Health Information Management

News: IPPS Final Rule confirms DCA adjustment, kidney injury designated CC

CDI Strategies, August 5, 2010

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On July 30, CMS issued the inpatient prospective payment system (IPPS) final rule to update policies and rates for fiscal year (FY) 2011, which maintains long-standing CMS policy and implements some provisions of the Patient Protection and Affordable Care Act (PPACA).

CMS updated acute care hospital rates by 2.35%. This update reflects a market basket increase of 2.6% for inflation, which is a slight increase over the FY 2010 inflation rate. The final rule reduces the 2.6% inflation update by 0.25%, as required by PPACA.
Despite strong opposition from the hospital community, CMS also finalized its proposed documentation and coding adjustment (DCA) of -2.9% to offset overpayments that resulted from documentation and coding practices under the new Medicare Severity DRG (MS-DRG) system that in their opinion, did not reflect actual increases in patient severity. CMS states in the final rule:
Under legislation passed in 2007, CMS is required to recoup the entire amount of FY 2008 and 2009 excess spending due to changes in hospital coding practices no later than FY 2012. CMS has determined that a -5.8% adjustment is necessary to recoup these overpayments. The -2.9% adjustment for FY 2011 is one-half of this amount.
But many in the provider community, including ACDIS in a formal letter to the agency, argued that the increased payments were actually a product of faulty calculations by CMS and, indeed, the severity of illness of the patients did increase.
This DCA creates a challenge for hospitals, which will need to focus additional efforts on documentation and coding specificity, says Gloryanne Bryant, RHIA, CCS, CCDS, regional managing director of HIM for NCAL revenue cycle at Kaiser Foundation Health Plan Inc. & Hospitals in Oakland, CA.
“I was disappointed to see not only that [CMS] continues to use [DCA methodology] but that the DCA was as much as it was,” Bryant says. “I think this will present struggles and challenges to hospitals, including documentation and coding improvement that is valid and accurate.”
Furthermore, the new rule downgrades acute kidney failure or injury (ICD-9-CM code 584.9) from an MCC to a CC.
“Renal failure is the only acute organ failure that is not an MCC,” says Robert S. Gold, MD, CEO of DCBA Inc., in Atlanta. “It’s this over-reporting that has diluted the risk factors for patients who really do have significant renal damage by adding patients who don’t.”
Other changes included in the IPPS final rule include:
  • Clarification of CMS’ three-day payment
  • Division of MS-DRG 9 (Bone marrow transplant) into two new MS-DRGs—14 (Allogenic bone marrow transplant), with a relative weight of 11.5947 and MS-DRG 15 (Autologous bone marrow transplant), with a relative weight of 5.9504.
  • Inclusion of ICD-9-CM code 251.3 (postsurgical hypoinsulinemia) as an acceptable principal diagnosis for MS-DRG 8 (Simultaneous kidney/pancreas transplant) and MS-DRG 10 (Pancreas transplant
  • Reductions in the relative weight of five MS-DRGs—622 (Skin grafts and wound debridement for endocrine, nutritional and metabolic disorders with MCC), -19.2%, 855 (Infectious and parasitic diseases with operative room procedure without CC/MCC), -19.0% , 10 (Pancreas transplant), -11.5%, 420 (Hepatobiliary diagnostic procedures with MCC), -11.5%, 624 (Skin grafts and wound debridement for endocrine, nutritional and metabolic disorders without CC/MCC), -10.5%,
  • Increases in the relative weight of five MS-DRGs—770 (Abortion with dilation and curettage, aspiration curettage, or hysterotomy), 30.8%, 585 (Breast biopsy, local excision and other breast procedures without CC/MCC), 21.2% , 779 (Abortion without dilation and curettage), 21.1%, 725 (Benign prostatic hypertrophy with MCC), 19.3%, 686 (Kidney and urinary tract neoplasms with MCC), 18.7%
  • added 12 items to the measures set for the reporting hospital quality data for annual payment update (RHQDAPU) program, and retired one current measure, mortality for selected surgical procedures (composite).
Editor’s note: CDI Strategies subscribers and ACDIS members received this original news alert regarding the IPPS release on Monday, August 2.
For in-depth analysis of the final rule, listen to the September 23 audio conference, “2011 IPPS MS-DRG Update: Analyze the Rule and Understand the Impact.”
Click here to view a press release on the release of the final rule.

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