FY2022 Proposed DRG Changes

It is that time of year! CMS released the IPPS proposed rule on 4/27/21 outlining the proposed changes to the Inpatient Prospective Payment System (IPPS) for FY2022, which begins October 1, 2021. Later this year, sometime in August, CMS will release the Final Rule. Currently CMS is reviewing responses to their proposed rule and will address them in the final rule. This Coding Tip will only give you a brief overview of what is coming. I won’t go into the Quality Measures/Programs proposed changes in this tip. In the fall we will have the final information and will have education sessions on all of the changes to IPPS, ICD-10-CM and ICD-10-PCS changes.

FY2022 IPPS Proposed Payment Changes

• Acute care hospitals that report quality data and that are meaningful users of EHRs will receive approximately a 2.8% increase in Medicare operating rates.
• Hospitals that do not submit quality data would lose 1/4 of the market basket update (of 2.8% as above) and hospitals that are not meaningful users of EHRs will be subject to a 3/4 or -0.75 reduction of the market basket for FY 2022.
• CMS proposes to repeal the requirement it had finalized last year that hospitals report their median payer-specific negotiated rates for inpatient services, by Medicare Severity-Diagnosis Related Group, for Medicare Advantage organizations
• CMS is projecting that with the 2.8% increase and other changes to IPPS policies it will boost total IPPS payments in FY2022 by roughly $3.4 billion.
• As a result of the ongoing COVID-19 public health emergency, CMS proposes to extend its “New COVID-19 Treatments Add-on Payments” through the end of the fiscal year in which the PHE ends. (This is done by increasing the normal DRG relative weight by 20% for cases that have U07.1 coded)
• Also, in light of the COVID-19 PHE, CMS proposes adjustments to its hospital quality measurement and value programs. Specifically, for FY 2022, CMS proposes to suppress (i.e., not use) most hospital value-based purchasing program measures. As a result, hospitals would receive neutral payment adjustments under the VBP for FY 2022. In addition, CMS proposes to exclude performance data from 2020 in calculating Hospital Acquired Condition Reduction Program performance for FYs 2022 and 2023. Lastly, for the FY 2023 Hospital Readmissions Reduction Program, CMS proposes to suppress the pneumonia readmissions measure, and to exclude COVID-19 diagnosed patients from the remaining five measures.

