[Federal Register: August 1, 2003 (Volume 68, Number 148)]
[Rules and Regulations]
[Page 45345-45394]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01au03-9]
To assist readers in referencing sections contained in this
document, we are providing this linked table of contents.
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Part III
Department of Health and Human Services
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Centers of Medicare & Medicaid Services
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42 CFR Parts 412 and 413
Medicare Program; Changes to the Hospital Inpatient Prospective Payment
Systems and Fiscal Year 2004 Rates; Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412 and 413
[CMS-1470-F]
RIN 0938-AL89
Medicare Program; Changes to the Hospital Inpatient Prospective
Payment Systems and Fiscal Year 2004 Rates
AGENCY: Centers for Medicare and Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: We are revising the Medicare hospital inpatient prospective
payment systems (IPPS) for operating and capital costs to implement
changes arising from our continuing experience with these systems. In
addition, in the Addendum to this final rule, we are describing changes
to the amounts and factors used to determine the rates for Medicare
hospital inpatient services for operating costs and capital-related
costs. These changes are applicable to discharges occurring on or after
October 1, 2003. We also are setting forth rate-of-increase limits as
well as policy changes for hospitals and hospital units excluded from
the IPPS that are paid on a cost basis subject to these limits.
Among other changes that we are making are: changes to the
classification of cases to the diagnosis-related groups (DRGS); changes
to the long-term care (LTC)-DRGs and relative weights; the introduction
of updated wage data used to compute the wage index; the approval of
new technologies for add-on payments; changes to the policies governing
postacute care transfers; payments to hospitals for the direct and
indirect costs of graduate medical education; pass-through payments for
nursing and allied health education programs; determination of hospital
beds and patient days for payment adjustment purposes; and payments to
critical access hospitals (CAHs).
EFFECTIVE DATES: The provisions of this final rule, except the
provisions of Sec. 412.230(e)(2)(ii)(A) (because it grants an
exemption) and Sec. 412.278(f)(2)(i), are effective on October 1,
2003. The provisions of Sec. 412.230(e)(2)(ii)(A) and Sec.
412.278(f)(2)(i) are effective on August 1, 2003. This rule is a major
rule as defined in 5 U.S.C. 804(2). Pursuant to 5 U.S.C. 801(a)(1)(A),
we are submitting a report to Congress on this rule on August 1, 2003.
FOR FURTHER INFORMATION CONTACT:
Stephen Phillips, (410) 786-4548, Operating Prospective Payment,
Diagnosis-Related Groups (DRGs), Wage Index, New Medical Services and
Technology, Patient Transfers, Counting Beds and Patient Days, and
Hospital Geographic Reclassifications Issues.
Tzvi Hefter, (410) 786-4487, Capital Prospective Payment, Excluded
Hospitals, Nursing and Allied Health Education, Graduate Medical
Education, and Critical Access Hospital Issues, and Long-Term Care
(LTC)-DRGs.
Sandra Hetrick, (410) 786-4542, RCE Limits.
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Acronyms
AHIMA American Health Information Management Association
AHA American Hospital Association
CAH Critical access hospital
CBSAs Core Based Statistical Areas
CC Complication or comorbidity
CMS Centers for Medicare & Medicaid Services
CMSA Consolidated Metropolitan Statistical Areas
COBRA Consolidated Omnibus Reconciliation Act of 1985, Pub. L. 99-272
CPI Consumer Price Index
CRNA Certified registered nurse anesthetist
DRG Diagnosis-related group
DSH Disproportionate share hospital
FDA Food and Drug Administration
FQHC Federally qualified health center
FTE Full-time equivalent
FY Federal fiscal year
GME Graduate medical education
HIPC Health Information Policy Council
HIPAA Health Insurance Portability and Accountability Act, Pub. L. 104-
191
HHA Home health agency
ICD-9-CM International Classification of Diseases, Ninth Revision, and
Clinical Modification
ICD-10-PCS International Classification of Diseases Tenth Edition, and
Procedure Coding System
IME Indirect medical education
IPPS Acute care hospital inpatient prospective payment system
IRF Inpatient Rehabilitation Facility
LDP Labor, delivery, and postpartum
LTC-DRG Long-term care diagnosis-related group
LTCH Long-term care hospital
MCE Medicare Code Editor
MDC Major diagnostic category
MDH Medicare-dependent small rural hospital
MedPAC Medicare Payment Advisory Commission
MedPAR Medicare Provider Analysis and Review File
MEI Medicare Economic Index
MGCRB Medicare Geographic Classification Review Board
MPFS Medicare Physician Fee Schedule
MSA Metropolitan Statistical Area
NECMA New England County Metropolitan Areas
NCHS National Center for Health Statistics
NCVHS National Committee on Vital and Health Statistics
O.R. Operating room
PPS Prospective payment system
PRA Per resident amount
ProPAC Prospective Payment Assessment Commission
PRRB Provider Reimbursement Review Board
RCE Reasonable compensation equivalent
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RHC Rural health center
RRC Rural referral center
SCH Sole community hospital
SNF Skilled nursing facility
TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248
UHDDS Uniform Hospital Discharge Data Set
Table of Contents
I. Background
A. Summary
B. Summary of the Provisions of the May 19, 2003 Proposed Rule
C. Public Comments Received to the May 19, 2003 IPPS Proposed
Rule
II. Changes to DRG Classifications and Relative Weights
A. Background
B. DRG Reclassification
1. General
2. Review of DRGs for Complications or Comorbidity (CC) Split
3. MDC 1 (Diseases and Disorders of the Nervous System)
a. Revisions of DRGs 1 and 2
b. DRG 23 (Nontraumatic Stupor and Coma)
4. MDC 5 (Diseases and Disorders of the Circulatory System)
a. DRG 478 (Other Vascular Procedures With CC) and DRG 479
(Other Vascular Procedures Without CC)
b. DRGs 514 (Cardiac Defibrillator Implant With Cardiac
Catheterization) and 515 (Cardiac Defibrillator Implant Without
Cardiac Catheterization)
5. MDC 8 (Diseases and Disorders of the Musculoskeletal System
and Connective Tissue)
6. MDC 15 (Newborns and Other Neonates with Conditions
Originating in the Perinatal Period)
a. Nonneonate Diagnoses
b. Heart Failure Codes for Newborns and Neonates
7. MDC 17 (Myeloproliferative Diseases and Disorders and Poorly
Differentiated Neoplasms)
8. MDC 23 (Factors Influencing Health Status and Other Contracts
with Health Services)
a. Implantable Devices
b. Malignancy Codes
9. Medicare Code Editor (MCE) Change
10. Surgical Hierarchies
11. Refinement of CCs
12. Review of Procedure Codes in DRGs 468, 476, and 477
a. Moving Procedure Codes from DRG 468 or DRG 477 to MDCs
b. Reassignment of Procedures among DRGs 468, 476, and 477
c. Adding Diagnosis Codes to MDCs
13. Changes to the ICD-9-CM Coding System
14. Other Issues
a. Cochlear Implants
b. Burn Patients on Mechanical Ventilation
c. Multiple Level Spinal Fusion
d. Heart Assist System Implant
e. Drug-Eluting Stents
f. Artificial Anal Sphincter
C. Recalibration of DRG Weights
D. LTC-DRG Reclassifications and Relative Weights for LTCHs for
FY 2004
1. Background
2. Changes in the LTC-DRG Classifications
a. Background
b. Patient Classifications into DRGs
3. Development of the Final FY 2004 LTC-DRG Relative Weights
a. General Overview of Development of the LTC-DRG Relative
Weights
b. Data
c. Hospital-Specific Relative Value Methodology
d. Low Volume LTC-DRGs
4. Steps for Determining the Final FY 2004 LTC-DRG Relative
Weights
E. Add-On Payments for New Services and Technologies
1. Background
2. FY 2004 Status of Technology Approved for FY 2003 Add-On
Payments:
Drotrecogin Alfa (Activated)--Xigris[reg]
3. FY 2004 Applicants for New Technology Add-On Payments
a. Bone Morphogenetic Proteins (BMPs) for Spinal Fusions
b. GLIADEL[reg] Wafer
4. Review of the High-Cost Threshold
5. Technical Changes
III. Changes to the Hospital Wage Index
A. Background
B. FY 2004 Wage Index Update
C. FY 2004 Wage Index Changes
1. Elimination of Wage Costs Associated with Rural Health
Clinics and Federally Qualified Health Centers
2. Paid Hours
D. Verification of Wage Data from the Medicare Cost Reports
E. Computation of the FY 2004 Wage Index
F. Revisions to the Wage Index Based on Hospital Redesignation
1. General
2. Effects of Reclassification
G. Requests for Wage Data Corrections
H. Modification of the Process and Timetable for Updating the
Wage Index
IV. Other Decisions and Changes to the IPPS for Operating Costs and
GME Costs
A. Transfer Payment Policy
1. Transfers to Another Acute Care Hospital
2. Technical Correction
3. Expanding the Postacute Care Transfer Policy to Additional
DRGs
B. Rural Referral Centers
1. Case-Mix Index
2. Discharges
C. Indirect Medical Education (IME) Adjustment and
Disproportionate Share Hospital (DSH) Adjustment
1. Available Beds and Patient Days: Background
2. Unoccupied Beds
3. Nonacute Care Beds and Days
4. Observation Beds and Swing-Beds
5. Labor, Delivery, and Postpartum Beds and Days
6. Days Associated with Demonstration Projects under Section
1115 of the Act
7. Dual-Eligible Patient Days
8. Medicare+Choice (M+C) Days
D. Medicare Geographic Classification Review Board (MGCRB)
Reclassification Process
E. Costs of Approved Nursing and Allied Health Education
Activities
1. Background
2. Continuing Education Issue for Nursing and Allied Health
Education Activities
3. Programs Operated by Wholly Owned Subsidiary Educational
Institutions of Hospitals
F. Payment for Direct Costs of Graduate Medical Education
1. Background
2. Prohibition Against Counting Residents Where Other Entities
First Incur the Training Costs
3. Rural Track FTE Limitation for Purposes of Direct GME and IME
for Urban Hospitals that Establish Separately Accredited Approved
Medical Programs in a Rural Area
a. Change in the Amount of Rural Training Time Required for an
Urban Hospital to Qualify for an Increase in the Rural Track FTE
Limitation
b. Inclusion of Rural Track FTE Residents in the Rolling Average
Calculation
4. Technical Changes Related to Affiliated Groups and Affiliated
Agreements
G. Notification of Updates to the Reasonable Compensation
Equivalent (RCE) Limits
1. Background
2. Publication of the Updated RCE Limits
3. Application of RCE Limits
4. Exceptions to RCE Limits
5. Geographic Area Classifications for RCE Limits
V. PPS for Capital-Related Costs
VI. Changes for Hospitals and Hospital Units Excluded from the IPPS
A. Payments to Excluded Hospitals and Hospital Units
1. Payments to Existing Excluded Hospitals and Hospital Units
2. Updated Caps for New Excluded Hospitals and Units
6. Implementation of a PPS for IRFs
4. Development of a PPS for Inpatient Psychiatric Facilities
5. Implementation of a PPS for LTCHs
6. Report of Adjustment (Exception) Payments
B. Payment for Services Furnished at Hospitals-Within-Hospitals
and Satellite Facilities
C. Clarification of Classification Requirements for LTCHs
D. Criteria for Payment on a Reasonable Cost Basis for Clinical
Diagnostic Laboratory Services Performed by CAHs
E. Technical Changes
VII. MedPAC Recommendations
VIII. Other Required Information
A. Requests for Data from the Public
B. Collection of Information Requirements
Regulation Text
Addendum--Schedule of Standardized Amounts Effective with Discharges
Occurring On or After October 1, 2003 and Update Factors and Rate-
of-Increase Percentages Effective With Cost Reporting Periods
Beginning On or After October 1, 2003
Tables
Table 1A--National Adjusted Operating Standardized Amounts,
Labor/Nonlabor
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Table 1C--Adjusted Operating Standardized Amounts for Puerto
Rico, Labor/Nonlabor
Table 1D--Capital Standard Federal Payment Rate
Table 2--Hospital Average Hourly Wage for Federal Fiscal Years
2002 (1998 Wage Data), 2003 (1999 Wage Data), and 2004 (2000 Wage
Data) Wage Indexes and 3-Year Average of Hospital Average Hourly
Wages
Table 3A--3-Year Average Hourly Wage for Urban Areas
Table 3B--3-Year Average Hourly Wage for Rural Areas
Table 4A--Wage Index and Capital Geographic Adjustment Factor
for Urban Areas
Table 4B--Wage Index and Capital Geographic Adjustment Factor
for Rural Areas
Table 4C--Wage Index and Capital Geographic Adjustment Factor
for Hospitals That Are Reclassified
Table 4F--Puerto Rico Wage Index and Capital Geographic
Adjustment Factor
Table 4G--Pre-Reclassified Wage Index for Urban Areas
Table 4H--Pre-Reclassified Wage Index for Rural Areas
Table 5--List of Diagnosis-Related Groups (DRGs), Relative
Weighting Factors, and Geometric and Arithmetic Mean Length of Stay
(LOS)
Table 6A--New Diagnosis Codes
Table 6B--New Procedure Codes
Table 6C--Invalid Diagnosis Codes
Table 6D--Invalid Procedure Codes
Table 6E--Revised Diagnosis Code Titles
Table 6F--Revised Procedure Code Titles
Table 6G--Additions to the CC Exclusions List
Table 6H--Deletions from the CC Exclusions List
Table 7A--Medicare Prospective Payment System Selected
Percentile Lengths of Stay FY 2002: MedPAR Update March 2003 GROUPER
V20.0
Table 7B--Medicare Prospective Payment System Selected
Percentile Lengths of Stay: FY 2002 MedPAR Update March 2003 GROUPER
V21.0
Table 8A--Statewide Average Operating Cost-to-Charge Ratios for
Urban and Rural Hospitals (Case-Weighted)
Table 8B--Statewide Average Capital Cost-to-Charge Ratios (Case-
Weighted)
Table 9--Hospital Reclassifications and Redesignations by
Hospital--FY 2004
Table 10--Thresholds to Qualify for New Technology Add-On
Payments: FY 2004
Table 11--LTC-DRGs Relative Weights and Geometric and Five-
Sixths of the Average Length of Stay--FY 2004
Appendix A--Regulatory Impact Analysis
Appendix B--Recommendation of Update Factors for Operating Cost
Rates of Payment for Inpatient Hospital Services
I. Background
A. Summary
1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
Section 1886(d) of the Social Security Act (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 pay for the capital-related costs of hospital inpatient
stays under a prospective payment system (PPS). 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; and 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 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 may vary based on the outcome
of the statutory calculations.
