2014 IPPS Proposed Rule: CMS focuses on quality measures, inpatient status

HCPRO Website, April 29, 2013

CMS added new quality measures and penalties for new categories of readmitted patients, emphasizing its push to improve the quality of healthcare through payment initiatives in its Inpatient Prospective Payment System, fiscal year (FY) 2014 proposed rule released Friday, April 26. The release also includes a proposal to change the criteria for an inpatient admission.

Hospitals will see a net increase of 0.8% in payments, according to CMS. As always, some MS-DRG weights increased, while others decreased. Facilities should review the relative-weight change tables included in the proposed rule.
Facilities still face a negative 0.8% recoupment adjustment under the Documentation and Coding Adjustment, and CMS expects to make similar adjustments in FY 2015, 2016, and 2017 in order to recover the full $11 billion mandated in the American Taxpayer Relief Act of 2012.
“I personally believe that any ‘improvement’ in a facility’s case mix index with clinical documentation and coding integrity since 2007 is a truer reflection of their patient’s actual resource intensity in contrast to the ‘underdocumentation’ that occurred prior to MS-DRGs,” says James S. Kennedy, MD, CCS, CDIP,  managing director of FTI  Health Solutions in Brentwood, Tenn. “Even so, I believe that hospitals and physicians, as well as the entire healthcare delivery system, benefits in their partnership to consistently define, diagnose, and document conditions and treatments as to deploy clinically congruent ICD-9-CM codes essential to MS-DRGs and in their preparation for ICD-10-CM’s impact as well.”
Change to inpatient criteria
CMS solicited ideas for how to define an inpatient admission in the 2013 OPPS proposed and final rules because the agency was concerned about the increased length of outpatient stays in observation.
In the FY 2014 IPPS proposed rule, CMS suggests a significant revision to the definition of inpatient.
CMS proposed redefinition is:
Medicare’s external review contractors would presume that hospital inpatient admissions are reasonable and necessary for beneficiaries who require more than 1 Medicare utilization day (defined by encounters crossing 2 midnights) in the hospital receiving medically necessary services.
In some circumstances, inpatient stays may occur if a patient stays less than two midnights, which would require explicit documentation by an ordering physician, Kennedy says. “The whole issue of medical necessity is not well understood by most physicians, yet with bundled payments on the horizon, it is an area that physicians will need substantial education and support.”
This is a big benchmark change that could make many more patients outpatient than under the previous 24 hour benchmark, says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc. in Danvers, Mass.
“This coupled with the Part B rebilling where the facility can self-deny inpatient cases and rebill under Part B will probably mean that every stay less than two midnights will always be billed outpatient either up front or because of after-the-fact self-denials,” Hoy says. 
CMS seems to be looking at the proposal in a different way, believing it will shift care to the inpatient side and is making a slight downward payment adjustment to account for it in the inpatient rates.
“The proposal would give constancy in decisions because I think that the only cases anyone will be questioning very much anymore will be those less than two midnights,” Hoy says.
One more interesting thing about the proposal is when to start counting inpatient time, Hoy says. With all the discussion on inpatient orders in the rule, it would be with the inpatient order when the patient officially becomes inpatient, but CMS includes an interesting statement:
The starting point for this time-based instruction would be when the beneficiary is moved from any outpatient area to a bed in the hospital in which the additional hospital services will be provided.
That is usually the time when the physician orders observation services because observation is most often provided in an inpatient hospital bed, not a separate outpatient area, Hoy says.
“Therefore if I was interpreting this in light of how care is provided the time would start when the patient is moved from the ED to a bed on the floor even if the physician ordered observation,” Hoy says. Presumably as the patient remains (and is sick) the physician admits the patient and services are billed as inpatient with the time counting back to the time they went to the bed.
“The problem is that doesn’t allow for counting by utilization days because observation time doesn’t accrue inpatient utilization days,” Hoys says. “There will need to be significant clarification about when the time starts for this ‘two midnights.’ Otherwise, there is going to be a lot of confusion.”
Hospital-acquired conditions
Under the Affordable Care Act, CMS is required to penalize hospitals in the lowest-performing 25% for eight hospital-acquired conditions (HACs). Beginning in 2015, those facilities would receive only 99% of what they would otherwise be paid under IPPS.
CMS plans to divide the HACs into two domains. The first would include:
  • Rates of pressure ulcers
  • Number (not rate) of foreign surgical objects left inside patients
  • Rate of iatrogenic pneumothorax
  • Rate of postoperative physiologic and metabolic derangement
  • Rate of postoperative pulmonary embolism or deep vein thrombosis