FY2022 Proposed MS-DRG Changes

• PRE-MDC: 16 new codes were added for “introduction of CAR T cell therapy.” These codes are in represented by XW0—7 for introduction of various CAR T cell therapies via peripheral or central vein. They were added to MS-DRG 018. In connection with our proposed assignment of the listed procedure codes to Pre-MDC MS-DRG 018, we are also proposing to revise the title for Pre-MDC MS-DRG 018 “Chimeric Antigen Receptor (CAR) T-cell Immunotherapy” to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies.
• MDC-3: Proposed that three codes, 0W310ZZ, 0W313ZZ and 0W214ZZ, Control of bleeding of cranial cavity should be moved out of MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) map to MS-DRGs 23, 24, 25, 26, and 27 (for example, “craniotomy” MS-DRGs) in MDC 01. CMS agreed with the above and proposed to move them there.
• MDC-3: CMS is proposing to reassign the three procedure codes describing excision of subcutaneous tissue of chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ) from MS-DRGs 140, 141, and 142 (Major Head and Neck Procedures with MCC, with CC, and without CC/MCC, respectively) to MS–DRGs 143, 144, and 145 (Other Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 03 for FY 2022.
• MDC-4: Proposal to reassign Laser Interstitial Therapy (LITT) procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY 2022.
  Of the LITT procedures currently assigned to MS–DRGs 163, 164, 165, 166, 167, and 168, we found 17 procedure codes in MS-DRGs 163, 164, and 165 describing laser interstitial thermal therapy (LITT) of body parts that do not describe areas within the respiratory system, which would not be clinically appropriate to maintain in the logic. Therefore, we are proposing to reassign these 17 procedure codes from their current MS-DRG assignments in MDC 04, and from the additional MDCs and MS-DRGs identified during our review that were found to be clinically inappropriate, to their clinically MDC and MS-DRGs as shown in Table 6P.2b in the proposed rule.
• MDC-4: CMS was asked to look at “Repair of esophagus” codes that were erroneously assigned to MS-DRGS 163-165 for Major Chest Procedures. As a result of our preliminary review of ALL codes in MS-DRGs 163, 164, 165, 166, 167, and 168 for Major Chest Procedures and Other Respiratory System Procedures for FY 2022 we are proposing the reassignment of 26 procedure codes (9 procedure codes describing repair of pulmonary or thoracic structures, and 17 procedure codes describing procedures performed on the sternum or ribs) from MS-DRGs 166, 167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04. See Table 6P.2c in the proposed rule. Example is 02QP4ZZ, Repair Pulmonary Trunk, Percutaneous Endoscopic Approach. CMS plans to do data analyses of all codes in Tables 6P1e and 6P1f to see if these MS-DRGS are warranted and also analysis of the creation of the new procedure codes assigned to these MS-DRGs.
  MDC-5: Impella heart assist devices currently are assigned to MS-DRG 215 (Other Heart Assist System Implant). CMS received a request to reassign certain cases reporting procedure codes describing the insertion of a percutaneous short-term external heart assist device from MS-DRG 215 to MS-DRGs 216, 217, and 218 (Cardiac Valve and Other Major Cardiothoracic Procedures WITH Cardiac Catheterization with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 219, 220, 221 (Cardia Valve and Other Major Cardiothoracic Procedures WITHOUT Cardiac Catheterization with MCC, with CC, and without CC/MCC, respectively. Codes involved are 5A0221D for assistance with cardiac output Impeller pump and 02HA3RJ/02HA0RJ/02HA4RJ for insertion of short-term external heart assist system intraoperative, various approaches.
• MDC-5: A requester stated if I21.A1, Type 2 MI is coded with PDX in MDC 05, DRGs 280-282 (Acute Myocardial Infarction, Discharged Alive with MCC, with CC, and without CC/MCC, respectively) is assigned. A type 2 myocardial infarction is not a true acute myocardial infarction. CMS did not agree with changing MS-DRGs 280-282 but did propose modifications to the GROUPER logic to allow cases reporting diagnosis code I21.A1 (Myocardial infarction type 2) as a secondary diagnosis to group to MS-DRGs 222 and 223 (Cardiac Defibrillator Implant with Cardiac Catheterization with AMI, HF or Shock with and without MCC, respectively) when reported with a listed procedure code for clinical consistency with the other MS-DRGs describing acute myocardial infarction.
• MDC-5: CMS received requests to add ICD-10-CM diagnosis code B33.24 (Viral cardiomyopathy) to the list of principal diagnoses for MS-DRGs 314, 315, and 316 (Other Circulatory System Diagnoses with MCC, with CC, and without CC/MCC, respectively) in MDC 05. Other viral diagnoses such as B33.20, viral carditis, B33.21, viral endocarditis, B33.22, viral myocarditis and B33.23, viral pericarditis are assigned to MDC 5 whereas B33.24 had been assigned to MDC 18 (Infectious and Parasitic Diseases). CMS is in agreement with this change.
• MDC-8: Proposing to add the three procedure code combinations listed below describing removal and replacement of the right knee joint that were inadvertently omitted from the logic to MS-DRGs 461, 462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629, and 630 in MDC 10. Adding:
  • 0SPC4JC (remove patellar surface) with 0SRV0JZ (Replace tibial surface with synthetic)
  • 0SPT4HZ (remove femoral surface) with 0sRV0JZ (Replace tibial surface with synthetic)
  • 0SPV4JZ (remove tibial surface) with 0SRV0JZ (Replace tibial surface with synthetic)
• MDC-16: Cytokine Release Syndrome (CRS) Logic currently DRGs 814-816. Previous to FY2022 PDX T80.89XA Other complications following infusion, transfusion and therapeutic injection, initial encounter with D89.831-D89.839. We will now have new codes for FY2022:
  • T80.82XA Complication of immune effector cellular therapy, initial encounter
  • T80.82XD Complication of immune effector cellular therapy, subsequent encounter
  • T80.82XS Complication of immune effector cellular therapy, sequela

With the finalization of new diagnosis codes T80.82- -as above, diagnosis code T80.89XA would no longer be reported and these cases would instead report new diagnosis code T80.82XA, as of October 1, 2021. Therefore, we are proposing to revise the structure of MS-DRGs 814, 815, and 816 by removing the logic that includes a principal diagnosis of T80.89XA with a secondary diagnosis of any CRS code D89.8- from MS-DRGs 814, 815, and 816 effective FY 2022.

OR to NON-OR and NON-OR to OR MS-DRG Changes

• Previously three control of bleeding in cranial cavity codes were assigned into various MDCs and MS-DRGs. These procedures always involve drilling into skull. Therefore, we are proposing to add procedure codes 0W310ZZ, 0W313ZZ, and 0W314ZZ to MDC 01 in MS-DRGs 23, 24, 25, 26, and 27 (“craniotomy” MS-DRGs) for FY 2022.
• Currently cases reporting a principal diagnosis not in MDC in which the below procedures are assigned are in 981, 982, and 983:
  • 0JB60ZZ, 0JB70ZZ and 0JB80ZZ for Excision of chest or back or abdomen subcutaneous tissue and fascia, open approach
  • 23 LITT procedures (D0Y-KZZ, DBY-KZZ, DDY-KZZ, DFY-KZZ, DGY-KZZ, DMY-KZZ, DVY0KZZ) depending on body part were listed as extensive OR procedures.
    Five procedure codes describing repair of esophagus, 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, 0DQ58ZZ
  • 0T9D0ZZ, Drainage of urethra, open approach

CMS states these should be “non-extensive” procedures as they are not extensive. Reassigning the above procedure codes listed from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC, respectively) when unrelated PDX for FY 2022.