If the hospital is an approved teaching hospital, 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 that have been approved for special add-on payments. To
qualify, a new technology must demonstrate that it is a substantial
clinical improvement over technologies otherwise available, and that,
absent an add-on payment, it 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 outlier payment due is added to the DRG-adjusted base payment rate,
plus any DSH, IME, and new technology add-on adjustments.
Although payments to most hospitals under the IPPS are made on the
basis of the standardized amounts, some categories of hospitals are
paid the higher of a hospital-specific rate based on their costs in a
base year (the higher of FY 1982, FY 1987, or FY 1996) or the IPPS rate
based on the standardized amount. For example, sole community hospitals
(SCHs) are the sole source of care in their areas, and Medicare-
dependent, small rural hospitals (MDHs) are a major source of care for
Medicare beneficiaries in their areas. Both of these categories of
hospitals are afforded this special payment protection in order to
maintain access to services for beneficiaries (although MDHs receive
only 50 percent of the difference between the IPPS rate and their
hospital-specific rates if the hospital-specific rate is higher than
the IPPS 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 PPS, payments are adjusted by the same DRG for the case as they
are under the operating IPPS. Similar adjustments are also made for IME
and DSH as under the operating IPPS. In addition, hospitals may receive
an outlier payment 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
specialty hospitals and hospital units are excluded from the IPPS.
These hospitals and units are: psychiatric hospitals and units,
rehabilitation hospitals and units; long-term care hospitals (LTCHs);
children's hospitals; and cancer hospitals. Various sections of the
Balanced Budget Act of 1997 (Pub. L. 105-33), the Medicare, Medicaid
and SCHIP [State Children's Health Insurance Program] Balanced Budget
Refinement Act of 1999 (Pub. L. 106-113), and the Medicare, Medicaid,
and SCHIP Benefits Improvement and Protection Act of 2000 (Pub. L. 106-
554) provide for the implementation of PPSs for rehabilitation
hospitals and units (referred to as inpatient rehabilitation
[[Page 45349]]
facilities (IRFs)), psychiatric hospitals and units, and LTCHs, as
discussed below. Children's hospitals and cancer hospitals continue to
be paid under reasonable cost-based reimbursement.
The existing regulations governing payments to excluded hospitals
and hospital units are located in 42 CFR parts 412 and 413.
a. Inpatient Rehabilitation Facilities
Under section 1886(j) of the Act, as amended, rehabilitation
hospitals and units (IRFs) have been transitioned from payment based on
a blend of reasonable cost reimbursement subject to a hospital-specific
annual limit under section 1886(b) of the Act and prospective payments
for cost reporting periods beginning January 1, 2002 through September
30, 2002, to payment on a full prospective payment system basis
effective for cost reporting periods beginning on or after October 1,
2002 (66 FR 41316, August 7, 2001 and 67 FR 49982, August 1, 2002). The
existing regulations governing payments under the IRF PPS are located
in 42 CFR part 412, subpart P.
b. LTCHs
Under the authority of sections 123(a) and (c) of Public Law 106-
113 and section 307(b)(1) of Public Law 106-554, LTCHs are being
transitioned from being paid for inpatient hospital services based on a
blend of reasonable cost-based reimbursement under section 1886(b) of
the Act to fully Federal prospective rates during a 5-year period,
beginning with cost reporting periods that start on or after October 1,
2002. For cost reporting periods beginning on or after October 1, 2006,
LTCHs will be paid under the fully Federal prospective payment rate
(the June 6, 2003 LTCH PPS final rule (68 FR 34122)). LTCHs may elect
to be paid based on full PPS payments instead of a blended payment in
any year during the 5-year transition period. The existing regulations
governing payment under the LTCH PPS are located in 42 CFR part 412,
subpart O.
c. Psychiatric Hospitals and Units
Sections 124(a) and (c) of Public Law 106-113 provide for the
development of a per diem PPS for payment for inpatient hospital
services furnished in psychiatric hospitals and units under the
Medicare program, effective for cost reporting periods beginning on or
after October 1, 2002. This system must include an adequate patient
classification system that reflects the differences in patient resource
use and costs among these hospitals and maintain budget neutrality. We
are in the process of developing a proposed rule, to be followed by a
final rule, to implement the PPS for psychiatric hospitals and units
(referred to as inpatient psychiatric facilities (IPFs).
3. Critical Access Hospitals
Under sections 1814, 1820, and 1834(g) of the Act, payments are
made to critical access hospitals (CAHs) (that is, rural hospitals or
facilities that meet certain statutory requirements) for inpatient and
outpatient services on a reasonable cost basis. Reasonable cost is
determined under the provisions of section 1861(v)(1)(A) of the Act and
existing regulations under 42 CFR parts 413 and 415.
4. Payments for Graduate Medical Education
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.
B. Summary of the Provisions of the May 19, 2003 Proposed Rule
On May 19, 2003, we published a proposed rule in the Federal
Register (68 FR 27154) that set forth proposed changes to the Medicare
IPPS for operating costs and for capital-related costs in FY 2004. We
also set forth proposed changes relating to payments for GME costs,
payments to CAHs, and payments to providers classified as psychiatric
hospitals and units that continue to be excluded from the IPPS and paid
on a reasonable cost basis. These changes were proposed to be effective
for discharges occurring on or after October 1, 2003.
The following is a summary of the major changes that we proposed
and the issues we addressed in the May 19, 2003 proposed rule:
1. Changes to the DRG Reclassifications and Recalibrations of Relative
Weights
As required by section 1886(d)(4)(C) of the Act, we proposed annual
adjustments to the DRG classifications and relative weights. Based on
analyses of Medicare claims data, we proposed to establish a number of
new DRGs and make changes to the designation of diagnosis and procedure
codes under other existing DRGs.
Among the proposed changes discussed were:
[sbull] Expansion of the number of DRGs that are split on the basis
of the presence or absence of complications or comorbidities (CCs). The
DRGs we proposed to split were: DRG 4 (Spinal Procedures) into proposed
new DRGs 531 and 532 (Spinal Procedures With and Without CC,
respectively); DRG 5 (Extracranial Vascular Procedures) into proposed
new DRGs 533 and 534 (Extracranial Vascular Procedures With and Without
CC, respectively); DRG 231 (Local Excision and Removal of Internal
Fixation Devices Except Hip and Femur) into proposed new DRGs 537 and
538 (Local Excision and Removal of Internal Fixation Devices Except Hip
and Femur With and Without CC, respectively); and DRG 400 (Lymphoma and
Leukemia With Major O.R. Procedure) into proposed new DRGs 539 and 540
(Lymphoma and Leukemia With Major O.R. Procedure With and Without CC,
respectively).
[sbull] Creation of a new DRG for patients with an intracranial
vascular procedure and an intracranial hemorrhage. The DRG we proposed
to create was DRG 528 (Intracranial Vascular Procedure With a Principal
Diagnosis of Hemorrhage).
[sbull] Creation of two new DRGs, differentiated on the basis of
the presence or absence of a CC, for craniotomy patients with only a
vascular shunt procedure. The DRGs we proposed to create were DRGs 529
and 530 (Ventricular Shunt Procedure With CC and Without CC,
respectively).
[sbull] Creation of two new DRGs to differentiate current DRG 514
(Cardiac Defibrillator Implant With Cardiac Catheterization) on the
basis of whether the patient does or does not experience any of the
following symptoms: acute myocardial infarction, heart failure, or
shock. The new DRGs we proposed were DRG 535 (Cardiac Defibrillator
Implant With Cardiac Catheterization and With Acute Myocardial
Infarction, Heart Failure, or Shock) and DRG 536 (Cardiac Defibrillator
Implant With Cardiac Catheterization and Without Acute Myocardial
Infarction, Heart Failure, or Shock)
[sbull] Changes in the DRG assignment of certain congenital
anomalies that currently result in patients being assigned to newborn
DRGs even when the patient is actually an adult. We also proposed
adding to the list of major problems in newborns that affect DRG
assignment.
[sbull] Modification of DRG 492 (Chemotherapy With Acute Leukemia
as
[[Page 45350]]
Secondary Diagnosis) to include in this DRG cases receiving high-dose
Interleukin-2 (IL-2) chemotherapy for patients with advanced renal cell
cancer and advanced melanoma.
We also presented our analysis of applicants for add-on payments
for high-cost new medical technologies and proposed a revision to the
high-cost threshold for a new technology or medical service to qualify
for add-on payments.
[sbull] We proposed to continue to make add-on payments for Xigris.
[sbull] We discussed new applications for add-on payments for FY
2004.
[sbull] We proposed to reduce the high-cost threshold for a new
technology or medical service to qualify for add-on payments from 1
standard deviation above the geometric mean standardized charge for
cases in the DRGs to which the new technology is assigned to 75 percent
of 1 standard deviation.
2. Changes to the Hospital Wage Index
We proposed revisions to the wage index and the annual update of
the wage data. Specific issues addressed in this section included the
following:
[sbull] The FY 2004 wage index update, using wage data from cost
reporting periods that began during FY 2000.
[sbull] Exclusion of the wage data for rural health centers (RHCs)
and Federally qualified health centers (FQHCs) from the calculation of
the FY 2004 wage index.
[sbull] Exclusion of paid hours associated with military and jury
duty leave from the wage index calculation, and request for comments on
possible exclusion of paid lunch or meal break hours.
[sbull] Revisions to the wage index based on hospital
redesignations and reclassifications.
[sbull] Amendments to the timetable for reviewing and verifying the
wage data that will be in effect for the FY 2005 wage index.
3. Other Decisions and Changes to the PPS for Inpatient Operating and
GME Costs
In the proposed rule, we discussed several provisions of the
regulations in 42 CFR Parts 412 and 413 and set forth certain proposed
changes concerning the following:
[sbull] Expansion of the current postacute transfer policy to 19
additional DRGs.
[sbull] Clarification of our policies that would be applied to
counting hospital beds and patient days, in particular with regard to
the treatment of swing-beds and observation beds, for purposes of the
IME and DSH adjustments.
