Analysis of Final Rule for 2005 Revisions to the Medicare Hospital Inpatient Prospective Payment System

The final rule regarding fiscal year 2005 revisions to the Medicare hospital inpatient prospective payment system (PPS) was published in the August 11, 2004 issue of the Federal Register. This rule becomes effective on October 1, 2004. This analysis covers highlights of the rule that are of particular interest to health information management (HIM) professionals. Changes that were proposed in the proposed rule but not adopted in the final rule are not addressed. The final rule can be reviewed in its entirety by downloading it from this link: http://www.access.gpo.gov/su_docs/fedreg/a040811c.html .

DRG Reclassifications

Intracranial Hemorrhage and Stroke with Infarction (69FR48927)

The title of DRG 14 has been changed from “Intracranial Hemorrhage and Stroke With Infarction” to “Intracranial Hemorrhage or Cerebral Infarction.”

Centers for Medicare & Medicaid Services' (CMS') Rationale : The former title may be misleading because it implies that a combination of conditions exists when this DRG is assigned.

Heart Assist System and Implant (69FR48927)

Code 37.66, Insertion of implantable heart assist system, has been moved from DRG 525 to DRG 103. DRG 525 has been re-titled “Other Heart Assist System Implant” and DRG 103 has been re-titled “ Heart Transplant or Implant of Heart Assist System.”

Code 37.62, Insertion of nonimplantable heart assist system, has been moved from DRGs 104 and 105 (Cardiac Valve & Other Major Cardiothoracic Procedure With and Without Cardiac Catheterization) to DRG 525.

CMS' Rationale : One of the indications for ventricular assist devices has become destination therapy and this new indication is more clinically aligned with DRG 103. Once code 37.66 was removed from DRG 525, the average charges for code 37.62 more closely matched the average charges for the remaining cases in DRG 525.

Combination Cardiac Pacemaker Devices and Lead Codes (69FR48933)

The following pacemaker device and lead procedure code combinations have been added to DRGs 115 (Permanent Cardiac Pacemaker Implant With Acute Myocardial Infarction, Heart Failure, or Shock or AICD Lead or Generator Procedures) and 116 (Other Permanent Cardiac Pacemaker Implant).

• 00.53 & 37.70
• 00.53 & 37.71
• 00.53 & 37.72
• 00.53 & 37.73
• 00.53 & 37.74
• 00.53 & 37.76

CMS' Rationale : These procedure code combinations also describe pacemaker device and lead implantations that should be included in DRGs 115 and 116.

Artificial Anal Sphincter (69FR48934)

Codes 49.75, Implantation or revision of artificial anal sphincter, and 49.76, Removal of artificial anal sphincter, have been moved from DRGs 157 and 158 (Anal and Stomal Procedures With and Without CC) to DRGs 146 and 147 (Rectal Resection With and Wwithout CC).

CMS' Rationale : Codes 49.75 and 49.76 are not a clinical match to the other procedure codes found in DRGs 157 and 158. The other procedure codes in these DRGs are for simpler and less invasive procedures. Also, the average charges for DRGs 146 and 147 more closely resemble the actual average charges found in the MedPAR data for these cases.

360 Degree Spinal Fusions (69FR48934)

Code 81.61, 360 degree spinal fusion, single incision approach, has been moved from DRG 496 (Combined Anterior/Posterior Spinal Fusion) and reassigned to DRGs 497 and 498 (Spinal Fusion Except Cervical With and Without CC).

CMS' Rationale : Cases with code 81.61 have significantly lower average charges than other cases in DRG 496 and including code 81.61 in DRG 496 will have the effect of lowering the relative weights for DRG 496 in future years.

MDC 15: Newborns and Other Neonates with Conditions Originating in the Perinatal Period (69FR48938)

The following codes have been added to the list of major problems under DRGs 387 (Prematurity With Major Problems) and 389 (Full-Term Neonate With Major Problems):

• 398.91, Rheumatic heart failure (congestive)
• 402.01, Malignant hypertensive heart disease, with heart failure
• 402.11, Benign hypertensive heart disease, with heart failure
• 402.91, Unspecified hypertensive heart disease, with heart failure
• 404.01, Malignant hypertensive heart and renal disease, with heart failure
• 404.03, Malignant hypertensive heart and renal disease, with heart failure and renal failure
• 404.11, Benign hypertensive heart and renal disease, with heart failure
• 404.13, Benign hypertensive heart and renal disease, with heart failure and renal failure
• 404.91, Unspecified hypertensive heart and renal disease, with heart failure
• 404.93, Unspecified hypertensive heart and renal disease, with heart failure and renal failure
• 428.9, Heart failure, unspecified

CMS' Rationale : Other codes for heart failure are already listed as major problems under DRGs 387 and 389.

