILLING CODE 4120-01-C
As the data show, there were no cases found to report the use of
IORT in the performance of a brain tumor excision; therefore, we are
unable to evaluate whether the use of IORT directly impacts resource
utilization. For this reason, we proposed to maintain the current
structure of MS-DRGs 023, 024,
[[Page 69014]]
025, 026, and 027 for FY 2025. We stated that we would continue to
monitor the claims data in consideration of any future modifications to
the MS-DRGs for which IORT may be reported.
Comment: Commenters supported the proposal to maintain the current
structure of MS-DRGs 023, 024, 025, 026, and 027 for FY 2025.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to maintain the current structure of MS-DRGs
023, 024, 025, 026, and 027 for FY 2025.
4. MDC 05 (Diseases and Disorders of the Circulatory System)
a. Concomitant Left Atrial Appendage Closure and Cardiac Ablation
As discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR
35956 through 35959), we received a request to create a new MS-DRG to
better accommodate the costs of concomitant left atrial appendage
closure and cardiac ablation for atrial fibrillation in MDC 05
(Diseases and Disorders of the Circulatory System). Atrial fibrillation
(AF) is an irregular and often rapid heart rate that occurs when the
two upper chambers of the heart experience chaotic electrical signals.
AF presents as either paroxysmal (lasting < 7 days), persistent
(lasting > 7 day, but less than 1 year), or long standing persistent
(chronic)(lasting > 1 year) based on time duration and can increase the
risk for stroke, heart failure, and mortality. Management of AF has two
primary goals: optimizing cardiac output through rhythm or rate control
and decreasing the risk of cerebral and systemic thromboembolism. Among
patients with AF, thrombus in the left atrial appendage (LAA) is a
primary source for thromboembolism. Left Atrial Appendage Closure
(LAAC) is a surgical or minimally invasive procedure to seal off the
LAA to reduce the risk of embolic stroke.
According to the requestor, the manufacturer of the
WATCHMAN<SUP>TM</SUP> Left Atrial Appendage Closure (LAAC) device,
patients who are indicated for a LAAC device can also have symptomatic
AF. For these patients, performing a cardiac ablation and LAAC
procedure at the same time is ideal. Cardiac ablation is a procedure
that works by burning or freezing tissue on the inside of the heart to
disrupt faulty electrical signals causing the arrhythmia, which can
help the heart maintain a normal heart rhythm. In the proposed rule, we
noted the requestor highlighted a recent study (Piccini et al. Left
atrial appendage occlusion with the WATCHMAN<SUP>TM</SUP> FLX and
concomitant catheter ablation procedures. Heart Rhythm Society Meeting
2023, May 19, 2023; New Orleans, LA.). According to the requestor, the
results of this study indicate that when LAAC is performed
concomitantly with cardiac ablation, the outcomes are comparable to
patients who have undergone these procedures separately.
As discussed in the proposed rule, the requestor identified the
following potential procedure code combination that would comprise a
concomitant left atrial appendage closure and cardiac ablation
procedure: ICD-10-PCS procedure code 02L73DK (Occlusion of left atrial
appendage with intraluminal device, percutaneous approach), that
identifies the WATCHMAN<SUP>TM</SUP> device, in combination with
02583ZZ (Destruction of conduction mechanism, percutaneous approach).
We noted in the proposed rule that the requestor performed its own
analysis of this procedure code combination and stated that it found
the average costs of cases reporting concomitant left atrial appendage
closure and cardiac ablation procedures were consistently higher
compared to the average costs of other cases within their respective
MS-DRG, which it asserted could limit beneficiary access to these
procedures. The requestor asserted that improved Medicare payment for
providers who perform these procedures concomitantly would help
Medicare patients to gain better access to these lifesaving and
quality-improving services and decrease the risk of future readmissions
and the need for future procedures.
We reviewed this request and in the proposed rule noted concerns
regarding making proposed MS-DRG changes based on a specific, single
technology (the WATCHMAN<SUP>TM</SUP> Left Atrial Appendage Closure
(LAAC) device) identified by only one unique procedure code versus
considering proposed changes based on a group of related procedure
codes that can be reported to describe the same type or class of
technology, which is more consistent with the intent of the MS-DRGs.
Therefore, in reviewing this request, in the proposed rule we stated we
identified eight additional ICD-10-PCS procedure codes that describe
LAAC procedures and included these codes in our analysis. The nine
codes we identified are listed in the following table.
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Similarly, as noted previously, the requestor identified code
02583ZZ (Destruction of conduction mechanism, percutaneous approach) to
describe cardiac ablation. In our review of the ICD-10-PCS
classification, in the proposed rule we stated we identified 26
additional ICD-10-PCS codes that describe cardiac ablation that we also
examined. The 27 codes we included in our analysis are listed in the
following table.
[[Page 69015]]
[GRAPHIC] [TIFF OMITTED] TR28AU24.005
In the ICD-10 MS-DRGs Definitions Manual Version 41.1, for
concomitant left atrial appendage closure and cardiac ablation
procedures, the GROUPER logic assigns MS-DRGs 273 and 274 (Percutaneous
and Other Intracardiac Procedures with and without MCC, respectively)
depending on the presence of any additional MCC secondary diagnoses. We
stated in the proposed rule that we examined claims data from the
September 2023 update of the FY 2023 MedPAR file for all cases in MS-
DRGs 273 and 274 and compared the results to cases reporting procedure
codes describing concomitant left atrial appendage closure and cardiac
ablation. Our findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU24.006
As shown in the table, in MS-DRG 273, we identified a total of
7,250 cases with an average length of stay of 5.4 days and average
costs of $35,197. Of those 7,250 cases, there were 80 cases reporting
procedure codes describing concomitant left atrial appendage closure
and cardiac ablation with average costs higher than the average costs
in the FY 2023 MedPAR file for MS-DRG 273 ($70,447 compared to $35,197)
and a slightly longer average length of stay (5.8 days compared to 5.4
days). In MS-DRG 274, we identified a total of 47,801 cases with an
average length of stay of 1.4 days and average costs of $29,209. Of
those 47,801 cases, there were 781 cases reporting procedure codes
describing concomitant left atrial appendage closure and cardiac
ablation, with average costs higher than the average costs in the FY
2023 MedPAR file for MS-DRG 274 ($66,277 compared to $29,209) and a
slightly longer average length of stay (1.5 days compared to 1.4 days).
In the proposed rule we stated we reviewed these data and noted,
clinically, the management of AF by performing concomitant left atrial
appendage closure and cardiac ablation can improve symptoms, prevent
stroke, and reduce the risk of bleeding compared with oral
anticoagulants. We stated the data analysis clearly shows that cases
reporting concomitant left atrial appendage closure and cardiac
ablation procedures have higher average costs and slightly longer
lengths of stay compared to all the cases in their assigned MS-DRG. For
these reasons, we proposed to create a new MS-DRG for cases reporting a
LAAC procedure and a cardiac ablation procedure.
[[Page 69016]]
As discussed in the proposed rule, to compare and analyze the
impact of our suggested modifications, we ran a simulation using the
claims data from the September 2023 update of the FY 2023 MedPAR file.
The following table illustrates our findings for all 1,723 cases
reporting procedure codes describing concomitant left atrial appendage
closure and cardiac ablation. We stated we believed the resulting
proposed MS-DRG assignment is more clinically homogeneous, coherent and
better reflects hospital resource use.
[GRAPHIC] [TIFF OMITTED] TR28AU24.007
We applied
[…truncated; see source link]Indexed from Federal Register on August 28, 2024.
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