• 22 procedure codes for drainage of various sites of subcutaneous tissue have been changed from “OR Procedures” to NON-OR Procedures. They should not have been OR procedures to begin with.
• Add XW0Q316, Introduction of Eladocagene exuparvovec into cranial cavity and brain, percutaneous, new technology group 6 as OR procedure and assign them to MSDRGs 628, 629, and 630; (Other Endocrine, Nutritional OR procedures) or MSDRGS 987-989 (Non extensive OR procedures with unrelated principal). This is because a burr hole is needed.
• For 0BBN0ZX (Excision of right pleura, open approach, diagnostic) and 0BBP0ZX (Excision of left pleura, open approach, diagnostic) CMS will be adding as an O.R. procedure assigned to MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. procedures with MCC, CC, without CC/MCC, respectively). They typically require the use of an operating room.
• CMS is proposing to add code 02WY3DZ (great vessel) as an O.R. procedure assigned to MS-DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the Circulatory System). We are also proposing to add codes 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ as O.R. procedures assigned to MS-DRGs 252, 253, and 254 (Other Vascular Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the Circulatory System).
• CMS is proposing to add the two procedure codes describing percutaneous reposition of the sacroiliac joint with internal fixation procedures (0SS734Z and 0SS834Z as O.R. procedures, assigned to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) and to MS–DRGs 987, 988, and 989 (Non- Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without MCC/CC, respectively).
  CMS is also proposing to add the two procedure codes describing percutaneous reposition of the hip joint with internal fixation procedures (0SS934Z and 0SSB34Z) as O.R. procedures, assigned to MS-DRGs 480, 481, and 482 (Hip and Femur Procedures Except Major Joint with MCC, with CC, and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) and to MS–DRGs 987, 988, and 989 (Non- Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without MCC/CC, respectively).
• Adding 8 procedure codes for insertion of or removal of spacer in/of shoulder joint, (0RH–8Z, 0RP—8Z to MS-DRGs 510, 511, and 512 (Shoulder, Elbow or Forearm Procedures, Except Major Joint Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) and to MS–DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without MCC/CC, respectively).
• CMS is proposing to add codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ for Extirpation of matter from upper or lower jaw, open or percutaneous endoscopic as O.R. procedures assigned to MS-DRGs 143, 144 and 145 (Other Ear, Nose, Mouth and Throat O.R. procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat).
• One requestor identified 22 ICD-10-PCS procedure codes that describe the open extirpation of matter from the subcutaneous tissue and fascia (0JC-0ZZ) that are currently not recognized as O.R. procedures. CMS is proposing to add the 22 ICD-10-PCS listed previously as O.R. procedures assigned to MS-DRGs 579, 580 and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures, with MCC, with CC, and without CC/MCC, respectively) in MDC 09 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) and MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs).
• CMS is proposing to maintain the current non-O.R. designation of ICD-10-PCS procedure codes 0TCB8ZZ and 0TCC8ZZ Extirpation of matter from bladder or balder neck endoscopic. We are also proposing to remove ICD-10-PCS procedure codes 0TC08ZZ, 0TC18ZZ, 0TC38ZZ, 0TC48ZZ, 0TC68ZZ, and 0TC78ZZ (Extirpation of matter from kidneys, kidney pelvis and ureters, as O.R. procedures. Under this proposal, these procedures would no longer impact MS-DRG assignment.
• CMS is proposing to remove procedure codes 0U9L0ZX and 0U9LXZX (Drainage of vestibular gland open or external) as O.R. procedures. Under this proposal, these procedure codes would no longer impact MS-DRG assignment.

We will be sending a follow up coding tip when the FY2022 IPPS Final Rule is published

References
https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-19637.pdf
https://www.cms.gov/medicare/acute-inpatient-pps/fy-2021-ipps-final-rule-home-page#1735
Website for MS-DRG Manual Version 39 for FY2022:
https://www.cms.gov/icd10m/version39-fullcode-cms/fullcode_cms/P0001.html
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html
https://www.cms.gov/medicare/icd-10/2022-icd-10-pcs

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The information contained in this post is valid at the time of posting. Viewers are encouraged to research subsequent official guidance in the areas associated with the topic as they can change rapidly.