Burn Patients on Mechanical Ventilation (69FR48940)

DRGs 504 and 505 have been modified so that cases in which there is a principal diagnosis of extensive third degree burns or full-thickness burns and code 96.72, Continuous mechanical ventilation for 96 consecutive hours or more, is reported are assigned to these DRGs instead of DRGs 506 through 509. The title of DRG 504 has been changed to “Extensive Burns or Full Thickness Burns With Mechanical Ventilation 96+ Hours With Skin Graft.” The title of DRG 505 has been changed to “Extensive Burns or Full Thickness Burns With Mechanical Ventilation 96+ Hours Without Skin Graft.”

CMS' Rationale : Burn cases with code 96.72 reported have significantly longer average lengths of stay and average charges. These DRG modifications will recognize the impact of long-term mechanical ventilation on burn cases. Cases currently assigned to DRGs 504 and 505 that do not entail 96+ hours of mechanical ventilation will continue to be assigned to DRGs 504 and 505 because they would have extensive burns, as required by the DRG logic. DRGs 510 and 511 (Non-extensive Burns With and Without CC or Significant Trauma) are not included in the revised DRG logic. Cases currently assigned to DRG 510 or 511 that also report code 96.72 would not be reassigned to DRGs 504 and 505. In analyzing the data for cases assigned to DRG 510 or 511 with code 96.72 reported, CMS noted that that an incorrect principal diagnosis may have been reported for these cases. It would appear that the principal diagnosis may more appropriately be related to an inhalation injury, rather than a minor burn, if the inhalation injury was present at the time of admission. CMS recommended that hospitals review their medical records for cases assigned to DRGs 510 or 511 that had a code for mechanical ventilation to determine if there are coding errors or other problems.

Tracheostomy (69FR48942)

DRG 483 (Tracheostomy With Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth, and Neck Diagnoses) has been deleted and two new DRGs created that are distinguished according to whether or not a major O.R. procedure was performed:

• DRG 541 – Tracheostomy With Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth, and Neck Diagnoses with Major O.R. Procedure
• DRG 542 – Tracheostomy With Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth and Neck Diagnoses Without Major O.R. Procedure

CMS' Rationale : The presence or absence of code 96.72 does not explain differences in charges for patients within DRG 483. CMS expressed concern that code 96.72 may be underreported because of space limitations on the reimbursement claim. CMS found that the performance of an additional major O.R. procedure (in addition to the tracheostomy procedure required for this DRG assignment) does help to identify the more expensive patients within DRG 483. A major O.R. procedure is a procedure whose code is included on the list that would be assigned to DRG 468. These are the procedure codes listed in Appendix E of the Diagnosis Related Groups Definitions Manual.

Medicare Code Editor (MCE) Changes: Noncovered Procedures (69FR48945)

Changes were made to the MCE edit for noncovered procedures to conform to the national coverage decision on stem cell transplantation. See the final rule for specific details regarding the restructuring of this edit.

CMS' Rationale : The national coverage decision on stem cell transplantation provides for coverage of certain diagnoses and excludes coverage for other diagnoses. However, the vast majority of diagnoses are not mentioned as either covered or noncovered, which allows individual Medicare contractor consideration regarding provision of reimbursement for stem cell transplantation for these diagnoses. Therefore, diagnoses that are not mentioned as noncovered in the national coverage decision are not appropriate for inclusion in the edit for noncovered procedures.

Code 00.62, Percutaneous angioplasy or atherectomy of intracranial vessel(s), has been added to the MCE edit for Noncovered Procedures, as this procedure is not covered by Medicare under any circumstances. Code 00.61, Percutaneous angioplasty or atherectomy of precerebral (extracranial) vessel(s), has been identified as a Noncovered Procedure except when the following non-O.R. procedure and secondary diagnosis are also present:

• Non-O.R. Procedure: 00.63, Percutaneous insertion of carotid artery stent(s)
• Secondary Diagnosis: V70.7, Examination of participant in clinical trial

CMS' Rationale : These new procedure codes, effective October 1, 2004, should be included in the MCE edit for Noncovered Procedures in order to conform to current Medicare coverage policy.