[sbull] Changes in our policy relating to nursing and allied health
education payments to wholly owned subsidiary educational institutions
of hospitals.
[sbull] Clarification of our policy relating to application of
redistribution of costs and community support funds in determining a
hospital's resident training costs.
[sbull] A change in the amount of rural training time required for
an urban hospital to qualify for an increase in the rural track FTE
limitation.
[sbull] Inclusion of FTE residents training in rural tracks in a
hospital's rolling average calculation.
4. PPS for Capital-Related Costs
We discussed the payment requirements for capital-related costs. We
did not propose any changes to the policies on payments to hospitals
for capital-related costs.
5. Changes for Hospitals and Hospital Units Excluded From the IPPS
We discussed the following proposed revisions and clarifications
concerning excluded hospitals and hospital units and CAHs:
[sbull] Revisions to the operation of excluded grandfathered
hospitals-within-hospitals in effect on September 30, 1999.
[sbull] Clarification of the classification criteria for LTCHs.
[sbull] Clarification of the policy on payments for laboratory
services provided by a CAH to patients outside a CAH.
6. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits
In the Addendum to the May 19, 2003 proposed rule, we proposed
changes to the amounts and factors for determining the FY 2004
prospective payment rates for operating costs and capital-related
costs. We also established the proposed threshold amounts for outlier
cases. In addition, we addressed update factors for determining the
rate-of-increase limits for cost reporting periods beginning in FY 2004
for hospitals and hospital units excluded from the PPS.
7. Impact Analysis
In Appendix A of the proposed rule, we set forth an analysis of the
impact that the proposed changes would have on affected hospitals.
8. Recommendation of Update Factor for Hospital Inpatient Operating
Costs
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 2004 for the following:
[sbull] Large urban area and other area average standardized
amounts (and hospital-specific rates applicable to SCHs and MDHs) for
hospital inpatient services paid under the IPPS for operating costs.
[sbull] Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by hospitals and
hospital units excluded from the IPPS.
9. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, the Medicare Payment Advisory
Commission (MedPAC) is required to submit a report to Congress, no
later than March 1 of each year, that reviews and makes recommendations
on Medicare payment policies. In the proposed rule, we discussed the
MedPAC recommendations concerning hospital inpatient payment policies
and presented our response to those recommendations. For further
information relating specifically to the MedPAC March 1 report or to
obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit
MedPAC's Web site at: http://www.medpac.gov.
C. Public Comments Received in Response to the May 19, 2003 IPPS
Proposed Rule
We received approximately 4,200 timely items of correspondence
containing multiple comments on the May 19, 2003 proposed rule.
Summaries of the public comments and our responses to those comments
are set forth below under the appropriate heading.
II. Changes to 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 DRGs) for inpatient
discharges and adjust payments under the IPPS based on appropriate
weighting factors assigned to each DRG. Therefore, under the IPPS, we
pay 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
[[Page 45351]]
resources used to treat cases in all DRGS.
Congress recognized that it would be necessary to recalculate the
DRG relative weights periodically to account for changes in resource
consumption. Accordingly, section 1886(d)(4)(C) of the Act requires
that the Secretary adjust the DRG classifications and relative weights
at least annually. These adjustments are made to reflect changes in
treatment patterns, technology, and any other factors that may change
the relative use of hospital resources. Changes to the DRG
classification system and the recalibration of the DRG weights for
discharges occurring on or after October 1, 2003 are discussed below.
B. DRG Reclassification
1. General
Cases are classified into DRGs for payment under the IPPS based on
the principal diagnosis, up to eight additional diagnoses, and up to
six procedures performed during the stay. In a small number of DRGs,
classification is also based on the age, sex, and discharge status of
the patient. The diagnosis and procedure information is reported by the
hospital using codes from the International Classification of Diseases,
Ninth Revision, Clinical Modification (ICD-9-CM).
For FY 2003, cases are assigned to one of 510 DRGs in 25 major
diagnostic categories (MDCs). Most MDCs are based on a particular organ
system of the body. For example, MDC 6 is Diseases and Disorders of the
Digestive System. This approach is used because clinical care is
generally organized in accordance with the organ system affected.
However, some MDCs are not constructed on this basis because they
involve multiple organ systems (for example, MDC 22 (Burns)). The table
below lists the 25 MDCs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Major diagnostic categories
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................... Diseases and Disorders of the Nervous System.
2.......................................... Diseases and Disorders of the Eye.
3.......................................... Diseases and Disorders of the Ear, Nose, Mouth, and Throat.
4.......................................... Diseases and Disorders of the Respiratory System.
5.......................................... Diseases and Disorders of the Circulatory System
6.......................................... Diseases and Disorders of the Digestive System.
7.......................................... Diseases and Disorders of the Hepatobiliary System and Pancreas.
8.......................................... Diseases and Disorders of the Musculoskeletal System and Connective Tissue.
9.......................................... Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast.
10......................................... Endocrine, Nutritional and Metabolic Diseases and Disorders.
11......................................... Diseases and Disorders of the Kidney and Urinary Tract.
12......................................... Diseases and Disorders of the Male Reproductive System.
13......................................... Diseases and Disorders of the Female Reproductive System.
14......................................... Pregnancy, Childbirth, and the Puerperium.
15......................................... Newborns and Other Neonates with Conditions Originating in the Perinatal Period.
16......................................... Diseases and Disorders of the Blood and Blood Forming Organs and Immunological Disorders.
17......................................... Myeloproliferative Diseases and Disorders and Poorly Differentiated Neoplasms.
18......................................... Infectious and Parasitic Diseases (Systemic or Unspecified Sites).
19......................................... Mental Diseases and Disorders.
20......................................... Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental Disorders.
21......................................... Injuries, Poisonings, and Toxic Effects of Drugs.
22......................................... Burns.
23......................................... Factors Influencing Health Status and Other Contacts with Health Services.
24......................................... Multiple Significant Trauma.
25......................................... Human Immunodeficiency Virus Infections.
--------------------------------------------------------------------------------------------------------------------------------------------------------
In general, cases are assigned to an MDC based on the patient's
principal diagnosis before assignment to a DRG. However, for FY 2003,
there are eight DRGs to which cases are directly assigned on the basis
of ICD-9-CM procedure codes. These DRGs are for heart, liver, bone
marrow, lung, simultaneous pancreas/kidney, and pancreas transplants
(DRGs 103, 480, 481, 495, 512, and 513, respectively) and for
tracheostomies (DRGs 482 and 483). Cases are assigned to these DRGs
before they are classified to an MDC.
Within most MDCs, cases are then divided into surgical DRGs and
medical DRGs. Surgical DRGs are based on a hierarchy that orders
operating room (O.R.) procedures or groups of O.R. procedures by
resource intensity. Medical DRGs generally are differentiated on the
basis of diagnosis and age (less than or greater than 17 years of age).
Some surgical and medical DRGs are further differentiated based on the
presence or absence of a complication or a comorbidity (CC).
Generally, nonsurgical procedures and minor surgical procedures
that are not usually performed in an operating room are not treated as
O.R. procedures. However, there are a few non-O.R. procedures that do
affect DRG assignment for certain principal diagnoses, for example,
extracorporeal shock wave lithotripsy for patients with a principal
diagnosis of having urinary stones.
Patient's diagnosis, procedure, discharge status, and demographic
information is fed into the Medicare claims processing systems and
subjected to a series of automated screens called the Medicare Code
Editor (MCE). The MCE screens are designed to identify cases that
require further review before classification into a DRG.
After patient information is screened through the MCE and any
further development of the claim is conducted, cases are classified
into the appropriate DRG by the Medicare GROUPER software program. The
GROUPER program was developed as a means of classifying each case into
a DRG on the basis of the diagnosis and procedure codes and, for a
limited number of DRGs, demographic information (that is, sex, age, and
discharge status).
[[Page 45352]]
After cases are screened through the MCE and assigned to a DRG by
the GROUPER, a base DRG payment is calculated by the PRICER software.
The PRICER calculates the payments for each case covered by the IPPS
based on the DRG relative weight and additional factors associated with
each hospital, such as IME and DSH adjustments. These additional
factors increase the payment amount to hospitals above the base DRG
payment.
The records for all Medicare hospital inpatient discharges are
maintained in the Medicare Provider Analysis and Review (MedPAR) file.
The data in this file are used to evaluate possible DRG classification
changes and to recalibrate the DRG weights. However, in the July 30,
1999 IPPS final rule (64 FR 41500), we discussed a process for
considering non-MedPAR data in the recalibration process. In order for
us to consider the feasibility of using particular non-MedPAR data, we
must have sufficient time to evaluate and test the data. The time
necessary to do so depends upon the nature and quality of the non-
MedPAR data submitted. Generally, however, a significant sample of the
non-MedPAR data should be submitted by mid-October for consideration in
conjunction with the next year's proposed rule. This allows us time to
test the data and make a preliminary assessment as to the feasibility
of using the data. Subsequently, a complete database should be
submitted by early December for consideration in conjunction with the
next year's proposed rule.
Many of the changes to the DRG classifications are the result of
specific issues brought to our attention by interested parties. We
encourage individuals with concerns about DRG classifications to bring
those concerns to our attention in a timely manner so they can be
carefully considered for possible inclusion in the next proposed rule
and so any proposed changes may be subjected to public review and
comment. Therefore, similar to the timetable for interested parties to
submit non-MedPAR data for consideration in the DRG recalibration
process, concerns about DRG classification issues should be brought to
our attention no later than early December in order to be considered
and possibly included in the next annual proposed rule updating the
IPPS.
In the May 19, 2003 proposed rule, we proposed numerous changes to
the DRG classification system for FY 2004. The changes we proposed to
the DRG classification system for FY 2004, the public comments we
received concerning the proposed changes, the final DRG changes, and
the methodology used to recalibrate the DRG weights are set forth
below. The changes we are implementing in this final rule will be
reflected in the revised FY 2004 GROUPER version 21.0 and effective for
discharges occurring on or after October 1, 2003. Unless otherwise
noted in this final rule, our DRG analysis is based on data from the
March 2002 update of the FY 2002 MedPAR file, which contains hospital
bills received through March 31, 2002, for discharges in FY 2002.
2. Review of DRGs for a Split Based on Presence or Absence of a CC
In an effort to improve the clinical and cost cohesiveness of the
DRG classification system, we have evaluated whether additional DRGs
should be split based on the presence or absence of a CC. There are
currently 116-paired DRGs that reflect a split based on the presence or
absence of a CC. We last performed a systematic evaluation and
considered changes to the DRGs to recognize the within-DRG cost
differences based on the presence or absence of CCs in 1994 (May 27,
1994 IPPS proposed rule, 59 FR 27715). In the May 27, 1994 IPPS
proposed rule, we described a refined DRG system based on a list of
secondary diagnoses that have a major effect on the resources that
hospitals use to treat patients across DRGs. We analyzed how the
presence of the secondary diagnosis affected resource use compared to
other secondary diagnoses, and classified these secondary diagnoses as
non-CC, CC, or major CC. After finalizing the classification of
secondary diagnoses, we evaluated which collapsed DRGs should be split
based on the presence of a major CC, other CC, or both.\1\ However, we
did not implement this refined system because we did not believe it
would be prudent policy to make changes for which we could not predict
the effect on the case-mix (the average DRG relative weight for all
cases) and, thus, payments (60 FR 29209). We were concerned that we
would be unable to fulfill the requirement of section
1886(d)(4)(C)(iii) of the Act that aggregate payments may not be
affected by DRG reclassification and recalibration of weighting
factors. That is, our experience has been that hospitals respond to
major changes to the DRGs by changing their coding practices in ways
that increase total payments (for example, by beginning to include ICD-
9-CM codes that previously did not affect payment for a case). Because
changes in coding behavior do not represent a real increase in the
severity of the overall mix of cases, total payments should not
increase. We believe that the only way to ensure this behavioral
response does not lead to higher total payments is to make an
offsetting adjustment to the system in advance of the fiscal year for
which the changes are effective.
---------------------------------------------------------------------------
\1\ The complete description of the analysis was published in
the Health Care Financing Review (Edwards, N., Honemann, D., Burley,
D., Navarro, M., ``Refinement of the Medicare Diagnosis-Related
Groups to Incorporate a Measure of Severity,'' Health Care Financing
Review, Winter 1994, Vol. 16, No. 2, p. 45).