  • Rate of accidental puncture and laceration
The second domain would include rates of central line-associated bloodstream infections and catheter-associated urinary tract infections.
CMS will calculate a domain score for each hospital, with each domain accounting for 50% of the score. CMS will also factor in patient’s age, gender, and comorbidities so that hospitals serving a large proportion of sicker patients would not be unfairly penalized.
CMS will not create new or modify the existing (HACs), which surprised Kennedy.
“I find it interesting that the titles of two HACs, catheter-associated urinary tract infections and vascular catheter-associated infection, cannot be coded with the codes defining these HACs if documented by a provider,” Kennedy says. He believe that the titles of these HACs should be changed to “symptomatic urinary tract infections due to an indwelling urinary catheter” and “infection due to a central venous catheter” to reflect the documentation necessary to identify and code these HACs.
Kennedy hopes providers comment upon these, especially in light of advice written in the Medicare Provider Quarterly Compliance Newsletter in April 2012 and in Coding Clinic for ICD-9-CM, 2nd Quarter, 2012, pages 21-22, concerning catheter “associated” urinary tract infections.
Readmissions reduction
CMS currently assesses hospitals’ readmission penalties using three readmissions measures endorsed by the National Qualify Forum (NQF): heart attack, heart failure, and pneumonia. For FY2014, CMS plans to modify the readmissions rate to take into account planned readmissions within 30 days.
In addition, CMS proposes adding exacerbation of chronic obstructive pulmonary disease (COPD) and patients admitted for elective total hip or total knee arthroplasty (THA/TKA) to the readmissions reduction calculations for FY 2015.
CC/MCC changes
CMS proposes to add diagnosis code 575.0 (acute cholecystitis) to the CC Exclusion List when reported as a secondary diagnosis code with a principal diagnosis code 574.00 (calculus of gallbladder with acute cholecystitis without mention of obstruction).
CMS also proposes removing the following diagnosis codes from the CC Exclusion List for diagnosis code 440.4 (chronic total occlusion of artery of the extremities):
  • Atherosclerosis codes 440.20-440.32, 443.22, and 443.29
  • Aneurysm codes 441.00-441.03, 441.1-441.7, 441.9, 442.0, 442.2, 442.3, 442.9
The proposed rule does not include any revisions to the CC/MCC Exclusion List based on ICD-9-CM code changes.
MS-DRG changes
CMS is proposing to move stroke cases with ICD-9-CM code V45.88 (status post administration of tPA [rtPA] in a different facility within the last 24 hours prior to admission to current facility) as a secondary diagnosis from MS-DRG 066 to MS-DRG 065. CMS would change the title of MS-DRG 065 to Intracranial Hemorrhage or Cerebral Infarction with CC or tPA in 24 hours.
Hospitals who receive patients undergoing a stroke-in-evolution who had tPA given at an outside facility demonstrated higher costs and lengths of stay in all stroke MS-DRGs without tPA (MS-DRG 64-66), particularly if there was a MCC.
“I am grateful that CMS proposes to allow hospitals accepting patients with stroke-in-evolution who receive tPA at an outside facility to have code V45.88, in essence to count as a CC if a CC is not otherwise documented,” Kennedy says.
CMS proposes reassigning the following diagnosis codes from MS-DRG 794 to MS-DRG 795:
  • V64.00, vaccination not carried out, unspecified reason
  • V64.01, vaccination not carried out because of acute illness
  • V64.02,vaccination not carried out because of chronic illness or condition
  • V64.03,vaccination not carried out because of immune compromised state
  • V64.04, vaccination not carried out because of allergy to vaccine or component
  • V64.06, vaccination not carried out because of patient refusal
In addition, all of the diagnosis codes currently assigned to MS-DRG 794 would be added to the “only secondary diagnosis” list for MS-DRG 795.
Discharge status codes
CMS proposes to add new patient discharge status code 69 (discharged/transferred to a designated disaster alternative care site) for MS-DRGs 280 (acute myocardial infarction discharged alive with MCC), 281 (acute myocardial infarction discharged alive with CC), and 282 (acute myocardial infarction discharged alive without CC/MCC) to identify patients who are discharged or transferred to an alternative site that will provide basic patient care during a disaster response.
CMS also proposes added 15 new discharge status codes for MS-DRGs 280, 281, and 282 to identify patients who are discharged with a planned acute care hospital inpatient readmission.
“I find it interesting that CMS is proposing new discharge codes only for MS-DRGs 280-282 to identify scheduled readmissions,” Kennedy said. “If implemented, this means that provider and case management documentation must be explicit as to assist the coder or HIM abstractor in assigning these discharge statuses. Why CMS does not offer this for other conditions or treatments, such as renal or liver transplantation, perplexes me.”
Comment on the rule
CMS will accept comments on the proposed rule until June 25 and will respond to comments in the final rule to be published by August 1. The proposed rule will be published in the May 10 Federal Register. Comments may submit comments electronically, via first-class or express mail, or via hand delivery.  


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