Medicare Code Editor (MCE) Changes: Manifestations Not Allowed as Principal Diagnosis (69FR48947)

The following diagnosis codes have been added to the MCE edit for Manifestations Not Allowed as Principal Diagnosis:

• 289.52, Splenic sequestration
• 517.3, Acute chest syndrome
• 785.52, Septic shock

CMS' Rationale : These codes describe the manifestation of an underlying disease, and ICD-9-CM coding conventions require that the underlying etiologic condition be sequenced first.

Medicare Code Editor (MCE) Changes: Unacceptable Principal Diagnoses (69FR48947)

The following codes have been removed from the list of Unacceptable Principal Diagnoses:

• V53.01, Adjustment of cerebral ventricular (communicating) shunt
• V53.02, Adjustment of neuropacemaker (brain) (peripheral nerve) (spinal cord)

CMS' Rationale : These codes represent legitimate causes for inpatient admission.

Reassignment of Procedures among DRGs 468, 476, and 477 (69FR48950)

Code 51.23, Laparoscopic cholecystectomy, has been moved from DRG 468 (Extensive O.R. Procedure Unrelated to Principal Diagnosis) to DRG 477 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis).

The following new procedure codes have been assigned to DRGs 476 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis) and 477 (this DRG assignment would only occur when these procedures are unrelated to the principal diagnosis):

• 44.67, Laparoscopic procedures for creation of esophagogastric sphincteric competence
• 44.68, Laparoscopic gastroplasty
• 44.95, Laparoscopic gastric restrictive procedure
• 44.96, Laparoscopic revision of gastric restrictive procedure
• 44.97, Laparoscopic removal of gastric restrictive device(s)
• 44.98, Laparoscopic adjustment of size of adjustable gastric restrictive device

In DRG 476, these codes have been added to the section “With or Without Operating Room Procedures” in the Grouper logic.

CMS' Rationale : These procedures represent nonextensive O.R. procedures.

Pancreatic Islet Cell Transplantation in Clinical Trials (69FR48950)

An add-on payment has been established for cases classified to DRGs 302 (Kidney Transplant), 315 (Other Kidney and Urinary Tract O.R. Procedures), and 468 (Extensive O.R. Procedure Unrelated to Principal Diagnosis) when code 52.84, Autotransplantation of cells of islets of Langerhans, or code 52.85, Allotransplantation of cells of islets of Langerhans, is reported. In addition, the structure of DRG 315 has been modified so that patients receiving infusions of islet cells without any other surgical intervention will appropriately be assigned to DRG 315.

CMS' Rationale : The add-on payment is intended to reimburse the acquisition costs associated with islet cell procurement. These three DRGs were selected because they represent the most logical DRGs to which cases of islet cell transplantation would be assigned. The structure of DRG 315 was modified in order to recognize the surgical aspects of islet cell transplantation in the absence of any other surgical procedure.

Changes to the ICD-9-CM Coding System (69FR48953)

In response to the legislative requirement that ICD-9-CM codes be updated twice a year instead of just annually, CMS outlined changes to the ICD-9-CM maintenance process. This requirement for twice-yearly code changes was included in the provision of legislation that revised the standards and process for recognizing new technology under the inpatient PPS. Beginning in 2005, ICD-9-CM codes will be updated on April 1 and October 1 of each year. In order to meet deadlines associated with implementing code changes on April 1, the date of the second Coordination and Maintenance Committee held each year will be moved up to a date earlier in the fall.

Since the requirement for twice-yearly code updates is related to recognition of new technology, April 1 code revisions will be limited to those needed to describe new technologies and medical services. Topics considered at the fall ICD-9-CM Coordination and Maintenance Committee meeting will be considered for implementation on April 1 if a strong and convincing case is made by the requester. The request for a diagnosis or procedure code revision must identify why a new code is needed in April for purposes of the new technology process. The public would have an opportunity to comment on the expedited request. All other topics would be considered for the October 1 update.