---------------------------------------------------------------------------
Section 301(e) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (Pub. L. 106-554) authorized the
Secretary to make such a prospective adjustment to the average
standardized amounts for discharges occurring on or after October 1,
2001, to ensure the total payment impacts of changes to the DRGs do not
result in any more or less total spending than would otherwise occur
without the changes (budget neutrality).
We are not proceeding with implementing a refined DRG system at
this time, pending a decision whether to replace the ICD-9-CM coding
system with another classification system. The refined DRG system
discussed in the May 1994 IPPS proposed rule involved a complete and
thorough assessment of all of the ICD-9-CM diagnosis codes in order to
establish an illness severity level associated with each code. Rather
than undertaking the time-consuming process of establishing illness
severity levels for all ICD-9-CM codes at this time, we believe the
more prudent course would be to delay this evaluation pending the
potential replacement of ICD-9-CM. For example, the National Committee
on Health and Vital Statistics (NCHVS) is considering making a
recommendation to the Secretary on whether to recommend the adoption of
the ICD-10-CM and the ICD-10--Procedure Coding System (PCS) as the
national uniform standard coding system for inpatient reporting.
In the meantime, we have undertaken an effort to identify
additional DRGs where a CC split appears most justified. Our analysis
identified existing DRGs that meet the following criteria: a reduction
in variance in charges within the DRG of at least 4 percent; fewer than
75 percent of all patients in the current DRG would be assigned to the
with-CC DRG; and the overall payment impact (higher payments for cases
in the with-CC DRG offset by lower payments for cases in the without-CC
DRG) is at least $40 million.
The following four DRGs meet these criteria: DRG 4 (Spinal
Procedures) and
[[Page 45353]]
DRG 5 (Extracranial Vascular Procedures) in MDC 1 (Diseases and
Disorders of the Nervous System); DRG 231 (Local Excision and Removal
of Internal Fixation Devices Except Hip and Femur) in MDC 8 (Diseases
and Disorders of the Musculoskeletal and Connective Tissue); and DRG
400 (Lymphoma and Leukemia with Major O.R. Procedure) in MDC 17
(Myeloproliferative Diseases and Disorders and Poorly Differentiated
Neoplasms).
The following data indicate that the presence or absence of a CC
was found to have a significant impact on patient charges and on
average lengths of stay in these four DRGs.
------------------------------------------------------------------------
Average
DRG Number of Average length of
cases charges stay
------------------------------------------------------------------------
DRG 4 (Current).................. 4,488 $35,074 7.3
With CC...................... 2,514 46,071 10.0
Without CC................... 1,974 21,070 3.9
DRG 5 (Current).................. 64,942 18,613 2.9
With CC...................... 29,296 23,213 4.1
Without CC................... 35,646 14,833 2.0
DRG 231 (Current)................ 8,971 20,147 4.9
With CC...................... 4,565 25,948 6.9
Without CC................... 4,406 14,136 2.9
DRG 400 (Current)................ 4,275 39,953 9.0
With CC...................... 2,990 49,044 11.2
Without CC................... 1,285 18,799 4.0
------------------------------------------------------------------------
Therefore, we proposed to establish the following new DRGs:
proposed DRG 531 (Spinal Procedures With CC) and proposed DRG 532
(Spinal Procedures Without CC) in MDC 1; proposed DRG 533 (Extracranial
Procedures With CC) (the proposed rule incorrectly included
``Vascular'' in the title) and proposed DRG 534 (Extracranial
Procedures Without CC) (the proposed rule incorrectly included
``Vascular'' in the title) in MDC 1; proposed DRG 537 (Local Excision
and Removal of Internal Fixation Devices Except Hip and Femur With CC)
and proposed DRG 538 (Local Excision and Removal of Internal Fixation
Devices Except Hip and Femur Without CC) in MDC 8; and proposed DRG 539
(Lymphoma and Leukemia With Major O.R. Procedure With CC) and DRG 540
(Lymphoma and Leukemia With Major O.R. Procedure Without CC) in MDC 17.
We proposed that DRGs 4, 5, 231, and 400 would become invalid.
Comment: Seven commenters supported the proposed expansion of the
number of DRGs related to spinal procedures and extracranial vascular
procedures and the removal of internal fixation devices. One commenter
commended CMS for the proposed change to payments for implanting spinal
code stimulation devices. Referring to proposed new DRGs 531 and 532,
the commenter stated that most inpatients receiving a spinal cord
stimulator implant have a comorbid condition, which adds significantly
to the cost of care and can serve as a barrier to patient access.
Another commenter specifically supported the new DRGs 533 and 534 for
extracranial vascular procedures.
One commenter expressed support for CMS' recognition of cost
differences within a given DRG based on the presence or absence of a CC
and encouraged CMS to continue to consider secondary diagnoses that can
have a substantial effect on hospital resources when restructuring DRGs
based on cost considerations.
Response: We appreciate the support for these proposals and are
adopting them as final without further modification.
We are establishing new DRGs 531, 532, 533, 534, 537, 538, 539, and
540, effective for discharges occurring on or after October 1, 2003. As
a result of establishing these new DRGS, DRGs 4, 5, 231, and 400 are
invalid, effective October 1, 2003. We will continue to monitor whether
additional DRGs should be split based on the presence or absence of a
CC.
3. MDC 1 (Diseases and Disorders of the Nervous System)
a. Revisions of DRGs 1 and 2
In the FY 2003 IPPS final rule, we split DRGs 1 and 2 (Craniotomy
Age 17 With and Without CC, respectively) based on the
presence or absence of a CC (67 FR 49986). We have received several
proposals related to devices or procedures that are used in a small
subset of cases from these DRGS. These proposals argue that the current
payment for these devices or procedures under DRGs 1 and 2 is
inadequate.
Therefore, we conducted an analysis of the charges for various
procedures and diagnoses within DRGs 1 and 2 to assess whether further
changes to these DRGs may be warranted. Currently, the average charges
for cases assigned to DRGs 1 and 2 are approximately $55,000 and
$30,000, respectively. In the May 19, 2003 proposed rule, we proposed
to create two separate new DRGs for: (1) cases with an intracranial
vascular procedure and a principal diagnosis of an intracranial
hemorrhage; and (2) craniotomy cases with a ventricular shunt procedure
(absent another procedure). The former set of cases are much more
expensive than those presently in DRGs 1 and 2; the latter set of cases
are much less expensive.
(1) Intracranial Vascular Procedures
Our analysis indicated that patients with an intracranial vascular
procedure and a principal diagnosis of an intracranial hemorrhage were
significantly more costly than other cases in DRGS 1 and 2. These
patients have an acute condition with a high severity of illness and
risk of mortality. There were 917 cases in DRGs 1 and 2 with an
intracranial vascular procedure and a principal diagnosis of hemorrhage
with average charges of approximately $113,884, which are much higher
than the average charges of DRGS 1 and 2 noted above.
We also found 890 cases that had an intracranial vascular procedure
without a principal diagnosis of hemorrhage (for example, nonruptured
aneurysms). These cases are generally less acutely ill than those
involving ruptured aneurysms, and have a lower risk of mortality. Among
these 890 cases, the average charges were approximately $52,756, which
are much more similar to the average charges for all cases in DRGs 1
and 2.
[[Page 45354]]
Based on this analysis, we proposed to create new DRG 528
(Intracranial Vascular Procedure With a Principal Diagnosis of
Hemorrhage) for patients with an intracranial vascular procedure and an
intracranial hemorrhage. We proposed that cases involving intracranial
vascular procedures without a principal diagnosis of hemorrhage would
remain in DRGs 1 and 2.
We indicated that proposed new DRG 528 would have the following
principal diagnoses:
[sbull] 094.87, Syphilitic ruptured cerebral aneurysm
[sbull] 430, Subarachnoid hemorrhage
[sbull] 431, Intracerebral hemorrhage
[sbull] 432.0, Nontraumatic extradural hemorrhage
[sbull] 432.1, Subdural hemorrhage
[sbull] 432.9, Unspecified intracranial hemorrhage
And operating room procedures:
[sbull] 02.13, Ligation of meningeal vessel
[sbull] 38.01, Incision of vessel, intracranial vessels
[sbull] 38.11, Endarterectomy, intracranial vessels
[sbull] 38.31, Resection of vessel with anastomosis, intracranial
vessels
[sbull] 38.41, Resection of vessel with replacement, intracranial
vessels
[sbull] 38.51, Ligation and stripping of varicose veins,
intracranial vessels
[sbull] 38.61, Other excision of vessels, intracranial vessels
[sbull] 38.81, Other surgical occlusion of vessels, intracranial
vessels
[sbull] 39.28, Extracranial-intracranial (EC-IC) vascular bypass
[sbull] 39.51, Clipping of aneurysm
[sbull] 39.52, Other repair of aneurysm
[sbull] 39.53, Repair of arteriovenous fistula
[sbull] 39.72, Endovascular repair or occlusion of head and neck
vessels
[sbull] 39.79, Other endovascular repair of aneurysm of other
vessels
(2) Ventricular Shunt Procedures
We also found that craniotomy patients who had a ventricular shunt
procedure (absent another procedure) were significantly less costly
than other craniotomy patients in DRGs 1 and 2. Ventricular shunts are
normally performed for draining intracranial fluid. A ventricular shunt
is a less extensive procedure than the other intracranial procedures in
DRGs 1 and 2. As a result, if a ventricular shunt is the only
intracranial procedure performed, these cases will typically be less
costly.
There were 4,373 cases in which only ventricular shunt procedures
were performed. These cases had average charges of approximately
$27,188. However, the presence or absence of a CC had a significant
impact on patient charges and lengths of stay. There were 2,533 cases
with CC, with average charges of approximately $33,907 and an average
length of stay of 8.2 days. In contrast, there were 1,840 cases without
CC, with average charges of approximately $17,939 and an average length
of stay of 3.7 days.
Therefore, we proposed to create two new DRGs, splitting with CC
and without CC, for patients with only a vascular shunt procedure:
proposed new DRG 529 (Ventricular Shunt Procedures With CC) and
proposed new DRG 530 (Ventricular Shunt Procedures Without CC).
We indicated that proposed new DRG 529 would consist of any
principal diagnosis in MDC 1 (erroneously cited as MDC 5 in the
proposed rule), with the presence of a CC and one of the following
operating room procedures:
[sbull] 02.31, Ventricular shunt to structure in head and neck
[sbull] 02.32, Ventricular shunt to circulatory system
[sbull] 02.33, Ventricular shunt to thoracic cavity
[sbull] 02.34, Ventricular shunt to abdominal cavity and organs
[sbull] 02.35, Ventricular shunt to urinary system
[sbull] 02.39, Other operations to establish drainage of ventricle
[sbull] 02.42, Replacement of ventricular shunt
[sbull] 02.43, Removal of ventricular shunt
We proposed that the proposed new DRG 530 would consist of any
principal diagnosis in MDC 1 (erroneously cited as MDC 5 in the
proposed rule) with one of the operating room procedures listed above
for the proposed new DRG 529, but without the presence of a CC.
Comment: Four commenters supported the proposed creation of two
DRGs to capture ventricular shunt procedures. Ten commenters supported
the proposed creation of new DRG 528 for an intracranial vascular
procedure with a principal diagnosis of hemorrhage.
Two commenters requested that CMS verify its GROUPER analysis and
clarify in the final rule the estimated number of cases that will be
assigned to DRG 528. One commenter also believed that CMS is
underestimating the volume of hemorrhagic cases that would be assigned
to this new DRG. The commenter indicated that its analysis of MedPAR
2001 data demonstrated 1,550 cases.
Response: We conducted an analysis based on later available MedPAR
data and found 1,596 cases that would be assigned to DRG 528 (based on
a full year of MedPAR data). This volume is consistent with the
commenter's analysis, although different MedPAR files were used in the
analysis. In the proposed rule (68 FR 27161), we reported 917 cases
based on preliminary data (6 months' worth of cases) that we analyzed
when we considered the proposed change in the DRG classification. There
were actually 1,354 cases grouped to the proposed new DRG 528 for the
proposed rule.
Comment: One commenter suggested the creation of a new companion
DRG to DRG 528 for intracranial vascular procedures for unruptured
cerebral aneurysms. The commenter was concerned that the charges for
endovascular repair of unruptured aneurysms is higher than other
procedures currently assigned to DRG 2.
