Health Information Management

Column: What impact will ICD-10 have on MS-DRG payments?

CDI Strategies, October 14, 2010

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by Shannon McCall, RHIA, CCS, CCS-P, CPC-I, CCDS

I often wondered how the ICD-9-CM code set would translate to ICD-10-CM/PCS in regards to MS-DRGs. I couldn’t fathom that along with the costly transition to a new code set, CMS would “double whammy” us by implementing a system that would result in a severe adjustment in our MS-DRGs (i.e., reimbursement).
I am glad my hunch was correct. The intended impact of mapping of MS-DRGs from ICD-9 to ICD-10 should be (note I say should be) minimal for hospitals, at least according to the ICD-9-CM Coordination and Maintenance committee meeting which found that only about a little over 1% of the almost 11 million discharges studied resulted in an MS-DRG change. The abstract from the committee states:
“The results of the payment impact analysis show that the conversion to a native ICD-10 version of MS-DRGs will have a minimal impact on aggregate payments to hospitals and the distribution of payments across hospitals.”
The objective of the conversion project was to produce an ICD-10 version of MS-DRGs that replicated the ICD-9-CM. So, data coded in ICD-10, would result in the same MS-DRG as if the same scenario was coded using ICD-9-CM.
Note, however, that due to its sample size the analysis only mapped ICD-9/ICD-10 codes which had a direct relationship. It did include those codes for which there exists additional specificity in ICD-10. So, if an ICD-9 code had added specificity in ICD-10, it was not considered.
To me, this means that they did not take into consideration (and understandably so) how obtaining added specificity for a code series may impact the overall MS-DRG if there are certain codes within that series labeled as CC/MCC.
In addition to other considerations, and not just focusing on the intention but rather reality, is that DRG shifts could occur due to improper training of the coding staff. An example could be if the coder selects the improper root operation for a code (e.g., excision versus resection). This incorrect code assignment could also potentially cause changes within the MS-DRGs resulting in payment increases or decreases.
Editor’s note: Shannon McCall, RHIA, CCS, CCS-P, CPC-I, CCDS, is director of coding and HIM at HCPro, Inc. where she manages the instructors of the Certified Coder Boot Camps® which covers physician and outpatient hospital coding and inpatient hospital facility coding. McCall has extensive experience with coding for both physician and hospital services. She is also a member of the ACDIS advisory board.
This excerpt was taken from the ICD-10 Trainer Blog.

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