The current means of disseminating information new, revised, and deleted ICD-9-CM codes will be used, including publication on the CMS and National Center for Health Statistics (NCHS) web sites and in the American Hospital Association's Coding Clinic for ICD-9-CM. CMS will strive to make the April 1 code updates available through these standard mechanisms five months prior to implementation (early November of the preceding year). Since no mid-year inpatient PPS rule is published, the April 1 code updates will not be published in a mid-year inpatient PPS rule. New procedure codes will be assigned to the same DRG in which its predecessor code was assigned.

CMS' Rationale : CMS believes that this approach captures the intent of the legislation, since the requirement for twice-yearly ICD-9-CM code updates was in the provision revising the standards and process for recognizing new technology under the inpatient PPS. In addition, the need for approval of new codes outside the existing cycle (October 1) arises most frequently and most acutely where the new codes will capture new technologies that are (or will be) under consideration for new technology add-on payments. CMS believes the legislative provision regarding twice-yearly code updates was intended to expedite data collection through the assignment of new ICD-9-CM codes for new technologies seeking higher payments. CMS' approach for implementing an April 1 code update process is designed to carry out that intention, while minimizing the additional administrative costs associated with mid-year changes to the ICD-9-CM codes.

GLIADEL® Chemotherapy Wafers (69FR48957)

A new DRG has been created that includes cases involving implantation of a chemotherapeutic agent (code 00.10) in which an acute complex central nervous system diagnosis is reported as the principal diagnosis. An example of an acute complex diagnosis is an intracranial abscess. GLIADEL® chemotherapy wafer cases have been assigned to this DRG. New DRG 543 (Craniotomy With Implantation of Chemotherapeutic Agent or Acute Complex Central Nervous System Principal Diagnosis) contains patients who undergo a craniotomy procedure with a principal diagnosis belonging to one of the following three categories:

• Patients with a major central nervous system infection, such as bacterial meningitis, encephalitis, or an intracranial abscess;
• Patients with a subarachnoid hemorrhage, intracranial hemorrhage, or an acute stroke;
• Patients with central nervous system trauma resulting in brain laceration or brain injury associated with an open head wound.

In addition, DRG 543 will include cases involving treatment using chemotherapeutic agents and devices implanted in the brain, such as implantable chemotherapeutic wafers.

The logic for DRG 543 is:

• Craniotomy procedure from DRGs 1 and 2 and procedure code 00.10, Implantation of chemotherapeutic agent; OR
• Craniotomy procedure from DRGs 1 and 2 and principal diagnosis of acute complex central nervous system (a list of the acute complex central nervous system diagnoses can be found on pages 48960-48971 in the final rule).

CMS' Rationale : A number of comments had been received by CMS requesting reassignment of GLIADEL® chemotherapy wafer treatment to a new or higher paying DRG. CMS felt the volume of GLIADEL® wafer cases is too small to warrant establishing a new DRG just for this procedure. No existing DRG was appropriate for classification of these cases. The creation of DRG 543 ensures that GLIADEL® cases are assigned to a DRG that is clinically coherent and reflects the resources used to treat these cases.

Intestinal Transplantation (69FR48976)

Code 46.97, Intestinal transplantation, has been moved from DRGs 148 and 149 (Major Small & Large Bowel Procedures With and Without CC) to DRG 480 (Liver Transplant). The title of DRG 480 has been changed to “Liver Transplant and/or Intestinal Transplant.”

CMS' Rationale : The cost of intestinal transplants is significantly higher than the payment for DRGs 148 and 149.

Add-on payments for new services and technologies

Drotrecogin Alfa (Activated) - Xigris® (69FR49006)

Xigris® has been removed from new technology status and no longer qualifies for an add-on payment. CMS encourages hospitals to continue to report code 00.11 for the administration of Xigris® in order to continue collecting data about the use of this technology.

Changes to DRGs Subject to the Postacute Care Transfer Policy (69FR49071)

Since DRG 483, the predecessor for new DRGs 541 and 542, was included in the postacute care transfer policy, these new DRGs have been added to this policy.

Reporting of Hospital Quality Data for Annual Hospital Payment Update (69FR49078)

The market basket update for each of fiscal years 2005 through 2007 will be reduced for any hospital that is expected to submit data on a set of ten quality indicators established by the Secretary of Health and Human Services and fails to do so.

To ensure that the quality data being reported are timely, complete, and accurate, CMS will be implementing a chart audit validation procedure. Data will be reabstracted using the Clinical Data Abstraction Contractors (CDACs). The CDACs will request a sample of paper charts from each hospital that submitted data and reabstract the quality measures using the CMS Abstraction and Reporting Tool (CART). Hospitals achieving an eighty percent agreement with the CDAC abstraction will be considered as providing valid data.