Response: The average charges for unruptured aneurysm cases varied
according to the DRG to which the cases were assigned. The average
charges for these cases in DRG 1 were slightly higher than the overall
charges for that DRG, of approximately $69,682 and $54,900,
respectively. However, we found that these charges are consistent with
the variation of charges within this DRG and, therefore, did not
propose a change in the DRG reclassification. Similarly, for cases
assigned to DRG 2, we found the average charges of approximately
$36,077 are consistent with the overall average charges of that DRG of
approximately $32,000. We will continue to monitor these cases.
Comment: Three commenters requested a change to the DRG assignment
of cases involving implantation of GLIADEL[reg] chemotherapy wafers to
treat brain tumors.\2\ One of the commenters offered two options:
create a new DRG or reassign these cases to DRG 484 (Craniotomy for
Multiple Significant Trauma). The commenter cited an example in which
CMS has in the past grouped together in the same DRG cases that are
clinically dissimilar but similar in resource intensity when there were
no other options available. For FY 1998 (62 FR 45974), coronary stent
cases were moved from DRG 112 (Percutaneous Cardiovascular Procedures)
to DRG 116 (Other Permanent Cardiac Pacemaker Implant or PTCA with
Coronary Artery Stent Implant). In that instance, CMS concluded that,
although coronary artery stent cases are not clinically similar to the
pacemaker cases in DRG 116, the resource consumption of these
[[Page 45355]]
cases is very similar. The commenter contended that, absent another
appropriate craniotomy DRG, the same argument could be applied to
assigning cases with GLIADEL[reg] wafer to DRG 484.
---------------------------------------------------------------------------
\2\ We also discuss this issue later in this preamble under
section II.E.3.b. relative to the application for new technology
add-on payments for the GLIADEL[reg] wafer.
---------------------------------------------------------------------------
In a comment on the proposed rule, the manufacturer of this implant
provided estimated FY 2003 average costs and charges for these cases.
Its report indicated that the costs of the cases of $24,280 would be
the same for cases assigned to DRG 1 and DRG 2, and the charges of the
cases of $50,394 would be the same for both DRGs. The manufacturer
requested that we analyze the available data in the FY 2003 MedPAR file
to identify GLIADEL[reg] cases. The manufacturer believed these data
support the need for a DRG change.
One commenter agreed with our determination that this technology is
currently reflected within the DRG weights and does not meet the
definition of a new technology.
Response: In our analysis of the data from the March 2003 update of
the FY 2003 MedPAR file, we found a total of 61 cases in which the ICD-
9-CM procedure code 00.10 (Implantation of a chemotherapeutic agent)
was reported for cases assigned to DRGs 1 and 2. There were 38 cases
assigned to DRG 1 and 23 cases assigned to DRG 2. Consistent with the
GROUPER logic for these DRGs that splits cases based on the presence or
absence of CCs, we found that the average standardized charges in DRGs
1 and 2 were approximately $64,864 and $42,624, respectively. We
believe that while the charges for GLIADEL[reg] wafer cases may be
higher than the average standardized charges for DRG 2, they are within
the normal variation of the overall charges within each DRG.
We note that the DRGs are a system of averages, and there is
expected to be variation in the average charges for different
procedures and services across all DRGs. Hospitals are expected to be
able to finance some higher cost procedures with lower cost procedures
within the same DRG as well as across DRGs. Although the average
charges of the cases we identified in our analysis are somewhat higher
than the average charges of all cases in these DRGs, they are within
the range of other procedures included in these DRGs. By way of
comparison, we are creating a new DRG for cases with an intracranial
vascular procedure and a principal diagnosis of an intracranial
hemorrhage on the basis of our analysis that showed the average charges
for these cases were $113,884. This is approximately $59,000 more than
the average charges in DRG 1 (more than the total charges for the
GLIADEL[reg] cases reported by the commenter) and approximately $84,000
more than the average charges in DRG 2.
We also are concerned that there may be insufficient volume of
cases to warrant the establishment of a new DRG for this technology.
Thus, before considering the creation of a new DRG for these cases, we
would like to review a full year of data, as well as consider
alternative options if they appear warranted. It would also be
necessary to provide opportunity for public comment on any potential
changes to the DRG assignment of these cases before proceeding with a
final change.
Currently, DRG 484 includes complex, multiple significant trauma
cases; that is, patients with a principal diagnosis of trauma and at
least two significant trauma diagnosis codes (either as principal or
secondary diagnosis) from different body site categories. While this
DRG includes craniotomy, it is assigned to MDC 24 (Multiple Significant
Trauma). While the treatment for glioblastoma multiforme is
significant, we do not believe these cases are clinically similar to
other cases currently assigned to DRG 484.
We also are concerned that there may be insufficient volume to
warrant the establishment of a new DRG for this technology, and we
would like to review a full year of data, as well as consider
alternative options if they appear warranted. It also would be
necessary to provide opportunity for public comment on any potential
changes before proceeding with a final change.
Comment: Two commenters pointed out a typographical error in our
proposal. The commenters indicated that we proposed new DRGs 529 and
530 for placement in MDC 5; the correct MDC should have been MDC 1.
Response: We agree with the commenters and have corrected this
placement, as indicated in the discussion above.
After consideration of the comments received, we are adopting as
final the three new proposed DRGs 528, 529, and 530. These DRGS will be
effective for discharges occurring on or after October 1, 2003.
b. DRG 23 (Nontraumatic Stupor and Coma)
In DRG 23 (Nontraumatic Stupor and Coma), there are currently six
principal diagnoses identified by the following ICD-9-CM diagnosis
codes: 348.4, Compression of the brain; 348.5, Cerebral edema; 780.01,
Coma; 780.02, Transient alteration of awareness; 780.03, Persistent
vegetative state; and 780.09, Other alteration of consciousness. Code
780.02 is often used to describe the diagnosis of psychiatric patients
rather than the diagnosis of patients with severe neurological
disorders. The treatment plan for a patient with ``transient alteration
of awareness'' is clinically very different from the treatment plan for
a coma patient. Furthermore, many patients with this diagnosis are
treated in psychiatric facilities rather than in acute care hospitals.
Although there are neurological patients who present with the
complaint of ``transient alteration of awareness,'' the cause of this
alteration of consciousness is commonly identified, and the principal
diagnosis for the hospital admission is the etiology of the alteration
of consciousness rather than the symptom itself. For the few remaining
neurological patients for whom the cause is not identified and for whom
code 780.02 is assigned as the principal diagnosis, we believe that the
care of these patients is different than the care of patients with coma
or cerebral edema.
Because we believe the patients with a principal diagnosis of
``transient alteration of consciousness'' are more clinically related
to the patients in DRG 429 (Organic Disturbances and Mental
Retardation) in MDC 19 (Mental Diseases and Disorders), we proposed
that patients who are assigned a principal diagnosis of code 780.02
would be assigned to DRG 429 instead of DRG 23. DRG 429 also contains
similar diagnoses, such as code 293.81, Organic delusional syndrome and
code 293.82, Organic hallucinosis syndrome. (We note that the charges
for the patient cases in DRGs 23 and 429 are very similar ($11,559 and
$11,713, respectively), so the proposed movement of code 780.02 from
DRG 23 to DRG 429 would have minimal payment impact.) Moving this
diagnosis code as proposed would also consolidate diagnoses treated
frequently in psychiatric hospitals in those DRGs that are likely to be
a part of the upcoming proposed Medicare psychiatric facility PPS.
Comment: An organization representing hospitals supported our
proposed change, while other commenters opposed the change. The
commenters who opposed the change stated that code 780.02 is included
in the ICD-9-CM chapter for signs and symptoms of ill-defined
conditions. The commenters believed that since this code is included in
a chapter with ill-defined conditions, it would be inappropriate to
move the code to DRG 429. The commenters stated that this
[[Page 45356]]
code does not describe a mental disorder; and disagreed with our
statement in the proposed rule that code 780.02 was similar to codes
293.81 and 293.82. The commenters further stated that they disagreed
with our assertion that many patients with a diagnosis of transient
alteration of awareness are treated in psychiatric facilities.
Response: Our review of claims data indicates that code 780.02 is a
frequent diagnosis for patients admitted to psychiatric hospitals. Many
patients are likely to present with transient alteration of awareness
at the time of admission to a psychiatric hospital. The cause of this
transient alteration is likely to be diagnosed during the stay, leading
to the assignment of another, more specific principal diagnosis.
However, in many patients, this is not the case, and no underlying
cause for the transient alteration of awareness is determined. When a
more definitive diagnosis cannot be made, the patient is left with the
diagnosis of alteration of awareness. We recognize the difficulty in
assigning symptoms such as these to the most appropriate DRG. However,
we will note that the average charges for DRG 23 (where the code is
currently assigned) and DRG 429 are similar.
Therefore, we are proceeding with the assignment of code 780.02 to
DRG 429 based on a review of psychiatric hospital data as well as a
clinical comparison of cases already assigned to DRG 429.
4. MDC 5 (Diseases and Disorders of the Circulatory System)
a. DRG 478 (Other Vascular Procedures With CC) and DRG 479 (Other
Vascular Procedures Without CC)
Code 37.64 (Removal of heart assist system) in DRGs 478 and 479
describes the operative, as opposed to bedside, removal of a heart
assist system. Based on comments we received suggesting that code 37.64
was inappropriately assigned to DRGs 478 and 479, we reviewed the
MedPAR data for both DRGs 478 and 479 and DRG 110 (Major Cardiovascular
Procedures With CC) and DRG 111 (Major Cardiovascular Procedures
Without CC) to assess the appropriate assignment of code 37.64.
We found that there were only 17 cases of code 37.64 in DRGs 478
and 479, with an average length of stay of 14.1 days and average
charges of $105,153. There were a total of 90,591 cases in DRGs 478 and
479 that did not contain code 37.64. These cases had an average length
of stay of 6.6 days and average charges of $31,879. In DRGs 110 and
111, we found an average length of stay of 8.1 days, with average
charges of $54,653.
We proposed to remove code 37.64 from DRGs 478 and 479 and reassign
it to DRGs 110 and 111. The surgical removal of a heart assist system
is a major cardiovascular procedure and, therefore, more appropriately
assigned to DRGs 110 and 111. Accordingly, we believe this DRG
assignment for this procedure is more clinically and financially
appropriate.
We received two comments in support of this change. Therefore, we
are adopting as final our proposal to remove code 37.64 from DRGs 478
and 479 and assign it to DRGs 110 and 111.
b. DRGs 514 (Cardiac Defibrillator Implant With Cardiac
Catheterization) and 515 (Cardiac Defibrillator Implant Without Cardiac
Catheterization)
(1) Cardiac Defibrillator Implant With Cardiac Catheterization With
Acute Myocardial Infarction
Prior to the publication of the proposed rule, we received a
recommendation to modify DRG 514 (Cardiac Defibrillator Implant With
Cardiac Catheterization) and DRG 515 (Cardiac Defibrillator Implant
Without Cardiac Catheterization) so that these DRGs are split based on
the presence or absence of acute myocardial infarction, heart failure,
or shock as a principal diagnosis. We note that the increased cost of
treating cardiac patients with acute myocardial infarction, heart
failure, or shock is recognized in the payment logic for pacemaker
implants (DRG 115 (Permanent Cardiac Pacemaker Implant With Acute
Myocardial Infarction, Heart Failure or Shock, or AICD Lead or
Generator) and DRG 116 (Other Permanent Cardiac Pacemaker Implant)).
We examined FY 2002 MedPAR data regarding the number of cases and
the average charges for DRGs 514 and 515. The results of our
examination are summarized in the following table.
----------------------------------------------------------------------------------------------------------------
With AMI,
Number of Average heart Average
DRG cases charges failure, or charges
shock count
----------------------------------------------------------------------------------------------------------------
514......................................................... 16,743 $97,133 3,623 $120,852
515......................................................... 4,674 76,537 935 84,140
----------------------------------------------------------------------------------------------------------------
A cardiac catheterization is generally performed to establish the
nature of the patient's cardiac problem and determine if implantation
of a cardiac defibrillator is appropriate. Generally, the cardiac
catheterization can be done on an outpatient basis. Patients who are
admitted with acute myocardial infarction, heart failure, or shock and
have a cardiac catheterization are generally acute patients who require
emergency implantation of the defibrillator. Thus, there are very high
costs associated with these patients.