CMS' Response to AHIMA's Comments

AHIMA provided comments to CMS in response to the proposed rule regarding fiscal year 2005 changes to the Medicare inpatient hospital PPS (published in the May 18, 2004 issue of the Federal Register ). CMS responded to these comments directly and indirectly in the final rule:

Cardiac Resynchronization Therapy and Heart Failure

AHIMA Comments : “We believe that coders would follow the ICD-9-CM Official Guidelines for Coding and Reporting when sequencing the principal diagnosis for admissions involving cardiac resynchronization therapy. If the reason for admission is heart failure, then that condition would be sequenced as the principal diagnosis. When two conditions are equally responsible for the admission, the ICD-9-CM Official Guidelines for Coding and Reporting allow either condition to be sequenced as the principal diagnosis. In that case, the condition resulting in the higher-weighted DRG adjustment would likely be sequenced as the principal diagnosis.

We recommend that CMS continue to analyze the data in DRGs 535 and 536 and seek additional clinical input regarding the typical principal diagnosis for patients being admitted to evaluate the need for a CRT-D device. If the principal diagnosis is typically a condition other than congestive heart failure, consideration may need to be given to modifying the DRG structure such that these cases would still be assigned to the most appropriate DRG.”

CMS Response : Discussions between coding representatives from the American Hospital Association, American Health Information Management Association, National Center for Health Statistics, and CMS did not identify diagnosis sequencing problems for patients receiving a CRT-D, as was suggested by the manufacturer. A number of problems in coding the implantation of these devices using the procedure codes were discussed. In addition, CMS learned that physicians are not clearly and consistently documenting the types of devices being implanted. The Editorial Advisory Board for Coding Clinic for ICD-9-CM is developing a series of questions and answers to clearly illustrate to hospitals how the various devices, leads, and generators are to be correctly coded.

CMS agreed that coders should follow the ICD-9-CM Official Guidelines for Coding and Reporting . They will continue to examine data for these procedures in future years to ensure that assignment of cases to these DRGs remains appropriate.

MDC 20 (Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental Disorders): Drug-Induced Dementia

AHIMA Comments : “AHIMA disagrees with the classification of code 292.82, Drug-induced dementia, to DRGs 521 through 523. These DRGs describe alcohol/drug abuse and dependence. Drug-induced dementia can be caused by an adverse effect of a prescribed medication or a poisoning. Clearly, assignment to DRGs 521 through 523 is not appropriate if the drug-induced dementia is related to an adverse effect or poisoning due to a prescribed drug. We recommend that admissions for drug-induced dementia be classified to DRGs 521 through 523 only if there is a secondary diagnosis indicating alcohol/drug abuse or dependence.

Drug-induced dementia that is due to the adverse effect of a drug should be classified to the same DRGs as other types of dementia, such as DRG 429, Organic Disturbances and Mental Retardation. When drug-induced dementia is caused by a poisoning, either accidental or intentional, the appropriate poisoning code would be sequenced as the principal diagnosis and, therefore, these cases would likely already be assigned to DRGs 449 and 450, Poisoning and Toxic Effects of Drugs, Age Greater than 17, with and without CC respectively and DRG 451, Poisoning and Toxic Effects of Drugs, Age 0-17. We believe these would be the appropriate DRG assignments for drug-induced dementia due to a poisoning.”

CMS' Response : CMS acknowledged that patients develop drug-induced dementia from drugs that are prescribed as well as from drugs that are not prescribed. However, they still believe that dementia developed as a result of use of a drug is appropriately assigned to DRGs 521 through 523. CMS agreed that if the drug-induced dementia is caused by a poisoning, the appropriate poisoning code should be sequenced as the principal diagnosis.

CMS will continue to evaluate the DRG assignment for this code during the next year and further consider alternative DRG structures suggested by commenters, if warranted. They will also further examine the use of secondary diagnoses as a means of better classifying patients with drug-induced dementia. They also encouraged hospitals to examine the coding for these types of cases to determine if there are any coding or sequencing errors.