We found that the average charges for patients with cardiac
catheterizations who also were admitted with acute myocardial
infarction, heart failure, or shock were $120,852, compared to the
average charges for all DRG 514 cases of $97,133. Therefore, we
proposed to split DRG 514 and create a new DRG for patients receiving a
cardiac defibrillator implant with cardiac catheterization and with a
principal diagnosis of acute myocardial infarction, heart failure, or
shock.
Patients without cardiac catheterization generally have had the
need for the defibrillator established on an outpatient basis prior to
admission. We found 935 cases with acute myocardial infarction, heart
failure, or shock, with average charges of $84,140. The average charges
for all cases in DRG 515 were $76,537. Because of the relatively small
number of patients and the less-than-10-percent charge difference for
patients in DRG 515 who have acute myocardial infarction, heart
failure, or shock, we did not propose to create a separate DRG for
patients with a cardiac defibrillator implant without cardiac
catheterization with acute myocardial infarction, heart failure, or
shock.
Specifically, we proposed to create two new DRGs that would replace
the current DRG 514. We indicated that the two proposed new DRGs would
have the same procedures currently listed for DRG 514, but would be
split based on the presence or absence of acute myocardial infarction,
heart failure, or
[[Page 45357]]
shock as a principal diagnosis. We proposed to establish new DRG 535
(Cardiac Defibrillator Implant With Cardiac Catheterization and With
Acute Myocardial Infarction, Heart Failure, or Shock) and new DRG 536
(Cardiac Defibrillator Implant With Cardiac Catheterization and Without
Acute Myocardial Infarction, Heart Failure, or Shock). Proposed new DRG
536 would exclude the following principal diagnosis codes from MDC 5
associated with acute myocardial infarction, heart failure, or shock.
[sbull] 398.91, Rheumatic heart failure
[sbull] 402.01, Malignant hypertensive heart disease with heart
failure
[sbull] 402.11, Benign hypertensive heart disease with heart
failure
[sbull] 402.91, Hypertensive heart disease not otherwise specified
with heart failure
[sbull] 404.01, Malignant hypertensive heart and renal disease with
heart failure
[sbull] 404.03, Malignant hypertensive heart and renal disease with
heart failure and renal failure
[sbull] 404.11, Benign hypertensive heart and renal disease with
heart failure
[sbull] 404.13, Benign hypertensive heart and renal disease with
heart failure and renal failure
[sbull] 404.91, Hypertensive heart and renal disease not otherwise
specified with heart failure
[sbull] 404.93, Hypertensive heart and renal disease not otherwise
specified with heart failure and renal failure
[sbull] 410.01, AMI anterolateral, initial
[sbull] 410.11, AMI anterior wall, initial
[sbull] 410.21, AMI inferolateral, initial
[sbull] 410.31, AMI inferopost, initial
[sbull] 410.41, AMI inferior wall, initial
[sbull] 410.51, AMI lateral not elsewhere classified, initial
[sbull] 410.61, True posterior infarction, initial
[sbull] 410.71, Subendocardial infarction, initial
[sbull] 410.81, AMI not elsewhere classified, initial
[sbull] 410.91, AMI not otherwise specified, initial
[sbull] 428.0, Congestive heart failure, not otherwise specified
[sbull] 428.1, Left heart failure
[sbull] 428.20, Systolic heart failure, not otherwise specified
[sbull] 428.21, Acute systolic heart failure
[sbull] 428.22, Chronic systolic heart failure
[sbull] 428.23, Acute on chronic systolic heart failure
[sbull] 428.30, Diastolic heart failure, not otherwise specified
[sbull] 428.31, Acute diastolic heart failure
[sbull] 428.32, Chronic diastolic heart failure
[sbull] 428.33, Acute on chronic diastolic heart failure
[sbull] 428.40, Combined systolic and diastolic heart failure not
otherwise specified
[sbull] 428.41, Acquired combined systolic and diastolic heart
failure
[sbull] 428.42, Chronic combined systolic and diastolic heart
failure
[sbull] 428.43, Acute on chronic combined systolic and diastolic
heart failure
[sbull] 428.9, Heart failure, not otherwise specified
[sbull] 785.50, Shock, not otherwise specified
[sbull] 785.51, Cardiogenic shock
(2) Cardiac Resynchronization Therapy (CRT)
Prior to the publication of the proposed rule, we received a
comment from a provider who pointed out that we did not include the
following combination of codes under the list of procedure combinations
that would lead to an assignment of DRG 514 or DRG 515:
[sbull] 37.95, Implantation of automatic cardioverter/defibrillator
lead(s) only
[sbull] 00.54, Implantation or replacement of cardiac
resynchronization defibrillator, pulse generator device only [CRT-D]
The commenter pointed out that cases are assigned to DRGs 514 and
515 when a total cardiodefibrillator or CRT-D system is implanted. In
addition, cases are assigned to DRGs 514 and 515 when implantation of a
variety of combinations of defibrillator leads and device combinations
is reported. The commenter indicated that a total defibrillator and
CRT-D system may be replaced with a completely new system or all new
devices and leads, and added that it is also possible to replace a
generator, a lead, or a combination of generators and up to three
leads.
When the CRT-D generator (code 00.54) and one of the cardioverter/
defibrillator leads are replaced, the case currently is assigned to DRG
115 (Permanent Cardiac Pacemaker Implant with AMI, Heart Failure, or
Shock or AICD Lead or Generator Procedure). The commenter recommended
that we include the combination of codes 37.95 and 00.54 as a
combination that would result in assignment to DRG 514 or DRG 515, as
do other combinations of generators and leads. Our medical advisors
agree with this recommendation. As discussed previously, we proposed to
delete DRG 514 and replace it with proposed new DRGs 535 and 536.
Therefore, we proposed to add codes 37.95 and 00.54 to the list of
procedure combinations that would result in assignment to DRG 515 or
new proposed DRGs 535 and 536.
Comment: Several commenters supported our proposed revision to DRG
514 so that it would be split based on the presence or absence of a
principal diagnosis of acute myocardial infarction, heart failure, or
shock.
One commenter pointed out a typographical error in the proposed
rule in the code number cited for the procedure, Implantation of
automatic cardioverter/defibrillator lead(s) only. The code number
should have been 37.95 instead of 39.75.
Response: We appreciate the support for our proposed revision of
DRG 514. We have corrected the code number for Implantation of
automatic cadioverter/defibrillator lead(s) only to 37.95 in the
description of this issue above.
Comment: Several commenters supported the addition of codes 37.95
and 00.54 to the list of procedure combinations that would lead to an
assignment of DRG 515 and new DRGs 535 and 536. However, one commenter
suggested that, in addition to this combination, codes 37.97
(Replacement of automatic cardioverter/defibrillator lead(s) only and
00.54 also should be added to the procedure combination list under DRG
515 and new DRGs 535 and 536. The commenter pointed out that both
procedures would involve the insertion of a pulse generator and a lead
so that resources required are equivalent to those for a total system
implant.
Response: We agree with the commenter that the combination of codes
37.97 and 00.54 also would involve the implantation of a pulse
generator and a lead. Therefore, in this final rule, we are adding the
combination of procedure codes 37.97 and 00.54 to the list of procedure
combinations that will lead to assignment to DRG 515 and new DRGs 535
and 536.
Comment: One commenter recommended that CMS also consider modifying
DRGs 115 and 116 to recognize more combination groups of devices and
leads. Specifically, the commenter recommended adding the following
combination of codes to the list of procedure combinations under DRGs
115 and 116:
[sbull] 00.53, Implantation or replacement of CRT-P pulse generator
only
[sbull] 37.74, Implantation or replacement of epicardial pacemaker
lead.
Response: DRGs 115 and 116 have one of the most complex assignment
structures of all the DRGs. The DRG logic for DRGs 115 and 116 involves
three separate combinations of code groups that can possibly lead to
these DRG assignments. Before making a
[[Page 45358]]
modification to one of the combination groups (particularly the
procedure combinations), we believe we should analyze the impact of a
modification to the currently existing types of device, lead, and
diagnosis combinations. In the future, we will undertake a close review
of DRGs 115 and 116 to determine if additional modifications, such as
the one suggested, are needed.
Comment: Two commenters supported the proposal to restructure DRG
514 through the creation of new DRGs 535 and 536. One of the commenters
supported the division of these new DRGs based on the presence or
absence of acute myocardial infarction, heart failure, or shock.
However, the commenter believed that this new structure would lead to
significant confusion among hospital coders with respect to the coding
of CRT-Ds. The commenter stated that hospital coders may be confused
when a patient is admitted with one diagnosis, but then develops an
acute myocardial infarction, heart failure, or shock after the
admission but prior to discharge. In these cases, the acute myocardial
infarction, heart failure, or shock would be a secondary diagnosis. The
split of DRGs 535 and 536 is based on these conditions when they are
the principal diagnosis (reason for the hospital admission). To
eliminate the potential for misunderstanding, the commenter requested
that the definition of DRG 535 be modified so that patients who receive
CRT-D devices are assigned to DRG 535 when an ICD-9-CM diagnosis code
for heart failure is present as either a principal or secondary
diagnosis.
Response: We appreciate the support from the commenters for our
proposal to modify DRG 514 through the creation of new DRGs 535 and
536. We note that the issue of coding the implantation of CRT-Ds has
been covered through extensive articles in the American Hospital
Association's Coding Clinic for ICD-9-CM. In the past, the coding of
cases with acute myocardial infarction, heart failure, or shock has not
been problematic for hospital coding specialists. However, should the
DRG modifications lead to coding questions on CRT-D cases, we will ask
the American Hospital Association to provide additional guidance in its
Coding Clinic for ICD-9-CM. Furthermore, the DRG splits for an acute
myocardial infarction, heart failure, or shock, which currently are
included in DRGs 115 and 116, are based on these conditions being the
principal diagnosis. As a result, this is a longstanding DRG logic
precedent. We do not believe that replicating the logic used for
splitting DRGs 115 and 116 and using it for DRGs 535 and 536 would
create confusion for hospital coders. Rather, we believe hospital
coders would easily recognize this type of longstanding DRG logic.
Comment: Another commenter supported the proposal to split DRG 514
into DRGs 535 and 536 based on the presence or absence of acute
myocardial infarction, heart failure, or shock. The commenter stated
that this split would ensure greater consistency within the DRG system
and ensure adequate payment to hospitals for the higher costs patients
receiving implantable cardioverter-defibrillator implants. However, the
commenter recommended that DRG 515 undergo a similar split based on the
presence or absence of acute myocardial infarction, heart failure, or
shock. The commenter stated that the creation of these additional new
DRGs would fully align payment logic across all pacemaker and
implantable cardioverter-defibrillator implant devices. The
manufacturer also believed that differences between average charges and
average length of stay for these cases within DRG 515 would warrant
this additional splitting of the DRG.
Response: We appreciate the support for the revisions involving
DRGs 514, 535, and 536. However, when we examined the data for DRGs 514
and 515, we found that there were almost three times as many cases with
an acute myocardial infarction, heart failure, or shock cases in DRG
515 as in DRG 514. Those cases in DRG 514 with a principal diagnosis of
an acute myocardial infarction, heart failure, or shock, had average
charges approximately 20 percent greater than the average charges for
all cases in DRG 514. However, cases with a principal diagnosis of an
acute myocardial infarction, heart failure, or shock in DRG 515 had
average charges that were only about 10 percent greater than all cases
in this DRG. Therefore, there is a significantly greater need for the
DRG split for DRG 514. We will continue to examine cases within this
area, and specifically DRG 515, to determine if additional DRG
refinements are needed in the future.
Comment: One commenter, who supported the revisions to DRG 514
through the new DRGs 535 and 536, expressed concern about our coverage
decisions on automatic implantable cardioverter-defibrillators. The
commenter believed the coverage was extremely restricted.
Response: We appreciate the support of the commenter for new DRGs
535 and 536. We will share the concerns relating to coverage decisions
on automatic implantable cardioverter-defibrillators with our coverage
staff.
5. MDC 8 (Diseases and Disorders of the Musculoskeletal System and
Connective Tissue)
Prior to the issuance of the proposed rule, we received a comment
that two codes for cervical fusion of the spine are not included within
DRG 519 (Cervical Spinal Fusion With CC) and DRG 520 (Cervical Spinal
Fusion Without CC). The two cervical fusion codes are:
[sbull] 81.01, Atlas-axis spinal fusion
[sbull] 81.31, Refusion of atlas-axis
The atlas-axis includes the first two vertebrae of the cervical
spine (C1 and C2). These two cervical fusion codes are currently
assigned to DRG 497 (Spinal Fusion Except Cervical With CC) and DRG 498
(Spinal Fusion Except Cervical Without CC). Because codes 81.01 and
81.31 involve the cervical spine, we proposed to remove these codes
from DRGs 497 and 498 and reassign them to DRGs 519 and 520.
We did not receive any comments on this proposal. Therefore, we are
adopting as final our proposal to remove codes 81.01 and 81.31 from
DRGs 497 and 498 and reassign them to DRGs 519 and 520, effective for
FY 2004.
6. MDC 15 (Newborns and Other Neonates With Conditions Originating in
the Perinatal Period)
a. Nonneonate Diagnoses
As indicated earlier, ICD-9-CM diagnosis codes are assigned to MDCs
based on 25 groupings corresponding to a single organ system or
etiology and, in general, are associated with a particular medical
specialty. MDC 15 is comprised of diagnoses that relate to newborns and
other neonates with conditions originating in the perinatal period.
Some of the codes included in MDC 15 consist of conditions that
originate in the neonatal period but can persist throughout life. These
conditions are referred to as congenital anomalies. When an older (not
neonate) population is treated for a congenital anomaly, DRG assignment
problems can arise. For instance, if a patient is over 65 years old and
is admitted with a congenital anomaly, it is not appropriate to assign
the patient to a newborn DRG. This situation occurs when a congenital
anomaly code is classified within MDC 15.
Prior to the publication of the proposed rule, we received a
recommendation to move the following congenital anomaly codes from MDC
15 and reassign them to other appropriate MDCs based on the body system
being treated:
[sbull] 758.9, Chromosome anomaly, not otherwise specified
[sbull] 759.4, Conjoined twins
[[Page 45359]]
[sbull] 759.7, Multiple congenital anomalies, not elsewhere
classified
[sbull] 759.81, Prader-Willi syndrome
[sbull] 759.83, Fragile X syndrome
[sbull] 759.89, Specified congenital anomalies, not elsewhere
classified
[sbull] 759.9, Congenital anomaly, not otherwise specified
[sbull] 779.7, Periventricular leukomalacia
[sbull] 795.2, Abnormal chromosomal analysis
Each of the congenital anomaly diagnosis codes recommended for
reassignment represents a condition that is frequently addressed beyond
the neonatal period. In addition, the assignment of these congenital
anomaly codes as principal diagnosis currently results in assignment to
MDC 15.
We evaluated the recommendation and agreed that each of the
identified codes represents a condition that is frequently addressed
beyond the neonate period and should therefore be removed from the list
of principal diagnoses that result in assignment to MDC 15. Therefore,
we proposed to change the MDC and DRG assignments of the congenital
anomaly codes as specified in the following table. The table shows the
principal diagnosis code for the congenital anomaly and the proposed
MDC and DRG to which the code would be assigned.
----------------------------------------------------------------------------------------------------------------
Proposed
Principal diagnosis code in MDC 15 Code title MDC Proposed DRG assignment
assignment
----------------------------------------------------------------------------------------------------------------
758.9.................................... Chromosome anomaly, not 23 467 (Other Factors
otherwise specified. Influencing Health
Status).
759.4.................................... Conjoined twins............ 6 188, 189, and 190 (Other
Digestive System
Diagnoses, Age 17 with CC, Age 17 without CC, and Age
0-17, respectively).
759.7.................................... Multiple congenital 8 256 (Other Musculoskeletal
anomalies, not elsewhere System and Connective
classified. Tissue Diagnoses).
759.81................................... Prader-Willi syndrome...... 8 256 (Other Musculoskeletal
System and Connective
Tissue Diagnoses).
759.83................................... Fragile X syndrome......... 19 429 (Organic Disturbances
and Mental Retardation).
759.89................................... Specified congenital 8 256 (Other Musculoskeletal
anomalies, not elsewhere System and Connective
classified. Tissue Diagnoses).
759.9.................................... Congenital anomaly, not 23 467 (Other Factors
otherwise specified. Influencing Health
Status).
779.7.................................... Periventricular 1 34 and 35 (Other Disorders
leukomalacia. of Nervous System with CC,
and without CC,
respectively).
795.2.................................... Abnormal chromosomal 23 467 (Other Factors
analysis. Influencing Health
Status).
----------------------------------------------------------------------------------------------------------------
Comment: Several commenters supported all of the proposed changes
relating to congenital anomalies. One commenter supported the changes
in general, but mentioned several concerns. While this commenter agreed
that it was feasible to move these congenital conditions out of MDC 15,
the commenter suggested that those patients who are still in the
neonatal period (first 28 days of life) when admitted should continue
to be classified to MDC 15.
In addition, this commenter questioned whether the proposed DRG
assignments were correct for codes 759.4 (Conjoined twins), code 759.7
(Multiple congenital anomalies, not elsewhere classified), and 759.89
(Specified congenital anomalies, not elsewhere classified). The
commenter stated that although the proposed DRG assignments for these
three DRGs may be appropriate based on the body system being treated
for most cases, these DRGs do not necessarily reflect the body system
affected or being treated. The commenter did not suggest alternative
DRG assignments.
Response: We acknowledge the commenter's point that, for a minority
of cases, the admission will, in fact, be in the neonatal period.
However, the majority of cases will continue to be patients well beyond
the neonatal period. The proposed DRG modifications will correct the
majority of inappropriate DRG assignments that occur when adults are
assigned to MDC 15 (Newborns and Other Neonates with Conditions
Originating in the Perinatal Period). In the future, we will examine
other means to further refine this area, such as making new DRG
assignments for congenital anomalies based on the age of the patient.
However, at this point, we are attempting to resolve the problems
created for the majority of patients.
Regarding the commenter's concern that codes 759.4, 759.7, and
759.89 may not always be appropriately assigned according to our
proposal, the commenter did not suggest an alternative. The commenter
agreed that many cases with these three codes will be assigned to the
appropriate body system by using our proposed DRG assignments. We
recognize that reassignment of these codes will not resolve all
problems, and some cases may be assigned to the wrong body system based
on the patient's actual condition. However, we note that these three
codes are vague and do not specify a precise congenital anomaly by body
system. Therefore, we had to rely on our medical advisors to determine
the most appropriate DRG for the majority of cases. Our main concern
was to correct the DRG assignment that resulted in adults being
assigned to a neonatal DRG when they had a congenital anomaly. We will
continue to examine the data for these cases to determine if additional
modifications are needed in the future.
Therefore, we are adopting the proposed revisions as final without
modification.
b. Heart Failure Codes for Newborns and Neonates
Under MDC 15, cases of newborns and neonates with major problems
may be assigned to DRG 387 (Prematurity With Major Problems) or DRG 389
(Full-Term Neonate With Major Problems). Existing DRG 387 has three
components: (1) Principal or secondary diagnosis of prematurity; (2)
principal or secondary diagnosis of major problem (these are the
diagnoses that define MDC 15); or (3) secondary diagnosis of major
problem (these are diagnoses that do not define MDC 15, so they will
only be secondary diagnosis codes for patients assigned to MDC 15). To
be assigned to DRG 389, the neonate must have one of the principal or
secondary diagnoses listed under the DRG.
Prior to the publication of the proposed rule, we received
correspondence suggesting that the following diagnosis codes for heart
failure, which are currently in MDC 5, be added to the list of
secondary diagnosis of major problems for neonates under MDC 15.
[[Page 45360]]
------------------------------------------------------------------------
Diagnosis code Title
------------------------------------------------------------------------
428.20............................ Systolic heart failure, not
otherwise specified.
428.21............................ Acute systolic heart failure.
428.22............................ Chronic systolic heart failure.
428.23............................ Acute on chronic systolic heart
failure.
428.30............................ Diastolic heart failure, not
otherwise specified.
428.31............................ Acute diastolic heart failure.
428.32............................ Chronic diastolic heart failure.
428.33............................ Acute on chronic diastolic heart
failure.
428.40............................ Systolic/diastolic heart failure,
not otherwise specified.
428.41............................ Acute systolic/diastolic heart
failure.
428.42............................ Chronic systolic/diastolic heart
failure.
428.43............................ Acute on chronic systolic/diastolic
heart failure.
------------------------------------------------------------------------
These heart failure-related diagnosis codes were new codes as of
October 1, 2002. They were an expansion of the previous 4-digit codes
for heart failure and provided additional detail about the specific
type of heart failure. The codes for heart failure that existed prior
to October 1, 2002, are classified as secondary diagnoses of major
problems within MDC 15 and are currently assigned to DRGs 387 and DRG
389. We stated in the proposed rule that these other heart failure
diagnosis codes should be included as principal diagnosis of major
problem codes within MDC 15. However, these heart failure codes are
currently listed in the secondary, not principal, diagnoses of major
problems within MDC 15.
We agree that diagnosis codes 428.20 through 428.43 listed in the
chart above should be included as secondary diagnosis of major problem
codes within MDC 15, as are the other heart failure codes. Therefore,
we proposed to add them to DRG 387 and 389.
Comment: Several commenters supported the proposal to add codes
428.20 through 428.43 (codes for heart failure that became effective
October 1, 2002, listed in the chart above) to DRGs 387 and 389. The
commenters agreed that the heart failure codes created on October 1,
2002, should be assigned to DRGs 387 and 389 in the same fashion as
were those heart failure codes created prior to October 1, 2002.
One commenter indicated that we incorrectly described the addition
of diagnosis codes 428.20 through 428.43 listed in the chart to the
list of ``principal'' diagnosis of major problem codes. The commenter
stated that we should have indicated that these codes would be added to
the list of ``secondary'' diagnoses of major problem codes because this
category is where the other heart failure codes are currently assigned.
Response: We agree that the codes should have been described as an
addition to the list of secondary diagnoses of major problem codes
within DRGs 387 and 389. We have clarified this point in the
description above.
Comment: One commenter who supported the addition of the heart
failure-related diagnosis codes (428.20 through 428.43) to DRGs 387 and
389, asked for clarification of how diagnoses for combined codes that
include congestive heart failure will be handled. The commenter
mentioned code 402.91 (Hypertensive heart disease with heart failure,
unspecified benign or malignant) as an example.
Response: We will conduct an additional review of DRGs 387 and 389
to determine if additional codes should be added to the list of
secondary diagnoses of major problems for FY 2005. We encourage
commenters to send their recommendations to us to assist in this
review.
We are adopting our proposal as final, with the clarification that
the major problem codes are secondary, not principal, codes.
Accordingly, we are adding codes 428.20 through 428.43 listed above to
the list of secondary diagnoses of major problem codes within DRGs 387
and 389.
7. MDC 17 (Myeloproliferative Diseases and Disorders and Poorly
Differentiated Neoplasms)
High-dose Interleukin-2 (IL-2) Chemotherapy is a hospital
inpatient-based regimen requiring administration by experienced
oncology professionals. It is used for the treatment of patients with
advanced renal cell cancer and advanced melanoma. Unlike traditional
cytotoxic chemotherapies that attack cancer cells themselves,
Interleukin-2 is designed to enhance the body's defenses by mimicking
the way natural IL-2 activates the immune system and stimulates the
growth and activity of cancer-killing cells. The Food and Drug
Administration (FDA) approved the IL-2 product on the market for use in
1992.
High-dose IL-2 therapy is performed only in very specialized
treatment settings, such as an intensive care unit or a bone marrow
transplant unit. This therapy requires oversight by oncology health
care professionals experienced in the administration and management of
patients undergoing this intensive treatment because of the severity of
the side effects. Unlike most cancer therapies, high-dose IL-2 therapy
is associated with predictable toxicities that require extensive
monitoring. Often patients require one-on-one nursing or physician care
for extended portions of their stay.
High-dose IL-2 therapy is significantly different from conventional
chemotherapy in terms of the resources required to administer it.
Conventional chemotherapy may be given to patients either on an
outpatient basis or through a series of short (that is, 1 to 3 day)
inpatient stays.
High-dose IL-2 therapy is given during two separate hospital
admissions. For the first cycle, the IL-2 is administered every 8 hours
over 5 days. Patients are then discharged to rest at home for several
days and are admitted for the second cycle of therapy during which the
same regimen and dosing is repeated. The two cycles complete the first
course of high-dose IL-2 therapy. This regimen may be repeated at 8 to
12 weeks if the patient is responding. The maximum number of courses
for any one patient is predicted to be five courses.