MDC 22 (Burns): Burn Patients on Mechanical Ventilation

AHIMA Comments : “AHIMA supports the restructuring of the burn DRGs to account for the use of mechanical ventilation. We share CMS' concern about possible mis-sequencing of diagnoses on claims resulting in a nonextensive burn being reported as the principal diagnosis instead of the more serious inhalation or respiratory condition that was the actual reason for inpatient admission. In some cases, the condition requiring mechanical ventilation may not develop until after admission. However, in some of the cases cited by CMS, it appeared that the nonextensive burn reported as the principal diagnosis was unlikely to be the most appropriate principal diagnosis. Hospitals are encouraged to review admissions assigned to DRG 510 or 511 (Nonextensive Burns with CC or Significant Trauma and Nonextensive Burns without CC or Significant Trauma, respectively) that have a code for mechanical ventilation (96.70-96.72) assigned in order to identify any coding errors. AHIMA recommends that identified cases of poor physician medical record documentation regarding the reason for inpatient admission or mechanical ventilation should be used as the basis for physician education to improve documentation practices.”

CMS'Response : CMS agreed with the suggestion that hospitals should review their medical records for cases assigned to DRGs 510 or 511 that had a code for mechanical ventilation to determine if there are coding errors. CMS also agreed that it is important for hospitals to have good medical record documentation in order to code accurately.

Pancreatic Islet Cell Transplantation in Clinical Trials

AHIMA Comments : “AHIMA agrees that providing an add-on payment for the acquisition costs associated with islet cell procurement is probably the best approach until more data are available. However, we believe there may be other DRGs than the three DRGs listed in the proposed rule. For example, if a patient has type I diabetes mellitus with ESRD and no other procedures are performed during the admission than the islet cell transplantation, the case would group to DRG 331, Other Kidney and Urinary Tract Diagnoses Age > 17 with CC, or DRG 332, Other Kidney and Urinary Tract Diagnoses Age > 17 without CC. We disagree with the DRG assignment listed in the proposed rule for a patient who had islet cells inserted via an open approach, without mention of any other procedure being performed. According to the proposed rule, this scenario would be assigned DRG 315 (Other Kidney and Urinary Tract O.R. Procedures). However, since approaches are not supposed to be coded separately, this admission would not be grouped to DRG 315 unless another procedure, in addition to the islet cell transplantation, was performed. Instead, we believe that DRG 331 or 332 (depending on whether any complications/comorbidities were present) would be the appropriate DRG.

We recommend that the add-on payment for acquisition costs associated with islet cell procurement be provided for any case for which codes 52.84 or 52.85 are assigned, regardless of the DRG assignment.”

CMS' Response : CMS acknowledged that the scenario they had described in the proposed rule that led to assignment of DRG 315 reflected incorrect coding practice. They modified the structure of DRG 315 so that patients receiving infusions of islet cells without any other surgical intervention will appropriately be assigned to DRG 315.

ICD-9-CM Coding

AHIMA Comments : “AHIMA supports CMS' proposed approach for implementing the new legislative requirement to update ICD-9-CM codes twice a year. Specifically, we agree that limiting the implementation of new codes on April 1 to those for which a strong and convincing case is made for an expedited implementation is the best approach and will reduce the additional administrative costs associated with twice-yearly updates to the coding system .

We request clarification of whether any new diagnosis codes might also be implemented on April 1. The proposed rule does not specifically indicate whether both diagnosis and procedure codes, as opposed to procedure codes only, would be implemented twice a year. Although the section of Public Law 108-173 that includes the requirement for updating ICD-9-CM codes twice a year is primarily related to the recognition of new technology under the inpatient prospective payment system, the language in the legislation does not limit the requirement to procedure codes. However, CMS' proposed approach requires the requestor of a code proposal to identify the reason why a new code is needed on April 1 for purposes of the new technology process. This requirement seems to preclude diagnosis codes. Therefore, please clarify whether new diagnosis codes are intended to be included in the April 1 update.

We recommend that the April 1 and October 1 addenda should be posted on the National Center for Health Statistics (new diagnosis codes) and CMS (new procedure codes) web sites at least four months prior to the effective date for the code changes. Adequate lead time for vendors and providers to prepare for implementation (e.g., training, systems changes) is critical to ensuring industrywide compliance with the effective dates.

It is clear to AHIMA that CMS must actively promote HHS' adoption and implementation of the ICD-10-CM and ICD-10-PCS coding systems, if appropriate, consistent, and accurate clinical information that is reflective of patients' medical conditions and care provided is to be available to support this country's healthcare data needs, including the foundation of CMS' IP-PPS reimbursement system.”

CMS' Response : CMS indicated that the same means used to disseminate information regarding the October 1 code changes, including posting the information on the CMS and NCHS web sites, would be used to disseminate information on the April 1 code changes. They will strive to have the April 1 updates available through these web sites five months prior to implementation. CMS also agreed that the requirement for twice-yearly ICD-9-CM code updates includes both diagnosis and procedure codes. Therefore, consideration will be given to updates to both the diagnosis and procedure parts of ICD-9-CM on April 1 if a strong and convincing case can be made that either a diagnosis or procedure code is necessary to capture a new technology. CMS acknowledged that it may be necessary to recognize a new disease, such as SARS, on April 1 so that a new technology directed toward the disease can be more easily identified. CMS anticipates that most, if not all, requests for April 1 ICD-9-CM code updates will apply to procedure codes. But while it is unlikely that there will be many such disease code requests for an April 1 update, they will not restrict such requests for consideration.

Regarding AHIMA's comments on the need to promote adoption of ICD-10-CM and ICD-10-PCS, CMS acknowledged that there are concerns with the ICD-9-CM code set and indicated that they are assessing the National Committee on Vital and Health Statistics recommendation to initiate the rulemaking process for adoption of ICD-10-CM and ICD-10-PCS.

Other DRG Issues: Severe Sepsis

AHIMA Comments : “While the data may not support making any changes to the current DRG structure for sepsis at this time, we recommend that CMS continue to analyze data on sepsis cases in the future to determine if changes to the DRG structure are warranted. The new codes in category 995 are still relatively new, and both coding professionals and clinicians are still learning about the proper use of the various related terms and proper application and sequencing of the codes. Although the new codes in category 995 became effective October 1, 2002, there has been a lot of confusion regarding these codes and their appropriate use and sequencing. Therefore, the current data on sepsis may not be entirely accurate.”

CMS' Response : CMS agreed that there has been confusion in the correct use of the SIRS (Systemic Inflammatory Response Syndrome) codes. The related section of the ICD-9-CM code book is being revised, effective October 1, 2004, to help resolve this confusion. Additional coding instructions are also being developed on the correct use of these codes. These instructions will be published in the American Hospital Association's Coding Clinic for ICD-9-CM . These actions should lead to more consistency in identifying and reporting cases of severe sepsis. Once this information is available, CMS will review the data to determine any needed DRG modifications to better capture severe sepsis.

Drotrecogin Alfa (activated) – Xigris®

AHIMA is concerned about maintaining consistency in the coding requirements, in the case of technology, procedure requirements that are turned on and off to facilitate the technology payment process. We urge the agency to consider an on-going requirement for reporting of procedures codes whether or not an add-on payment has been terminated. This, as we noted in the example above would be for on-going reporting and data, that can only help the agency in the future should the use of such procedures be warranted for other situations. Such consistency would also allow providers to provide a steady stream of data, rather than an intermittent approach that can add to confusion and error.”

CMS' Response : CMS indicated that they while they encourage hospitals to continue to report the code for administration of Xigris®, even though there is no longer a payment incentive to do so, they cannot require hospitals to code for the use of the drug.

Proposed Changes to DRGs Subject to the Postacute Care Transfer Policy

AHIMA Comments : “AHIMA opposes CMS' proposal to expand the criteria for the postacute transfer policy. This proposal seems to be driven by the split of DRG 483 into two new DRGs that do not meet the postacute transfer criteria. We believe significantly lowering the volume threshold disrupts the premise behind the original criteria and would result in the inappropriate expansion of the postacute transfer policy to DRGs that should not be included under this policy.”

CMS' Response : Based on the comments received, CMS has decided not to adopt the proposed alternate criteria for the postacute care transfer policy at this time.

Resources

The final rule regarding the fiscal year 2005 revisions to the Medicare hospital inpatient prospective payment system can be found in the August 11, 2004 issue of the Federal Register located at: http://www.access.gpo.gov/su_docs/fedreg/a040811c.html .

AHIMA's letter to CMS regarding the proposed rule for fiscal year 2005 revisions to the Medicare hospital inpatient prospective payment system can be found on the Policy and Government Relations section of the AHIMA web site.