Not all patients with end-stage renal cell carcinoma or end-stage
melanoma are appropriate candidates for high-dose IL-2 chemotherapy. It
is estimated that there are between 15,000 and 20,000 patients in the
United States who have one of these two types of cancer. However, only
20 percent of those patients will be appropriate candidates for the
rigors of the treatment regimen. It is further estimated that,
annually, approximately 1,300 of these patients will be Medicare
beneficiaries. However, we have been informed by industry sources that,
allegedly due to the level of payment for the DRGs to which these cases
are currently assigned, only 100 to 200 Medicare patients receive the
treatment each year. According to these industry sources, several
treatment centers have had to discontinue their high-dose IL-2 therapy
programs for end-stage renal cell carcinoma or end-stage melanoma
because of the low Medicare payment.
According to industry sources, the wholesale cost of IL-2 is
approximately $700 per vial. Dosages range between 15 and 20 vials per
treatment, or between $10,500 and $14,000 per patient, per cycle, for
the cost of the IL-2 drug alone. There is no ICD-9-CM procedure code
that currently identifies patients receiving this therapy. Therefore,
it is not possible to identify directly these cases in the MedPAR data.
Currently, this therapy is coded using the more general ICD-9-CM code
99.28 (Injection or infusion of biologic response modifier). When we
addressed this issue previously in the August 1, 2000 IPPS final rule
(65 FR 47067) by examining cases for which procedure code 99.28
[[Page 45361]]
was present, our analysis was inconclusive due to the wide range of
cases identified (1,179 cases across in 136 DRGs). However, recent data
collected by the industry on 30 Medicare beneficiaries who received
high-dose IL-2 therapy during FY 2002 show average charges for these
cases of approximately $54,000.
Depending on the principal diagnosis reported, patients receiving
high-dose IL-2 therapy may be assigned to one of the following five
DRGs: DRG 272 (Major Skin Disorder With CC) and DRG 273 (Major Skin
Disorder Without CC) in MDC 9; DRG 318 (Kidney and Urinary Tract
Neoplasms With CC) and DRG 319 (Kidney and Urinary Tract Neoplasms
Without CC) in MDC 11; and DRG 410 (Chemotherapy Without Leukemia as
Secondary Diagnosis) in MDC 17. The following table illustrates the
average charges for patients in these DRGs.
------------------------------------------------------------------------
Average
DRG charges
------------------------------------------------------------------------
272.......................................................... $14,997
273.......................................................... 9,128
318.......................................................... 16,892
319.......................................................... 9,583
410.......................................................... 16,103
------------------------------------------------------------------------
Because of the need to identify the subset of patients receiving
this type of treatment, the ICD-9-CM Coordination and Maintenance
Committee determined, based on its consideration at the December 6,
2002 public meeting, that a new code for high-dose IL-2 therapy was
warranted. Therefore, a new code has been created in the 00 Chapter of
ICD-9-CM (Procedures and Interventions, Not Elsewhere Classified), in
category 00.1 (Pharmaceuticals) at 00.15 (High-dose infusion
Interleukin-2 (IL-2)). The code is effective for cases discharged on or
after October 1, 2003.
We believe patients receiving high-dose IL-2 therapy are clinically
similar to other cases currently assigned to DRG 492 (Chemotherapy With
Acute Leukemia as Secondary Diagnosis) in MDC 17. The average charge
for patients currently assigned to DRG 492 is $55,581. Currently, DRG
492 requires one of the following two principal diagnoses:
[sbull] V58.1, Encounter for chemotherapy
[sbull] V67.2, Followup examination following chemotherapy
And one of the following secondary diagnoses:
[sbull] 204.00, Acute lymphoid leukemia without mention of
remission
[sbull] 204.01, Acute lymphoid leukemia with remission
[sbull] 205.00, Acute myeloid leukemia without mention of remission
[sbull] 205.01, Acute myeloid leukemia with remission
[sbull] 206.00, Acute monocytic leukemia without mention of
remission
[sbull] 206.01, Acute monocytic leukemia with remission
[sbull] 207.00, Acute erythremia and erythroleukemia without
mention of remission
[sbull] 207.01, Acute erythremia and erythroleukemia with remission
[sbull] 208.00, Acute leukemia of unspecified cell type without
mention of remission
[sbull] 208.01, Acute leukemia of unspecified cell type without
mention of remission
We proposed to modify DRG 492 by adding new procedure code 00.15 to
the logic. We indicated that assignment to this DRG would require the
same two V-code principal diagnosis codes listed above (V58.1 and
V67.2), but would require either one of the leukemia codes listed as a
secondary diagnosis, or would require the procedure code 00.15. In
addition, we proposed to change the title of DRG 492 to ``Chemotherapy
With Acute Leukemia or With Use of High Dose Chemotherapy Agent''.
In the proposed rule, we indicated that we would monitor cases with
procedure code 00.15 as these data became available, and consider
potential further refinements to DRG 492 as necessary.
Comment: Five commenters supported our proposed change. One
commenter who opposed the proposed change believed that classifying
high-dose IL-2 therapy as chemotherapy would be a violation of coding
advice published in the American Hospital Association's coding
publication, Coding Clinic for ICD-9-CM, because IL-2 therapy is a
biologic response modifier and is considered immunotherapy, not
chemotherapy. Therefore, the commenter asserted that the use of either
V58.1 or V67.2 as principal diagnosis codes for these cases would
result in erroneous coding advice. The commenter added that Coding
Clinic, Fourth Quarter, page 51, indicates that when a patient is
admitted for immunotherapy, the code for the neoplasm should be
assigned as the principal diagnosis.
Response: We acknowledge the commenter's points concerning correct
selection of principal diagnosis, as well as the advice published
previously in Coding Clinic. However, the discussion of this topic has
raised some concerns among the Cooperating Parties of AHA's Editorial
Advisory Board. The advice given in the Fourth Quarter 1994 Coding
Clinic predates the new treatment technology now available, which calls
into question the correctness of the published advice. Therefore, this
topic will be included on the agenda of an upcoming AHA Editorial
Advisory Board meeting for further discussion and clarification. It is
likely that new instructions will be issued in the next several months
to clarify these coding instructions.
Therefore, in anticipation of this clarification, we are adopting
as final the proposed changes to DRG 492. We will continue to monitor
this DRG for shifts in resource consumption and validity of DRG
assignment, and will specifically monitor code 00.15 for appropriate
placement in DRG 492.
8. MDC 23 (Factors Influencing Health Status and Other Contacts With
Health Services)
a. Implantable Devices
Prior to the publication of the proposed rule, we received a
comment regarding three ICD-9-CM diagnosis codes that are currently
assigned to MDC 23: V53.01 (Fitting and adjustment of cerebral
ventricular (communicating) shunt); V53.02 (Neuropacemaker (brain)
(peripheral nerve) (spinal cord)); and V53.09 (Fitting and adjustment
of other devices related to nervous system and special senses). The
commenter suggested that we move these three codes from MDC 23 to MDC 1
(Diseases and Disorders of the Nervous System) because these codes are
used as the principal diagnosis for admissions involving removal,
replacement, and reprogramming of devices such as cerebral ventricular
shunts, neurostimulators, intrathecal infusion pumps and thalamic
stimulators.
Currently, if these diagnosis codes are reported alone without an
O.R. procedure, the case would be assigned to DRG 467 (Other Factors
Influencing Health Status). However, if an O.R. procedure is reported
with the principal diagnosis of V53.01, V53.02, or V53.09, the case
would be assigned to DRG 461 (O.R. Procedure with Diagnoses of Other
Contact with Health Services).
In our analysis of the MedPAR data, we found 30 cases assigned to
DRG 467 and 179 cases assigned to DRG 461 with one of these codes as
principal diagnosis. We found that the procedures reported with one of
these diagnosis codes were procedures in MDC 1. The most frequent
procedure was 86.06 (Insertion of totally implantable infusion pump).
Because the procedures that are routinely used with these codes are
in MDC 1, we believe it would be
[[Page 45362]]
appropriate to assign these diagnosis codes to MDC 1. As the commenter
also stated, this assignment would be consistent with how fitting and
adjustments of devices are handled within other MDCs, such as in MDC 5
(Diseases and Disorders of the Circulatory System) and MDC 11 (Diseases
and Disorders of the Kidney and Urinary Tract). Diagnosis codes V53.31
(Cardiac pacemaker), V53.32 (Automatic implantable cardiac
defibrillator), and V53.39 (Other cardiac device) are used for fitting
and adjustment of cardiac devices and are assigned to MDC 5. Diagnosis
code V53.6 (Urinary devices) is used for fitting and adjustment of
urinary devices and is assigned to MDC 11.
Therefore, we proposed to move V53.01, V53.02, and V53.09 from MDC
23 to MDC 1 when an O.R. procedure is performed. If no O.R. procedure
is performed, these diagnosis codes would be assigned to DRG 34 (Other
Disorders of Nervous System With CC) or DRG 35 (Other Disorders of
Nervous System Without CC). If an O.R. procedure is performed on a
patient assigned with one of these codes as the principal diagnosis,
the case would be assigned to the DRG in MDC 1 to which the O.R.
procedure is assigned.
We received three comments that supported our proposal to move
diagnosis codes V53.01, V53.02, and V53.09 from MDC 23 to MDC 1.
Accordingly, we are adopting as final the proposed reassignment,
effective for discharges occurring on or after October 1, 2003.
b. Malignancy Codes
Prior to the issuance of the proposed rule, we received
correspondence that indicated that when we recognized code V10.48
(History of malignancy, epididymis) as a new code for FY 2002, we did
not include the code as a history of malignancy code in DRG 465
(Aftercare with History of Malignancy as Secondary Diagnosis). All
other history of malignancy codes were included in DRG 465.
We agree that code V10.48 should have been included in the list of
history of malignancy codes within DRG 465. Therefore, we proposed to
add it to the list of secondary diagnoses in DRG 465.
We received several comments that supported this DRG modification.
Accordingly, we are adopting the proposal as final without
modification.
9. Medicare Code Editor (MCE) Change
As explained under section II.B.1. of this preamble, the MCE is a
software program that detects and reports errors in the coding of
Medicare claims data.
We received a request to examine the MCE edit ``Adult Diagnosis--
Age Greater than 14'' because currently the edit rejects claims for
patients under age 15 who are being treated for gall bladder disease.
We reviewed this issue with our pediatric consultants and determined
that, although incidence is rare, gallbladder disease does occur in
patients under age 15. Therefore, in the May 19, 2003 proposed rule, we
proposed to modify the MCE by removing the following codes from the
edit ``Adult Diagnosis--Age Greater Than 14'':
[sbull] 574.00, Calculus of gallbladder with acute cholecystitis
without mention of obstruction
[sbull] 574.01, Calculus of gallbladder with acute cholecystitis
with obstruction
[sbull] 574.10, Calculus of gallbladder with other cholecystitis
without mention of obstruction
[sbull] 574.11, Calculus of gallbladder with other cholecystitis
with obstruction
[sbull] 574.20, Calculus of gallbladder without mention of
cholecystitis without mention of obstruction
[sbull] 574.21, Calculus of gallbladder without mention of
cholecystitis with obstruction
[sbull] 574.30, Calculus of bile duct with acute cholecystitis
without mention of obstruction
[sbull] 574.31, Calculus of bile duct with acute cholecystitis with
obstruction
[sbull] 574.40, Calculus of bile duct with other cholecystitis
without mention of obstruction
[sbull] 574.41, Calculus of bile duct with other cholecystitis with
obstruction
[sbull] 574.50, Calculus of bile duct without mention of
cholecystitis without mention of obstruction
[sbull] 574.51, Calculus of bile duct without mention of
cholecystitis with obstruction
[sbull] 574.60, Calculus of gallbladder and bile duct with acute
cholecystitis without mention of obstruction
[sbull] 574.61, Calculus of gallbladder and bile duct with acute
cholecystitis with obstruction)
[sbull] 574.70, Calculus of gallbladder and bile duct with other
cholecystitis without mention of obstruction
[sbull] 574.71, Calculus of gallbladder and bile duct with other
cholecystitis with obstruction
[sbull] 574.80, Calculus of gallbladder and bile duct with acute
and chronic cholecystitis without mention of obstruction
[sbull] 574.81, Calculus of gallbladder and bile duct with acute
and chronic cholecystitis with obstruction
[sbull] 574.90, Calculus of gallbladder and bile duct without
cholecystitis without mention o